As Vice President Harris and former President Trump both exchange heated words about the economy and inflation, political watchers say important parts of the conversation are missing. That is, the national debt is increasing.
One of the next president's biggest priorities when he enters the Oval Office next year will be to address the nation's debt ceiling, which is suspended until January 1st. But experts and strategists say it wouldn't be surprising if this problem didn't happen. Let's take a closer look at the campaign's trajectory.
“Voters don't seem to care about that,” said Alex Conant, a Republican strategist who also worked at the Office of Management and Budget under former President George W. Bush.
“So it's not a candidate's priority.”
“Voters don't want to be told to eat spinach,” Conant said. “Telling people they need to cut spending or raise taxes is generally not a popular message. Now that interest rates are falling, politicians are under a lot of pressure to talk about it in terms of good governance. I don’t feel it.”
An analysis released earlier this week by the Committee for a Responsible Federal Budget estimates that the plans proposed by both candidates could add trillions of dollars to the national debt by 2035. But the report found that President Trump's tax and spending plan could double the national debt. The national debt is similar to that brought about by Vice President Harris.
The most expensive item in the group's side-by-side comparison of candidates' policies was the estimated $5.3 trillion price tag on proposals to extend and amend parts of President Trump's signature 2017 tax law. is. Harris' proposal to extend parts of the plan to households earning less than $400,000 a year is also expected to cost $3 trillion between 2026 and 2035.
The fiscal implications of other proposals with the highest estimated costs include a $1 trillion-plus price tag for Ms. Harris' plan to strengthen the Child Tax Credit and the Earned Income Tax Credit, and a $2 trillion price tag for Mr. Trump's proposal to eliminate the tax. Includes trillion dollar stickers and more. Both candidates' proposals also include increased spending in other policy areas.
At the same time, the two men presented proposals estimated to raise revenue and cut spending by trillions of dollars, including Harris' proposed increases in corporate tax rates and taxes on capital income and Trump's proposed changes to energy policy. Tariff.
Looking at the group's central estimates, the budget watchdog found that Ms. Harris' plan would increase the national debt by 3.5 trillion dollars over the next 10 years, compared to an estimated $7.5 trillion increase in the national debt under Mr. Trump's plan. They found that it has the potential to increase the amount by trillions of dollars.
The latest estimates represent only the latest analysis conducted in recent months by the group and others assessing the potential impact of both candidates' policy agendas on the economy and the nation's budget deficit. And while estimates may change as details of each candidate's proposal emerge, experts believe that no matter who the candidate is, the nation's debt of more than $35 trillion will increase in the coming years. There is a consensus that the trend is likely to continue.
“Both would add to the debt,” said Howard Gleckman, a senior fellow at the Urban-Brookings Tax Policy Center. “Trump will increase the deficit more than Harris, but both will increase the debt. Neither is doing anything to ensure the debt is reduced.”
“People love tax-free tips, people love tax-free Social Security benefits,” he said, “and frankly, politicians who say, 'Here's my debt reduction plan.' There's no benefit to the candidates. No one will vote for them.”
The last showdown in Congress over the nation's debt ceiling ended with a bipartisan agreement to suspend the cap until early 2025, days before the nation was at risk of an unprecedented default. The debt ceiling sets a limit on the amount the Treasury can borrow to cover the nation's bills.
The agreement creates a spending agreement that caps government funding subject to Congress' annual appropriations process for fiscal years 2024 and 2025. But there has been much debate about how effective the deal was in containing spending, especially amid growing uncertainty about what funding will look like. The same will happen next year as expectations for the presidential election increase.
Some of the biggest drivers of federal spending also lie outside the annual spending process, such as funding programs like Social Security and Medicare, which are often seen as the third rail of politics.
“If you're thinking about balancing the budget or reducing the deficit, mathematically speaking, there's essentially no way to do that unless you address Medicare, Medicaid, and Social Security.” Gleckman said.
“Very few politicians want to do anything about Social Security or Medicare, and very few politicians want to do anything about Medicaid, but they talk about it very vaguely, and they “There's no way to really know what that is,” he said.
There is a broader bipartisan debate taking place in the current Congress, particularly over how to strengthen Social Security's solvency, which has gained particular attention over the past year.
But some lawmakers participating in these talks are pessimistic about changes in the near future, often citing election-year politics.
Some Republican lawmakers have expressed a willingness in the past to use the debt limit as a way to secure potential changes to entitlement programs. But experts have expressed doubts about the likelihood of such a change, especially if the party gains control of Congress and the White House without contesting the Democratic House and Senate.
“If Trump wins the election and the Republicans take control of Congress, I think they'll just extend the debt ceiling,” said Martin Neil Bailey, a senior fellow emeritus at the Brookings Institution. , Martin Neil Bailey, a senior fellow emeritus at the Brookings Institution, predicted that this would become more likely. This would be a constraint if Harris were to win in a Republican-led Congress.
“I think it will eventually be resolved in some way, but maybe it will limit some of the things she wants to do,” he said. But he added that at some point “increasing debt will put us in trouble.”
“That will manifest itself in higher interest rates and a gradual loss of confidence in U.S. debt, especially from overseas. That could be quite severe.”
