Yahoo Finance - Trump, Biden Both Likely to Push National Debt to New Heights: Expert

August 26, 2020

Article by Ben Werschkul in Yahoo Finance

The U.S. national debt is nearing $27 trillion and forecasters are looking ahead to a decade of record deficits to come.

But neither Donald Trump nor Joe Biden are talking much about it. In fact, according to a leading budget watchdog, both are making promises that are set to make the problem worse in the years ahead.

“It's not the top priority right now and in fact it shouldn't be” said Maya MacGuineas, president of the nonpartisan, nonprofit Committee for a Responsible Federal Budget.

The total federal debt has ballooned from around $9 trillion in 2008 to $19 trillion in 2016 and is expected to pass $27 trillion later this year. By 2030, according to estimates, it could grow to somewhere between 118% and 130% of GDP. The pandemic has necessitated an explosion in government spending this year but that spending has come on top a government “irresponsibly growing the national debt” for years, according to MacGuineas.

Biden’s plan: More spending but also more taxes

At their convention this week, Republicans have taken turns attacking Joe Biden for wanting to raise taxes. The Democratic presidential nominee has indeed promised to increase taxes between $3 trillion and $4 trillion with new levies focused on the richest Americans and corporations.

But even that, says MacGuineas, is “not enough,” noting that Biden’s spending plans are significantly higher.

Biden has published a series of plans — from a $700 billion ‘Buy American’ plan to a $2 trillion climate proposal and others — that analysts say would cost much more than his tax increases. 

Trump’s plan: More tax cuts

President Trump has been a little vague about how he would govern in a second term. His campaign recently published a second term agenda featuring bullet points but little in the way of specifics.

One thing he has been clear on is his desire for more tax cuts. “For the most part, [Trump] would widen the deficit significantly with very few offsets" says MacGuineas.

One tax cut in particular Trump has been keen on is a payroll tax cut. He recently signed an executive order to defer payroll taxes for some workers and, at a press briefing, promised “If I am victorious on November 3rd, I plan to forgive these taxes and make permanent cuts to the payroll tax,” adding “I’m going to make them all permanent.” He then immediately attacked Biden for wanting to raise taxes.

MacGuineas hopes for real discussion on the issue in the coming years, noting “If you continue to push that message that you can have all the things you want and never pay for them, we are going to be ...

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