Harris’ proposed economic plan follows up Bidenomics. Except that this time around, Harris – and Trump, in his own way – has embraced the idea of a strong federal government that would use its authority to manipulate markets to create a more robust and wealthy economy. However, neither Harris not Trump has, till date, presented a thorough policy framework.
Harris has called for a reduction in the price of food, housing, medicine and other living expenses. A large portion of Joe Biden‘s last presidential budget – and brief re-election campaign – are being expanded upon by Harris. The strategy calls for significant tax hikes on corporations and high earners to support middle-class and low-income workers. Simultaneously, it offers substantial tax advantages to businesses involved in activities that Democrats believe yield significant economic benefits, such as building affordable housing, or developing technologies required to combat global warming.
Poll promises of direct or indirect financial assistance – waiving farm loans, providing direct cash transfers, giving out (almost) free rice or giving away free laptops – aren’t characteristic of only countries like ours. Harris has pledged to send up to $25,000 in down-payment assistance to every first-time homebuyer over four years if she becomes president, while allocating $40 bn to construction companies that develop starter homes.
The expanded Child Tax Credit from the American Rescue Plan that Biden briefly instituted with his 2021 stimulus bill is also a part of Harris’ plan. She has suggested a new $6,000 Child Tax Credit for ‘families with children in the first year of life’. Her version, which includes measures to strengthen and protect social security and Medicare by building on Biden-era proposals like lowering drug costs by capping cost of insulin at $35 and out- of-pocket expenses for prescription drugs at $2,000 for everyone (not just seniors), calls for ‘cracking down on pharmaceutical companies who block competition and abusive practices by pharmaceutical middlemen’.
Harris also demands stronger federal enforcement mechanisms to penalise businesses that unjustly raise food prices, as well as a federal ban on corporate ‘price gouging’ on groceries. Many of Harris’ recommendations are aimed at appealing to working- and middle-class families, the young, and those without generational wealth. These groups are more likely to be rural and Black or Hispanic, the traditional Democratic voting base. Harris’ initiatives, if unpaid for, would increase the federal debt by $1.7 tn over the next decade, according to estimates from the nonpartisan Committee for a Responsible Federal Budget.No wonder that Harris was referred to as ‘Comrade Kamala’ by the Trump team. But this might help her woo her traditional votebank. Trump has also threatened that the Great Depression will be dragged out if the veep is elected as prez. Harris must battle both the legacies of Biden, who has claimed credit for managing the US post-pandemic economic recovery, and Trump, who claims to have led ‘the greatest economy in the history of America’.When accounting for inflation, US’ GDP has grown by 8.4% since Biden’s inauguration. Trump’s administration saw 6.8% growth despite a year-long pandemic. The economy has also created roughly 15.7 mn jobs under Biden. However, Trump had almost 3 million fewer jobs when he left office, although that number was distorted by Covid.
But, today, America feels inflation. Prices have increased by about 19% since Biden took office. Harris knows that as an integral part of the Biden administration, she can’t ring-fence herself from this aspect. Her ‘opportunity economy’ promise appears to have infused her own unique perspective into progressive economics that has dominated Democratic politics for years. This is coupled with her audacious suggestion to tax the wealthiest somewhat more.
Will it be able to sway voters? Many of Harris’ suggestions would typically need Congressional approval, which is uncertain (read: impossible) in a divided house like today’s America. She is well aware of this, as are Democrats. So, one wonders if much of the opportunity economy is simply an opportunistic pitch that would remain elusive.
