Politics
Trump, Harris blasted for ignoring exploding budget deficit, as economists plead with both to 'get real'
Economists told Fox News Digital that the economic proposals former President Donald Trump and Vice President Kamala Harris have put forward would continue to increase the nation’s already ballooning budget deficit, noting that neither candidate seems particularly concerned with fiscal responsibility.
Neither Trump nor Harris has released dedicated policy plans for addressing the nation’s deficit. Trump’s 16-point policy plan on his website mentions the word “deficit” once.
Meanwhile, Harris’ economic platform does mention the deficit several times and says Harris is “committed” to fiscal responsibility, but only suggests increasing taxes on the wealthy and corporations as a solution.
“I think the reason neither candidate is really talking about fiscal responsibility is because neither candidate is fiscally responsible,” said Tax Foundation senior economist Erica York. “Both have left a lot of details unspecified, so there’s questions still about how Harris’s spending policies would stack up. Would Trump really repeal all of the green energy tax credits? Would he really impose all of the tariffs he’s promised?”
When asked what message York had for Trump and Harris when it comes to the deficit, she told them to “get real.”
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“We face several challenges on the fiscal policy front, from debt and deficits to the need to compete with China, to the need to encourage entrepreneurship and work, and neither of the tax policy visions being outlined right now really come close to providing an answer to those challenges,” York said.
Rep. Thomas Massie, a Republican from Kentucky, wears a homemade national debt clock pin on Capitol Hill on Jan. 26, 2023.
Meanwhile, Kimberly Clausing, an economist with the Peterson Institute for International Economics, echoed York’s concerns, adding that she “does not think there’s been enough attention on the deficit this campaign season.”
“I don’t know whether to blame the candidates or the American attention span,” Clausing said. “Candidates have an incentive to cater to what the population wants to listen to, but there doesn’t seem to be a big drumbeat in favor of fiscal responsibility. And that’s a big contrast from some prior elections in at least my lifetime, where that issue was much more prominent.”
So far, in fiscal year 2024, the government is running a cumulative deficit of $1.9 trillion, according to the Bipartisan Policy Center’s “Deficit Tracker.”
Revenues, meanwhile, have increased 11% through last month. The revenue increase, according to the deficit tracker, is largely the result of an increase in individual and corporate taxes, higher interest rates and a 20% decrease in individual income tax refunds. Trump’s economic proposals include extending tax cuts, reducing the corporate tax rate and exempting tips, overtime pay and social security benefits from one’s taxable income. Despite his plan to generate revenue through tariffs and repealing green energy tax credits, economists say it will not be enough to balance out the lost revenues from Trump’s tax cuts and other economic proposals.
Research from the Tax Foundation, a tax policy nonprofit in the nation’s capital, estimated that Trump’s deficit impact would be roughly a $4 trillion increase over ten years.
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However, according to Heritage Foundation economist Richard Stern, it is government spending and not tax cuts that are the real culprit when it comes to the ballooning deficit.
“Though tax cuts can increase the deficit, it returns that money to the people that earned it. Deficit increases from more spending, on the other hand, means that the government is stealing even more and suppressing growth even more intensely,” Stern said. “Deficits created by way of tax cuts and spending increases are not the same. Tax cuts grow the economy and shrink deficits as a share of the economy, whereas more spending strangles the economy and stunts growth.”
The Treasury Department is seen near sunset in Washington. (AP Photo/Jon Elswick, File)
The Biden-Harris administration’s fiscal year 2024 budget proposed the highest sustained levels of spending in U.S. history, according to Republicans on the House Budget Committee. The committee also pointed out that the administration’s plan to add $82.2 trillion in spending over ten years, is 18% more than the historical average of the past half century.
Since becoming the Democratic Party’s official nominee for president, Harris has said she will provide $25,000 housing subsidies for first-generation home buyers, implement $100 billion in tax credits for the manufacturing sector and increase small business tax credits by tenfold. She has also suggested support for increasing government spending to support families’ child care needs, while also expanding the child tax credit, among other proposals.
Overall, the Tax Foundation calculated that Harris would grow the deficit by roughly $1.5 trillion over ten years.
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Among the deleterious downstream effects of an ever-growing deficit, according to Clausing, are increased interest rates and reduced creditworthiness for the country, which can be problematic at a time when global tensions are on edge.
“If a new crisis comes along, whether it’s a pandemic or a national security crisis or a big recession, which are sometimes caused by things beyond our control. You know, those kinds of crises are really difficult to respond to without fiscal space,” Clausing said. “If you’re starting from a point where you’re kind of maxing out the credit card, it’s a little harder to respond to these emergencies.”
Currently, China and Japan are the United States’ two largest foreign creditors.
Former President Trump and Vice President Kamala Harris (Getty Images)
When reached by Fox News Digital, the Harris campaign declined to comment.
The vice president was endorsed this week by more than 400 left-leaning economists and former policymakers who served under Democrats. Additionally, Andrew Ross Sorkin, a financial columnist with the New York Times, insisted this week that Harris will be able to get much closer to balancing the national budget than Trump.
When it comes to the electorate, voters have usually told pollsters they have more confidence in Trump than Harris when it comes to the economy, but reports have indicated Harris is gaining some of that ground back more recently. Trump’s advantage over Harris on the economy stands at only five points in a recent Fox News poll, and just two points in an AP/NORC survey.
“Dangerously Liberal Kamala Harris’ budget would add $17 trillion to the national debt by 2034 and also includes a $4.9 trillion tax hike — the largest in history — which would cost every American family nearly $40,000 per year, on top of the costs of record-high inflation,” Trump Campaign National Press Secretary Karoline Leavitt told Fox News Digital. “Thanks to Kamalanomics, families are already struggling to afford gas and groceries, and President Trump will continue to highlight how Harris’ budget will compound these difficulties on hardworking Americans.”
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White House press secretary Karoline Leavitt explained why President Donald Trump does not consider Iran’s seizure of two ships in the Strait of Hormuz a violation of the ceasefire agreement.
Leavitt made the statement during an interview with Fox News’ Martha McCallum on Wednesday just hours after Iran captured the Greek and Mediterranean-flagged vessels.
“Does the seizure of two ships — as we said, they were Greek and Mediterranean-owned ships with cargo on them, and the reports are that Iran basically seized them and then moved them into Iranian waters. We don’t know what’s going to happen to these crews. We’re not sure where all of this is going. Does the president view that as a violation of the ceasefire?” McCallum asked.
“No, because these were not U.S. ships. These were not Israeli ships. These were two international vessels,” Leavitt responded.
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Karoline Leavitt, White House press secretary, conducts a press briefing. (Tom Williams/CQ-Roll Call, Inc via Getty Images)
“And for the American media, who are sort of blowing this out of proportion to discredit the president’s facts that he has completely obliterated Iran’s conventional Navy, these two ships were taken by speedy gunboats. Iran has gone from having the most lethal Navy in the Middle East to now acting like a bunch of pirates. They don’t have control over the strait,” she continued.
“This is piracy that we are seeing on display. And the naval blockade that the United States has imposed continues to be incredibly effective. And, to be clear, the blockade is on ships going to and from Iranian ports. And the point of this is the economic leverage that we maintain over Iran now. While there’s a ceasefire with respect to the military and kinetic strikes, Operation Economic Fury continues, and the crux of that is this naval blockade,” she added.
The Iranian made ‘Seraj’ a high-speed missile-launching assault boat on display in Tehran on August 23, 2010, as Iran kicked off mass production of two high-speed missile-launching assault boats the ‘Seraj’ (Lamp) and ‘Zolfaqar’ (named after Shiite Imam Ali’s sword) speedboats which will be manufactured at the marine industries complex of the ministry of defense. (YALDA MOAIERY/AFP via Getty Images)
Iran’s Revolutionary Guard Corps said the vessels, identified as the MSC Francesca and the Epaminondas, were operating without proper authorization and had tampered with navigation systems, accusations that could not be independently verified. The ships had earlier reported coming under fire near the strait, underscoring the increasingly volatile conditions in one of the world’s most critical shipping lanes.
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The Guard attacked a third ship, identified as the Euphoria, which had become “stranded” on the Iranian coast, Iranian media reported. It did not seize that vessel.
Ships and tankers in the Strait of Hormuz off the coast of Musandam, Oman, April 18, 2026. (Reuters)
Both the U.S. and Iranian sides have targeted commercial and cargo vessels as part of a broader pressure campaign tied to stalled negotiations. U.S. forces have also moved to seize at least one Iranian-linked vessel in the region, with each side accusing the other of violating the terms of a fragile ceasefire.
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The Strait of Hormuz is a vital artery for global oil shipments, with roughly 20% of the world’s supply passing through it. Traffic has slowed dramatically as ships reroute or avoid the area amid gunfire, seizures and conflicting directives from both militaries.
Fox News’ Morgan Phillips contributed to this report.
WASHINGTON — Los Angeles Mayor Karen Bass and L.A. County Supervisor Kathryn Barger met privately with President Trump and administration officials Wednesday to press for federal support and yet-unpaid wildfire recovery funding as the region continues to rebuild from the 2025 fires.
“This afternoon we met with President Trump and Administration officials to advocate for families who lost everything,” Bass and Barger said in a statement. “We had a very positive discussion about FEMA and other rebuilding funds as well as the support of the President to continue joining us in pressuring the insurance companies to pay what they owe — and for the big banks to step up to ease the financial pressure on L.A. families.”
Barger said the two leaders had a “high-level discussion” with the president in the Oval Office, sharing stories about what fire survivors are experiencing day to day. She added that “we left details behind with the President,” but did not specify whether Trump made any funding or policy promises during the meeting.
“First and foremost, today’s meeting was to thank the President for his initial support of infusing federal resources to expedite debris removal, as well as his recent tweet about insurance companies, which have already proven fruitful,” she said in a statement provided to The Times.
Bass was similarly reserved about the discussions, telling reporters that “we will follow up with the details,” but signaled progress is being made on federal support.
“I think what’s important is that we certainly got the president’s support in terms of, you know, what is needed, and then the appropriate people were in the room for us to follow up. And that was Russ Vought, who is the head of the Office of Management and budget,” Bass told KNX on Wednesday.
The meeting comes on the heels of a yearlong standoff between California leaders and the Trump administration over wildfire recovery funding, disaster response and whether the federal government should have a say in local rebuilding permitting.
California leaders, led by Gov. Gavin Newsom, have accused the Trump administration of withholding billions in critical wildfire aid, prompting a lawsuit over stalled recovery funds. Officials allege political bias in the delay of billions of dollars from the Federal Emergency Management Agency.
Newsom visited Washington in December. When he made his rounds on Capitol Hill, he met with five lawmakers, including three who serve on the Senate and House appropriations committees, to renew calls for $33.9 billion in federal aid for Los Angeles County fire recovery.
But the governor said he was denied a meeting with FEMA and would not say whether he had attempted to meet with Trump to discuss the issue.
Bass, meanwhile, appears to have found a path to the president on a subject that has been paramount for her community.
The fruitful meeting comes after Trump lobbed insults at the mayor at a news conference earlier this year, where he called her “incompetent” for how she handled last year’s wildfire recovery efforts. He alleged that under Bass’ leadership, the city’s delay in issuing local building permits will take years when it should have taken “two or three days.”
California officials, including Newsom, have urged the Trump administration to send Congress a formal request for the $33.9 billion in recovery aid needed to rebuild homes, schools, utilities and other critical infrastructure destroyed or damaged when the fires tore through neighborhoods more than 15 months ago.
What Bass and Barger’s meeting with the president ultimately produces remains to be seen.
The billions in recovery aid have not yet materialized, but the meeting could potentially give those discussions new momentum.
The White House did not immediately respond to a request seeking comment about the meeting.
Earlier this month, Trump criticized insurance provider State Farm on Truth Social for its handling of the devastating Los Angeles County wildfires. He accused the insurance giant of abandoning its policyholders when tragedy struck.
“It was brought to my attention that the Insurance Companies, in particular, State Farm, have been absolutely horrible to people that have been paying them large Premiums for years, only to find that when tragedy struck, these horrendous Companies were not there to help!” Trump wrote.
But the rebuke didn’t come out of the blue. It stemmed from a controversial February visit to Los Angeles by Trump administration officials.
Trump tapped Environmental Protection Agency Administrator Lee Zeldin in an effort to strip California state and local governments of their authority to permit the rebuilding of homes destroyed in the Eaton and Palisades fires.
Within the week, Zeldin was in Los Angeles, bashing Newsom and Los Angeles officials at a roundtable with fire victims and reporters, saying that residents were suffering from “bureaucratic, red tape delays and incompetency” and that leadership was “denying them … the ability to rebuild their lives”.
During the trip, officials heard direct complaints from local leaders and fire victims about insurers being slow, restrictive and insufficient with their claim payouts.
After these meetings, Trump directed Zeldin to investigate the insurers’ responses. State Farm, facing roughly $7 billion in fire-related claims, is also under formal investigation by California’s insurance commissioner over its handling of the crisis.
Despite tensions with the administration, Bass and Barger appeared confident that progress was being made on the insurance and funding issues.
“Our job is to fight for our communities,” their joint statement concluded. “When it comes to this recovery, our federal partners are essential, and we are grateful for the support of the President.”
Navy Secretary John Phelan was fired on Wednesday after months of infighting with senior Pentagon leaders and disagreements over how to revive the Navy’s struggling shipbuilding program.
Mr. Phelan is leaving the Pentagon and the Trump administration effective immediately, wrote Sean Parnell, the Pentagon’s chief spokesman, in a terse statement.
In his role leading the Navy, Mr. Phelan had championed the “Golden Fleet,” a major investment in new ships including a “Trump-class” battleship. But Mr. Phelan’s leadership was marred by feuds with senior leaders in the Pentagon, including Defense Secretary Pete Hegseth and Deputy Defense Secretary Stephen Feinberg, Pentagon and congressional officials said.
Mr. Phelan is the first service secretary to leave the administration, though he is the second one to clash with the defense secretary. Mr. Hegseth also has butted heads with Army Secretary Daniel P. Driscoll over promotions and a host of other issues. Mr. Hegseth fired the Army’s chief of staff, Gen. Randy George, earlier this month.
The Navy secretary has no role overseeing deployed forces, and Mr. Phelan’s firing is not likely to have significant implications for the conduct of the Iran war or U.S. Navy operations to blockade Iranian ports or open the Strait of Hormuz. As the Navy’s top civilian leader, his main responsibility is to oversee the building of the future naval and Marine Corps force.
But the tumult could make it harder for the Navy to replenish its stock of Tomahawk missiles and high-end air defense systems, which have been in heavy use in Iran.
Tensions had been simmering for months between Mr. Phelan and his two bosses — Mr. Hegseth and Mr. Feinberg — over management style, personnel issues and other matters.
Mr. Feinberg, in particular, had grown increasingly dissatisfied with Mr. Phelan’s handling of the Navy’s major new shipbuilding initiative, and had been siphoning off responsibility for the project from him, said the congressional official, who spoke on the condition of anonymity to discuss personnel matters.
Mr. Phelan, a White House appointee, also had a contentious relationship with his deputy, Under Secretary Hung Cao, who is more aligned with Mr. Hegseth, especially on some of the social and cultural battles that have defined the defense secretary’s tenure, the officials said.
A senior administration official said that Mr. Hegseth informed Mr. Phelan before the Pentagon’s official announcement that he and President Trump had decided that the Navy needed new leadership.
A spokeswoman for Mr. Phelan referred all questions on Wednesday evening to the Defense Department.
Last fall, Mr. Hegseth fired Mr. Phelan’s chief of staff, Jon Harrison, who had clashed with senior officials throughout the Pentagon. The unusual move highlighted the broader tensions between Mr. Hegseth and Mr. Phelan.
Still, the timing of Mr. Phelan’s firing caught some Pentagon and congressional officials off guard. On Wednesday, Mr. Phelan was making the rounds on Capitol Hill, talking to senators about his upcoming annual hearing with lawmakers to discuss the Navy’s budget request and other priorities.
“Secretary Phelan’s abrupt dismissal is troubling,” Senator Jack Reed of Rhode Island, the top Democrat on the Armed Services Committee, said in a statement Wednesday night. “In the midst of President Trump’s war of choice in Iran, at a moment when our naval forces are stretched thin across multiple theaters, this kind of disruption at the top sends the wrong signal to our sailors and Marines, to our allies, and to our adversaries.”
Mr. Phelan also had a close relationship with Mr. Trump. In December, Mr. Phelan appeared alongside Mr. Trump at his Mar-a-Lago resort to announce the “Golden Fleet” and the new class of battleships bearing Mr. Trump’s name.
“John Phelan is one of the most successful businessmen in the country — in our country,” Mr. Trump said. “He’s been a tremendous success.”
Before joining the Trump administration, Mr. Phelan ran a private investment fund based in Florida.
“He’s taken probably the largest salary cut in history, but he wanted to do it,” Mr. Trump said at the December press conference. “He wants to rebuild our Navy. And you needed that kind of a brain to do it properly.”
But Mr. Trump’s effusive praise masked deeper tensions with Mr. Phelan’s Pentagon bosses.
Bryan Clark, a naval analyst at the Hudson Institute, said that Mr. Phelan was “driving the Navy in a different direction” than what Mr. Hegseth and Mr. Feinberg wanted.
“He was championing initiatives like the battleship and frigate that don’t align with where the D.O.W. leadership is taking the military, which is toward submarines, stealth aircraft, unmanned systems and software-driven capabilities like electronic warfare and cyber,” Mr. Clark said in an email, using the abbreviation for Department of War, as the administration calls the Defense Department.
Mr. Phelan also clashed with Mr. Hegseth over personnel issues in the Navy and Marine Corps, a former senior military official said. Mr. Hegseth has directed service secretaries to scrub the social media accounts of general- and admiral-level promotion candidates to ensure they are not deemed too “woke” by Mr. Hegseth’s standards, the official said.
Maggie Haberman and Eric Schmitt contributed reporting.
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