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    Harris Economic Plan Focuses on Prices, a Key Vulnerability

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    Vice President Kamala Harris has been balancing the challenges of defending “Bidenomics” and charting her own course on the economy.As Vice President Kamala Harris unveiled her economic plans in recent weeks, former President Donald J. Trump has accused her of being a Marxist, a communist and a socialist.When they meet on Tuesday night for their only scheduled presidential debate, Ms. Harris will have the opportunity to rebut those claims and confront Mr. Trump about his record of managing the U.S. economy.She will also lay out her vision, which has been challenging as she tries to defend “Bidenomics” and demonstrate that she has a plan to chart a new course amid widespread economic discontent among many Americans who are struggling with high prices and other affordability issues.In a compressed presidential campaign, Ms. Harris indicated that she would continue many of President Biden’s policies, which aim to raise taxes on companies and punish them for price gouging, while also trying to strike a more business-friendly tone. In some cases, such as her embrace of ending taxation of tips, the vice president has even shown a willingness to adopt the policies put forward by Mr. Trump.How Ms. Harris would ultimately govern if elected will depend largely on the makeup of Congress, but her initial suite of proposals — from taxes to trade to child care — suggests that she would take the economy in a vastly different direction than her Republican opponent.Cost of LivingPerhaps Ms. Harris’s biggest political vulnerability is the run-up in prices that occurred during the Biden administration. Mr. Trump has repeatedly blamed the vice president for causing inflation to surge after the coronavirus pandemic, a phenomenon that stemmed from a mix of factors such as supply chain issues, Russia’s invasion of Ukraine and repeated bursts of fiscal stimulus to keep families and businesses afloat. The higher cost of goods initially hurt Mr. Biden when he was running against Mr. Trump, and Ms. Harris is now facing many of the same concerns from Americans who are feeling negative about a relatively strong economy.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    Harris and Trump Offer a Clear Contrast on the Economy

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    Both candidates embrace expansions of government power to steer economic outcomes — but in vastly different areas.Vice President Kamala Harris and former President Donald J. Trump flew to North Carolina this week to deliver what were billed as major speeches on the economy. Neither laid out a comprehensive policy plan — not Ms. Harris in her half-hour focus on housing, groceries and prescription drugs, nor Mr. Trump in 80 minutes of sprinkling various proposals among musings about dangerous immigrants.But in their own ways, both candidates sent voters clear and important messages about their economic visions. Each embraced a vision of a powerful federal government, using its muscle to intervene in markets in pursuit of a stronger and more prosperous economy.They just disagreed, almost entirely, on when and how that power should be used.In Raleigh on Friday, Ms. Harris began to put her own stamp on the brand of progressive economics that has come to dominate Democratic politics over the last decade. That economic thinking embraces the idea that the federal government must act aggressively to foster competition and correct distortions in private markets.The approach seeks large tax increases on corporations and high earners, to fund assistance for low-income and middle-class workers who are struggling to build wealth for themselves and their children. At the same time, it provides big tax breaks to companies engaged in what Ms. Harris and other progressives see as delivering great economic benefit — like manufacturing technologies needed to fight global warming, or building affordable housing.That philosophy animated the policy agenda that Ms. Harris unveiled on Friday. She pledged to send up to $25,000 in down-payment assistance to every first-time home buyer over four years, while directing $40 billion to construction companies that build starter homes. She said she would permanently reinstate an expanded child tax credit that President Biden temporarily established with his 2021 stimulus law, while offering even more assistance to parents of newborns.She called for a federal ban on corporate price gouging on groceries and for new federal enforcement tools to punish companies that unfairly push up food prices. “My plan will include new penalties for opportunistic companies that exploit crises and break the rules,” she said, adding: “We will help the food industry become more competitive, because I believe competition is the lifeblood of our economy.”We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    One Obstacle for Trump’s Promises: This Isn’t the 2016 Economy

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    Donald J. Trump slapped tariffs on trading partners and cut taxes in his first term. But after inflation’s return, a repeat playbook would be riskier.When Donald J. Trump became president in 2017, prices had risen roughly 5 percent over the previous four years. If he were to win the race for the White House in 2024, he would be entering office at a time when they are up 20 percent and counting.That is a critically different economic backdrop for the kind of policies — tariffs and tax cuts — that the Republican contender has put at the center of his campaign.Mr. Trump regularly blames the Biden administration for the recent price surge, but inflation has been a global phenomenon since the onset of the coronavirus pandemic in 2020. Supply chain problems, shifting consumer spending patterns and other quirks related to pandemic lockdowns and their aftermath collided with stimulus-fueled demand to send costs shooting higher.The years of unusually rapid inflation that resulted have changed the nation’s economic picture in important ways. Businesses are more accustomed to adjusting prices and consumers are more used to those changes than they were before the pandemic, when costs had been quiescent for decades. Beyond that, the Federal Reserve has lifted interest rates to 5.3 percent in a bid to slow demand and wrestle the situation under control.That combination — jittery inflation expectations and higher interest rates — could make many of the ideas Mr. Trump talks about on the campaign trail either riskier or more costly than before, especially at a moment when the economy is running at full speed and unemployment is very low.Mr. Trump is suggesting tax cuts that could speed up the economy and add to the deficit, potentially boosting inflation and adding to the national debt at a time when it costs a lot for the government to borrow. He has talked about mass deportations at a moment when economists warn that losing a lot of would-be workers could cause labor shortages and push up prices. He promises to ramp up tariffs across the board — and drastically on China — in a move that might sharply increase import prices.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    Biden’s $7.3 Trillion Budget Proposal Highlights Divide With Trump and GOP

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    President Biden proposed a $7.3 trillion budget on Monday packed with tax increases on corporations and high earners, new spending on social programs and a wide range of efforts to combat high consumer costs like housing and college tuition.The proposal includes only relatively small changes from the budget plan Mr. Biden submitted last year, which went nowhere in Congress, though it reiterates his call for lawmakers to spend about $100 billion to strengthen border security and deliver aid to Israel and Ukraine.Most of the new spending and tax increases included in the fiscal year 2025 budget again stand almost no chance of becoming law this year, given that Republicans control the House and roundly oppose Mr. Biden’s economic agenda. Last week, House Republicans passed a budget proposal outlining their priorities, which are far afield from what Democrats have called for.Instead, the document will serve as a draft of Mr. Biden’s policy platform as he seeks re-election in November, along with a series of contrasts intended to draw a distinction with his presumptive Republican opponent, former President Donald J. Trump.Mr. Biden has sought to reclaim strength on economic issues with voters who have given him low marks amid elevated inflation. This budget aims to portray him as a champion of increased government aid for workers, parents, manufacturers, retirees and students, as well as the fight against climate change.Speaking in New Hampshire on Monday, Mr. Biden heralded the budget as a way to raise revenue to pay for his priorities by raising taxes on the wealthiest Americans and big corporations.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    Yellen Hits Trump Over Handling Of Economy

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    The Treasury Secretary acknowledged that consumer prices, which have weighed on economic sentiment, continue to be too high.Treasury Secretary Janet L. Yellen criticized the Trump administration’s economic policies, while praising the Biden administration for successfully navigating the pandemic.Yuri Gripas for The New York TimesTreasury Secretary Janet L. Yellen defended the Biden administration’s economic agenda on Thursday, drawing sharp contrasts with the policies of the Trump administration as President Biden begins to make the general election argument that he has been a stronger steward of the economy than his predecessor.The comments from Ms. Yellen came after new data released on Thursday bolstered that message: The United States economy grew at a healthy clip over the past year, surpassing 3 percent and defying expectations of a recession. The strong numbers coincided with an effort by the White House to amplify the president’s economic record and dispatch his top economic advisers around the country to make the case that his strategy is working.Biden administration officials are trying to convince a skeptical public that, while they may feel pessimistic about the economy, its performance is delivering gains to average Americans. Officials are expected to spend the coming months highlighting the investments that Mr. Biden has directed toward infrastructure, domestic manufacturing and clean energy projects.In a speech at the Economic Club of Chicago, Ms. Yellen argued that the Biden administration had successfully navigated challenging headwinds caused by the pandemic and led a recovery that has outpaced those in the rest of the world. She also suggested that the Biden administration needed more time to tackle affordability issues, such as improving access to child care and housing.“Our economic agenda is far from finished,” Ms. Yellen said.The Treasury secretary also took the rare step of directly criticizing the policies of Mr. Biden’s predecessor and likely opponent, former President Donald J. Trump. Pointing to Mr. Trump’s repeated pledges to rebuild America’s roads and bridges, she recalled how those promises went unfulfilled.“Our country’s infrastructure has been deteriorating for decades,” Ms. Yellen said. “In the Trump administration, the idea of doing anything to fix it was a punchline.”We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber?  More

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    Higher Rates Stoke a Growing Chorus of Deficit Concerns

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    A long period of higher interest rates would make the government’s large debt pile costly, a possibility that is fueling a conversation about debt sustainability.The U.S. government’s persistent budget deficit and growing debts were low on Wall Street’s list of worries when interest rates were at rock bottom for years. But borrowing costs have risen so sharply that it is causing many investors and economists to fret that the United States’ big debt pile could prove less sustainable.Federal Reserve officials have raised interest rates to about 5.3 percent since early 2022 in a bid to control inflation. Officials predicted at their meeting last month that interest rates could remain high for years to come, shaking expectations among investors who had bet on rates falling notably as soon as next year.The realization that the Fed could keep borrowing costs high for a long time has combined with a cocktail of other factors to send long-term interest rates soaring in financial markets. The rate on 10-year Treasury bonds has been climbing since July, and reached a nearly two-decade high this week. That matters because the 10-year Treasury is like the market’s backbone: It helps drive many other borrowing costs, from mortgages to corporate debt.The exact cause of the latest run-up in Treasury rates is hard to pinpoint. Many economists say a combination of drivers is probably helping to drive the pop — including strong growth, fewer foreign buyers of America’s debt, and concerns about debt sustainability in and of itself.What’s clear is that if rates remain elevated, the federal government will need to pay investors more interest in order to fund its borrowing. America’s gross national debt stands just above $33 trillion, more than the total annual output of the American economy. The debt is projected to keep growing both in dollar figures and as a share of the economy.While the climbing cost of holding so much debt is stoking conversations among economists and investors about the appropriate size of the government’s annual borrowing, there is no consensus in Washington for deficit reduction in the form of either higher taxes or big spending cuts.Still, the renewed concern is a stark reversal after years in which mainstream economists increasingly thought that the United States might have been too timid when it came to its debt: Years of low interest rates had convinced many that the government could borrow cheap money to pay for relief in times of economic trouble and investments in the future.The deficit as a share of the economy rose this year under President Biden even though the economy was growing.Pete Marovich for The New York Times“How big of a problem deficits are depends — and it depends very critically on interest rates,” said Jason Furman, an economist at Harvard and former economic official under the Obama administration. “That’s changed a lot,” so “your view on the deficit should change as well.”Mr. Furman had previously estimated that the growing cost of interest on federal debt would remain sustainable for some time, after factoring in inflation and economic growth. But now that rates have climbed so much, the calculus has shifted, he said.Since 2000, the United States has run an annual budget deficit, meaning it spends more than it receives in taxes and other revenue. It has made up the gap by borrowing money.Tax cuts, spending increases and emergency economic assistance approved by both Democratic and Republican presidents has helped fuel the rising deficits in recent years. So has the aging of America’s population, which has driven up the costs of Social Security and Medicare without corresponding increases in federal tax rates. The deficit as a share of the economy rose this year under President Biden even though the economy was growing, just as it did in the prepandemic years under President Donald J. Trump.Now, borrowing costs are poised to add to the gap.Higher interest rates are a leading cause, along with surprisingly weak tax collections, of what the Congressional Budget Office projects will be a doubling of the federal budget deficit over the last year. The deficit, when properly measured, grew from $1 trillion in the 2022 fiscal year to an estimated $2 trillion in the 2023 fiscal year, which ended last month.If borrowing costs climb further — or simply remain where they are for an extended period — the government will accumulate debt at a much faster rate than officials expected even a few months ago. A budget update released by Biden administration economists in July predicted annual average interest rates on 10-year Treasury bonds would not exceed 3.7 percent at any time over the next decade. Those rates are now hovering around 4.7 percent.That recent surge in longer-term bond yields ties back to a number of factors.While the Federal Reserve has been raising short-term interest rates for roughly 18 months, rates on longer-term bonds had remained fairly stable over the first half of this year. But investors have been slowly coming around to the possibility that the Fed will leave interest rates higher for longer — partly because growth has remained solid even in the face of elevated borrowing costs.At the same time, there have been fewer buyers for government bonds. The Fed has been shrinking its balance sheet of bonds as it reverses a pandemic-era stimulus policy, which means that it is no longer buying Treasuries — taking away a source of demand. And key foreign governments have also pulled back from bond purchases.“We’ve whittled down to a smaller universe of buyers,” said Krishna Guha, head of global policy and central bank strategy at Evercore ISI.Some analysts have suggested that the pickup in bond yields could also tie back to concerns about debt sustainability. To pay higher interest costs, the government may need to issue even more debt, compounding the problem — and focusing attention on America’s mammoth debt pile, said Ajay Rajadhyaksha, global chairman of research at Barclays.“The problem is not just that number,” he said, referencing the increasing deficit. “The problem is that this economy is as good as it gets.”The economy has remained strong even though the Federal Reserve has raised borrowing costs. That has many expecting the Fed to leave rates higher for longer.Jim Wilson/The New York TimesThat, several economists have said, is the core of the issue: America is borrowing a lot even at a time when the unemployment rate is very low and growth is strong, so the economy does not need a lot of government help.“Right now we have an incredible amount of issuance at the same time as the Fed is messaging higher for longer,” said Robert Tipp, chief investment strategist at PGIM Fixed Income, noting that typically higher issuance comes in periods of turmoil when central bank policy is more accommodative. “This is like a wartime budget deficit but without any help from the central bank. That is why this is so different.”White House officials say it is too early to know whether rising bond yields should spur Mr. Biden to add new deficit-reduction proposals to the $2.5 trillion in plans he included in this year’s budget. Those proposals consist largely of tax increases on corporations and high earners.“We might be having a different discussion about this a month from now,” said Jared Bernstein, the chair of the White House Council of Economic Advisers. “And when you’re writing budgets, you don’t go back and change your path lightly.”The Treasury Department has sold close to $16 trillion of debt for the year through September, up roughly 25 percent from the same period last year, according to data from the Securities Industry and Financial Markets Association. Much of that issuance replaced existing debt that was coming due, leaving a net debt issuance of around $1.7 trillion, more than at any other point over the past decade except for the pandemic-induced bond binge in 2020. The Treasury’s own advisory committee forecasts the size of government debt sales to rise another 23 percent in 2024.Maya MacGuineas, the president of the bipartisan Committee for a Responsible Federal Budget and a longtime proponent of reducing deficits, said it was hard to tell what had caused rates to climb recently. Still, she said, the move serves as a “reminder.”“From a fiscal perspective, the story is very simple: If you borrow too much, you become increasingly vulnerable to higher interest rates,” she said.Santul Nerkar More

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    Oregon Town’s Marijuana Boom Yields Envy in Idaho

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    Tax revenue has surged since cannabis stores opened in Ontario, Ore., fueling a push in neighboring Idaho to legalize sales and get in on the action.For John Leeds, the hour-and-a-half commute to and from his job as assistant manager at Treasure Valley Cannabis Company is exhausting, but logistically unavoidable.Like nearly half of the other employees, Mr. Leeds, 39, lives in Idaho and travels along Interstate 84, past sprawling alfalfa and onion fields, to the marijuana shop just across the Oregon state line, where cannabis is legal.“It’s really two different worlds,” Mr. Leeds said. “A lot of whiplash on this issue just in a car ride up and down the highway.”Every day, hundreds of customers and workers like Mr. Leeds make the pilgrimage from Idaho to Ontario, Ore., a small city nestled along the Snake River that is home to 11 dispensaries — roughly one for every 1,000 residents. They can compare the aromas of various strains of marijuana and gather the staff’s insights on THC levels in edibles.The cannabis boom is helping to drive a thriving local economy — and tax revenues that have paid for new police positions, emergency response vehicles, and park and trail improvements.Missing out on the action has become increasingly frustrating to some politicians and longtime residents in Idaho, where the population and living costs have surged in recent years.Because the sale or possession of marijuana remains illegal at the federal level, many states — and in this case neighboring ones — have landed on drastically different approaches for whether and how to decriminalize, regulate and tax cannabis. Since 2012, 23 states have legalized it for recreational use, and more than three dozen allow medical marijuana.Eleven states, mostly conservative-leaning, have enacted extremely limited medical marijuana laws. Aside from cannabis-derived drugs approved by the U.S. Food and Drug Administration for limited medical use, Idaho has not legalized any cannabis sales — a prohibition that has helped its more progressive neighbors.“Our cannabis market caters almost exclusively to Idaho residents,” said Ontario’s mayor, Debbie Folden. “This has been an economic boom unlike any this city has seen.”The patchwork of laws, which vary by state and often by county, have created similar commuter-propelled booms in other parts of the country as well, said Mason Tvert, a partner at VS Strategies, a national cannabis policy and public affairs firm in Denver.Texans travel to Colorado to stock up on their favorite strains or edibles, and Indiana residents make the trek to Michigan, he said. “Demand will be met by either the illegal market or by a legal market in another state,” Mr. Tvert said.That proposition, and the larger economic equation, are not lost on officials in Idaho.Last year, the state approached two million residents, a swell attributed largely to people moving from California and looking for overall cheaper costs of living. Only Florida grew faster.At the same time, property taxes have increased 20 percent since 2018, according to a report from the Idaho Center for Fiscal Policy, a nonpartisan group. And the state’s budget — currently showing a surplus — is expected to come under strain, the group noted, citing legislation that cut income taxes by roughly $500 million over three years even as population growth put new demands on health care, education and transportation.Some longtime residents of the state are tired of seeing the marijuana tax dollars go elsewhere as prices increase from the newer residents arriving.Legalizing and taxing cannabis sales could bring in revenue and help offset any budgetary concerns, said Joe Evans, a lead organizer for Kind Idaho, a group pushing to legalize medical marijuana.“That money should not be leaving the state of Idaho,” said Joe Evans, who supports the legalization of medical marijuana in the state.Ellen Hansen for The New York Times“That money should not be leaving the state of Idaho,” said Mr. Evans, who noted the entrepreneurial spirit of the region, home to Joe Albertson, who started a local grocery store chain, Albertsons, and laid the foundation for a multibillion-dollar national business.But for Mr. Evans, who served with the Army in Iraq and Afghanistan and knows fellow veterans who use cannabis for pain relief, legalization is also about something bigger than money. It is long past time, he said, for his state to legalize a substance that can offer relief for some medical conditions.Patients who use marijuana, especially older or chronically ill Idahoans, shouldn’t have to drive an hour or more to Oregon, he said.“This is about patient advocacy,” said Mr. Evans, who hopes the state will next year consider a measure to legalize cannabis for medicinal use.It would not be the first try.Initiatives to legalize cannabis for medicinal use failed to qualify for the ballot in 2012, 2014 and 2016. In 2020, supporters of a ballot measure suspended efforts to gather signatures because of the onset of the Covid-19 pandemic, and the next year a bipartisan group of state lawmakers introduced a medical marijuana bill that failed to get out of committee.As those efforts foundered, customers in Idaho increasingly made the trek to Oregon, where voters legalized cannabis for medical use in 1998 and for recreational use in 2014.Ontario, Ore., is home to 11 dispensaries — roughly one for every 1,000 residents.Ellen Hansen for The New York TimesFew areas in the state have benefited as much as Malheur County, home to Ontario.The city, which voted to legalize local recreational sales of marijuana in 2018, is the only part of the county with dispensaries. Even so, Malheur County racked up roughly $104 million in total cannabis sales last year, outpacing each of the state’s 35 other counties except Multnomah, which includes Portland.In 2020, the first full year in which Ontario allowed cannabis sales, the city took in $1.8 million in resulting tax revenue. The next year, the revenue increased 65 percent.The area is a conservative pocket in a progressive state — a movement called “Greater Idaho” wants the region to secede from Oregon and become part of Idaho — and Mayor Folden, an Ontario native, calls herself a conservative Republican.That hasn’t blocked the city’s emergence as a cannabis capital. The tax revenues, the mayor said, have been a municipal lifeline. But the city is stockpiling its reserves, Ms. Folden said, because she expects that within five years, Idaho will move ahead with some form of legalization.Treasure Valley Cannabis is one of the businesses that have led to a surge in tax revenue for Malheur County.Ellen Hansen for The New York Times“We know that this will not last forever, so we’re being prudent,” Ms. Folden said. “We know the economic winds, as they say, might shift.”In the fall, a poll for The Idaho Statesman, a Boise newspaper, found that 68 percent of residents backed legalizing marijuana for medicinal purposes. For recreational use, 48 percent supported legalization, while 41 percent were opposed.Gov. Brad Little of Idaho, who is in his second term, staunchly opposes marijuana legalization. In an emailed statement, Mr. Little, a Republican, said that “legalization of marijuana triggers numerous unintended consequences.”But some local politicians in Idaho have begun to consider the economics of the issue.Patrick Bageant, a Boise councilman, said the need for alternative forms of tax revenue was increasingly urgent.“Legalizing marijuana can help bring in different forms of cash,” Mr. Bageant said. “Just look around the country — we as a state should be more forward-looking.”Adam Watkins, a software engineer and a constituent of Mr. Bageant’s, has lived in the city’s West End neighborhood for the past decade. His home value has doubled since 2018, when he paid $3,200 in property taxes; now he pays close to $4,200.“You look around at other states that have legalized marijuana decades ago, when it comes to medical marijuana, and you just cannot help but think, why are we so backward on this issue?” said Mr. Watkins, who supports legalization for philosophical and fiscal reasons.“This is a drug with proven health effects, and we are just leaving this issue to other states to solve,” he added. “We are turning blindly, like this is not an issue, when it clearly is.”Back in Ontario on a recent afternoon, red, white and blue license plates emblazoned with the phrase “Scenic Idaho” lined the parking lot of Treasure Valley Cannabis. (A federal law prohibits transporting marijuana between states.)John Leeds commutes an hour and a half to and from his job at Treasure Valley Cannabis, where he manages a staff of 45.Ellen Hansen for The New York TimesMr. Leeds manages a staff of 45 employees four days a week. He used to work five days, but made a deal with the owner, Jeremy Archie, to work four to cut back on his commute.That day, Mr. Leeds and Mr. Archie walked the floor past vape pens, various strains of cannabis, and sweatshirts acclaiming the company and the state.They greeted customers and shared stories of patients battling health issues like cancer, who use their products to ease pain. On one wall hung a poster board proclaiming a 25 percent discount for customers car-pooling with at least three people.A small gesture of thanks, Mr. Archie said, for their Idaho customers.“The Idaho market has made this a very successful business,” he said. More

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    The Debt-Ceiling Deal Suggests Debt Will Keep Growing, Fast

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    The bipartisan deal to avert a government default this week featured modest cuts to a relatively small corner of the federal budget. As a curb on the growth of the nation’s $31.4 trillion debt load, it was a minor breakthrough, at best.It also showed how difficult — perhaps impossible — it could be for lawmakers to agree anytime soon on a major breakthrough to demonstrably reduce the nation’s debt load.There is no clear economic evidence that current debt levels are dragging on economic growth. Some economists contend that rising debt levels will hurt growth by making it harder for businesses to borrow money; others say spiraling future costs of government borrowing could unleash rapid inflation.But Washington is back to pretending to care about debt, which is poised to top $50 trillion by the end of the decade even after accounting for newly passed spending cuts.With that pretense comes the reality that the fundamental drivers of American politics all point toward the United States borrowing more, not less.The bipartisan agreement to suspend the debt ceiling for two years, which passed the Senate on Thursday, effectively sets overall discretionary spending levels over that period. The agreement cuts federal spending by $1.5 trillion over a decade, according to the Congressional Budget Office, by essentially freezing some funding that had been projected to increase next year and then limiting spending to 1 percent growth in 2025.But even with those savings, the agreement provides clear evidence that the nation’s overall debt load will not be shrinking anytime soon.Republicans cited that mounting debt burden as a reason to refuse to raise the limit, risking default and financial crisis, unless Mr. Biden agreed to measures to reduce future deficits. But negotiators from the White House and House Republican leadership could only agree to find major savings from nondefense discretionary spending.That’s the part of the budget that funds Pell grants, federal law enforcement and a wide range of domestic programs. As a share of the economy, it is well within historical levels, and it is projected to fall in the coming years. Currently, base discretionary spending accounts for less than one-eighth of the $6.3 trillion the government spends annually.The deal included no major cuts to military spending, which is larger than base nondefense discretionary spending. Early in the talks, both parties ruled out changes to the two largest drivers of federal spending growth over the next decade: Social Security and Medicare. The cost of those programs is expected to soar within 10 years as retiring baby boomers qualify for benefits.While Republicans at first balked when Mr. Biden accused them of wanting to cut those politically popular programs, they quickly switched to blaming the president for taking them off the table.Asked on Fox News on Wednesday why Republicans had not targeted the entire budget for cuts, Speaker Kevin McCarthy replied, “Because the president walled off all the others.”“The majority driver of the budget is mandatory spending,” he said. “It’s Medicare, Social Security, interest on the debt.”Negotiators for Mr. McCarthy effectively walled off the other half of the debt equation: revenue. They rebuffed Mr. Biden’s pitch to raise trillions of dollars from new taxes on corporations and high earners, and both sides wound up agreeing to cut funding for the Internal Revenue Service that was expected to bring in more money by cracking down on tax cheats.Instead, Republicans attempted to frame mounting national debt as solely a spending problem, not a tax-revenue problem, even though tax cuts by both parties have added trillions to the debt since the turn of the century.Republican leaders now appear poised to introduce a new round of tax-cut proposals, which would likely be financed with borrowed money, a move Democrats decried during the floor debate over the debt-ceiling deal.“Before the ink is dry on this bill, you will be pushing for $3.5 trillion in business tax cuts,” Representative Gwen Moore, Democrat of Wisconsin, said shortly before the final vote on the Fiscal Responsibility Act, as it is called, on Wednesday.Those comments reflected a lesson Democrats took from 2011, when Washington leaders last made a big show of pretending to care about debt in a bipartisan deal to raise the borrowing limit. That agreement, between President Barack Obama and Speaker John Boehner, limited discretionary spending growth for a decade, helping to drive down budget deficits for years.Many Democrats now believe those lower deficits gave Republicans the fiscal and political space they needed to pass a tax-cut package in 2017 under President Donald J. Trump that the Congressional Budget Office estimated would add nearly $2 trillion to the national debt. They have come to believe that Republicans would happily do the same again with any future budget deals — putting aside deficit concerns and effectively turning budget savings into new tax breaks.At the same time, both parties have grown more wary of cuts to Social Security and Medicare. Mr. Obama was willing to reduce future growth of retirement benefits by changing how they were tied to inflation; Mr. Biden is not. Mr. Trump won the White House after promising to protect both programs, in a break from past Republicans, and is currently slamming his rivals over possible cuts to the programs as he seeks the presidency again.All the while, the total amount of federal debt has more than doubled, to $31.4 trillion from just below $15 trillion in 2011. That growth has had no discernible effect on the performance of the economy. But it is projected to continue growing in the next decade, as retiring baby boomers draw more government benefits. The budget office estimated last month that debt held by the public would be nearly 20 percent larger in 2033, as a share of the economy, than it is today.Even under a generous score of the new agreement, which assumes Congress will effectively lock in two years of spending cuts over the full course of a decade, that growth will only fall by a few percentage points.Groups promoting debt reduction in Washington have celebrated the deal as a first step toward a larger compromise to reduce America’s reliance on borrowed money. But neither Mr. McCarthy nor Mr. Biden has shown any interest in what those groups want: a mix of significant cuts to retirement programs and increases in tax revenues.Mr. McCarthy suggested this week that he would soon form a bipartisan commission to scour the full federal budget “so we can find the waste and we can make the real decisions to really take care of this debt.”The 2011 debt deal produced a similar sort of commission, which issued recommendations on politically painful steps to reduce debt. Lawmakers discarded them. There’s no evidence they’d do anything else today. More