With the election just weeks away, Vice President Kamala Harris and former President Donald Trump have outlined their respective economic strategies, focusing on tax reductions, border security expenditures, and affordable housing measures. However, the financial implications and funding sources for these proposals remain unclear.
A report by the nonpartisan Committee for Responsible Federal Budget indicates that both candidates’ initiatives could significantly increase the national debt. Trump’s proposals could add $7.5 trillion to the debt over the next decade, while Harris’ plans could result in an additional $3.5 trillion. The committee emphasizes the considerable fiscal challenges the next president will face, as both candidates’ proposals risk maintaining or exacerbating existing debt and deficit levels.
The report acknowledges the uncertainty of its estimates due to the lack of specific details from the campaigns. Harris’ plans could potentially increase the debt by between $0 and $8.1 trillion, whereas Trump’s could range from $1.5 trillion to $15.2 trillion. The committee warns of a looming fiscal crisis unless more aggressive action is taken to address national debt.
Among the candidates’ economic plans, both intend to extend elements of the Tax Cuts and Jobs Act (TCJA) from 2017. Harris’ extension of the TCJA is estimated to cost $3 trillion, compared to Trump’s $5.4 trillion. Harris plans to protect individuals earning less than $400,000 annually from tax increases, while Trump aims to permanently extend the TCJA for all beneficiaries and abolish the $10,000 cap on state and local tax deductions.
In addressing taxes on tips, both candidates promise tax removals, although Harris’ plan includes safeguards to prevent exploitation. Harris’ approach could cost $200 billion over ten years, whereas Trump’s could cost $300 billion. Trump also proposes eliminating taxes on overtime pay, potentially incurring a $2 trillion loss in tax revenue over a decade. Additionally, ending taxes on Social Security benefits, as Trump suggests, could increase the deficit by $1.3 trillion. Harris, however, has no plans to cut taxes on overtime or Social Security benefits.
Harris also prioritizes expanding the Child Tax Credit (CTC), significantly increasing its scope and potential costs to $1.4 trillion over ten years. Conversely, Trump’s running mate, Senator JD Vance, supports expanding the CTC, though it isn’t included in the committee’s evaluation.
Both candidates advocate for increased border security spending; Harris supports a bipartisan bill that could cost $100 billion over ten years, while Trump focuses on mass deportations and completing the border wall, with an estimated cost of $350 billion over the same period.
Harris plans to tackle affordable housing with tax incentives and credits, potentially costing $250 billion. Trump, focusing on unspecified homeowner tax incentives, could incur a $150 billion cost, with speculation that he might revive past tax credits for first-time homebuyers.
The candidates’ health care proposals also diverge. Harris proposes expanding Affordable Care Act subsidies, costing $550 billion over ten years, whereas Trump suggests covering in vitro fertilization treatments, adding another $150 billion to the deficit.
To finance these initiatives, Harris plans to increase taxes on corporations and high earners, potentially generating $4.3 trillion, alongside $250 billion in prescription drug cost savings. Trump’s revenue measures include imposing tariffs on foreign imports and relaxing environmental protections to boost drilling and tax revenue, which could yield $3.7 trillion over a decade. However, both revenue-generating strategies fall short of covering the anticipated costs of their respective plans.
