It was a split-screen debate for the three leading GOP presidential contenders Wednesday, with Nikki Haley and Ron DeSantis squaring off on CNN, and Donald Trump taking to Fox News for a counterprogramming town hall.
But across the two stages in Iowa—the state that will host the first 2024 caucuses on Monday—the three rivals had one big thing in common: an account of the U.S. economy that was completely divorced from reality, along with a host of plans that would actually exacerbate the problems they enumerated.
With Iowans, like most voters, naming the economy as their No. 1 issue, the three candidates were all asked about how they’d run things from the White House. And while Trump characteristically glossed over his own record and avoided offering many specifics on what he’d do with a second term, Haley and DeSantis delved into some details on their tax programs, intentions for Social Security, and plans to address inflation.
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At least, the CNN moderators tried to get Haley and DeSantis to address some specifics. When Dana Bash asked Haley how she would make things more affordable, she offered an abridged version of her stump speech, calling for “an accountant in the White House” and to simply “quit borrowing, cut up the credit cards.”
That proposal—to simply stop borrowing money overnight and not run a deficit—would almost certainly crash the economy. The U.S. government is projected to have spent $6.3 trillion in 2023, accounting for about 25 percent of the GDP. Meanwhile, the government brought in $4.3 trillion in revenues, meaning it will have to borrow about $2 trillion to close the shortfall.
But with health-care programs like Medicare, Medicaid, and the Children’s Health Insurance Program accounting for about $1.5 trillion, Social Security accounting for $1.4 trillion, defense about $800 billion, interest payments on the existing U.S. debt being about $660 billion, and veterans and government retiree benefits adding up to about $500 billion, just those expenses add up to more than $5 trillion—more than what the government brings in, before a self-imposed recession would further reduce tax revenue. (And these outlays exclude education programs, law enforcement costs, transportation spending, science and medical research, and thousands of other government programs that Republicans themselves have overwhelmingly supported.)
But while Haley offered an unserious government spending proposal, DeSantis expounded on a nonsensical tax plan that didn’t even seem to make sense to him.
DeSantis has tried to offer a simplistic approach to taxes: the flat tax, a program that would impose the same federal tax percent on everyone, no matter how much they make.
Sensing that raising taxes on the lowest income earners would be extremely unpopular, however, DeSantis seemed to suggest his “flat tax” could also have multiple tax brackets—and said he wouldn’t raise taxes on anyone.
If that proposal was to be taken seriously, DeSantis is proposing a flat tax rate of 10 percent, which would dramatically cut revenue while slashing how much the highest income earners (who pay a 37 percent tax rate) are charged while doing just about nothing for the poorest Americans.
(Under the current progressive tax rate, individual filers already pay a 10 percent federal tax rate after the first $11,600 of income, while joint filers don’t pay anything on the first $23,000 of income.)
DeSantis, seeming to recognize how that might be a tough pill to swallow, then suggested he might exempt taxes on “the first forty, fifty grand.”
“That’s just to subsist,” he said.
The topic of subsisting was also a common theme, with all three candidates—on both stages—suggesting the economy was in a far more dire state than the numbers suggest.
Unemployment is currently at the historically low 3.7 percent. GDP growth has been historically high (4.9 percent in the third quarter of last year, the last quarter for which there is data). The Dow Jones is near an all-time high. Inflation is dramatically down (Personal Consumption Expenditures, a key indicator of inflation, is at 1.9 percent over the last six months, which is below the Federal Reserve’s target of 2 percent). And gas prices are actually lower, adjusted for inflation, than at any time during Trump’s presidency.
All three candidates particularly seemed to be living in an alternate reality on gas prices.
To start, Trump suggested people were paying “$4 or $5” a gallon on a day when the national average was $3.07, and some states were experiencing average gas prices under $2.65 a gallon. (In Iowa, where Trump was on Wednesday, the average gas price was $2.77 a gallon.)
Part of that equation is that U.S. oil production is higher than ever before. But judging by what the candidates said Wednesday night, you would have never guessed that.
When asked what his top economic policy priority would be to lower costs for Americans, DeSantis repeated his call to “open up all energy for production because that will be deflationary.”
Increasing oil production also seemed to be a key principle for Trump. When he was asked how he would decrease the national debt—which he added $8 trillion to when he was president—he suggested the U.S. could sell more oil.
Haley emerged from the economic exchanges more or less unscathed. Yet beyond her normal stump speech buzzwords about getting an accountant in the White House and halting all federal borrowing, she only suggested one-off programs.
“We’ll start by clawing back $100 billion of unspent COVID dollars,” Haley said, referring to the unspent pandemic stimulus funds without a dedicated home, totalling just over $90 billion at the start of last year. (Haley has previously estimated the amount of unspent pandemic aid to be as high as $500 billion.)
Similarly, Haley called for halting the Biden administration’s plans to backfill 87,000 IRS workers in favor of going after “COVID fraud,” which she argued would bring back hundreds of billions of dollars into the federal budget. (An Associated Press analysis found some $280 billion of COVID relief was lost to fraud, and another $123 billion wasted or misspent.)
Republican presidential candidate Nikki Haley speaks during a Fox News Channel town hall.
Scott Morgan/ReutersMeanwhile, the only other remotely substantive portion of the economic exchange was Haley calling for states to be able to repurpose a portion of the federal gas tax for their own projects, instead of national infrastructure.
Still, the award Wednesday night for the least substantive proposals would have to go to Trump, facing softball questions from a Fox News crowd of supporters.
Trump kept to his characteristically sweeping proclamations—like the Biden economy is terrible, and his was historically good, if you forget COVID. But with no one on stage to challenge him about his fanciful assertions, Trump seemed to get away with even more than usual.
The former president even brushed off a gentle inquiry on his statement from this week, in which he expressed hope that the economy would tank.
“I don’t want to be Herbert Hoover,” Trump said Wednesday night.
The Fox moderators, Brett Baier and Martha MacCallum, didn’t challenge him further on it. Baier even clarified that he was “not saying you’re hoping for a crash, just to be clear,” even though Trump said Monday night that, “when there’s a crash, I hope it’s going to be during this next 12 months.”
In a typically Trumpian flare, the former president insisted that the current economy is “horrible” and that the only good thing about it is the stock market, which he said was strong because the markets anticipate he will return to office.
“I think the stock market’s going up because I’m leading Biden in the polls. Every poll. Every single poll,” Trump said, falsely.
“If I wasn’t leading, the stock market would be 25 percent lower,” he added.
