Spending plans by Joe Biden, Donald Trump hike federal debt by $5 trillion over 10 years: study
Both President Trump and Democratic rival Joseph R. Biden would increase the nation’s debt by an additional $5 trillion over 10 years if they were able to muscle through all their major campaign policy proposals — and that’s on top of any extra COVID-19 relief, according to a new analysis.
Mr. Trump would add $4.95 trillion to the federal debt held by the public over the next decade compared to Mr. Biden’s $5.6 trillion, according to the study by the nonpartisan Committee for a Responsible Federal Budget.
“These folks are making a lot of promises that would be very expensive if additional pay-fors are not mentioned,” said Marc Goldwein, the group’s senior vice president.
The proposed spending sprees would push federal debt to 125% of gross domestic product under Mr. Trump and 128% under Mr. Biden by 2030, well above the projected 109% under current law, the study showed.
The president would spend roughly $2 trillion on infrastructure, at least $1.3 trillion on tax cuts, and $650 billion on the U.S. military and the Space Force.
Those expenses would be offset partly by more than $500 billion in savings from ending “endless wars” and $150 billion in savings from cutting prescription drug prices and other health care changes.
Mr. Biden wants to spend $3 trillion on climate change and environmental initiatives, $2.7 trillion on child care and education, including universal pre-K and higher education spending, and $1.9 trillion to expand health insurance coverage, among his big-ticket items.
He would offset that partly by raising taxes by more than $4 trillion and ending wars in the Middle East, generating $550 billion in savings.
Mr. Biden has vowed that people making less than $400,000 per year would not see their taxes increase under his plan.
“Tens of millions of middle-class families are going to get a tax cut when they need it most,” he said while campaigning in Ohio Monday.
The Committee for a Responsible Federal Budget did not factor in additional spending on the coronavirus pandemic in its analysis.
“Biden supports much more spending, with more taxes,” Mr. Goldwein said. “The politics of saying we are going to increase taxes or cut spending just for the sake of helping our future is sometimes tough, but I do think we [can] at least expect candidates to put forward ways to pay for their own plans.”
In another new analysis, the James Madison Institute projected that Mr. Biden’s economic policies would cost roughly $6 trillion over 10 years.
That translates to an increased tax burden, on average, of at least $1,421 per taxpayer across the battleground states of Florida, Michigan, Ohio, Pennsylvania and Wisconsin, the think tank found.
Mr. Biden wants to increase the corporate tax rate from 21% to 28% and lift the top individual tax rate from 37% to 39.6%.
Under his plan, 97% of the tax increases would fall on the top 1% of earners, according to new projections from the left-leaning Institute on Taxation and Economic Policy.
“Only 1.9% of taxpayers will see their income taxes or payroll taxes rise under Biden’s plan, and they will certainly not be the Americans who face eviction, lack health insurance, and wonder when they can go back to work,” said Steve Wamhoff, director of federal tax policy at the institute.
Both Mr. Biden and Democratic vice presidential nominee Sen. Kamala D. Harris have talked generally about reversing the Republican 2017 tax cuts, which if repealed in their entirety would constitute a massive tax increase across the board, including on middle-class families.
“Sleepy Joe wants to quadruple your Taxes. Depression!!! Don’t let it happen! #MAGA,” Mr. Trump tweeted Monday.
The government’s bottom line is unlikely to improve under either a second Trump term or a Biden administration, said Robert Bixby, executive director of the Concord Coalition, a fiscal watchdog group.
“Right now, there is no longer a constraint — particularly in the Democratic Party — that you have to pay for your proposals and there’s not a consensus that the debt is a problem that there was,” Mr. Bixby said.
Congress already has authorized close to $3 trillion in coronavirus-related spending this year, helping power an estimated $3.3 trillion deficit for the fiscal year that ended Sept. 30, according to the Congressional Budget Office.
CBO projected last month that under current law, federal debt held by the public would increase from 98% in 2020 to 109% by 2030 before spiking to 142% in 2040 and 195% by 2050.
Mr. Bixby said Mr. Trump’s freewheeling style and fungible approach to spending and deficits puts Mr. Biden at a disadvantage.
“He’ll just say whatever he wants,” he said of the president. “On any given day, who knows what his fiscal agenda is?”
Published at Tue, 13 Oct 2020 02:02:03 +0000