Topline
Vice President Kamala Harris expounded on her economic platform Wednesday when she delivered a speech at Carnegie Mellon University in Pittsburgh, after the nominee has already called for an “opportunity economy” focused on the middle class and released plans that include lowering grocery and prescription drug prices and addressing the housing crisis.
Vice President Kamala Harris speaks in Pittsburgh on Wednesday.
Key Facts
Small Business Tax Credit: Harris reiterated a $50,000 tax deduction for new small businesses Wednesday, up tenfold from the $5,000 break currently offered, setting a goal of 25 million new small business applications in the first two years of her potential presidential term.
Grocery Prices: The candidate says she would work in her first 100 days to help Congress pass a national ban on “price gouging” for food, give the Federal Trade Commission and prosecutors authority to go after companies they determine to have price gouged, support small businesses in the industry, take a closer look at mergers between big grocery companies and “aggressively” investigate price-fixing in meat supply chains specifically (some economists have questioned the idea that price gouging worsened inflation—or that tighter regulations would help). On Wednesday, Harris stood by her idea of a “federal ban on price gouging” to “take on bad actors who exploit emergencies and drive up grocery prices.”
Housing Costs: Harris wants to provide $25,000 in down payment assistance for first-time home buyers and is calling for the creation of three million new housing units within the next four years, proposing a tax credit for developers who build starter homes and investing $40 billion in an “innovation fund” to tackle housing shortages. Harris noted Wednesday the independent Federal Reserve’s decision last week to cut interest rates for the first time since 2020 “will make it just a little easier for families to buy a home” as mortgage rates decline.
Rental Costs: Harris says she would also expand a tax credit for housing developers who build affordable housing rental units, and is calling on Congress to pass legislation to stop allegedly predatory investors who buy up rental homes and collude with each other to raise rental prices.
Child Tax Credit: Harris proposed giving families a $6,000 tax credit for newborns in their first year of life, and restore a pandemic-era tax credit of $3,600 per child for middle and lower-class families.
Taxes: Harris also wants to expand the Earned Income Tax Credit for workers in lower-income jobs, which would cut taxes by up to $1,250, and has previously said she would continue President Joe Biden’s promise not to raise taxes on American households earning $400,000 or less annually, and does support raising taxes for high earners and corporations, according to The New York Times. Harris said Wednesday the breaks will affect more than 100 million taxpayers.
No Tax On Tips: Harris has separately endorsed a plan to get rid of taxes on tips for hospitality and service workers, echoing a proposal by former President Donald Trump—which has been criticized by some experts—though a campaign official told CNN tips would still be subject to payroll taxes, and would include an income limit and guardrails to prevent people like hedge fund managers from taking advantage of the policy.
Prescription Drug Prices: Harris proposed a $35 cap on insulin and capping out-of-pocket expenses on prescription drugs at $2,000 per year, also saying she would speed up Medicare negotiations on the price of prescription drugs—after the Biden administration announced a deal lowering costs on 10 medications—and crack down on anti-competitive practices in the pharmaceutical industry that cause higher prices.
Healthcare: The Harris campaign also announced her intention to work with states to cancel Americans’ medical debt, and she proposed expanding subsidies for Affordable Care Act plans that would save health insurance customers an average of $700 on their health insurance premiums.
Paid Leave: Harris has not released a specific paid leave proposal, but she has previously co-sponsored 12-week paid leave legislation, Politico notes, with Sen. Patty Murray, D-Wash., telling the outlet, “I absolutely believe that when they are in office, we will get a paid leave bill done finally.”
Minimum Wage: Harris called for raising the minimum wage in a Las Vegas speech in August, but her campaign has not specified how high she believes it should be raised.
Fed Independence: Harris has vowed to maintain the Federal Reserve’s independence after Trump said he believed “the president should have at least [a] say” on the Fed’s decisions, with Harris telling reporters, “The Fed is an independent entity and as president I would never interfere in the decisions that the Fed makes.”
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Crucial Quote
“I am a capitalist. I believe in free and fair markets,” Harris declared at the event hosted by the Economic Club of Pittsburgh, pushing back against her opponent Trump’s attacks classifying Harris as a “communist.”
News Peg
Harris opened her speech by noting the “moment of great consequence...to make out middle class the engine of America’s prosperity.” An anonymous Harris aide told Politico prior to the address the vice president’s speech will paint her as being “pragmatic” on the economy and as “a capitalist” who “understands the limitations of government and has always sought to take good ideas from wherever they come and harness the power of innovation.” The speech was expected to include new proposals on manufacturing and “lowering costs, investing in American innovation and entrepreneurship, and leading the world in the industries of the future,” the aide told Politico.
What To Watch For
Harris may elaborate more on her economic agenda Wednesday at 7 p.m. EST when she sits down with MSNBC’s Stephanie Ruhle for her first one-on-one interview on a major network since becoming the Democratic nominee.
Tangent
Harris told CNN host Dana Bash in an August interview that her priority on “Day One” as president would be to start implementing her economic agenda. The vice president said one of her “highest priorities is to do what we can to support and strengthen the middle class,” arguing that while she believes the Biden administration has done “good work” on the economy, “there’s more to do.”
How Do Harris’ Policies Compare With Biden’s?
Harris’ economic policy agenda is largely in line with Biden’s economic platform, with some tweaks to emphasize causes that are more important to her, like the child tax credit. “Same values, different vision,” a Harris aide told The Guardian. “She’s not moving far away from him on substance, she will highlight the ones that matter most to her.” The initial plans from Harris’ campaign also suggest the vice president plans to be more aggressive in her policy approaches than Biden, however, as polls have suggested voters hold dim views of how the president has handled the economy. While Biden has also opposed price gouging, Harris’ proposal to enable the FTC and U.S. attorneys to go after companies that hike up prices goes beyond what the president has proposed, Politico notes, and her proposed $40 million investment in the housing crisis is double the amount the Biden administration spent.
Contra
Harris’ economic agenda so far hasn’t gone fully in depth about her proposals, which The New York Times reports is by design. The Times reported before Harris unveiled her agenda that the Harris campaign has adopted a “strategic vagueness” for her economic proposals, believing that being more of a “blank slate” will help ward off attacks and attract more support from business groups.
How Do Harris’ Policies Compare With Trump’s?
Trump’s economic agenda is largely focused on raising tariffs on imported goods, which Harris has said she opposes. The ex-president has also called for cutting taxes and regulations in hopes of lowering inflation, including lowering the corporate tax rate, and has encouraged increasing oil production in order to lower energy prices. In addition to his “no tax on tips” proposal that Harris has also endorsed, Trump has called for ending taxes on Social Security benefits, which Harris has not yet responded to. Experts believe the ex-president’s proposal could speed up Social Security and Medicare becoming insolvent, with the Committee for a Responsible Federal Budget projecting exempting taxes on benefits would result in Social Security and Medicare receiving $1.6 trillion less in revenue between 2026 and 2035. The Trump campaign opposed reports of Harris’ economic proposals earlier in September, with spokesperson Steven Cheung saying in a statement, “Kamala Harris can’t hide from her disastrous record of skyrocketing inflation … Americans are struggling under the Biden-Harris economy, and now she wants to gaslight them into believing her bald-faced lies.”
Big Number
41%. That’s the share of voters who trust Harris more to handle the economy, according to an Associated Press/NORC poll conducted Sept. 12-16, versus 43% who trust Trump more. While Trump still maintains a narrow lead, recent polling has broadly shown voters are warming up to Harris on the economy, with polls on who voters prefer on the issue going from being strongly in Trump’s favor to more of a toss up. A Washington Post analysis of five recent polls found that while Trump still leads on the economy by an average of six points, that’s narrowed from a 12-point lead that the ex-president held against Biden before the president dropped out of the race.
Key Background
Harris became the presumptive Democratic presidential nominee in July after Biden stepped down suddenly from the presidential race, following weeks of pressure over mounting concerns about his mental fitness. While the vice president has quickly garnered Democrats’ support and risen in the polls, Harris released few concrete policy proposals in the first few weeks of her campaign—drawing some criticism as a result. The vice president has made releasing a platform on economic proposals her first priority, delivering a speech earlier in August laying out her economic platform that marked the most substantive remarks she had given on policy so far. Her focus on the economy comes as polling has repeatedly shown it’s the most important issue to voters in this election cycle, with the vice president hoping to attract support amid low approval ratings for Biden’s handling of the economy. Harris’ August 16 speech also came days after news that inflation fell in July to its lowest point in more than three years, with federal data showing inflation at 2.9% in July, the first time it’s been below 3% since March 2021.
Further Reading
Alison Durkee is a senior reporter covering breaking news, with a focus on legal issues and U.S. politics. She joined Forbes in 2020 and is based in New York City, covering such topics as the Supreme Court, litigation against Donald Trump and clashes over abortion rights. Durkee previously covered U.S. politics at Vanity Fair and Mic, and as a theatre journalist she served as a New York Outer Critics Circle voter. Forbes reporters follow company ethical guidelines that ensure the highest quality. Follow her for continued coverage of Trump’s ongoing legal issues, the 2024 election and major cases at the Supreme Court.
Derek Saul is a New Jersey-based Senior Reporter on Forbes' news team. He graduated in 2021 from Duke University, where he majored in Economics and served as sports editor for The Chronicle, Duke's student newspaper, joining Forbes soon thereafter. Saul has covered everything from Trump Media to the Saudi Arabian influence on golf and what real-life billionaires think of "Succession." Send tips to [email protected]. Follow Saul for analysis on the biggest daily economic and stock market happenings, ranging from inflation data to tech earnings to deep-dives on hot button assets.