Happy Tuesday! Vice President Kamala Harris and Minnesota Gov. Tim Walz are set to return to the campaign trail with a two-day bus tour in Georgia starting tomorrow. They have also scheduled a joint interview with CNN’s Dana Bash on Thursday. The interview would be Harris’s first formal sit-down with a journalist since she entered the race last month and would fulfill her promise to arrange such a conversation before the end of August. Former President Donald Trump, meanwhile, has events planned in Wisconsin and Pennsylvania on Thursday and Friday.
Here’s your fiscal update.
Trump Economic Plans Would Cost More Than $4 Trillion: Analysis
An array of tax and spending proposals put forth by former President Donald Trump would raise the federal budget deficit by more than $4 trillion over the next 10 years, according to an analysis by the Penn Wharton Budget Model.
The Trump proposals were scored on both a static and dynamic basis, with the latter approach incorporating feedback loops from policy to the economy to tax revenues. On a conventional static basis, the Penn Wharton analysts estimated the 10-year cost of Trump’s proposals to be $5.8 trillion, while on a dynamic basis, the cost was estimated to be $4.1 trillion.
Here’s a breakdown, with costs provided on a static basis:
* Extending the individual tax cuts from the TCJA: Trump has vowed to extend the individual tax cuts from the 2017 Tax Cuts and Jobs Act, which are currently set to expire at the end of 2025. Doing so would cost an estimated $3.3 trillion between 2025 and 2034.
* Eliminating taxes on Social Security benefits: Trump has called for eliminating taxes on Social Security benefits, and the analysts found that doing so would cost $1.2 trillion over the next 10 years.
* Extending business tax provisions from the TCJA: Trump wants to restore more generous tax benefits for businesses, including deductions for corporate research and development costs. Doing so would cost an estimated $623 billion over 10 years.
* Lower the corporate tax rate: Trump has indicated that he wants to lower the corporate income tax rate from its current level of 21% and has raised the possibility that it could go as low as 15%. A reduction to that level would cost $595 billion over a decade.
The Penn Wharton analysts did not score Trump’s proposal to eliminate taxes on tipped income, because it involves too many unknowns at this point. “The 10-year budget cost could vary significantly depending on the ability to reclassify current sources of income as ‘tips’ to the mutual benefit of employers and employees,” the analysts wrote. “The ability to reclassify income is often a major source of revenue response in conventional tax scoring. As such, a considerable number of additional details would be needed to score this provision.”
The analysts did, however, provide a sense of who would benefit from Trump’s tax and spending proposals. While every income group would gain, some would do so more than others. The biggest winners would be very rich, with the top 1% taking home an additional $47,515 by 2034, and the top 0.1% gaining $214,935. Those in the bottom 20% of the income distribution, by comparison, would see an additional $465.
Quotes of the Day
“Hands down, VP Harris is being much more fiscally disciplined than President Trump.”
− Mark Zandi, chief economist at Moody’s Analytics, telling NBC News that the Harris camp is flipping the traditional script on partisan claims of fiscal responsibility.
NBC’s Sahil Kapur writes that “Harris is proposing to spend about $2 trillion and raise $5 trillion in tax revenues over a decade. Trump is calling for about $5 trillion in tax breaks and spending while raising less than $3 trillion in revenue through tariffs,” according to nonpartisan estimates. And the Harris camp is calling Trump’s agenda “an inflation and deficit bomb.”
“It’s a clear signal that whatever the policies, they plan to be fiscally disciplined,” Zandi told NBC News. “And that is a bit of a flip. Historically, being fiscally disciplined and focused on budget deficits has been a Republican rally cry.”
Neither campaign has released a fully detailed fiscal plan, but Trump has so far failed to outline any real deficit reduction. He has said he would pay for his plans by unleashing stronger growth, but budget experts scoff at the idea that deficit-financed tax cuts can pay for themselves. Campaign spokesperson Karoline Leavitt told NBC News that Trump would cut wasteful spending and boost energy exports. “America faces an inflationary spending problem, not a revenue problem,” she said.
“The parties are further apart than they have ever been, at least in my memory, and I’m pretty old. The Democrats have gone left and the Republicans have gone right.”
− Isabel V. Sawhill, 87, senior fellow emeritus in economic studies at the centrist Brookings Institution, in a New York Times piece detailing the starkly divergent antipoverty policies of Vice President Kamala Harris and former President Donald Trump.
The Times’ reporter on poverty issues, Jason DeParle, writes that the current presidential race “presents the sharpest clash in antipoverty policy in at least a generation, and its outcome could shape the economic security of millions of low-income Americans.” He writes that that Harris would look to continue or expand many pandemic-era programs that helped temporarily halve the poverty rate, “including subsidies for food, health care and housing, and revive a change to the child tax credit that essentially created a guaranteed income for families with children.”
Republicans say that Biden’s policies fueled inflation and discouraged work. Trump, by contrast, has promised to extend his 2017 tax cuts and said little else on helping the poor. “Mr. Trump’s poverty plans are otherwise vague,” DeParle writes, “but his record is one of animosity toward the programs Ms. Harris would defend or expand. He sought to remove millions of people from Medicaid and food stamps, many of them low-wage workers. He has sought to reduce the number of people with subsidized housing and raise their rents.”
Read more at the Times on differences in healthcare, housing, nutrition and taxes.
Public Health Experts Fear Kennedy’s Role Under Trump
Donald Trump is reportedly set to name Robert F. Kennedy Jr. and former Democratic Rep. Tulsi Gabbard as honorary co-chairs of a presidential transition team — and the Kennedy appointment in particular is raising fears among public health leaders, who worry that the anti-vax activist and conspiracy theorist could be put in a position to help pick the next directors of the Centers for Disease Control and Prevention, the Food and Drug Administration and the National Institutes of Health.
“If he gets into government and appoints people who think the way he does, it will do enormous damage to this country’s public health,” Dr. Ashish K. Jha, the dean of the Brown University School of Public Health and the former White House Covid-19 response coordinator, told The New York Times.
And Dr. Gavin Yamey, the director of the Center for Policy Impact in Global Health at Duke University, told the Times’ Christina Jewett: “It’s horrifying to think of R.F.K. Jr. ascending to that level of power and policy influence,” said. “He is an extreme anti-vax activist and conspiracy theorist with fringe views that are very far outside the mainstream.”
Times reporter Rebecca Davis O’Brien notes that several Kennedy supporters have told her the hope he will be empowered by Trump to dismantle what they view as a corrupt and dangerous federal bureaucracy. Trump’s running mate, Sen. JD Vance, told reporters Tuesday that he wanted Kennedy to be part of a potential second Trump administration, though he did not specify how. “He’s asking important questions about why Americans seem in such poor health,” Vance said.
Fiscal News Roundup
- Harris Campaign Slams Trump Agenda as a 'Deficit Bomb,' Seeking to Flip the Script on Fiscal Responsibility – NBC News
- Trump, Harris Lay Out Tax Plans With Trillions of Dollars on the Line – Politico
- Trump Economic Plans Would Cost More Than $4 Trillion Over a Decade: Analysis – The Hill
- Kamala Harris’s Tax Increases and Cuts Take Shape – Wall Street Journal
- Trump and Harris Embody a Stark Partisan Divide on Fighting Poverty – New York Times
- Harris and Trump Embrace Tariffs, Though Their Approaches Differ – New York Times
- For Progressives, Praise for Harris’ Economic Agenda – Roll Call
- More Than 200 Former Bush, McCain and Romney Staffers Endorse Harris – Washington Post
- Trump Plans to Put Robert F. Kennedy Jr. and Tulsi Gabbard on Transition Team – New York Times
- Eli Lilly Slashes Prices of Weight-Loss Drug Zepbound for Single-Use Vials – CBS News
- Zuckerberg Expresses Regrets Over Covid Misinformation Crackdown – Washington Post
- Trump Indicted Again in Election Subversion Case Brought by Jack Smith – Politico
Views and Analysis
- Kamala Harris Begins to Sketch a New Economic Vision – Jen Harris, New York Times
- The Trump Effect: Politicians Are in No Hurry to Craft Policy Solutions – Catherine Rampell, Washington Post
- Why Economists Worry About Trumpflation – Paul Krugman, New York Times
- Kamala Harris and Donald Trump Are Shredding Basic Economic Good Sense – Roger Lowenstein, New York Times
- 21 Questions for Harris – David Leonhardt, New York Times
- Trump’s Ad Attacks Harris for a Tax Program That Doesn’t Exist – Glenn Kessler, Washington Post
- Is Harris Pandering to the Center Too Much? Or Just the Right Amount? – Perry Bacon Jr., Washington Post
- Inflation Is Fading, Statistically and Politically – Paul Krugman, New York Times
- What Across-the-Board Tariffs Could Mean for the Global Economy – Patricia Cohen, New York Times
- No, Kamala Harris Is Not the Most Liberal Senator in History – Philip Bump, Washington Post
- How a Federal Court in New Orleans Is Driving the Conservative Agenda – Mattathias Schwartz, New York Times
- Men Are Having a Health Crisis. Why Aren’t We Paying Attention? – Richard V. Reeves, Washington Post