The Impact of Presidents Biden and Trump on the National Debt Revealed

Executive Actions and the National Debt

A new report by the Committee for a Responsible Federal Budget (CRFB) has analyzed the fiscal policies of Presidents Joe Biden and Donald Trump, shedding light on their contributions to the ballooning national debt. According to the report, both presidents added trillions of dollars to the 10-year debt, with Trump’s administration approving $8.4 trillion of new borrowing and Biden approving $4.3 trillion.

The CRFB analysis took into account key actions and their 10-year impact, including interest. Excluding pandemic-era stimulus and relief packages, Trump’s pre-pandemic borrowing was fueled by the Tax Cuts and Jobs Act, Bipartisan Budget Acts, and Affordable Care Act Tax Delays and Repeals. These actions added up to $4.8 trillion in new borrowing.

On the other hand, Biden’s borrowing, excluding the American Rescue Plan, was driven by appropriations for fiscal years 2022 and 2023, the Honoring Our PACT Act, and the Bipartisan Infrastructure Law. These actions accounted for $2.2 trillion in new borrowing.

Interestingly, the analysis also revealed that executive actions played a significant role in adding to the debt. Biden’s executive actions contributed $1.2 trillion to the 10-year debt, with a major portion dedicated to student debt forgiveness. In contrast, Trump’s executive actions added less than $20 billion to the debt on net.

The report highlighted that under Biden, 71 percent of new debt came from unilateral decisions, while 29 percent was based on bipartisan laws. This is in contrast to Trump’s term, where 77 percent of new debt originated from bipartisan legislation and 23 percent was attributed to executive decisions.

Future Fiscal Challenges

The report concluded that the next presidential term will present significant fiscal challenges. Both Trump and Biden’s contributions to the national debt will worsen these challenges. The report emphasized the need to address these issues as adding trillions more to the national debt will only exacerbate the situation.

New CBO Outlook

The Congressional Budget Office (CBO) recently updated its economic and budget outlook for 2024-2034. The projections indicate that the federal deficit is expected to be $1.9 trillion for fiscal year 2024, up from the previous estimate of $1.5 trillion. This increase is mainly driven by factors such as student-loan forgiveness, emergency aid, and Medicaid boosts.

Looking ahead, the U.S. government is projected to run a $2.8 trillion budget shortfall by 2034, with cumulative deficits reaching $22 trillion over the next decade. If the nation avoids a recession or major military conflict, the national debt is anticipated to surpass $50 trillion in the next 10 years.

The CBO report also highlighted the significant role of interest costs in the country’s growing debt and deficits. By 2034, annual interest charges are predicted to exceed $1.7 trillion, totaling around $13 trillion cumulatively. This will result from rising spending for Social Security and Medicare, higher interest rates, and mounting debt.

Trump-Era Tax Cuts in Focus

The expiration of the Trump-era tax cuts has sparked intense debate during the election cycle. The CBO estimates that extending the tax policy would add as much as $3.3 trillion to deficits over the next decade. The Peter G. Peterson Foundation suggests an even higher cost of $4.6 trillion due to net interest costs.

The extension of these tax cuts would significantly increase federal deficits that are already projected to grow over the next 10 years. This would worsen the imbalance between federal spending and revenues. Allowing the tax provision to persist would ensure that the debt continues to rise, resulting in even lower revenue.

President Biden has pledged to end the Trump-era tax breaks and has promised not to raise taxes for anyone making less than $400,000. In contrast, former President Trump has stated that if elected to a second term, he would implement across-the-board tax cuts for all classes.

In conclusion, the CRFB’s analysis provides valuable insights into the contributions of Presidents Biden and Trump to the national debt. It highlights the need to address the growing debt and fiscal challenges in the next presidential term. The CBO’s updated outlook further emphasizes the role of interest costs and projects significant deficits in the coming years. The expiration of the Trump-era tax cuts adds another layer of complexity to the issue, with potential consequences for federal revenues and the debt. As the nation navigates these challenges, it is crucial to find a balance between spending, revenue generation, and long-term fiscal sustainability.