Neither presidential candidate’s policies would have a major impact on economic growth, according to a new independent analysis, but the biggest effects would come from their proposed changes to immigration policies.
“The economic impact of fiscal policy would be extremely small over the next decade for either candidate,” the Committee for a Responsible Federal Budget, a nonprofit organization that advocates for lower deficits, concluded in an analysis released Monday.
Donald Trump’s tax cut proposals would modestly boost the economy, while falling far short of the 5 percent or 6 percent annual gross domestic product growth the Republican nominee suggested was possible. Hillary Clinton’s call to raise $1.4 trillion in taxes on the wealthy to pay for new spending programs such as tuition-free college would modestly crimp growth.
When the possibility of immigration reform is taken into account, however, the picture changes significantly.
Including Clinton’s call for comprehensive immigration reform to bring more people into the country, growth would be boosted by 0.3 percent per year, the group found. Trump’s plan to stem illegal immigration would have the opposite effect.
Importantly, however, Clinton’s immigration plans would reduce per capita output marginally because more people would be in the country, while Trump’s would boost per capita growth.
The Committee for a Responsible Federal Budget’s estimates are based on analyses of the candidates’ tax plans from another think tank, the Tax Policy Center, and analyses of their spending plans are taken from the Congressional Budget Office.
The study does not consider the candidates’ proposals for trade, energy or regulatory reform. As a result, it excludes the areas that the Trump campaign has said it would rely on for growth, although economists outside the campaign have been skeptical.
The analysis is just one of several that outside groups have tried to conduct. For another example, Moody’s Analytics considered the two plans earlier this year and concluded that Trump’s platform would pitch the U.S. into recession. Clinton’s plan would boost growth despite her planned tax increases, the group found, because her infrastructure spending program and immigration reform would outweigh the damage.
