Monday marks the one-year anniversary of the October 7 terrorist attacks by Hamas against Israel. President Joe Biden participated in a solemn candle-lighting service at the White House in memory of the victims. There are 101 hostages still in Gaza, including 66 believed to be alive and 35 dead. Four Americans are among those thought to be alive. The United States has spent at least $22.76 billion on military aid to Israel and related operations in the Middle East since October 7, according to a new report from Brown University’s Costs of War project, which says that the annual total is “substantially more than in any other year since the U.S. began granting military aid to Israel in 1959.”
Here's what else is happening.
Trump Would Balloon the National Debt by Twice as Much as Harris: CRFB
Tax and spending proposals from both presidential candidates would increase budget deficits in the coming years by trillions of dollars, according to a new analysis from the Committee for a Responsible Federal Budget, a nonpartisan group that advocates for debt and deficit reduction. Former President Donald Trump’s plans would raise deficits by an estimated $7.5 trillion over 10 years, CRFB says, while Vice President Kamala Harris’s proposed programs would add about half that at $3.5 trillion.
In recent weeks, Trump has added to his list of fiscal proposals, which now includes the elimination of taxes on tips, overtime pay and Social Security benefits. He also wants to extend the tax cuts provided by the 2017 Tax Cuts and Jobs Act that are scheduled to expire at the end of 2025, and lower the corporate tax rate from 21% to 15% for firms that manufacture products within the United States. Trump says he also wants to spend more on the military, immigration enforcement and assistance for homebuyers. On the revenue side, he has proposed trillions of dollars in new tariffs, while reducing spending on environmental regulations and education.
It's a complicated set of proposals, and to capture the potential effects over 10 years (2026-2035), as well as the inherent uncertainty involved in making long-term projections, the CRFB analysts provide a range of cost estimates, which include both revenue losses and gains over time. In its low-cost estimate, in which savings are maximized, CRFB says Trump’s proposals would increase deficits relative to the current baseline by $1.5 trillion over a decade. In its high-cost estimate, in which costs are maximized, Trump’s proposals would increase deficits relative to the current baseline by $15.2 trillion. The central estimate between the two extremes is $7.5 trillion — which includes $10.2 trillion of deficit-increasing measures, $3.7 trillion of deficit-reducing measures and $1 trillion of interest costs.
Harris’s plans include expanding the Child Tax Credit and the Earned Income Tax Credit, boosting health care subsidies under the Affordable Care Act, providing new subsidies for first-time homeowners, expanding access to preschool and child care, establishing national paid family and medical leave, extending the 2017 tax cuts for households earning less than $400,000 a year and exempting tips from federal income taxes. On the revenue side, her proposals include raising the corporate tax rate from 21% to 28%, raising taxes on investment income, and reforming international tax rules.
The low-cost estimate for Harris’s plan is $0 — that is, her revenue increases would cover her higher spending. At the high end, Harris’s plan would cost $8.1 trillion, while the central estimate comes to $3.5 trillion — $7.3 trillion of deficit-increasing measures, $4.3 trillion of deficit-reducing measures and $500 billion of interest costs.
Debt keeps growing: The estimates for both Trump and Harris are in addition to the current projections for the budget deficit, which is expected to add up to about $22 trillion over the next decade under current law. Those accumulated deficits would help push the debt-to-GDP ratio, which currently stands at 99%, to 125% by 2035. Under the central cost estimate for Harris’s proposals, debt-to-GDP would rise to 133%, while for Trump, it would climb to 142%.
The analysis suggests that Harris’s proposals would likely produce a significantly smaller increase in the deficit than Trump’s, and this result is consistent with other analyses from groups including the Budget Lab at Yale and the Penn Wharton Budget Model. However, neither presidential candidate has a plan to shrink debt and deficits over time. “Debt would continue to grow faster than the economy under either candidates’ plans and in most scenarios would grow faster and higher than under current law,” the report says.
Chart of the Day: Who Would Benefit From Trump’s Tax and Tariff Plans
Former President Donald Trump’s proposed tax changes would skew heavily toward the wealthy, according to a new analysis by the left-leaning Institute on Taxation and Economic Policy (ITEP).
Trump has proposed to cut a broad range of taxes while imposing steep tariffs of up to 20% on imported foreign goods — or 60% for goods from China. As we mentioned above, he’s called for extending his 2017 tax cuts, further lowering the corporate tax rate from 21% to 15% and ending taxes on tips, Social Security benefits and overtime pay. He’s also pledged to eliminate the $10,000 cap on the deductibility of state and local taxes, a measure he signed into law as part of the 2017 changes.
“Taken together, these proposals would, on average, lead to a tax cut for the richest 5 percent of Americans and a tax increase for all other income groups,” the ITEP report says. It adds: “Measured as a share of income, the tax increases faced by most Americans would fall hardest on working-class families.”
The proposed tariffs are far and away the biggest driver of increased costs for lower-income households. Those tariffs are effectively a tax increase, the report says, and it “would be paid by everyone who makes purchases in the U.S., but it would comprise a smaller share of income for the richest taxpayers than it would for everyone else.”
Fiscal News Roundup
- Trump Would Add Twice as Much to National Debt as Harris, Study Finds – Washington Post
- Trump’s Plans Could Increase U.S. Debt While Raising Costs for Most Americans – New York Times
- Biden Makes Formal Plea to Congress for Disaster Loan Funds – Roll Call
- US Disaster Relief Chief Blasts False Claims About Helene Response as a ‘Truly Dangerous Narrative’ – Associated Press
- White House, Fox News’s Peter Doocy Spar Over Helene Response – The Hill
- Major North Carolina Newspaper Knocks Trump Over Helene Response ‘Falsehoods’ – The Hill
- Mike Johnson Won't Commit to Bringing House Back Before the Election for More Hurricane Relief – NBC News
- Milton Raises Stakes for Congress to Pass More Disaster Aid – Politico
- Congressional Estimators Find Sharply Lower Revenue Take From Harris Tax Plans – Roll Call
- Trump Allies Threaten Deloitte Contracts After Employee Shares Vance Chats – Washington Post
- Trump Suggests ‘Bad Genes’ to Blame for Undocumented Immigrants Who Commit Crimes – Washington Post
- As Affordable Housing Disappears, States Scramble to Shore Up the Losses – Associated Press
- Let’s Get Fiscal: California Crime Debate Turns to Costs – Politico
- Harris Talks Abortion and More on ‘Call Her Daddy’ Podcast as Democratic Ticket Steps Up Interviews – Associated Press
Views and Analysis
- Fact Check: Six Days of Trump Lies About the Hurricane Helene Response – Daniel Dale, CNN
- Trump’s Politicization of Hurricane Helene Is Scandalous, Even for Him – Ed Kilgore, New York
- Fact Check: Walz Makes False Claims About Trump on Abortion and the Economy – Daniel Dale, CNN
- Harris’ Border Visit and Economy Speech Capture Attention as Warning Signs Emerge for Campaign – Jennifer Agiesta, CNN
- Could Trump’s Tariffs Pay for His Promises? – Howard Gleckman, Tax Policy Center
- Tips, Overtime, Social Security: A Look at Donald Trump’s No-Tax Pledges and What They Might Cost – Meg Kinnard, Associated Press
- The Fiscal Impact of the Harris and Trump Campaign Plans – Committee for a Responsible Federal Budget
- Impact Of Donald Trump’s Tax Proposals by Income Group – Steve Wamhoff et al, Institute on Taxation and Economic Policy
- This One Weird Trick Is the Best Way to Help Workers, Study Finds – Catherine Rampell, Washington Post
- America’s Jobs Market Has Entered the Twilight Zone – Claudia Sahm, Bloomberg
- The Elusive ‘Policy-Driven’ Undecided Voter – Phillip Bump, Washington Post
- Never-Trumpers Agree With Harris on Plenty – Jennifer Rubin, Washington Post
- Health Care Is Falling Through the Cracks This Election Year – Eugene Litvak, The Hill
- What Going on Call Her Daddy Did for Kamala Harris – Helen Lewis, The Atlantic