Study: Trump Budget, Tax Plans Add at Least $10T to Debt
WASHINGTON – A new Washington study says Donald Trump’s tax and budget plans would make the national debt skyrocket by $10 trillion or more over the coming decade, mostly because of his ambitious and expensive tax cuts.
The Committee for a Responsible Federal Budget says Democrat Hillary Clinton’s agenda – which relies on tax increases to pay for proposals such as making the Affordable Care Act more generous – would increase the debt by about $250 billion over 10 years.
Trump’s measure is considered important, because if the debt gets too large it would cause higher interest rates, be a severe drag on national investment and growth, and potentially lead to a fiscal crisis. Interest costs would also squeeze out other priorities such as defense, education and infrastructure investment.
Trump’s tax plans, which include lowering the top income tax bracket from 39.6 percent to 25 percent and the top corporate rate from 35 percent to 15 percent, would add $9 trillion-plus to cumulative deficits over a decade. Clinton would increase taxes by $1.25 trillion over the same period, chiefly through a 4 percent surtax on top earners and a limit on deductions taken by the wealthy.
All told, Trump’s policies would result in the $19.3 trillion national debt spiking to 127 percent of the size of the U.S. economy by 2026. Clinton’s plans would closely track current law, in which the debt would equal 86 percent of the economy.
By contrast, a tax proposal released last week by House Speaker Paul Ryan, R-Wis., promises no net loss of tax revenue and is therefore only able to lower the top individual tax rate to 33 percent and the top corporate rate to 20 percent.
The Committee for a Responsible Federal Budget advocates for smaller deficits, and, like the Congressional Budget Office and other nonpartisan groups, warns that the government’s projected deficits and debt will become unsustainable before too long. It receives backing from a foundation funded by deficit hawk Peter G. Peterson, the Pew Charitable Trusts and other foundations.
“Encouragingly, both of the major parties’ presumptive presidential nominees have highlighted the need for fiscal responsibility on the campaign trail,” said the group’s report. “Unfortunately, to date neither former Secretary of State Hillary Clinton nor businessman Donald Trump has put forward a plan to address the national debt, and Mr. Trump’s proposals would massively increase the debt.”