Former President Trump and Vice President Harris are offering a flurry of ideas on spending and taxes that are fueling concerns on Capitol Hill that there’s no end in sight for huge annual deficits.
Trump’s reversal on capping state and local tax deductions, a key part of his tax reform legislation, is just the latest expensive proposal to emerge on the campaign trail.
Trump has proposed $8 trillion in tax cuts over the next decade, which he would offset with only $900 billion in revenue from reversing Biden-era clean energy tax breaks and $4 trillion in new tariffs, according to the nonpartisan Tax Foundation.
Harris has called for raising taxes on the wealthy, but she’s also pushing expensive ideas, such as $25,000 down payments for first-time homebuyers and $50,000 tax cuts for entrepreneurs.
In all, her proposals would increase the deficit by $1.5 trillion over 10 years, experts say.
The exploding costs of both candidates’ policy platforms have experts predicting annual deficits of $2 trillion well into the future.
“The powers that be, other than a handful of us, are not that concerned about the debt. That’s just a fact,” Sen. Rand Paul (R-Ky.) said.
“I think both parties have been terrible and both parties are about equally responsible for the debt. The Trump administration added $8 trillion in debt. The Biden-Harris administration will add $8 trillion debt. It’s almost equal,” Paul said. “Neither of them have proposed much in spending cuts or in spending restraint.”
Paul said Trump’s record on deficit spending is one of the reasons he hasn’t yet endorsed his presidential campaign.
Some Democrats are also disappointed with the huge prospective tab Trump and Harris are running up on the campaign trail as they woo voters with promises of lavish spending and costly tax breaks.
“No one is talking about having $35.5 trillion of debt. It’s just absolutely a shame and it’s beyond my comprehension why no one is even talking about it,” said Sen. Joe Manchin (W.Va.), a longtime Democrat who recently became an independent.
“Every household cares about it. … But not here. No one cares. All they care about is trying to get more votes and spend more money,” he said of the lack of interest among most Democratic and Republican colleagues in trying to rein in the deficit. “It’s just a shame.”
Sen. Jon Tester (D-Mont.), who is in a tough race for reelection, said he’s open to shielding tipped wages from taxes and raising the cap on state and local tax (SALT) deductions but doesn’t want to add further to the debt.
“The real question here is what the next tax package is going to look like,” he said. “We need to make sure that tax package doesn’t end up adding to the debt.”
As for the spiraling deficit projections over the next decade, Tester acknowledged: “Both sides are guilty.”
The Congressional Budget Office projected in June that the annual budget deficit will reach $1.9 trillion by the end of this year and eventually climb to $2.9 trillion in 2034.
The agency projects cumulative deficits from 2025 to 2034 to total $22.1 trillion, which would take the national debt held by the public to more than $50 trillion by the middle of the next decade.
“In the near term, I don’t have a lot of optimism. On the spending side, there’s virtually no talk of addressing the big drivers” of deficits, said Erica York, senior economist and research director at the Tax Foundation’s Center for Federal Tax Policy.
The Tax Foundation estimates extending Trump’s signature tax reform law, the 2017 Tax Cuts and Jobs Act (TCJA), which is a top Republican priority, will cost $4.2 trillion over the next 10 years.
On top of that, Trump this week proposed repealing the cap on SALT deductions, which was included in the 2017 tax law to keep its cost in check.
That proposal would cost between $1.06 trillion and $1.2 trillion over the next decade, according to tax policy experts.
In addition, Trump and Harris have called for exempting tipped income from taxation, which would increase deficits by between $100 billion and $200 billion over 10 years.
Trump has even floated the idea of shielding Social Security benefits from taxes, which would increase deficits by $1.6 trillion to $1.8 trillion over 10 years, according to an analysis by the Committee for a Responsible Federal Budget.
“On the tax side, we’re just seeing tax cut promises pile up. We’re not even having a debate about, ‘Hey, should we offset some of the cost of the TCJA extension,’ we’re having a debate about how many tax cuts we can pile on top of the TCJA extension. It’s going in the exact wrong direction,” York said.
Trump has also floated some potentially costly spending ideas, such as having the federal government pay for in vitro fertilization treatments.
To help pay for his ideas, Trump and his Republican allies on Capitol Hill have talked about getting rid of the clean energy tax credits enacted in President Biden’s 2022 Inflation Reduction Act. Doing so would raise about $900 billion in revenue.
Trump is also proposing raising almost $4 trillion in tariffs, including 60 percent tariffs on imports from China and 20 percent tariffs on imports from other countries.
“If that was fully pursued, like 60 percent tariffs on China plus 20 percent tariffs on absolutely everything [else], you could maybe get not quite $4 trillion out of that,” York said. “It’s still an increase in the deficit of almost $4 trillion over the next decade.”
Trump’s proposal to eliminate the cap on SALT deductions is already running into opposition from Republicans on Capitol Hill.
“I think most Republicans are not in support of it. We actually supported the elimination of the SALT deduction because it subsidizes high-tax states. We shouldn’t be doing that,” Sen. Ron Johnson (R-Wis.) said.
And Republican lawmakers are also skeptical of Trump’s plan to dramatically increase tariffs on foreign imports, warning the costs will be passed on to consumers.
“Tariffs are unfortunately sometimes necessary when you have countries like China dumping their products, like steel, in the United States, but I don’t think we should be under [the] illusion that that’s cost free. The costs of those tariffs get passed on to consumers. And that’s a concern,” Sen. John Cornyn (R-Texas) said.
Harris has proposed increasing taxes by $4.1 trillion from 2025 to 2034, but after factoring in reduced revenue from lower economic growth, her proposals would increase net revenues by $642 billion over 10 years, according to the Tax Foundation.
That’s not enough to pay for her ambitious agenda, which includes expanding the child tax credit, expanding the earned income tax credit, exempting tipped income from taxes and extending health insurance premium tax credits established under the Affordable Care Act.
The Tax Foundation estimates Harris’s proposals would add $1.5 trillion to deficits over the next 10 years while the Penn Wharton Budget Model estimates $1.2 trillion to deficits, and as much as $2 trillion to the deficits when accounting for negative economic feedback effects.