Media Are Misleadingly Citing Wharton Budget Estimates to Underplay Deficit Impact of Kamala Harris’s Proposals

During Tuesday’s presidential debate, Vice President Kamala Harris said, “What the Wharton School has said is Donald Trump’s plan would actually explode the deficit.” The comment put the Penn Wharton Budget Model in the spotlight, but unfortunately the media are offering an incomplete citation of the report that underplays the deficit impacts of Harris’s proposals. 

The headline number that is getting tossed around is that the model says that the Trump campaign proposals would increase deficits by $5.8 trillion while the Harris proposals would increase them by $1.2 trillion. Looked at together, this suggests that Trump would increase deficits almost five times as much as Harris would. 

But if you read the Wharton report past the bullet points you find this very important caveat in an update from last week: “Some media outlets also report that the Harris campaign supports extending the 2017 Tax Cuts and Jobs Act for households with annual incomes below $400,000. Following longstanding tradition, PWBM focuses on specific plans and does not score media speculation.”

Thus, the headline figure of $5.8 trillion vs. $1.2 trillion assumes Trump extends all of the tax cuts, but does not take into account that Harris has pledged to keep most of them. For the $1.2 trillion estimate to hold, it would mean that Harris plans to violate a key campaign promise and would support the largest middle-class tax hike in history.

There is a question about how much the Harris pledge would change deficit estimates. A September 3 update to the Penn Wharton estimate says that extending the tax cuts for those making under $400,000 would increase deficits by about $1.46 trillion, while also projecting that other tax increases in President Biden’s budget would offset $1.2 trillion of that if Harris enacts them. A rival estimate by the Committee for a Responsible Federal Budget pegs the revenue loss of extending the tax cuts for those below $400,000 at anywhere from $1.55 trillion to $2.45 trillion. 

Either way, this is important context that is missing from media references to the study.

At Axios, Felix Salmon reported, “Keeping Trump’s campaign promises would increase the national debt by $5.8 trillion over 10 years, while Harris’ would cost $1.2 trillion.”

CNBC’s initial writeup of the studies opened:

Former President Donald Trump’s economic proposals would increase federal deficits by $5.8 trillion over the next decade, almost five times more than those of Vice President Kamala Harris, which would add $1.2 trillion, according to a new pair of studies from the nonpartisan Penn Wharton Budget Model.

One could argue that the Axios and CNBC reports came out before Wharton had added the caveat to its report. It still is unclear how any economic reporter wouldn’t have asked about that detail before writing up the report. But either way, that doesn’t explain why articles are continuing to mislead. 

The Associated Press fact check of the debate, written after the updated version of the Wharton report, included the following line:

THE TRUTH: The Penn-Wharton Budget Model did find that Trump’s tax and spending plans would significantly expand the deficit by $5.8 trillion over ten years. But it also found that Harris’ plans would increase the deficit by $1.2 trillion over the same period.

A CNN report from this Tuesday, incredibly, notes the Harris pledge but suggests that the $1.2 trillion figure takes the tax cut extensions into account:

And like Trump, she’s promised to end taxes on tips. She’s also pledged not to raise taxes on households making less than $400,000 annually. Both would growon [sic] the deficit.

Taken together, the Penn Wharton Budget model estimates Harris’ proposals could increase the deficit by an additional $1.2 trillion by 2034.

Taken together?

Don’t get me wrong. I’m not fan of Trump’s fiscally reckless policies, particularly his rejection of any reforms to unsustainable entitlements, but what the media are doing is essentially letting Harris bank a large increase in revenue without reporting that for this to hold, it would require a massive middle-class tax increase that would violate a core campaign pledge.