The national debt is projected to reach record levels relative to the economy’s size under the next presidential administration. This increase is partly attributed to policies approved by both Presidents Trump and Biden during their respective terms, including executive actions and legislation passed by Congress.
It’s crucial to assess the fiscal implications of campaign promises, as they reflect a candidate’s policy priorities and are not subject to external events or congressional actions. Considering that both leading candidates have served as President, comparing their actual fiscal records becomes feasible. This analysis concentrates on the estimated ten-year debt impact of policies approved by Presidents Trump and Biden around the time of enactment.
Key findings include:
- President Trump approved $8.4 trillion in new ten-year borrowing during his full term, or $4.8 trillion excluding COVID-19 relief measures like the CARES Act.
- President Biden, in his first three years and five months in office, approved $4.3 trillion in new ten-year borrowing, or $2.2 trillion excluding the American Rescue Plan.
- President Trump approved $8.8 trillion of gross new borrowing and $443 billion of deficit reduction during his full presidential term.
- President Biden has so far approved $6.2 trillion of gross new borrowing and $1.9 trillion of deficit reduction.
In companion analyses, the following will be explored:
- Approximately 77 percent of President Trump’s approved ten-year debt stemmed from bipartisan legislation, while 29 percent of the net ten-year debt President Biden has approved thus far came from bipartisan legislation.
- President Trump approved $2.2 trillion of debt in his first two years and $6.2 trillion ($2.6 trillion non-COVID) in his second two years. President Biden approved $4.9 trillion ($2.9 trillion non-COVID) in his first two years and has so far approved over $600 billion of net ten-year deficit reduction since.
- President Trump approved $5.9 trillion of net spending increases including interest ($2.8 trillion non-COVID) and $2.5 trillion of net tax cuts ($2.0 trillion non-COVID). President Biden has approved $4.3 trillion of net spending increases including interest ($2.3 trillion non-COVID) and roughly $0 of net tax changes ($60 billion revenue increase non-COVID).
- Debt held by the public rose by $7.2 trillion during President Trump’s term including $5.9 trillion in the first three years and five months. Debt held by the public has grown by $6.0 trillion during President Biden’s term so far.
- President Trump’s executive actions added less than $20 billion to ten-year debt on net. President Biden’s executive actions have added $1.2 trillion to ten-year debt so far.
- The President’s budget was on average 39 days late under President Trump and 58 days late under President Biden.
How Much Debt Did President Trump Approve?
During his four-year term, President Trump approved $8.4 trillion in new ten-year borrowing, or $4.8 trillion excluding bipartisan COVID-19 relief. This includes $8.8 trillion of deficit-increasing laws and actions, offset by $443 billion of deficit-reducing measures.
These estimates are based on scores of legislation and executive actions rather than retrospective analyses. While scores are typically made conventionally, the Tax Cuts and Jobs Act (TCJA) was scored dynamically. The actual debt impact may have been higher than these initial scores. The TCJA, for example, likely reduced revenue more than projected and saved less from repealing the individual health care mandate penalty.
The major actions approved by President Trump (and their ten-year impact with interest) include:
- Tax Cuts and Jobs Act of 2017 ($1.9 trillion debt increase)
- Bipartisan Budget Acts of 2018 and 2019 ($2.1 trillion debt increase)
- ACA Tax Delays and Repeals ($539 billion debt increase)
- Health Executive Actions ($456 billion debt increase)
- Other Legislation ($310 billion debt increase)
- New and Increased Tariffs ($443 billion debt reduction)
- The CARES Act ($1.9 trillion debt increase)
- The Response & Relief Act ($983 billion debt increase)
- Other COVID Relief ($756 billion debt increase)
How Much Debt Has President Biden Approved?
During his first three years and five months, President Biden has approved $4.3 trillion in new ten-year borrowing, or $2.2 trillion excluding the American Rescue Plan Act. This includes $6.2 trillion of deficit-increasing actions, offset by $1.9 trillion of deficit-reducing legislation and actions.
These estimates are based on scores of legislation and executive actions rather than retrospective data and exclude preliminary rules, unexecuted “side deals,” or actions deemed illegal by the Supreme Court. Updated scores and in-process actions could increase the total.
The major actions approved by President Biden so far (and their ten-year impact with interest) include:
- Appropriations for FY 2022 and 2023 ($1.4 trillion debt increase)
- The Honoring Our PACT Act ($520 billion debt increase)
- The Bipartisan Infrastructure Law ($439 billion debt increase)
- Other Legislation ($422 billion debt increase)
- Student Debt Actions ($620 billion debt increase)
- Other Executive Actions ($548 billion debt increase)
- The Fiscal Responsibility Act ($1.5 trillion debt reduction)
- The Inflation Reduction Act ($252 billion debt reduction)
- Deficit-Reducing Executive Actions ($129 billion debt reduction)
- The American Rescue Plan Act ($2.1 trillion debt increase)
Conclusion
The next presidential term will pose significant fiscal challenges. Examining the fiscal performance of each President’s time in office offers insights into how they might approach these challenges and the priority they place on fiscal responsibility.
Both candidates approved substantial new borrowing during their first terms. President Trump approved $8.4 trillion over a decade, while President Biden has approved $4.3 trillion so far. Congress, as a co-equal branch, also bears responsibility, as it passed the legislation that constituted the majority of the fiscal impact under both presidents.
While some borrowing was justified, especially during the early stages of the COVID-19 pandemic, funding classified as COVID relief represents less than half of the borrowing authorized by either President. A considerable portion of this COVID relief was arguably extraneous, excessive, poorly targeted, or unnecessary.
Adding trillions more to the national debt will exacerbate existing challenges. It would be beneficial for the candidates to propose and adhere to plans to reduce the national debt, secure trust funds, and establish a sustainable long-term budget.
