Candidates' Numbers Must Add Up
Although ballots are being cast and the field is narrowing, voters still don't know a lot about what the presidential candidates would do in the White House. This is especially true when it comes to the national debt.
One of the biggest challenges the next president will face is the soaring increase in budget deficits. The Congressional Budget Office recently forecast that deficits will return to the $1 trillion level by 2022 and continue growing indefinitely. The end of the era of declining deficits means that the national debt, already higher than it's ever been (with the exception of the World War II era), will grow even faster.
Although all the candidates acknowledge that rising debt is a problem, they have been lacking in specific solutions. Instead, most have offered campaign proposals that could greatly exacerbate the problem.
Let's start with the Republican candidates whose plans we've analyzed. Our new Fiscal FactCheck analysis finds that the proposals on Sen. Ted Cruz's campaign website would add approximately $12 trillion to the debt over a decade, which would bring the debt to 130 percent of GDP. Our similar examination of Donald Trump's proposals found that they would add $12 to $15 trillion to the debt over ten years, which would put the debt as high as 140 percent of GDP. The large tax cut proposals from Trump and Cruz, as well as Cruz's plan to expand the military, account for much of the cost.
Both Cruz and Trump have talked about balancing the budget, but their policies would make that ambitious task even more difficult. Federal spending would have to be cut in half to balance the Cruz budget. And Trump has a much harder job because he has promised not to touch Social Security and Medicare benefits, meaning that 75 to 87 percent of federal spending outside those two areas would have to be cut to balance his budget.
Trump was pointedly asked about the cost of his proposals at the February 13 Republican debate, with the moderator citing our analysis. Trump's response focused mostly on economic growth. However, the economy would have to grow 7.7 to 9 percent annually, more than three times what is currently projected, to simply pay for his initiatives. Growth would have to be 10.4 to 11.4 percent, twice as high as the fastest growth period in the last 60 years, in order to balance the budget with his policies.
Many other candidates rely on high rates of growth to make their plans work as well, so it's worth taking a close look at the historical numbers. For example, the average rate of growth since 1974 has been 3.2 percent, and future growth is expected to be about 1 percentage point lower than that due to an aging population. During that time, there has never been a period of ten consecutive years that have averaged 5 percent growth. And since 1973, there has not been a ten-year period that has averaged even 4 percent growth.
When pressed on how he would save Social Security from looming insolvency, Trump mentioned eliminating waste, fraud, and abuse. While that is a worthy goal, Social Security's solvency would be extended by only about 3 months even if all improper payments were eliminated.
The problem is not limited to one party. Sen. Bernie Sanders has come under increased scrutiny since another Fiscal FactCheck analysis found that the offsets he proposed would fall far short of paying for his "Medicare for All" plan. After he updated his plan, our analysis found that he still fell $2.6 to $2.8 trillion short of covering his own estimated price tag. Other analyses suggest that the plan could cost substantially more than he estimates.
In addition, the pay-fors that Sanders proposes are problematic. The revenue increases that Sanders offers would bring the top marginal tax rate above 73 percent, which is what even very liberal economists believe is the revenue-maximizing level. That means his tax plan is likely to slow economic growth, increase tax avoidance, and generate far less revenue than intended.
We are still crunching the numbers for Sec. Hillary Clinton and Sen. Marco Rubio. We will have analyses of their plans in the weeks to come.
One of the first actions the next president will take will be to produce a budget for the federal government that will lay out the cost of his or her plans and show how they will affect the debt. That first budget will help lay the groundwork for the new president's administration.
Everyone seeking our nation's highest office should now be giving voters a good idea of what that budget will look like. We need more specifics from the candidates about their plans to address the debt and less obfuscation on the cost of their campaign promises.
Marc Goldwein is the senior vice president of the Committee for a Responsible Federal Budget, a nonpartisan organization committed to educating the public about issues that have significant fiscal-policy impact.