The big presidential candidates aren’t leaving anything to chance since the election in November is only a week away.
During their campaigns, both Vice President Kamala Harris and former President Donald Trump have called for a lot of new tax cuts, credits, and other spending. They are still adding to their lists in the last few days of the election.
Trump revealed over the weekend a plan for a new tax credit for people who provide home health care. This follows Harris’s plan a few weeks ago to have Medicare pay for long-term care at home.
A report released Monday by the independent Committee for a Responsible Federal Budget says that these last-minute changes have made both candidates’ plans cost about $12 trillion more than they originally planned.
Marc Goldwein, senior policy director for the CFRB, announced the findings. “Our central estimate is that Vice President Harris would add about $4 trillion to the national debt.” “Our best guess is that President Trump would add almost $8 trillion to the national debt.”
They both thought that the Harris plan would cost $8.3 trillion and the Trump plan would cost $15.6 trillion.
The budget implications over 10 years of enacting these proposals would be extreme, Goldwein pointed out in a post on X Monday.
Chief economist at FHN Financial Chris Low wrote, “Bond traders are worried about deficits and interest rates more than at any time since the 1990s.” This is because more Treasury bonds are needed to pay off growing debt and large deficits can cause prices to rise.
In the past few weeks, as prices have gone down, yields on U.S. government debt have gone up sharply.
Statista says that the yield on the 10-year U.S. Treasury bond TMUBMUSD10Y 4.306% has gone up by more than 50 basis points in the last thirty days.
Low wrote in a Friday client note, “Congress will address the deficit when the deficit becomes a top voter priority, probably after the deficit starts to cause problems.” He also said that high deficits that last for a long time can lead to inflation, low confidence in the bond market, and higher interest rates.
“Rising interest rates forced Congress to act in the 1980s,” he said. “But it took about 10 years for budget discipline to take hold, and another 10 years for discipline to pay off.”
