The Wall Street Journal: Where Trump and Biden Stand on Budget Deficits
Article by Kate Davidson in The Wall Street Journal
Federal debt has climbed in recent years, and it is on a trajectory to rise further regardless of who is in the White House come January, as the economic downturn and the rising cost of Social Security and Medicare pressure government finances.
Both President Trump and former Vice President Joe Biden have called for more spending to combat the economic fallout from the coronavirus pandemic, arguing that short-term deficit increases are necessary to help stimulate the recession-stricken economy and help businesses and households.
Mr. Trump is also pushing for more tax cuts, which would further increase the deficit. Mr. Biden has called for large spending initiatives—on infrastructure, education and health care—that he says could boost long-term economic growth. The Democratic presidential nominee has said he would pay for those plans with tax increases on the wealthy, but it isn’t clear that would raise enough to offset all of the higher spending.
The upshot: Both candidates’ fiscal plans would add substantially to the total U.S. debt, according to estimates from the Committee for a Responsible Federal Budget.
Deficits and Debt
When he campaigned for president in 2016, Mr. Trump promised to eliminate deficits and pay down the government’s debt over eight years. Instead, he presided over four straight years of rising annual deficits, signing two bipartisan budget agreements, which boosted federal spending, and his 2017 tax cuts, which stunted revenue.
Then the coronavirus struck. Budget shortfalls soared as policy makers approved trillions of dollars of fresh spending. The 12-month deficit as a share of gross domestic product tripled to roughly 16% in September from 4.9% in February. Government debt now exceeds the size of the U.S. economy for the first time since the end of World War II.
Excluding temporary spending related to the downturn, the Committee for a Responsible Federal Budget estimates each candidate’s policies would have a similar impact on the government’s finances: Mr. Trump’s would add roughly $2.45 trillion to the debt and boost debt as a share of GDP to 125% by 2030, while Mr. Biden’s plans would add ...
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