Trump, Harris blasted for ignoring exploding budget deficit, as economists plead with both to ‘get real’
Economists told Fox News Digital that the economic proposals former President Donald Trump and Vice President Kamala Harris have put forward would continue to increase the nation’s already ballooning budget deficit, noting that neither candidate seems particularly concerned with fiscal responsibility.
Neither Trump nor Harris has released dedicated policy plans for addressing the nation’s deficit. Trump’s 16-point policy plan on his website mentions the word “deficit” once.
Meanwhile, Harris’ economic platform does mention the deficit several times and says Harris is “committed” to fiscal responsibility, but only suggests increasing taxes on the wealthy and corporations as a solution.
“I think the reason neither candidate is really talking about fiscal responsibility is because neither candidate is fiscally responsible,” said Tax Foundation senior economist Erica York. “Both have left a lot of details unspecified, so there’s questions still about how Harris’s spending policies would stack up. Would Trump really repeal all of the green energy tax credits? Would he really impose all of the tariffs he’s promised?”
When asked what message York had for Trump and Harris when it comes to the deficit, she told them to “get real.”
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“We face several challenges on the fiscal policy front, from debt and deficits to the need to compete with China, to the need to encourage entrepreneurship and work, and neither of the tax policy visions being outlined right now really come close to providing an answer to those challenges,” York said.
Rep. Thomas Massie, a Republican from Kentucky, wears a homemade national debt clock pin on Capitol Hill on Jan. 26, 2023.
Meanwhile, Kimberly Clausing, an economist with the Peterson Institute for International Economics, echoed York’s concerns, adding that she “does not think there’s been enough attention on the deficit this campaign season.”
“I don’t know whether to blame the candidates or the American attention span,” Clausing said. “Candidates have an incentive to cater to what the population wants to listen to, but there doesn’t seem to be a big drumbeat in favor of fiscal responsibility. And that’s a big contrast from some prior elections in at least my lifetime, where that issue was much more prominent.”
So far, in fiscal year 2024, the government is running a cumulative deficit of $1.9 trillion, according to the Bipartisan Policy Center’s “Deficit Tracker.”
Revenues, meanwhile, have increased 11% through last month. The revenue increase, according to the deficit tracker, is largely the result of an increase in individual and corporate taxes, higher interest rates and a 20% decrease in individual income tax refunds. Trump’s economic proposals include extending tax cuts, reducing the corporate tax rate and exempting tips, overtime pay and social security benefits from one’s taxable income. Despite his plan to generate revenue through tariffs and repealing green energy tax credits, economists say it will not be enough to balance out the lost revenues from Trump’s tax cuts and other economic proposals.
Research from the Tax Foundation, a tax policy nonprofit in the nation’s capital, estimated that Trump’s deficit impact would be roughly a $4 trillion increase over ten years.
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However, according to Heritage Foundation economist Richard Stern, it is government spending and not tax cuts that are the real culprit when it comes to the ballooning deficit.
“Though tax cuts can increase the deficit, it returns that money to the people that earned it. Deficit increases from more spending, on the other hand, means that the government is stealing even more and suppressing growth even more intensely,” Stern said. “Deficits created by way of tax cuts and spending increases are not the same. Tax cuts grow the economy and shrink deficits as a share of the economy, whereas more spending strangles the economy and stunts growth.”
The Treasury Department is seen near sunset in Washington. (AP Photo/Jon Elswick, File)
The Biden-Harris administration’s fiscal year 2024 budget proposed the highest sustained levels of spending in U.S. history, according to Republicans on the House Budget Committee. The committee also pointed out that the administration’s plan to add $82.2 trillion in spending over ten years, is 18% more than the historical average of the past half century.
Since becoming the Democratic Party’s official nominee for president, Harris has said she will provide $25,000 housing subsidies for first-generation home buyers, implement $100 billion in tax credits for the manufacturing sector and increase small business tax credits by tenfold. She has also suggested support for increasing government spending to support families’ child care needs, while also expanding the child tax credit, among other proposals.
Overall, the Tax Foundation calculated that Harris would grow the deficit by roughly $1.5 trillion over ten years.
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Among the deleterious downstream effects of an ever-growing deficit, according to Clausing, are increased interest rates and reduced creditworthiness for the country, which can be problematic at a time when global tensions are on edge.
“If a new crisis comes along, whether it’s a pandemic or a national security crisis or a big recession, which are sometimes caused by things beyond our control. You know, those kinds of crises are really difficult to respond to without fiscal space,” Clausing said. “If you’re starting from a point where you’re kind of maxing out the credit card, it’s a little harder to respond to these emergencies.”
Currently, China and Japan are the United States’ two largest foreign creditors.
Former President Trump and Vice President Kamala Harris (Getty Images)
When reached by Fox News Digital, the Harris campaign declined to comment.
The vice president was endorsed this week by more than 400 left-leaning economists and former policymakers who served under Democrats. Additionally, Andrew Ross Sorkin, a financial columnist with the New York Times, insisted this week that Harris will be able to get much closer to balancing the national budget than Trump.
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When it comes to the electorate, voters have usually told pollsters they have more confidence in Trump than Harris when it comes to the economy, but reports have indicated Harris is gaining some of that ground back more recently. Trump’s advantage over Harris on the economy stands at only five points in a recent Fox News poll, and just two points in an AP/NORC survey.
“Dangerously Liberal Kamala Harris’ budget would add $17 trillion to the national debt by 2034 and also includes a $4.9 trillion tax hike — the largest in history — which would cost every American family nearly $40,000 per year, on top of the costs of record-high inflation,” Trump Campaign National Press Secretary Karoline Leavitt told Fox News Digital. “Thanks to Kamalanomics, families are already struggling to afford gas and groceries, and President Trump will continue to highlight how Harris’ budget will compound these difficulties on hardworking Americans.”
