U.S. Vice President Kamala Harris in Milwaukee, Wisconsin, U.S. August 20, 2024 and former U.S. President Donald Trump in Bedminster, New Jersey, U.S., August 15, 2024 are seen in a combination of file photographs. REUTERS/Marco Bello, Jeenah Moon/File Photo
CRFB Analysis: Trump and Harris Tax and Spending Plans’ Impact on Federal Debt
Projected Federal Debt Increases
According to new estimates from the Committee for a Responsible Federal Budget (CRFB), the tax and spending plans proposed by Republican presidential candidate Donald Trump would result in significantly more federal debt than those of Democratic candidate and Vice President Kamala Harris. The CRFB’s central estimate indicates that Harris’ plans would add $3.5 trillion to the federal deficit over the next decade, while Trump’s plans would increase the deficit by $7.5 trillion during the same period.
Range of Debt Projections
In addition to its central estimates, the CRFB provided a range of possible outcomes based on policy proposals from both candidates. Harris’ debt impact could range from zero additional debt in a low-end scenario to $8.1 trillion in the high-end estimate. For Trump, the range extends from $1.45 trillion on the low end to $15.15 trillion on the high end.
Key Tax and Spending Proposals
Donald Trump’s Proposals
Trump has outlined a series of tax cuts, including the extension of the 2017 tax cuts, which are set to expire in 2025. He has also proposed eliminating taxes on income from tips, Social Security benefits, and overtime pay. The main revenue-generating measure in Trump’s plan would be an increase in tariffs, which is estimated to raise $2.7 trillion according to the CRFB’s central projection.
Kamala Harris’ Proposals
Harris’ plans focus on expanding social benefits, including an increase in the Child Tax Credit, a $6,000 bonus credit for newborns, and enhanced support for child and elder care. She also proposes a $25,000 tax credit for first-time homebuyers. To offset the costs of these initiatives, Harris has proposed raising taxes on corporations and individuals earning more than $400,000, which the CRFB estimates would generate $4.25 trillion in revenue.
Reactions to the CRFB Estimates
Harris Campaign’s Response
A spokesperson for Harris contested the CRFB’s projections, arguing that Harris’ proposals would reduce deficits, citing her commitment to paying for her policies through increased revenues from wealthier households and corporations.
Trump Campaign’s Response
Brian Hughes, a senior adviser to Trump, dismissed the CRFB’s estimates, criticizing the organization for opposing the 2017 tax cuts and supporting the Biden administration’s Inflation Reduction Act. Hughes argued that Trump’s plan would curtail wasteful spending, reduce inflation, lower interest costs, and drive economic growth, ultimately increasing federal revenues and improving the deficit outlook.
Context of the Federal Debt Baseline
The CRFB’s estimates compare the candidates’ proposals against a baseline set by the Congressional Budget Office (CBO). This baseline assumes that the 2017 tax cuts will expire at the end of 2025, causing individual tax rates to revert to higher levels. Under the CBO baseline, the U.S. is already projected to accumulate an additional $22 trillion in debt over the next 10 years, including nearly $2 trillion in the 2024 fiscal year alone.
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