Forbes, Sarah Hansen October 7, 2020
TOPLINE In a new analysis of President Trump’s and former Vice President Joe Biden’s campaign policy proposals, the Committee for a Responsible Federal Budget found that a Biden presidency would add $5.6 trillion to the national debt over ten years while a Trump presidency would add just under $5 trillion.
KEY FACTS
The non-partisan think tank also found that Trump’s campaign plan would increase the debt-to-GDP ratio—which stands at 98% today—to 125% by 2030, while Biden’s plan would push that ratio up to 128% (if every law stayed the same, the ratio would tick up to 109% by 2030).
The Congressional Budget Office said last month that for the first time since World War II, the national debt will exceed the size of the U.S. economy in the 2021 fiscal year because of trillions in new stimulus spending.
If he wins the election, the CRFB predicts that some of Biden’s major expenditures would include $2 trillion on healthcare, $4.5 trillion for infrastructure and other domestic spending, and $1.2 trillion on Social Security and retirement, while his tax policy would raise $4.3 trillion.
Trump would reduce healthcare spending by $150 billion, add another $2.7 trillion to infrastructure and domestic spending, and keep Social Security and retirement spending the same while cutting taxes by $1.7 trillion.
BIG NUMBER
$3.3 trillion. That’s how much the CBO expects the federal budget deficit to reach this year—more than triple what it was in 2019—as a direct result of the historic stimulus spending from the $2.2 trillion CARES Act and the two smaller rescue bills that preceded it.
KEY BACKGROUND
Concerns over the ballooning national debt were front and center this summer as lawmakers and leaders struggled to come to agreement on another federal coronavirus relief bill. Republicans, wary of running up the deficit, favored a much smaller, more targeted bill. Democrats favored spending at much higher levels. While top Democrats and the White House were ultimately left with two competing offers, one worth $2.2 trillion from Democrats and another worth $1.6 trillion from the Trump administration, the GOP was essentially unwilling to support a bill worth more than about $1 trillion. Stimulus negotiations were thrown into disarray this week after President Trump abruptly announced that he had instructed his staff to pause discussions until after the November 3 election. He later said that he would support a handful of standalone bills.
CRUCIAL QUOTE
“Now is not the time to worry about shrinking the deficit,” Treasury Secretary Steven Mnuchin said last month, before negotiations with House Speaker Nancy Pelosi (D-Calif.) had resumed in earnest.
FURTHER READING
Mnuchin Says More Stimulus Needed—Don’t Worry About The Deficit (Forbes)
Thanks To Stimulus Spending, U.S. Debt Expected To Exceed The Size Of The Entire Economy Next Year (Forbes)
Pelosi Slams Trump Over Stimulus Talks Withdrawal, Standalone $1,200 Check Push (Forbes)
Stocks Dive After President Trump Shatters Stimulus Hope (Forbes)
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I’m a breaking news reporter for Forbes focusing on economic policy and capital markets. I completed my master’s degree in business and economic reporting at New York University. Before becoming a journalist, I worked as a paralegal specializing in corporate compliance.