The gross national debt stands at $19 trillion, equaling 106% of the country’s gross domestic product, and under our next president, either Democratic nominee Hillary Clinton or Republican nominee Donald Trump, it would grow larger, even if to wildly varying degrees.
The Committee for a Responsible Federal Budget said the high national debt is the result of rising entitlement spending and growing interest costs. Even some of the nation’s top economists differ on the impact the debt has on you, but it is a topic you will hear more about as the campaign season winds toward November.
The committee estimates Clinton’s specific plan will grow the debt by $250 billion and Trump’s broader plan will grow the debt by $11.5 trillion.
Trump’s agenda comes at a hefty cost
Before Trump’s recent speech in Michigan on the economy, the Committee for a Responsible Federal Budget gave its $11.5 trillion estimate for 2026.
In his speech last week, Trump proposed individual tax rates of 12%, 25% and 33% — all higher rates than in his initial plan of 10%, 20% and 25%. By increasing the tax rate, Trump would lessen slightly the impact of his plan on the national debt.
“These reforms will offer the biggest tax revolution since the Reagan tax reform, which unleashed years of continued economic growth and job creation,” Trump said in Michigan.
When asked, the Committee for a Responsible Federal Budget said it won’t have a revised estimate on how much the national debt would increase under Trump until September.
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Trump’s plan to reform the veterans’ affairs system and increase veterans’ access to private doctors would cost about $500 billion, and his plans to repeal and replace Obamacare and reduce illegal immigration would cost about $50 billion each, according to the committee.
“We urge Donald Trump to put forward a tax framework that will cost as little as possible — or preferably generate net revenue — along with a serious suite of new spending cuts and entitlement reforms that would not only pay for any remaining tax cuts but also put the national debt on a downward path relative to the economy,” said committee president Maya MacGuineas.
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Cost of Clinton plan partially offset
For her part, Clinton’s plans would add about a quarter of a trillion dollars to the national debt over 10 years.
Her free attendance at public universities would cost $500 billion, her changes to Obamacare would cost $400 billion, her spending on new infrastructure project would run about $300 billion, her changes to paid family leave would cost $300 billion, and she’d spend nearly half a trillion on a variety of other initiatives, the Committee for a Responsible Federal Budget estimated.
Clinton’s proposals are mostly offset by new income measures, the committee said.
The Clinton campaign has said it would offset these new costs primarily by changing the current 3.8% investment surtax that applies to income above $200,000 for individuals and $250,000 for couples.
Currently, this 3.8% surtax applies to investment income, including capital gains, dividends and interest. Similarly, wages above $200,000 ($250,000 for couples) face a Medicare payroll tax of 3.8%, including the 2.9% base tax and a 0.9% additional tax.
Also, the Clinton campaign would adopt changes to prevent small business owners from declaring certain wage income as business income to avoid paying payroll taxes on it.
“We should also add a new tax on multi-millionaires, crack down on tax gaming by corporations, and close the carried interest loophole — something I’ve advocated for years,” Clinton said last week in her speech on the economy.
We also look at more ways Clinton and Trump clash on your cash.