FACT CHECK: Ro Khanna Claims Tax Cuts And Wars Are The Primary Reasons For National Debt Increase
Democratic California Rep. Ro Khanna claims previous Republican presidents’ tax cuts and former President George W. Bush wars are the four reasons for the increase in the national debt.
The national debt was caused by 4 things:
1) Reagan’s tax cuts,
2) Bush’s tax cuts,
3) Trump’s tax cuts, and
4) Bush’s overseas wars.
We don’t need a fiscal commission to study it. Everyone knows Johnson’s fiscal commission will recommend cuts in Social Security & Medicare.…
— Ro Khanna (@RoKhanna) November 29, 2023
Although what Khanna listed has contributed to the national debt, experts pointed out that additional factors, such as COVID-19 spending and the 2008 financial crisis, also contributed significantly to the national debt.
Khanna claimed in a post shared on X, formerly Twitter, that the national debt was caused by previous Republican presidents’ tax cuts and former President George W. Bush wars.
“We don’t need a fiscal commission to study it. Everyone knows Johnson’s fiscal commission will recommend cuts in Social Security & Medicare.…” the post reads.
While those actions contributed significantly to the national debt, there are other events that also caused substantial deficits. The national debt has increased from $5.8 trillion in 2001 to $33 trillion in 2023, according to the Treasury Department.
Following the 2008 financial crisis, former President Barack Obama pushed Congress to approve of a nearly $800 billion package of tax cuts and stimulus spending in 2009 to boost the economy’s recovery, according to The New York Times. In 2020, former President Donald Trump responded to a recession caused by the COVID-19 pandemic by approving aid packages totaling over $3 trillion which included direct stimulus checks, the outlet reported.
Ben Ritz, the director of Progressive Policy Institute’s Center for Funding America’s Future, told Check Your Fact that “there are three primary causes for the debt increasing” since 2001.
“The national debt can be attributed to the tax cuts made by Bush, the 2008 financial crisis and stimulus measures enacted in response to COVID-19,” Ritz said. “Debt as a percentage of gross domestic product today would roughly be the same level as it was in 2000 had these three things not happened.”
Ritz said that “future debt accumulation” is primarily caused by social programs such as Medicare and Social Security.
“That debt is primarily caused by health-care and retirement programs, namely Medicare and Social Security, growing faster than our economy as the population ages. Although it is technically correct that projections showed revenue keeping pace with this spending growth before most of the Bush Tax Cuts were made permanent, those projections depended on an assumption that revenues would be allowed to rise on autopilot to unprecedented levels as a percent of national income,” Ritz said.
A Khanna spokesperson directed Check Your Fact to an article by the Center for American Progress that attributed the debt in part to tax cuts made during the Bush and Trump administrations.
“These tax cuts have added $10 trillion to the debt since their enactment and are responsible for 57 percent of the increase in the debt ratio since 2001, and more than 90 percent of the increase in the debt ratio if the one-time costs of bills responding to COVID-19 and the Great Recession are excluded,” the article reads.
The Khanna spokesperson also cited a Harvard paper from Linda Bilmes, a senior lecturer in public policy at Harvard University, about the cost of the Iraq and Afghanistan wars. Bilmes writes that taken together, the Iraq and Afghanistan conflict were the most expensive wars in US history – totaling somewhere between $4 to $6 trillion.
Bilmes agreed with the factors Khanna outlined in an email to Check Your Fact, but added two additional ones—COVID-19 spending and higher entitlement spending due to demographic changes.
“I would point out that we balanced the budget in 1998-2001, under Clinton, through higher taxes and lower spending. I served as Assistant Secy of Commerce then, so I was involved. So if you take 2001 as a starting point (last time we had a fiscal surplus), then the factors are: 1. Bush tax cuts in 2001 and 2003 2. Wars in Iraq and Afghanistan 3. Trump tax cuts 4. Covid 19 spending 5. Demographic changes leading to higher entitlement spending,” Bilmes said.
A spokesperson for the Urban-Brookings Tax Policy Center pointed to the CAP analysis as the source for Khanna. The spokesperson also pointed to a document from the Manhattan Institute showing data that federal spending has gone up by 20.4% between 1960 and 2022.
E.J. Antoni, an economist at the Heritage Foundation, a conservative think tank, told Check Your Fact that Khanna’s point about Bush’s war was broadly correct, but disputed that tax cuts are a major reason for the national debt.
“He does have a point when George Bush’s foreign wars. That was an absolute disaster, not just in terms of foreign policy, but financially. We essentially wasted a trillion dollars, at least a trillion dollars. So that part of the narrative, you can say at least, is true,” Antoni said.
Marc Goldwein, senior policy director at the non-partisan watchdog Committee for a Responsible Federal Budget, said that “it’s true” that the Reagan tax cuts contributed to the debt. (RELATED: New York Times Misleads On DeSantis-Newsom Debate Fact-Checks)
“It’s true that if we didn’t have the Reagan tax cuts, the debt would be under control, but if we didn’t have the Reagan tax cuts, Americans would be paying massive, massive, massive amounts of taxes,” Goldwein said.
“The big story is spending growth. Revenue is lower than it was in 2001, it is lower than its historic average, but not by a lot. Spending is way above where it was in 2001,” Goldwein added.
Adam Michel, the director of tax policy studies at the Cato Institute, a libertarian think tank, said that “blaming the current fiscal problems on tax cuts is highly misleading.” (RELATED: Fact-Checking The Third Republican Presidential Primary Debate)
“What I think is more informative is looking at what is driving the future fiscal imbalance moving forward and clearly it is not defense spending that is driving that fiscal imbalance. It’s almost exclusively in mandatory spending programs, which include Medicare, Medicaid, Social Security and health entitlements,” Michel added.
The number of people aged 65 or older increasing faster than the working-age population is another major contributor to federal spending, according to the Peter G. Peterson Foundation.
Check Your Fact reached out to the Center for American Progress for comment and will update this article if a response is provided.
Elias Atienza contributed to this report.