Soaring debt takes back seat in Harris’s, Trump’s economic plans

As both Vice President Harris and former President Trump continue to batter each other on the economy and inflation, political watchers say one critical piece of the conversation is missing: the nation’s climbing debt. 

One of the biggest priorities the next president will have when they enter the Oval Office next year is acting on the nation’s debt ceiling, which is suspended until Jan. 1. But experts and strategists say they aren’t surprised the issue isn’t coming up more on the campaign trail.

“It’s not something voters seem to care about,” said GOP strategist Alex Conant, who also served at the Office of Management and Budget under former President George W. Bush.

“So, it’s not something that the candidates will prioritize.”

“Voters don’t want to be told to eat their spinach,” Conant said. “Telling people that we have to cut spending or raise taxes is generally not a popular message, and with interest rates now going down, the politicians don’t feel a lot of pressure to talk about it from a good governance standpoint.”

An analysis released by the Committee for a Responsible Federal Budget earlier this week estimated the plans proposed by both candidates could increase the national debt by trillions of dollars through 2035. However, the report found that Trump’s tax and spending plans could add twice as much to the national debt as those brought by Vice President Harris.

The most expensive line item included in the group’s side-by-side comparison of the candidates’ policies is an estimated $5.3 trillion price tag attached to Trump’s proposals to extend and modify parts of his signature 2017 tax law. Harris’s proposal to extend some parts of that plan for households making below $400,000 is also projected to cost $3 trillion between 2026 and 2035.

The fiscal impact of other proposals that rank among the highest in estimated costs include a trillion-plus price tag for Harris’s plan to beef up the child tax credit and the earned income tax credit, a $2 trillion sticker for Trump’s proposal to do away with taxes on overtime, among other proposals from both candidates that also include spending boosts in other policy areas.

At the same time, both offered proposals that were estimated to result in trillions of dollars in revenue increases and reductions to spending, like pitches from Harris to raise the corporate tax rate and taxes on capital income, and Trump’s proposed changes to energy policy and on tariffs. 

When looking at the group’s central estimate, the budget watchdog found Harris’s plans could add $3.5 trillion to the national debt over the next decade, compared to an estimated $7.5 trillion boost to the national debt from Trump’s plans.

The recent estimates only mark the latest analysis from the group and others in recent months assessing the potential impact of both candidates’ policy agendas on the economy and the nation’s deficits. And while estimates can change as more details of each candidate’s proposals emerge, there’s consensus among experts that, whoever the candidate, the nation’s $35 trillion-plus debt is likely to continue its upward trajectory in the coming years.

“Both of them would increase the debt,” Howard Gleckman, a senior fellow at the Urban-Brookings Tax Policy Center, said. “Trump would increase the deficit more than Harris would, but both of them would increase the debt. Neither of them is doing anything to reduce the debt for sure.”

“People love the tax-free tips and people love the tax-free Social Security benefits,” he said,  “and frankly, there’s no benefit to a candidate for political office, saying, ‘Here’s my plan for reducing the debt,’ because nobody’s going to vote for them.”

Congress’s last showdown over the nation’s debt limit ended with a bipartisan deal to suspend the ceiling through the start of 2025 just days before the nation risked an unprecedented default on its debt. The debt ceiling caps how much money the Treasury Department can owe to cover the country’s bills.

The deal resulted in a spending agreement to cap government funding subject to Congress’s annual appropriations process for fiscal 2024 and 2025. But there has been much debate as to how effective the deal has been in curbing spending, particularly as uncertainty swells around what funding could look like for much of next year amid rising anticipation over the presidential election.

Some of the biggest drivers of federal spending also fall outside of the annual appropriations process, including funding for programs like Social Security and Medicare that are often seen as a third rail in politics.

“If you’re thinking about balancing the budget or even reducing the deficit, mathematically, there’s essentially no way you can do that unless you deal with Medicare and Medicaid and Social Security,” Gleckman said. 

“And there’s hardly any politician out there who wants to do anything about Social Security or Medicare, there are few of them that want to do something about Medicaid, but they talk so vaguely about it, there’s no way to really know what they’re talking about,” he said. 

There have been some broader bipartisan discussions in the current Congress around ways to shore up solvency for Social Security in particular that have gotten attention in the past year. 

But some lawmakers involved in those talks have been pessimistic about changes in the near future, often citing election-year politics. 

Some Republicans have shown appetite in the past for using the debt limit as a means to secure leverage for potential changes to entitlement programs. But there is doubt among experts about the chances of such changes, particularly if the party wins control of Congress and the White House without having to contend with a Democratic House or Senate.

“If Trump were to win the election … and the Republicans were to take control of Congress, then I think they would just extend the debt limit,” said Martin Neil Baily, senior fellow emeritus at the Brookings Institution, while predicting a higher chance of constraint if Harris were to win with a Republican-led Congress.

“I think eventually that would be resolved in some way, but it might, it might involve limiting some of the things that she would want to do,” he said. But he added, at some point, “increases in the debt are going to get us into trouble.”

“It’s going to show up in higher interest rates and the gradual loss of confidence, especially from overseas, in U.S. debt, and that could be quite serious.”