Could Policy Deregulation and Tariffs Rewire the U.S. Debt Path?

Regulations mostly decreased under Republican presidents in the modern era.

History suggests that Republican administrations often pursue deregulation, and this can influence productivity over time. For example, the Reagan administration implemented broad deregulation across multiple industries in the 1980s which spurred productivity gains emerging in the early 1990s. Similarly, the Bush administration’s exemption of fracking fluids from the Clean Water Act in 2005 helped initiate the development of the U.S. fracking industry.

During the first Trump administration, similar deregulation occurred, particularly in the energy and economic sectors. If a second term follows a comparable approach, regulation levels could decrease by 20%. While the effects may not be immediate, previous shifts have aligned with periods of higher productivity growth. 

Federal Regulations as proxied by the Federal Register page count

The Federal Register, published by the National Archives, contains all rules, proposed rules, and regulations of the Federal Government. Sources:
https://www.govinfo.gov/help/fr#about, The George Washington University Regulatory Studies Center, “Total Pages Published in the Federal Register" retrieved 6/2/2025, go.gwu.edu/regstudies.

Potential tariff revenue may offset much, but not all, of 10-year debt increase.

The latest spending package – as passed initially by the House – might’ve surprised investors by potentially reducing the national debt over ten years. However, the final version has a projected cost of approximately $5.6 trillion over ten years which is only expected to be partially offset by an estimated $2.3 trillion in savings. Though not formally included in the legislative text, a proposed 10% universal tariff could generate $2 to $2.5 trillion in additional revenue. Taking these assumptions into account, the net addition to the federal debt over a decade would be around $1 trillion.

Net Effects of Trump's Fiscal Policies over Next 10 Years

Source: The Economist analysis of Congressional Budget Office data. Amounts do not include all effects of interactions between all provisions. The listed sources of costs and savings show the top 5 items from each category

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