Trump and Biden: Debt Growth

We recently estimated that former President Trump and current President Biden approved $8.4 trillion and $4.3 trillion of new ten-year borrowing (or $4.8 trillion and $2.2 trillion excluding various COVID relief bills) during their respective four years and first three years and five months in office. Measuring approved borrowing – as we did in our previous analysis – shows how much new debt each president specifically approved. Another option would be to measure how much the national debt actually grew during the period each president was in office. 

The growth in debt over a presidential term, however, does not reflect how much a president “added to the debt” – as debt accumulation is largely the result of laws on the books before a president took office (including early in a term before there is an opportunity to enact changes) and circumstances that are partially or entirely outside of a president’s control. But it can help to show how much policymakers allowed the debt to grow – including from new policy changes – under each Administration. As with the comparison of approved debt, many factors including Congressional actions and changes in the economy also influence the outcome.

In this supplemental analysis, we show:

• Federal debt held by the public grew by $5.9 trillion over the first three years and five months of President Trump’s term in office, and $7.2 trillion over his full term.
• Debt held by the public has grown $6.0 trillion during the President Biden’s three years and five months in office.
• Gross federal debt grew by $6.3 trillion over the first three years and five months of President Trump’s term and $7.8 trillion during his full term; gross debt has grown $7.0 trillion during President Biden’s term so far.
• Debt held by the public as a share of Gross Domestic Product (GDP) grew by roughly 23 percentage points under President Trump and has remained relatively flat under President Biden – though this disparity is largely driven by the timing of the COVID-19 recession, the subsequent inflation surge, and their impacts on nominal GDP.

In addition to its impact on GDP, the COVID-19 pandemic, recession, and response had a significant influence on the amount and timing of spending and revenue collections, as well as the size of Treasury’s cash balances and other financial assets, which render measures of debt growth less useful for comparison than in more stable periods.

Debt Held by the Public

Debt held by the public – which is economists’ preferred measure of the national debt because it reflects only debt that the government owes to others and not itself – grew significantly during both President Trump’s presidency and President Biden's presidency thus far. Specifically, it grew by $1.7 trillion in the first two years of President Trump’s term, $5.9 trillion in the first three years and five months, and $7.2 trillion during President Trump’s full four years in office. While President Biden hasn’t served a full term yet, debt held by the public grew by $3.0 trillion in his first two years and has grown by $6.0 trillion during his first three years and five months in office so far.

Debt held by the public was $14.4 trillion when President Trump took office, grew to $20.3 trillion after the first three years and five months he was in office, and ended at $21.6 trillion after he finished his full term, and President Biden began his, in January 2021. Debt held by the public then grew to $27.6 trillion today under President Biden. 

It is important to note that the Treasury was holding an unusually large $1.7 trillion in cash when President Trump left office, which inflated the growth in debt relative to the cumulative deficits run during his time in office. Debt held by the public net of cash balances grew by $6.0 trillion during President Trump’s full term and has grown by $6.9 trillion during President Biden’s three years and five months in office so far. 

Gross Debt

The gross national debt, which includes federal debt held by other parts of the federal government such as the Social Security and federal worker retirement trust funds , also grew under both President Trump and President Biden. Gross federal debt grew by $2.0 trillion in President Trump’s first two years in office, $6.3 trillion in his first three years and five months, and $7.8 trillion over his entire presidency. Gross federal debt grew by $3.7 trillion in President Biden’s first two years in office and $7.0 trillion in his first three years and five months.

Gross debt stood at $20.0 trillion when President Trump took office, grew to $26.4 trillion after three years and five months, and ended at $27.8 trillion by the day he left office. Gross debt grew from $27.8 trillion when President Biden took office to about $34.7 trillion today.

A substantial portion of this debt came during the COVID-19 pandemic, when Congress and the President approved trillions of dollars in borrowing to provide relief for families and businesses, support the economy, and combat the pandemic itself. In particular, the gross federal debt grew by $4.5 trillion during President Trump’s final year in office and by $2.1 trillion during President Biden’s first year in office. 

Debt Held by the Public as a Share of GDP 

Debt held by the public as a share of GDP grew by 23 percentage points under President Trump but has remained relatively flat under President Biden. This disparity can be explained in large part by a temporary drop in nominal GDP during the final year of the Trump Administration resulting from the pandemic and a huge increase in nominal GDP over the next three years due mainly to the recovery and to surging inflation. Had nominal GDP followed pre-pandemic projections, debt would have grown by 20 percentage points under President Trump and 11 percentage points under President Biden. Net of cash balances, the debt-to-GDP ratio would have grown by 15 percentage points under President Trump and 16 percentage points so far under President Biden.

Importantly, the amount by which debt grew during their respective terms is not the same as the amount the presidents and Congress added to the debt through legislation and executive actions they approved. We estimate that President Trump approved 8.4 trillion of new ten-year borrowing during his term, while President Biden has approved $4.3 trillion of new ten-year borrowing thus far in his term. Excluding the CARES Act and other COVID relief, we estimate President Trump approved $4.8 trillion of borrowing. Excluding the American Rescue Plan, we estimate President Biden has approved $2.2 trillion.

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