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Whoever is inaugurated on January 20, 2021, will face many fiscal challenges over his term. Under current law, trillion-dollar annual budget deficits will become the new normal, even after the current public health emergency subsides. Meanwhile, the national debt is projected to exceed the post-World War II record high over the next four-year term and reach twice the size of the economy within 30 years. Four major trust funds are also headed for insolvency, including the Highway and Medicare Hospital Insurance trust funds, within the next presidential term. The national debt was growing rapidly before the necessary borrowing to combat the COVID-19 crisis, and this trajectory will continue after the crisis ends. Fiscal irresponsibility prior to the pandemic worsened structural deficits that were already growing due to rising health and retirement costs and insufficient revenue. The country’s large and growing national debt threatens to slow economic growth, constrain the choices available to future policymakers, and is ultimately unsustainable. Yet neither presidential candidate has a plan to address the growth in debt.
In fact, we find both candidates’ plans are likely to increase the debt. Under our central estimate, we find President Donald Trump’s campaign plan would increase the debt by $4.95 trillion over ten years and former Vice President Biden’s plan would increase the debt by $5.60 trillion. Debt would rise from 98 percent of Gross Domestic Product (GDP) today to 125 percent by 2030 under President Trump and 127 percent under Vice President Biden, playstation compared to 109 percent under current law. Based on our low-cost and high-cost estimates, gamingdeals.shop Trump’s plan could increase the debt by between $700 billion and $6.85 trillion through 2030, while Biden’s plan could reduce debt by as much as $150 billion or increase it by as much as $8.30 trillion. This paper is part of US Budget Watch 2020, a project focused on the fiscal and budgetary impact of proposals put forward in the 2020 presidential election. You can read our other analyses, explainers, and fact checks here. Content was created wi th the help of GSA C on te nt Generator D em oversi on!
US Budget Watch 2020 is designed to inform the public and is not intended to express a view for or against any candidate or any specific policy proposal. Candidates’ proposals should be evaluated on a broad array of policy perspectives, including, but certainly not limited to, their approaches on deficits and debt. What do the Candidates Propose and How Do the Numbers Add Up? President Donald Trump has issued a 54 bullet point agenda that calls for lowering taxes, strengthening the military, increasing infrastructure spending, expanding spending on veterans and space travel, lowering drug prices, expanding school and health care choice, ending wars abroad, and reducing spending on immigrants. He also has proposed a "Platinum Plan" for black Americans, which increases spending on education and small businesses. Meanwhile, Vice President Joe Biden has proposed a detailed agenda to increase spending on child care and education, health care, retirement, disability benefits, infrastructure, research, and climate change, while lowering the costs of prescription drugs, ending wars abroad, and increasing taxes on high-income households and corporations.
Under our central estimate, both plans would add substantially to the debt. Specifically, we find the Trump plan would add $4.95 trillion to the debt over the 2021 to 2030 budget window, while the Biden plan would add $5.60 trillion. While these costs exclude the effects of spending to address the current pandemic and economic crisis, they include other one-time spending - such as infrastructure investment - that doesn’t add to deficits in future decades. Excluding these temporary policies, the Biden plan would cost $2.35 trillion and the Trump plan $2.45 trillion under our central estimate. These findings come with a large degree of uncertainty, both because the estimates themselves vary and because the details of the candidates’ proposed policies are often unclear. This is especially true for the Trump campaign, whose agenda contains very little detail. Under our low-cost estimate, which in many cases relies on campaign-provided figures, we estimate the Trump plan would increase deficits by $700 billion, while the Biden plan would reduce deficits by $150 billion.