In an estimation of decadelong spending and revenue projections, the Committee for a Responsible Federal Budget claimed former President Donald Trump approved $8.4 trillion of new debt during his presidency compared to $4.3 trillion approved by President Joe Biden. But the CRFB admitted projections are subject to change, and a total debt estimate over the course of 10 years arguably misleads from the reality. Per my own analysis, Trump spent at least a trillion dollars less while he was president, including during the pandemic spending spree, than Biden will spend during the first four years of his own presidency.
CRFB’s strategy is to compare all the spending bills and executive orders signed by each president and tally up their net increases and decreases to the national debt. While this approach is laudable in its attempt to determine the long-term effect of presidential policies, it ignores the responsibility of successors to modify policies they dislike and the vast variation in scores. For example, the CRFB estimates the 10-year cost of Trump’s 2017 Tax Cuts and Jobs Act at $1.9 trillion, even though wildly increased overall federal revenue streams have led the Joint Committee on Taxation to estimate the cost dynamically at $1.5 trillion and the Tax Foundation to estimate it at as little as half a trillion dollars. On the other hand, the CRFB claimed Biden’s Inflation Reduction Act reduces the deficit by $252 billion, but the nonpartisan Congressional Budget Office recently conceded the Inflation Reduction Act will actually add $300 billion from 2024 to 2033. Again, this does not mean the CRFB is being dishonest, but the decadelong approach requires it to pick and choose among a wide range of expert estimations.
In my humble opinion, another worthwhile approach is to consider how much the presidents spent and accrued taxpayer money during their own presidencies.
Rather than focusing on overall debt levels, the Treasury allows us to break down federal outlays and revenues by month. According to this data, Trump spent $5.9 trillion more than he brought in from January 2017 to December 2020.
To compare that to Biden, we use two parts: adding together the existing Treasury data from January 2021 through September 2023, $5.3 trillion in compound deficit, and then the deficit projection by the CBO for fiscal 2024, which runs from October 2023 through September of this year, $1.9 trillion. The total then comes to about $7.2 trillion. It’s not a perfect four-year comparison, but it comes close. This is also a more meaningful measure than merely comparing the overall levels of debt held by the public because of the Treasury’s idiosyncratic excess cash reserves during the pandemic.
Another way to measure this is to compare the CBO’s annual budgets, which adhere to the fiscal year calendars. This means this estimate will include the September through December of the previous presidency, but we get a better comparison of exactly four years of Trump and four years of Biden.
Trump racked up $5.6 trillion of debt from fiscal 2017 through fiscal 2020, according to the CBO. From fiscal 2021 through the projected fiscal 2024, Biden will have accumulated $7.8 trillion in debt.
Why does this snapshot comparison between Trump and Biden vary dramatically from the CRFB’s estimation? In no small part, it’s because even though the Trump tax cut law has not and will not pay for itself entirely, it did spur enough real economic growth that it didn’t depress tax revenue as much as experts expected. For example, corporate income taxes have amounted to about 1.7% of our annual economic output throughout Biden’s presidency, even though he has kept the corporate tax rate at the 21% level set by the Tax Cuts and Jobs Act. Furthermore, while the CRFB does not claim to include all spending authorized by each president, just the major spending orders and bills, it absolves successive presidents of the responsibility to pursue fiscal policy proactively. For example, Trump absolutely should be held responsible for Obamacare spending under his watch, as he failed to achieve the key campaign promise to abolish Obamacare. Similarly, Biden has benefited from the Tax Cuts and Jobs Act through robust economic growth, even while he isn’t held responsible for its costs in the CRFB’s estimation.
The CRFB’s method also relieves Trump and Biden of responsibility for increases in mandatory spending on interest costs, when in reality, their inaction and refusal to rein in entitlements are deliberate choices that should be reflected in their fiscal records. Also, in Biden’s case, the 42% increase in net interest payments is a direct consequence of his refusal to curb even discretionary spending despite the Federal Reserve’s attempt to bring inflation back down to its 2% maximum target.
CLICK HERE TO READ MORE FROM THE WASHINGTON EXAMINER
There are plenty of other ways to splice the data, and the CRFB report isn’t wrong exactly. But it is misleading if we want to assess the actual, four-year records of how much was spent and how much was brought into the Treasury of tax revenue.
Trump did not govern as a staunch fiscal conservative even before the pandemic, and his cynical refusal to reform the entitlements driving the bulk of our impending deficit crisis is tantamount to a 21% spending cut for Social Security. But during his four years in office and even with the pandemic, Trump’s net deficit was at least $1 trillion less than Biden will generate in his first four years.