Donald Trump has had a 14-figure change of heart in three weeks.
Last month, the Republican presidential front-runner made news when he told the Washington Post that he'd push to “get rid of the $19 trillion” national debt “fairly quickly,” estimating the effort could be completed “over a period of eight years.”
But in an interview with Fortune published April 21, Trump seemed to walk it back, rejecting the idea of eliminating the national debt within 10 years. “You could pay off a percentage of it“ in that time, Trump told the magazine, stressing that the “most important thing is to make sure the economy stays strong” and adding the debt could be paid off in “smaller chunks,” larger chunks and refinancing.
“It depends on how aggressive you want to be. I'd rather not be so aggressive,” he said. “Don't forget: We have to rebuild the infrastructure of our country. We have to rebuild our military, which is being decimated by bad decisions. We have to do a lot of things. We have to reduce our debt, and the best thing we have going now is that interest rates are so low that lots of good things can be done that aren’t being done, amazingly.”
Trump's initial proposal to wipe out a $19 trillion national debt in two presidential terms struck fiscal policy experts and even outspoken deficit hawks as fanciful. The idea was also mathematically impossible to square with Trump's other promises not to cut Social Security or Medicare and to lower taxes by trillions of dollars.
A Trump campaign spokesperson didn't immediately respond to a request to explain his shift. Trump has faced criticism during his presidential run for altering his stated policy positions, sometimes sharply and rapidly.
Experts said the New York billionaire's new position makes more sense.
“His original claim that he could eliminate the debt in eight years was simply asinine,” said Loren Adler, a fiscal policy expert who works at the nonpartisan Brookings Institution. He said that even setting aside Trump's other proposals that would raise the debt, “there’s no way any president could pay of the entire debt in eight years without tax increases and spending cuts way beyond the magnitude of anything this country has seen before,” and attempting to do so would “inevitably cause a significant recession.”
“It’s obviously hard to tell which position he actually holds, but the desire to start paying off the debt slowly is certainly more sensible, particularly given today’s low-interest environment,” Adler said. “What we actually need to do is simply start lowering our debt relative to the size of our economy as we continue to recover.”
Jared Bernstein, a former economic adviser to Vice President Joe Biden, was surprised by Trump's shift but considered his call for infrastructure investments—a view supported by many Democrats—a step in the right direction.
“That's really something,” Bernstein said in an e-mail. “I gotta say, he makes numerous good, important points: low interest rates means servicing the debt is less costly and that this would be a smart time to emphasize productivity enhancing investments over debt reduction. But just to keep it real, let’s not forget that due to the massive revenue losses in his tax plan, it would be impossible to make these investments.”
Douglas Holtz-Eakin, a former director of the Congressional Budget Office and economic policy adviser to Republican John McCain's 2008 presidential campaign, cast doubt on the viability of Trump's old and new positions.
“Under current law, the debt will rise by 50 percent ($14 trillion to $21 trillion) by 2024,” he said in an e-mail. “He has proposed an enormous tax cut, promised to not touch either Social Security or Medicare, and is committed to bigger defense spending. His initial promise was preposterous and would not happen. This one is dubious as well.”
The federal government had $18.2 trillion debt outstanding at the end of the last fiscal year on Sept. 30, 2015, according to the Treasury Department. In order to even start to pay down the debt, the government would have to completely eliminate its annual budget deficit and run a surplus. Budget experts say it will be hard enough just reducing red ink. Getting rid of it entirely in any sort of reasonable time frame is considered virtually impossible. The Congressional Budget Office projects that the deficit will be $534 billion in the current fiscal year.
The U.S. last ran a surplus from 1998 through 2001, under President Bill Clinton, amid circumstances that are unlikely to be repeated. The U.S. benefited from a so-called peace dividend after the end of the Cold War, which held down military outlays. Revenues, meanwhile, were boosted by a stock market bubble that inflated capital gains. Prior to that, the U.S. had run deficits for 28 straight years.
Steve Bell, a former longtime Republican budget aide, said Trump's initial proposition to pay off the debt in eight years was "nonsensical" and based on an apparent misunderstanding of U.S. budget realities.
"Now that he is backtracking substantially on that, and even a 10 year elimination," Bell said, "I gather that his advisers have brought him a bit more up to speed on the deficit/debt situation."
—With assistance from Rich Miller.