The Cost of the Trump and Biden Campaign Plans
US Budget Watch 2020
October 7, 2020
Read the full paper, including details of both candidates'' plans
Whoever is inaugurated on January 20, 2021, will face many fiscal challenges over his term. Under current law, trillion-dollar annual budget deficits will become the new normal, even after the current public health emergency subsides. Meanwhile, the national debt is projected to exceed the post-World War II record high over the next four-year term and reach twice the size of the economy within 30 years. Four major trust funds are also headed for insolvency, including the Highway and Medicare Hospital Insurance trust funds, within the next presidential term.
The national debt was growing rapidly before the necessary borrowing to combat the COVID-19 crisis, and this trajectory will continue after the crisis ends. Fiscal irresponsibility prior to the pandemic worsened structural deficits that were already growing due to rising health and retirement costs and insufficient revenue.
The country's large and growing national debt threatens to slow economic growth, constrain the choices available to future policymakers, and is ultimately unsustainable. Yet neither presidential candidate has a plan to address the growth in debt. In fact, we find both candidates' plans are likely to increase the debt.
Under our central estimate, we find President Donald Trump's campaign plan would increase the debt by $4.95 trillion over ten years and former Vice President Biden's plan would increase the debt by $5.60 trillion. Debt would rise from 98 percent of Gross Domestic Product (GDP) today to 125 percent by 2030 under President Trump and 128 percent under Vice President Biden, compared to 109 percent under current law.
Based on our low-cost and high-cost estimates, Trump's plan could increase the debt by between $700 billion and $6.85 trillion through 2030, while Biden's plan could reduce debt by as much as $150 billion or increase it by as much as $8.30 trillion.
These estimates are based on our best understanding of the candidates' proposals, assume policies are enacted immediately, and exclude any COVID-19 relief proposals.
* * *
This paper is part of US Budget Watch 2020, a project covering the 2020 presidential election. In the coming weeks and months, we will continue to publish analyses of candidate proposals that are having the greatest impact on the debate over our nation's future. You can read more of our policy explainers and factchecks here. US Budget Watch 2020 is designed to inform the public and is not intended to express a view for or against any candidate or any specific policy proposal. Candidates' proposals should be evaluated on a broad array of policy perspectives, including but certainly not limited to their approaches on deficits and debt.
What Do the Candidates Propose and How Do the Numbers Add Up?
President Donald Trump has issued a 54 bullet point agenda that calls for lowering taxes, strengthening the military, increasing infrastructure spending, expanding spending on veterans and space travel, lowering drug prices, expanding school and health care choice, ending wars abroad, and reducing spending on immigrants. He also has proposed a "Platinum Plan" for black Americans, which increases spending on education and small businesses.
Meanwhile, Vice President Joe Biden has proposed a detailed agenda to increase spending on child care and education, health care, retirement, disability benefits, infrastructure, research, and climate change, while lowering the costs of prescription drugs, ending wars abroad, and increasing taxes on high-income households and corporations.
Under our central estimate, both plans would add substantially to the debt. Specifically, we find the Trump plan would add $4.95 trillion to the debt over the 2021 to 2030 budget window, while the Biden plan would add $5.60 trillion.
While these costs exclude the effects of spending to address the current pandemic and economic crisis, they include other one-time spending - such as infrastructure investment - that doesn't add to deficits in future decades. Excluding these temporary policies, the Biden plan would cost $2.35 trillion and the Trump plan $2.45 trillion under our central estimate.
These findings come with a large degree of uncertainty, both because the estimates themselves vary and because the details of the candidates' proposed policies are often unclear. This is especially true for the Trump campaign, whose agenda contains very little detail. Therefore, we generated low-cost, central, and high-cost estimates for each candidate.
Under our low-cost estimate, which in many cases relies on campaign-provided figures, we estimate the Trump plan would increase deficits by $700 billion, while the Biden plan would reduce deficits by $150 billion.
Under our high-cost estimate, we find the Trump plan would increase deficits by $6.85 trillion, while Biden's proposals would increase deficits by $8.30 trillion.
In terms of details, we estimate Biden would spend $2.70 trillion on child care and education, $2.05 trillion on health care, $1.15 trillion on Social Security, Supplemental Security Income (SSI), and retirement, and $4.45 trillion on infrastructure, environment, and other domestic spending under our central estimate. We also estimate that Biden's defense and immigration policies would save $750 billion, while his tax policies would raise $4.30 trillion and interest costs would increase by $300 billion.
Meanwhile, we estimate Trump would increase spending on education and child care by $150 billion, increase infrastructure and other domestic spending by $2.70 trillion, and security and immigration enforcement spending by $300 billion under our central estimate. He would cut taxes by $1.70 trillion, reduce federal health spending by $150 billion, and leave Social Security and retirement spending unchanged. We estimate $250 billion of interest costs under the Trump agenda.
Because the Trump campaign's 54 bullet points and platinum plan are relatively vague, we rely on the President's budget proposals, previous statements, and more detailed proposals from others to interpret these bullets. By contrast, the Biden campaign website features 48 different plans, most of which include dozens of individual policy proposals that overlap in some cases. We identified more than 800 distinct proposals.
In both cases, considerable policy ambiguity exists. Our low-cost and high-cost estimates attempt to capture some degree of this uncertainty.
Under the candidates' plans, debt will continue to grow over the next decade and beyond. Debt has already grown from 39 percent of the economy in 2008 to 76 percent in 2016, and is estimated to reach 98 percent by the end of FY2020. Under current law, the Congressional Budget Office (CBO) projects debt will continue to rise to 109 percent of GDP by 2030.
Our central estimate of the Trump plan finds debt would rise to 125 percent of the economy by 2030, excluding the effects of further COVID relief. Under our central estimate of the Biden plan, debt would rise to 128 percent of the economy by 2030, again excluding COVID proposals. For context, the standing historical record for debt is 106 percent of GDP, set just after World War II.
The actual debt impact from both campaign agendas could be higher or lower. Under our low-cost scenario, we estimate the Trump and Biden plans would result in debt of 111 percent and 108 percent of the economy in 2030, respectively, with debt declining modestly as a share of the economy after 2025 under the Biden plan. Under our high-cost scenario, debt would rise to 131 percent of the economy under the Trump proposals and 138 percent under the Biden proposals.
These estimates assume policies are implemented immediately, which leads them to overstate the potential debt impact relative to a more likely implementation timeline. On the other hand, these estimates exclude the cost of any further economic or public health spending related to the current crisis. A $3.00 trillion COVID relief package, for example, would increase debt by 10 percent of the economy in 2030. Our estimates also assume lawmakers follow the current law baseline outside of the candidates' proposals, allowing several policies to expire or otherwise be more favorable in terms of deficit effect than they have been in recent years.
Donald Trump's Second Term Agenda
President Donald Trump's 2020 Presidential campaign has not released a formal policy agenda. Instead, it issued a set of bullet point principles and goals as part of a release entitled Trump Campaign Announces President Trump's 2nd Term Agenda: Fighting For You! and an additional Platinum Plan to support the Black community.
Among the 54 bullet points in the core agenda, we identified 22 with a likely fiscal impact that are unrelated to the COVID crisis (we will be estimating the candidates' COVID policies separately). We identified several additional policies with fiscal impact in the Platinum plan.
Our analysis exclusively aims to estimate policies outlined in these bullet points, though they provide insufficient detail to score (for example, one policy reads "Cut Taxes to Boost Take-Home Pay and Keep Jobs in America"). We therefore turn to the President's budget proposals, speeches, and other policy proposals to determine the possible meaning of the bullet points.
Based on our assumptions of the campaign proposals, in our central estimate we find the Trump plan includes $5.45 trillion of spending increases and tax cuts, partially offset by $750 billion of savings. In our low-cost estimate, $2.50 trillion of spending increases and tax cuts are coupled with $1.85 trillion of savings. In our high-cost estimate, $7.15 trillion of spending increases and tax cuts are partially offset by $650 billion of savings.
Incorporating the cost of debt service, we estimate President Trump's agenda would add between $700 billion and $6.85 trillion to the debt from 2021 through 2030, assuming immediate enactment. Under our central estimate, the agenda would add $4.95 trillion to the debt.
Importantly, this is not an analysis of the President's budget, which President Trump has put forward every year as mandated by law. The latest budget was proposed in February and scored by CBO to reduce deficits by just over $2.00 trillion over a decade. However, most of the policies in the budget are not mentioned or alluded to on the Trump campaign website, nor on the campaign trail. Some are not even specified within the budget itself. Furthermore, our analysis does not include policies discussed by President Trump but not mentioned or referenced on the campaign website.
See our detailed score of the Trump plan
Joe Biden's Vision
Former Vice President Joe Biden proposes a sweeping policy agenda that would dramatically increase spending and raise taxes. Details are outlined on his campaign website through a number of initiatives under the header Bold Ideas.
Specifically, Biden has put forward detailed proposals to increase spending on child care and education, expand and build upon the Affordable Care Act (ACA) (detailed in our paper, Understanding Joe Biden''s 2020 Health Care Plan), expand Social Security and Supplemental Security Income (SSI) benefits, combat climate change, protect the environment, invest in infrastructure, support American jobs, manufacturing, and innovation, expand access to affordable housing, provide paid family and medical leave, and address other issues.
To help offset the cost of his policy agenda, Vice President Biden has proposed numerous tax increases (mostly detailed in our paper, Understanding Joe Biden's 2020 Tax Plan) targeted at high-earners and corporations, military and health spending savings, and pro-growth immigration reform.
In total we have identified over 800 proposals on Biden's website, a majority of which we were able to estimate. To avoid double counting, we did our best to identify overlap between various proposals on his campaign website, but in some cases a lack of clarity forced us to make assumptions.
Based on these assumptions, we estimate Biden's initiatives would cost $11.10 trillion over ten years, partially offset by $5.80 trillion of revenue and savings, under our central estimate. Under our low-cost scenario, Biden's $8.95 trillion of proposals are more than offset by $9.15 trillion of revenue and savings. Under our high-cost estimate, $12.90 trillion of new spending is partially offset by $5.00 trillion of revenue and savings.
Incorporating the cost of debt service, we estimate Vice President Biden's agenda would reduce the debt by $150 billion or increase it by as much as $8.30 trillion between 2021 and 2030, assuming immediate enactment. Under our central estimate, Biden's agenda would add $5.60 trillion to the debt.
See our detailed score of the Biden plan
Even before the onset of the COVID-19 pandemic and subsequent global economic crisis, the federal government was on an unsustainable fiscal path. Trillion-dollar deficits had become the norm and were projected to push our debt-to-GDP level to an all-time record by early next decade.
Now, the COVID-19 pandemic and economic crisis has accelerated that timeline. The national debt is projected to exceed the size of the economy this fiscal year and grow to twice the size of the economy within 30 years. Furthermore, four major trust funds are headed toward insolvency, including the Highway and Medicare trust funds, within the next presidential term.
Under our central estimate, neither major candidate for President of the United States in 2020 has put forward a plan that would address our unsustainable fiscal path. Instead, both President Donald Trump and former Vice President Joe Biden have promoted policy agendas that would likely significantly add to annual deficits and increase debt-to-GDP over the next decade.
Specifically, we estimate President Trump's agenda would cost $4.95 trillion and increase the debt to 125 percent of GDP by 2030. We estimate Vice President Biden's proposals would cost $5.60 trillion and increase debt to 128 percent of GDP by 2030.
Both of these estimates come with a significant degree of uncertainty. Under our low-cost estimate, the Trump plan would only cost $700 billion over a decade, and the Biden plan would actually reduce deficits by $150 billion. Under these scenarios, debt would still rise from 98 percent of GDP today to 111 percent of GDP by 2030 under Trump and to 108 percent under Biden.
Under our high-cost estimate, debt would increase by $6.85 trillion under Trump, resulting in 2030 debt of 131 percent of GDP, and $8.30 trillion under Biden, resulting in 2030 debt of 138 percent.
While some of the candidates' policies are temporary and thus would not add to structural deficits, debt is likely to grow further over the long term under either candidate's plan. This high and rising debt could have significant economic, generational, fiscal and distributional consequences.
Other US Budget Watch Products
- Comparing President Trump's Record to His 2016 Agenda
- Understanding Joe Biden''s 2020 Health Care Plan
- Understanding Joe Biden''s 2020 Tax Plan
- President Trump has Signed $4.7 Trillion of Debt into Law
Read the full paper, including details of both candidates'' plans
Committee for a Responsible Federal Budget
1900 M Street NW
Washington, DC 20036