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Trump's budget sees debt soar $US10tln

If elected Donald Trump's budget plans would see US debt skyrocket by $US10 trillion ($A13.46 trillion) in 10 years due to his promised tax cuts.

A new Washington study says Donald Trump's tax and budget plans would make the national debt skyrocket by $US10 trillion ($A13.46 trillion) or more over the coming decade, mostly because of his ambitious and expensive tax cuts.

The Committee for a Responsible Federal Budget says Democrat Hillary Clinton's agenda - which relies on tax increases to pay for proposals such as making the Affordable Care Act more generous - would increase the debt by about $US250 billion over 10 years.

Trump's measure is considered important, because if the debt gets too large it would cause higher interest rates, be a severe drag on national investment and growth, and potentially lead to a fiscal crisis.

Interest costs would also squeeze out other priorities such as defense, education and infrastructure investment.

Trump's tax plans, which include lowering the top income tax bracket from 39.6 per cent to 25 per cent and the top corporate rate from 35 per cent to 15 per cent, would add $US9 trillion-plus to cumulative deficits over a decade.

Clinton would increase taxes by $US1.25 trillion over the same period, chiefly through a four per cent surtax on top earners and a limit on deductions taken by the wealthy.

All told, Trump's policies would result in the $US19.3 trillion national debt spiking to 127 per cent of the size of the US economy by 2026.

Clinton's plans would closely track current law, in which the debt would equal 86 per cent of the economy.

The Committee for a Responsible Federal Budget advocates for smaller deficits, and, like the Congressional Budget Office and other nonpartisan groups, warns that the government's projected deficits and debt will become unsustainable before too long.

"Encouragingly, both of the major parties' presumptive presidential nominees have highlighted the need for fiscal responsibility on the campaign trail," said the group's report.

"Unfortunately, to date neither former Secretary of State Hillary Clinton nor businessman Donald Trump has put forward a plan to address the national debt, and Mr Trump's proposals would massively increase the debt."


2 min read

Published

Source: AAP



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