Trump and Biden: The National Debt – Committee for a Responsible Federal Budget
The national debt is on course to reach a record share of the economy under the next presidential administration, due in part to policies approved by Presidents Trump and Biden during their time in office, including executive actions and legislation passed by Congress.
While it is important to understand the fiscal impact of the promises candidates make on the campaign trail – particularly because they reflect the candidates’ own policy preferences and are not impacted by unexpected external events or the actions of Congress – the fact that both leading candidates have served as President also allows for a comparison of their actual fiscal records. This analysis focuses on the estimated ten-year debt impact of policies approved by Presidents Trump and Biden around the time of enactment.1 In this analysis, we find:
In companion analyses, we will show:
Note: bipartisan indicates legislation passed with votes from both political parties in either chamber of Congress. *Includes $23 billion of executive actions in the form of student debt payment pauses.
During his four-year term in office, President Trump approved $8.4 trillion of new ten-year borrowing above prior law, or $4.8 trillion when excluding the bipartisan COVID relief bills and COVID-related executive actions. Looking at all legislation and executive actions with meaningful fiscal impact, the full amount of approved ten-year borrowing includes $8.8 trillion of deficit-increasing laws and actions offset by $443 billion of deficit-reducing actions.2
These estimates are based on scores of legislation and executive actions rather than retrospective estimates. Scores are generally made on a conventional basis, though the Tax Cuts and Jobs Act (TCJA) is scored dynamically. The actual debt impact of the policies was likely somewhat higher than these scores. In particular, the TCJA likely reduced revenue more than projected and saved less from repealing the individual health care mandate penalty,3 while the Employee Retention Credit was likely far more expensive than originally estimated.
Sources: CRFB estimates based on CBO and OMB projections.
The major actions approved by President Trump (and ten-year impact with interest) include:
Over his first three years and five months in office, President Biden has approved $4.3 trillion of new ten-year borrowing, or $2.2 trillion when excluding the American Rescue Plan Act. This includes $6.2 trillion of deficit-increasing legislation and actions, offset by $1.9 trillion of legislation and actions scored as reducing the deficit.
These estimates are based on scores of legislation and executive actions rather than retrospective estimates and do not include preliminary rules, unexecuted “side deals,” or actions ruled illegal by the Supreme Court. Updated scores and in-process actions would increase the total. For example, an updated estimate would likely wipe away the $252 billion of scored savings from the Inflation Reduction Act,4 the informal FRA side deals would reduce its savings by about $500 billion, and the new student debt cancellation plan could cost $250 to $750 billion.
Sources: CRFB estimates based on CBO and OMB projections.
The major actions approved by President Biden so far (and ten-year impact with interest) include:
The next presidential term will present significant fiscal challenges. While past performance is not necessarily indicative of future actions, it is helpful to examine the fiscal performance from each President’s time in office for clues as to how they plan to confront these challenges or how high of a priority fiscal responsibility will be on their agendas.
Both candidates approved substantial amounts of new borrowing in their first term. President Trump approved $8.4 trillion in borrowing over a decade, while President Biden has approved $4.3 trillion so far in his first three years and five months in office. Of course, accountability also rests with Congress as a co-equal branch of government, which passed legislation constituting the majority of the fiscal impact under both presidents.
Some of this borrowing was clearly justified, particularly in the early parts of the COVID-19 pandemic when joblessness was rising rapidly and large parts of the economy were effectively shut down. However, funding classified as COVID relief explains less than half of the borrowing authorized by either President, and arguably, a meaningful portion of this COVID relief was either extraneous, excessive, poorly targeted, or otherwise unnecessary.5
In supplemental analyses, we will compare a number of other aspects of the candidates’ fiscal records.
During the next presidential term, the national debt is projected to reach a record share of the economy, interest costs are slated to surge, the debt limit will re-emerge, discretionary spending caps and major tax cuts are scheduled to expire, and major trust funds will be hurtling toward insolvency.
Adding trillions more to the national debt will only worsen these challenges, just as both Presidents Trump and Biden did during their terms along with lawmakers in Congress. The country would be better served if the candidates put forward and stuck to plans to reduce the national debt, secure the trust funds, and put the budget on a sustainable long-term path.
This analysis estimates the additional borrowing approved by Presidents Trump and Biden through tax and spending changes passed by Congress or contained in executive actions from their administrations. It does not estimate the amount of debt that accumulated over their terms, which partially reflects actions taken prior to their time in office and does not account for the fiscal impact of the actions approved by the President but incurred outside of his four-year term. We will publish changes in debt during their terms in a supplemental analysis.
Our analysis incorporates all major pieces of legislation and executive actions – those with more than $10 billion of ten-year budget impact – approved by Presidents Trump and Biden. Estimates rely on ten-year budget scores, as under standard convention. In order to rely on official scores wherever possible, however, all estimates are based on the ten-year budget window at the time of enactment – meaning different policies cover different time frames and thus are not purely additive or comparable.
In general, estimates rely on official estimates from the Congressional Budget Office (CBO) and Joint Committee on Taxation (JCT) presented prospectively. When such scores are not available or not comprehensive, we may use estimates from the Office of Management and Budget, the regulatory agencies, or our own estimates.
Estimates are not updated to incorporate data and results made available well after implementation; no legislation signed by either President Trump or President Biden has been re-estimated in full to incorporate observed costs or effects, and partial updates would bias the overall numbers. However, possible differences between initial scores and actual costs, including from the TCJA, the IRA, and COVID relief, are discussed throughout this paper.
Estimates incorporate impact on interest costs, which we calculate using the most recent CBO debt service tool at the time of enactment, unless interest impact is included in the estimate. Estimates are generally based on conventional scoring, but in the case of the Tax Cuts and Jobs Act, we incorporate macroeconomic impacts as estimated by CBO shortly after enactment.
All estimates are in nominal dollars at the time of approval, which means deficit impact from earlier budget windows generally represent a larger share of GDP per dollar due to higher price levels and output over time.
Finally, the estimates are based on the policies as written and do not try to correct for arbitrary cliffs, side agreements, or other budget gimmicks that may create a misleading picture of the intended fiscal impact of the policy.
1 Our estimates compare ten-year estimates of each action before implementation, generally using prospective scores of policies and adding them together despite being over different windows. Although this is not a perfect apples-to-apples comparison for a variety of reasons, it allows us to rely on official numbers and continue to compare over time. See the methodology section for a more detailed explanation.
2 Many pieces of legislation with fiscal impact include tax and spending changes that both add to and reduce projected deficits. The $8.8 trillion figure is based on the net deficit impact of deficit-increasing bills, rather than the gross deficit increases within those bills. For example, the $1.9 trillion impact of the TCJA represents the combination of tax cuts, base broadening, lower spending as a result of repealing the individual mandate penalty, interest, and dynamic effects on revenue and spending.
3 The larger deficit impact from the TCJA is due to a combination of a larger nominal tax base, lower health savings from individual mandate repeal, the unexpected use of a SALT cap workaround, reduced revenue collection from the limit on pass-through losses, higher revenue loss related to bonus depreciation, and other factors.
4 Due to higher prices and output, greater demand for subsidized activities, and laxer-than-expected regulations, the IRA’s energy provisions are now expected to have a fiscal impact of $660 billion – about two-thirds more than the original estimate of roughly $400 billion. This excludes the effects of the Administration’s vehicle emissions rule, which we’ve scored separately. At the same time, revenue collection under the IRA is also likely to be higher in light of higher-than-projected nominal corporate profits, greater expected voluntary tax compliance, and less-than-expected responsiveness to the buyback tax. Overall, we believe a re-estimate of the IRA would be roughly budget neutral. The emissions rule approved by President Biden would increase deficits by about $170 billion – mainly by further increasing the fiscal impact of the IRA tax credits – and is included in our tally of his executive actions.
5 In a previous analysis, we estimated that $500 to 650 billion of COVID relief was extraneous – unrelated to the pandemic or subsequent economic fallout – including $300 to $335 billion enacted under President Trump and $200 to $315 billion under President Biden. These prior estimates are not perfectly comparable to estimates in this paper but give a sense of scale. In additional analyses, we estimated that the American Rescue plan likely significantly overshot the output gap it was aiming to close while providing excessive relief to a number of sectors. There were also excesses and lack of targeting in earlier COVID relief packages, including as it related to stimulus checks, the additional $600 of weekly unemployment benefits, and the Paycheck Protection Program.