Updated August 16, 2024 at 15:00 PM ET
Vice President Harris unveiled an economic plan on Friday that focused on the high cost of housing, groceries and raising kids — top-of-mind expenses for voters pinched by years of rising prices.
The plan includes a major expansion in the child tax credit. Low- and middle-income families would get up to $6,000 when they have a new baby. And Harris said she wants to restore the pandemic-era program that gave families up to $3,600 per child.
A bigger child tax credit has also been proposed by Republicans. Vice presidential candidate Sen. JD Vance said on Sunday that he would like to see it expanded to $5,000 per child.
Polls have shown President Biden has struggled to get credit for his efforts to lower prices and many voters say they trust Republican presidential nominee Donald Trump more on the economy — but polls also show that voters are less critical of Harris on economic issues.
"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 on Friday in Raleigh, N.C.
Harris' plans would cost a lot. Her campaign hasn't said how much
The child tax credit is both popular with voters and effective at cutting child poverty rates. But, expanding the program also would be expensive.
"It would be very costly. The current child tax credit costs something like $100 billion a year. This [proposal] would probably double that cost," said Kevin Corinth, an economist with the American Enterprise Institute, who worked for the White House Council of Economic Advisers during the Trump era.
The Harris campaign so far has not put a price tag on its plans.
Felicia Wong, chief executive of Roosevelt Forward, a progressive advocacy group, said Harris' proposals would require new spending. "The good news is that we certainly have that money in our country," Wong said.
"It is a matter of increasing taxes on the wealthy and corporations and overall changing our tax code, in order to make sure that we can bring in these revenues and then pay for these investments," she said.
Harris will focus on housing prices
Harris announced a proposal for tax breaks that her campaign said would lead to 3 million new housing units in four years, going beyond a Biden White House proposal to ease housing shortages with 2 million new and renovated homes.
Harris' plan would give unspecified tax incentives to homebuilders for houses geared to first-time buyers and for affordable rental housing. She proposed a $40 billion fund to help local governments finance developments, up from a $20 billion proposal from the Biden White House. Like all spending, these proposals would depend on Congress being willing to fund them.
Harris said she would ask Congress to give first-time homeowners up to $25,000 toward their down payments — a plan that her campaign said could help more than 4 million first-time buyers. That is more generous than a plan Biden announced in this year’s State of the Union address that would have given first-time homebuyers a $10,000 tax credit, and help about 400,000 first-generation homebuyers with down-payment assistance.
And she said she would back legislation to restrict tax breaks for corporate investors that buy up homes, as well as a bill that would ban rental property owners from buying algorithmic data that helps them hike rent prices.
Harris would crack down on corporations, her campaign says
Harris and Biden gave campaign-style remarks on Thursday about their efforts to lower prescription drug prices for people on Medicare. Like Biden, Harris is proposing that a $35 cap on the price of insulin be extended for everyone, not just seniors -- as well as a $2,000 cap on out-of-pocket expenses for prescription drugs.
Harris argued that corporations are making too much money from consumers — a theme she has foreshadowed on the campaign trail, noting her work on price-fixing when she was California's attorney general.
"A loaf of bread costs 50% more today than it did before the pandemic. Ground beef is up almost 50%. Many of the big food companies are seeing their highest profits in two decades. And while many grocery chains pass along these savings, others still aren't," Harris said.
Harris called for a federal ban on price gouging in the food sector, and said her administration would more aggressively investigate and prosecute price-fixing in the meat supply chain.
This proposal is similar to an approach taken by the Biden administration, which said in Sept. 2021 that it would crack down on price fixing and enforce antitrust laws in the meat sector, as well as provide funding to smaller players to try to boost competition.
Harris’ plan would give the Federal Trade Commission and state attorneys general the authority to investigate corporations and impose penalties, her campaign said. Many large retailers have kept grocery prices high instead of passing savings along to consumers, Harris said.
Kevin Hassett, a top economic adviser in the Trump White House, said that some of Harris' proposals would amount to "price controls," and could lead to shortages of supply. He said Trump's approach of cutting taxes, deregulation, and boosting energy production would do more to address inflation.
"There's not a lot of price gouging going on here with Safeways and Giants and 7-Eleven stores — they just have very, very, low margins," Hassett told reporters on a conference call.
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