Vice President Kamala Harris vowed to build “an opportunity economy” as she unveiled an economic agenda seeking to tackle the burden of inflation with sweeping new subsidies and tax benefits for poor and middle class Americans.
The plan represented the first major policy rollout of Harris’ nascent campaign, and looked to attack one of her greatest liabilities – frustration voiced by voters over spiking post-pandemic prices.
The proposal includes aggressive — and costly — initiatives that would provide a $25,000 subsidy to first-time home buyers, significantly expand tax credits for parents, and a cap on out-of-pocket prescription drug prices. Harris is also proposing initiatives to prevent price gouging at the grocery store and reduce the cost of health insurance purchased on federal exchanges.
“As president, I will be laser focused on creating opportunities for the middle class that advance their economic security, stability, and dignity,” Harris said Friday in Raleigh, North Carolina, a state Democrats believe has again become competitive after President Joe Biden exited the race. She vowed to “make it a top priority to bring down costs and increase economic security for all Americans.”
The rollout of Harris’ economic plan has taken on outsized importance, both because of voters’ lingering frustration with Biden over inflation and as a marker in the race to define the vice president with less than three months before Election Day. The vice president is expected to continue to tout the proposal during a bus tour in Pennsylvania and a rally in Wisconsin next week, dovetailing into Democrats’ convention in Chicago where the party is expected to amplify the populist proposals alongside messaging decrying corporate greed.
Harris on Friday hailed Biden for his stewardship, calling the US economy “the strongest in the world,” even as she acknowledged many voters say they have not gained from his policies.
“Many Americans don’t yet feel that progress in their daily lives. Costs are still too high. And on a deeper level, for too many people, no matter how much they work, it feels so hard to just be able to get ahead,” Harris said.
Harris also sought to draw a contrast between her approach and that of her Republican opponent, former President Donald Trump, saying his pledge to hit other countries with tarrifs amounts to a “national sales tax on everyday products and basic necessities” that would “devastate Americans.”
“A Trump tax on gas. A Trump tax on food. A Trump tax on clothing. A Trump tax on over-the-counter medication,” she said, adding that economists estimate his plan would cost a typical family $3,900 annually.
Trump denounced Harris’ platform as “communist” at a press conference at his New Jersey golf club on Thursday. During a call organized by his campaign and the Republican National Committee on Friday, Kevin Hassett, former chair of the Council of Economic Advisers, said Harris’ policies would only fuel price growth.
“They’re doubling down on the type of policies in the Biden administration that ignited inflation,” he said.
Harris’ plan would expand the child tax credit to $3,600 from $2,000 per dependent, with a super-sized $6,000 credit for newborns. Harris also proposes expanding the Earned Income Tax Credit, and increasing subsidies for insurance on federal health exchanges.
The expanded child tax credit alone would likely cost hundreds of billions or trillions of dollars over the next decade, though it could garner bipartisan support: Trump’s running mate, Senator JD Vance, also proposed increasing the credit to $5,000 per child. The politically popular tax break is set to decrease in value at the end of 2025, meaning that whoever wins the White House faces pressure to revive it.
Harris would also offer more than one million first-time home buyers “down payment support” that could total as much as $25,000. That represents a substantial expansion of a program proposed by Biden offering a $10,000 tax credit for first-time home buyers and the more generous benefit for those whose parents didn’t own their home.
On prescription drugs, Harris would seek legislation capping all Americans’ out-of-pocket costs for prescription drugs at $2,000 annually, alongside an effort to limit insulin payments to $35 per month.
Other offerings also lean heavily on Biden policies and proposals, including tens of billions of federal dollars to states and local governments to subsidize the construction of affordable housing, and an expansion of Medicare’s ability to negotiate lower drug prices with pharmaceutical companies.
Additionally, Harris plans to direct the Federal Trade Commission and other agencies to investigate and penalize “big corporations” that violate the rules, and to find ways of tackling price fixing and other anti-competitive practices in the food and grocery industries.
“Most businesses are creating jobs, contributing to our economy and playing by the rules, but some are not,” Harris said. “And we need to take action when that is the case.”
Economists are divided on the practicality and efficacy of some of Harris’ proposals, warning that price caps in particular can be inefficient and costly. And while Democrats argue that inflation, which peaked at a 40-year high of 9.1% in mid-2022, has been driven by corporate profit padding, critics say that federal stimulus programs are responsible for pushing prices higher.
There’s also a question of cost. Harris includes in her proposal some small-scale tax increases, including reducing tax breaks enjoyed by some real estate investors as part of her housing affordability push. But she does not detail how she would overhaul the tax code — or increase levies on corporations — with Trump-era tax cuts set to expire next year. Harris does vow she would continue the Biden policy of opposing any tax increase on Americans making under $400,000 a year.
An analysis of Harris’ policy proposals by the nonpartisan Committee for a Responsible Federal Budget estimated that it would increase deficits on net by $1.7 trillion over a decade
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