President Donald Trump passed a conservative tax plan in 2017 and promises to reduce taxes further if re-elected. But the Republican candidate did not reduce government spending, which means his personal income tax cuts will expire in 2025, and the government’s debt is reaching record highs.
Joshua Roberts, HO / TNSThe claim: "I think the largest contributor to the debt ceiling, or to our deficit, has been the Trump tax cuts." — U.S. Rep. Alexandria Ocasio-Cortez.
PolitiFact Rating: False. A little more than two-thirds of today’s debt was already on the books before Trump’s 2017 inauguration.
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Of the remaining debt added since 2017, Trump’s tax cut played a significant role. But three other bills are expected to add nearly as much or more to the debt, and each received Democratic support: a 2019 spending bill and the CARES Act under Trump, and the American Rescue Plan under Biden.
Discussion
As Republicans and Democrats prepare to battle over the nation’s debt limit, finger-pointing over which side made the debt so large has intensified.
In a brief walk-and-talk interview with reporters outside the U.S. Capitol, Rep. Alexandria Ocasio-Cortez, D-N.Y., focused on the impact of tax cuts signed in 2017 by then-President Donald Trump as the primary reason the federal debt is close to hitting the statutory limit of $31.4 trillion.
That limit will need to be raised in the next few months to pay off the government’s existing commitments to bondholders and beneficiaries of programs such as Social Security and Medicare. If lawmakers can’t agree on raising the debt limit, the federal government could default on its debts.
PolitiFact is a fact-checking project to help you sort out fact from fiction in politics. Truth-O-Meter ratings are determined by a panel of three editors. The burden of proof is on the speaker, and PolitiFact rates statements based on the information known at the time the statement is made.
The Trump tax cuts have been a major factor in ballooning the federal debt, because the reduction in revenues has made it harder for the nation to cover its spending commitments. However, contrary to what Ocasio-Cortez said, the bill that Trump signed has not been the largest factor in increasing the debt, whether you use the debt or annual deficits as the measure.
First, a look at the major bills passed since 2017 that have added to the debt, based on calculations by the Committee for a Responsible Federal Budget, a Washington, D.C.-based nonprofit that analyzes federal spending.
The first thing to know is that about $19.5 trillion of today’s $31.4 trillion debt had already been accumulated by the time Trump took office. So, about 62 percent of today’s debt had nothing to do with Trump. Previous bills and autopilot spending on Social Security and Medicare contributed to that debt.
The second thing to know is that the Trump tax cuts, which received only Republican support in Congress, are expected to increase the debt by $1.9 trillion, according to the Committee for a Responsible Federal Budget’s tally. That’s a lot, but three other bills are also expected to have a big impact on the debt.
Trump signed two of those bills, with support from Democrats in Congress: a 2019 omnibus spending bill (estimated to increase the debt by $1.7 trillion), and the 2020 Coronavirus Aid, Relief, and Economic Security Act, or CARES Act, the first coronavirus relief bill that Congress approved ($1.9 trillion). Ocasio-Cortez was one of 19 Democrats who voted against the 2019 spending bill; she supported the CARES Act.
A third bill making a major contribution to the national debt is the 2021 American Rescue Plan, signed by President Joe Biden with the exclusive support of Democrats. The Committee for a Responsible Federal Budget estimates that this law will increase the debt by $2.1 trillion.
So it’s inaccurate for Ocasio-Cortez to characterize the Trump tax cuts as "the largest contributor" to the debt. It’s one of the largest among recent bills, but Biden’s American Rescue Plan, which Ocasio-Cortez voted for, is poised to contribute even more to the debt.
Other bills passed under Trump and Biden added smaller amounts to the debt.
Now for some caveats. First, a particular bill’s impact on the federal debt changes with time, as tax revenue waxes and wanes, so the figures here are estimates. But they are close enough to show the types of broad patterns that Ocasio-Cortez was referring to.
Second, not all money from these bills was spent in the first year the bills were approved. Typically, legislation is "scored" on its impact on deficits over a 10-year window. Only the money spent (or revenue forgone) through 2022 is reflected in today’s debt tally.
PolitiFact reviewed how the Trump tax cuts, the CARES Act, and the American Rescue Plan have contributed to the debt since their enactment.
Data from the nonpartisan Congressional Budget Office shows that, to date, the Trump tax cuts have added about $949 billion to the national debt, the CARES Act has added more than $1.9 trillion, and the American Rescue Plan has added nearly $1.7 trillion.
This data affirms that the CARES Act and the American Rescue Plan have each added more to the debt than the Trump tax cuts have.
Looking at the figures year by year also covers Ocasio-Cortez’s mention of the word "deficit." (Annual deficits, added together, equal the national debt.) In 2020 and 2021, the Trump tax cuts accounted for a smaller share of the annual deficit than the CARES Act. In 2021 and 2022, the Trump tax cuts also contributed less to the annual deficit than did the American Rescue Plan.
