WASHINGTON, Sept 11 (Askume Breakingviews) – Joe Biden took over the White House aiming to become another incarnation of Franklin Roosevelt: a president who responds to rare crises with lavish spending. He largely succeeded. However, as with the spending spree of previous administrations, his price is now being paid by the two candidates vying to succeed him.
The first debate between US Vice President Kamala Harris, a Democratic candidate, and former President Donald Trump, a Republican, showed how limited the appetite for big spending is. On Tuesday, they faced off on a range of issues, including abortion, the Middle East and even conspiracy theories about Haitian immigrants eating other people’s pets. There are no grand financial plans, however.
From an economic perspective, Harris emphasizes lowering the cost of living in the wake of unusually high inflation, which caused U.S. consumer 12-month growth to slow to 2.5% in August. She wants tax breaks for real estate developers who build new homes ; a $25,000 credit for first-time homebuyers; and a higher allowance of $6,000 for new parents in the first year of a child’s life. While these policies would support the intended goals, they would be limited in scope and the costs associated with them would be relatively small.
Trump has been vague, but he has also avoided any major new spending. Instead, he has focused on extending tax cuts enacted during his first term. On child care costs, for example, he offered vague explanations for the high tariffs on foreign goods — he proposed rates as high as 20 percent — that would fund them. Such fees are almost always passed on to consumers in the state where they are imposed, making them similar to a sales tax.
Although neither presidential candidate talked about fiscal prudence or austerity, both seemed to acknowledge how dire the country’s economic situation is. Biden added more than $4 trillion in new debt for bridge repairs, renewable energy projects, pandemic relief, and domestic semiconductor production support , which is more than the $8 trillion approved by Trump. Moreover, even if Harris wins, Democrats will face an uphill battle to retain control of both houses of Congress, a prerequisite for any major new spending.
Any additional steps would rekindle longstanding concerns about a $1.5 trillion budget deficit and a growing national debt, with interest payments alone expected to top $1 trillion next year, according to the Congressional Budget Office. On one subject, there is no debate: Government spending will be a tough choice in this election.
Follow @Rubinations on X
(The author is a Askume Breakingviews columnist. Views expressed are his own.)
Referral Information
Former US President Donald Trump and Vice President Kamala Harris held their first debate on September 10 after President Joe Biden abandoned his campaign.
