Trump’s ‘Truly Reckless’ Social Security Plan

The Fiscal Records of Kamala Harris and Tim Walz

Just days into their run for office, Vice President Kamala Harris and Minnesota Gov. Tim Walz have not yet released any detailed policy proposals, but their track records give us a sense of the kinds of policies they might pursue in office.

Harris doesn’t have much of a distinct fiscal record to run on, though her campaign told The New York Times on Friday that she will stick close to the policies proposed by President Joe Biden in his latest budget, which called for some $3 trillion in net deficit reduction over the next decade paid for by higher taxes on corporations and top earners.

The Tax Policy Center’s Nikhita Airi wrote this week that some of the key questions for a Harris fiscal platform include how she proposes to raise revenues, what she plans to do about the expiring 2017 tax cuts, her approach to tariffs and her support for enhanced funding for the IRS.

Walz, by contrast, has been a governor for nearly six years and has a fiscal record that includes increased tax credits as well as tax hikes. Some highlights, as discussed by Richard C. Auxier of the Urban-Brookings Tax Policy Center:

* The largest child tax credit in the U.S.: Minnesota increased its child tax credit in 2021, raising it to $1,750 per child. Thanks to relatively broad eligibility rules, the fully refundable credit is available to a significant number of families in the state.

* Tax cuts for Social Security recipients: In 2023, Minnesota eliminated income taxes on Social Security benefits for single filers earning less than $78,000 and married filers earning less than $100,000 per year. The policy costs the state $250 million to $300 million per year, or about 1% of revenues.

* Tax increases for high-income households and corporations: A tax package Walz signed in 2023 provided a tax cut overall but included some tax increases. Among other things, the bill limited deductions for households earning more than $220,000 per year and created a new tax on capital gains. It also imposed a minimum tax on corporations operating in the state.

* A payroll tax to fund paid leave program: Walz created a payroll tax of 0.7% to fund a new family and medical paid leave program, the first in the Midwest.

* Pot tax: Marijuana sales will be legal in Minnesota starting in 2025, and Walz approved a 10% tax on sales of legal weed.

Editorial of the Day: Trump’s ‘Truly Reckless’ Social Security Plan

The Washington Post’s fiscally minded editorial board takes Donald Trump to task for his recent proposal to eliminate income taxes on Social Security benefits. The editors write that the former president’s repeated statements that he wouldn’t touch Social Security or Medicare effectively ruled out any realistic efforts to address the national debt — and that Trump’s latest idea would exacerbate the fiscal picture: “Mr. Trump has taken his pandering to new and truly reckless heights, with proposals that would go beyond merely tolerating an unsustainable status quo to making it even worse.”

The Post editors point to an analysis by the Committee for a Responsible Federal Budget, which advocates for deficit reduction, that concluded that Trump’s plan would reduce government revenues by as much as $1.8 trillion over 10 years. Another analysis found that lower-income households would see little or no benefit from the plan since most of their Social Security benefits are already untaxed.

The editors warn that Trump’s plan would accelerate the insolvency of Social Security and Medicare and that a Project 2025 plan to make Medicare Advantage the default option in the government health insurance plan for seniors would also make it harder to rein in federal outlays.

In short, the Post says: “The GOP has gone from trying to cut entitlements to proposals that would make them financially unsustainable.”

Childhood Vaccinations Have Delivered Huge Benefits Over 3 Decades: Report

Routine childhood vaccinations have benefitted the public immensely over the past three decades, in both economic and health terms, according to a new analysis by the Centers for Disease Control and Prevention.

The report assesses the effects of nine routine childhood immunizations in children born from 1994 through 2023. The timeframe reflects the 1994 establishment by Congress of the Vaccines for Children program, which provides vaccines at no cost for children whose families might not otherwise be able to afford the immunizations.

The results, factoring in children who were and were not eligible for that program, are staggering. From the report:

Chart of the Day: Driving the Economy

As global financial markets continue to recover most of the losses recorded earlier this week due in part to worries about a faltering economy, some analysts are highlighting the strengths they see in the U.S.

“The so-called growth scare is looking more overdone by the day,” Joseph Brusuelas, chief economist at RSM, wrote Friday. “Just a reminder that real final private demand - my proxy for the real economy, which excludes volatile inventories, trade & government consumption - was up 2.6% through mid year. The economy is not falling off a cliff nor does it look like it will in the near term. Cooling and contraction across the economy are not the same thing.”

The chart below shows some of the data Brusuelas is relying on to back up his analysis. “With prime aged population employment at multi-decade highs & rate cuts on the way the American economy is not in recession nor is one imminent,” he wrote on X.

Fiscal News Roundup

• Trump’s Tax Plan Could Add Trillions in Debt. Harris’s Is a Mystery – New York Times
• Trump’s Plans Stir Fears for Fed Independence, Inflation – Wall Street Journal
• Trump Wants to Cut Taxes on Social Security — but It Could Threaten Benefits, Experts Say – CNBC
• Trump Heads to Montana in a Bid to Oust Sen. Tester After Failing to Topple the Democrat in 2018 – Associated Press
• Now Atop the Ticket, Harris Pivots From Some Progressive Policies – Axios
• Harris Campaign Calls Trump "Too Lazy" to Campaign in Swing States – CNN
• US Releases $3.5 Billion to Israel to Spend on US Weapons and Military Equipment, Months After Congress Appropriated – CNN
• VA Budget Shortfall Could Deepen 2025 Funding Headaches – The Hill
• ‘Sitting Empty': Vast Expanse of Federal Land Eyed for New Housing – Politico
• The Swing-State Economic Realities Shaping the US Election – Bloomberg
• Republican States Challenge Biden Effort to Extend Obamacare Coverage to DACA Recipients – CNN
• The World’s Priciest Drug May Save Lives. Can Kids Get It in Time? – Washington Post
• Fed Seen Rejecting Calls for Jumbo Rate Cut in Economist Survey – Bloomberg
• IRS Will Resume Processing New Pandemic Tax Credit Claims From Employers – Washington Post
• Meet America's Newest Giant Pandas, Yun Chuan and Xin Bao – Associated Press

Views and Analysis

• Trump Won’t ‘Touch’ Social Security and Medicare. But He Might Destabilize Them – Washington Post Editorial Board
• Trump Would Face Constraints in Remaking the Federal Reserve if Elected – Neil Irwin, Axios
• The Real Reason Trump and Vance Hate Being Called ‘Weird’ – Jamelle Bouie, New York Times
• Five Unanswered Questions About Kamala Harris’s Tax Agenda – Nikhita Airi, Tax Policy Center
• The Tax Policy Record of Minnesota Gov. Tim Walz – Richard C. Auxier, Tax Policy Center
• Walz’s Fiscal Record Veered From Moderate to Progressive Champion – Caitlin Reilly, Roll Call
• Could A Bigger Tax Credit Boost Employer-Provided Child Care? – Renu Zaretsky, Tax Policy Center
• How SALT May Shake Up the 2025 Tax Debate – Andrew Lutz, Bipartisan Policy Center
• The Politics Holding Back Medicaid Expansion in Some Southern States – Drew Hawkins, Gulf States Newsroom
• A Market Hiccup With a Message About Fed Meddling – George F. Will, Washington Post
• Both Parties Have a Chance to Appeal to American Workers — but Will They Take It? – Oren Cass, Financial Times
• An Idea for Trump: Make Government Work Again – Wall Street Journal Editorial Board
• Maybe Legalizing Weed Wasn’t Such a Great Idea – Tyler Cowen, Bloomberg