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The effects on deficit – Trump vs Biden

By Michael Knox - posted Monday, 16 November 2020

In this issue, we look at the report on the cost of Presidential campaign plans prepared by the nonpartisan Committee for a Responsible Federal Budget (CRFB).

This report was published on 7 October 2020. The benefit of the work of CRFB is that it gives us a nonpartisan comparison of the two sets of proposals.



Table 1

SOURCE:"The Cost of the Trump and Biden Campaign Plans", Committee for a Responsible Federal Budget, October 7, 2020

The judgement of what is contained in the Trump program and the Biden program is not as simple as it might first appear.

Trump has issued a 54 bullet point agenda, that calls for lowering taxes, strengthening the military, increasing infrastructure spending, expanding spending on veterans and space travel, lowering drug prices, expanding school and healthcare choice, ending wars abroad, and reducing spending on immigrants. He has also proposed a "platinum plan" for black Americans, which increases spending on education and small business.

Biden on the other hand, has proposed a detailed agenda to increase the spending on childcare and education, healthcare, retirement, disability benefits, infrastructure, research and climate change, while lowering the cost of prescription drugs, ending wars abroad and increasing taxes on high income, households and corporations.

Costing the Programs


The CRFB provides us with three separate estimates of the potential spending under both the Trump and Biden programs. These are a low-cost estimate, a high cost estimate and a central estimate. We will discuss the programs in terms of the central estimates for each program. In Table 1 above (Figure 2 of their report), we show the costing of the proposals under the central estimate for the Trump program and the Biden program.

The Deficits

Remarkably, there is little difference between the estimated budget deficits for both programs over a ten-year period from 2021 to 2030. The budget deficit for the Trump program is estimated to be $US4.95 trillion over a ten-year period. The budget deficit for the Biden program is estimated to be $US5.6 trillion over a ten-year period.

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This article was first published by Morgans.


The information contained in this report is provided to you by Morgans Financial Limited as general advice only, and is made without consideration of an individual’s relevant personal circumstances. Morgans Financial Limited ABN 49 010 669 726, its related bodies corporate, directors and officers, employees, authorised representatives and agents (“Morgans”) do not accept any liability for any loss or damage arising from or in connection with any action taken or not taken on the basis of information contained in this report, or for any errors or omissions contained within. It is recommended that any persons who wish to act upon this report consult with their Morgans investment adviser before doing so. Those acting upon such information without advice do so entirely at their own risk.

This report was prepared as private communication to clients of Morgans and is not intended for public circulation, publication or for use by any third party. The contents of this report may not be reproduced in whole or in part without the prior written consent of Morgans. While this report is based on information from sources which Morgans believes are reliable, its accuracy and completeness cannot be guaranteed. Any opinions expressed reflect Morgans judgement at this date and are subject to change. Morgans is under no obligation to provide revised assessments in the event of changed circumstances. This report does not constitute an offer or invitation to purchase any securities and should not be relied upon in connection with any contract or commitment whatsoever.

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About the Author

Michael Knox is Chief Economist and Director of Strategy at Morgans.

Other articles by this Author

All articles by Michael Knox

Creative Commons LicenseThis work is licensed under a Creative Commons License.

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