June 27 — Presumptive Republican presidential nominee Donald Trump's proposals would add more than $11 trillion to the national debt compared to current law, according to an analysis by a bipartisan anti-budget deficit group.
The 56-page report, issued June 26 by the Committee for a Responsible Federal Budget, said campaign proposals by Hillary Clinton, Trump's presumptive Democratic opponent, would also add to the debt, but by a much smaller amount.
CRFB President Maya MacGuineas said that, even under current law, the trajectory for the federal debt—which is projected to be 85.6 percent of the size of the economy in 2026—is not sustainable, much less adding to that total.
“We're very concerned about all the ways that affects the economy, in terms of slowing growth, slowing wages,” she told reporters in a conference call. “It affects the budget, squeezes out many other important priorities in the budget,”
In the report, the CRFB said Trump's proposals would add $11.55 trillion to the debt over 10 years, with most of it coming from reduced revenues stemming from his tax plans. The CRFB said that would cost about $9.25 trillion, while Trump's proposed spending increases would total $600 billion over that time frame. An additional $1.7 trillion in interests costs would bring the cumulative increase to $11.5 trillion.
Clinton's proposals would also add to the 10-year debt, CRFB said, but to a much smaller degree. The CRFB report said Clinton's proposals would increase spending by about $1.4 trillion over 10 years, while her tax proposals would raise about $1.2 trillion in new revenues. Combined with $50 billion in extra interest costs, the cumulative total would be about a $250 billion 10-year boost to the debt.
Measured as a percentage of gross domestic product, a metric that many economists say better describes the debt burden, the Clinton proposals would increase debt from 86 percent of GDP to 87 percent, while Trump's proposals would increase debt to 127 percent of GDP.
The CRFB said few of the costs of Trump's proposed tax cuts had identifiable offsets elsewhere, while Clinton had generally done a good job of specifying how her extra spending would be paid for, though it was often with tax increases on upper-income earners.
Inquiries to both campaigns for responses to the report were not returned.
Trump supporters in the past have said faster economic growth resulting from the tax cuts would mean the actual revenue losses would be smaller than is customarily estimated (See previous story, 05/12/16).
Marc Goldwein, the CRFB's said the report's central tendency estimates were done with conventional scoring that accounts for changes in behavior, but it didn't include the impact of changes in the economy—so-called macroeconomic feedback—on the budget. But he said those feedback effects were likely negative in both cases, due to the rise in debt.
In the report, the CRFB said Clinton's plan would require annual economic growth of 2.9 percent and Trump's plan would require a 4.7 percent annual growth rate to provide the macroeconomic feedback boost to stabilize the debt. In contrast, the nonpartisan Congressional Budget Office has said the long-term growth trend is about 2.1 percent annually.
In a related development, a report by consulting firm Ernst & Young said dramatic cuts in federal spending or sharp increases in federal revenue would be needed to reduce debt to its historical average over the next 50 years.
The report, prepared for the anti-deficit Peter G. Peterson Foundation, said spending cuts or revenue increases of 11 percent would be needed to close the 50-year “fiscal gap,” the amount of needed fiscal changes over a specific time period to hit a specific debt target.
“Although there is considerable uncertainty in projections so far out into the future, CBO projections are suggestive of the general trend of the federal government’s current fiscal imbalance. The increasing annual deficits and corresponding accumulation of debt that result from this imbalance can have substantial negative consequences for the U.S. economy,” EY said in the 21-page report.
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