Vice President Kamala Harris and former President Donald Trump flew to North Carolina this week to deliver what were billed as major speeches on the economy. Neither laid out a detailed policy plan — not Harris, who focused for a half-hour on housing, groceries and prescription drugs, or Trump, who for 80 minutes scattered several proposals amid musings aloud about dangerous immigrants.
But both candidates, each in their own way, sent voters clear and important messages about their economic visions. Each championed a vision of a powerful federal government, one that uses its power to intervene in markets in pursuit of a stronger, more prosperous economy.
They only disagreed, almost completely, on when and how that power should be used.
On Friday in Raleigh, Harris began putting her own stamp on the progressive economics that has dominated Democratic politics for the past decade. This economic thinking embraces the idea that the federal government should act aggressively to foster competition and correct distortions in private markets.
The plan seeks big tax increases on corporations and high-income earners to fund aid to low-income and middle-class workers struggling to build wealth for themselves and their children. At the same time, it offers big tax breaks to companies that engage in what Harris and other progressives see as big economic gains, such as manufacturing technologies needed to fight global warming or building affordable housing.
That philosophy animates the policy agenda Harris laid out Friday. She pledged to provide up to $25,000 in down payment assistance to every first-time homebuyer over four years, while directing $40 billion to first-time homebuilders. Harris said she would permanently reinstate the expanded child tax credit that President Biden temporarily established with his 2021 stimulus law, while offering even more help to parents of newborns.
Harris called for a federal ban on price gouging on groceries and new federal tools to punish companies that unfairly raise food prices. “My plan will include new penalties for opportunistic companies that take advantage of crises and flout the rules,” she said, adding: “We will help the food industry become more competitive, because I believe that competition is the lifeblood of our economy.”
Questions remain about the rest of Harris’s agenda, including what tax increases she would favor to offset those tax cuts and spending programs. The Committee for a Responsible Federal Budget, which focuses on deficit reduction, estimated Friday that the plans the vice president unveiled would increase the federal deficit by $1.7 trillion over the next decade, if not paid for.
But Harris’s main idea is clear: a mix of government intervention and assistance to help Americans rise into the middle class.
In the words of Gene Sperling, former economic adviser to three Democratic presidents and a senior economic adviser to Harris: “Her focus on an economy of opportunity and her emphasis on homeownership show that she is very focused on both cutting costs to help families make ends meet and being able to get ahead by owning a home or starting a small business.”
Trump’s plan is simpler: He says he made America rich the first time he was in the White House and would do it again. He also blames Harris and Biden for a rise in inflation under his administration.
“I gave Harris and Biden an economic miracle, and they quickly turned it into an economic nightmare,” he said Wednesday in Asheville, omitting the job and income losses from the 2020 pandemic recession under his watch.
Yet like Harris, Trump offered a series of promises about how he would wield the government’s power to intervene in markets and help consumers. He said he would direct his Cabinet to somehow reduce the cost of auto insurance in the first 100 days of his presidency, or possibly even in the first week. He said he would cut energy prices in half.
He claimed he would deport millions of immigrants to reduce housing prices.
Trump also underscored his promise to impose new taxes on imported goods — from all countries with which the United States trades — in an attempt to force more companies to make their products in the United States. Trump previously said he would tax imports at a rate of 10 percent; in Asheville, he said the rate could be as high as 20 percent. Such tariffs are paid by U.S. importers, not foreign countries. Economic studies suggest they would, to some extent, raise prices and serve as a tax on consumers.
This, too, is a clear vision of federal power to reshape the economy. It is one of the foundations of Trump’s economic program and, in many ways, a break with the conservative economic orthodoxy that has long dominated the Republican Party.
But Trump hasn’t abandoned all that tradition. He has promised to continue cutting taxes, including expanding the cuts for individuals he signed into law in a 2017 tax overhaul and eliminating federal income taxes on Social Security benefits and tip income. He has also promised to roll back federal regulations on businesses, including environmental regulations and restrictions on oil drilling on some public lands.
An analysis based on reports from the Committee for a Responsible Federal Budget suggests Trump’s tax cuts could add $7 trillion to the deficit over a decade, only part of which would be offset by tariffs or the repeal of tax breaks signed by Biden. Economists warn that higher deficits could stoke inflation. Trump’s advisers say his program will lower prices.
“If you cut taxes, you deregulate the economy, you produce more energy, all of those policies are deflationary, not inflationary,” Stephen Moore, co-founder of the conservative Committee to Unleash Prosperity and a Trump political adviser, told reporters Friday.
In North Carolina, Trump and Harris sought to portray each other’s philosophy of federal power as a threat to the economy and working families.
Trump warned that Harris would trigger a 1929-style stock market crash if elected. Harris said Trump’s tariffs would mean “a Trump tax on gasoline, a Trump tax on food, a Trump tax on clothing, a Trump tax on over-the-counter drugs.”
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There was little agreement in the speeches. Harris promised a little deregulation, saying she would cut “red tape” to speed up housing construction. Both candidates spoke highly of Medicare.
Harris had said in recent days that, like Trump, she supported exempting some tip income from federal taxes. In Raleigh, she did not mention that specific source of agreement.
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