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What we know before the debate

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Vice President Kamala Harris is expected to discuss her economic policy proposals in her debate with former President Donald Trump on Tuesday night. The candidate calls for a middle-class-focused “opportunity economy” and released plans that include lowering food and drug prices and solving the housing crisis, among other things.

Key data

Food prices: The candidate says she will work in her first 100 days to get Congress to pass a national ban on food “price gouging.” She will also give the Federal Trade Commission and state attorneys general authority to go after companies they find engaging in price gouging. She will also support small businesses in the industry, take a closer look at mergers between major food companies, and “aggressively” investigate price fixing in meat supply chains in particular (some economists question the notion that price gouging makes inflation worse—or that tighter regulations would help it).

Housing costs: Harris wants to give first-time home buyers a $25,000 down payment and calls for the creation of three million new housing units over the next four years. She also proposes tax breaks for developers building first-time homes and investing $40 billion in an “innovation fund” to address the housing shortage.

Rental costs: Harris also announced an expansion of tax breaks for housing developers that build affordable rental housing and called on Congress to pass legislation to stop allegedly reckless investors who buy up rental housing and collude with each other to drive up rent prices.

Child allowance: Harris proposed giving families a $6,000 tax credit for newborns in the first year of life and restoring the pandemic-era tax credit of $3,600 per child for middle- and lower-class families.

Steer: Harris also wants to expand the Earned Income Tax Credit for workers in low-wage jobs, which would mean a tax savings of up to $1,250. She has also previously stated that she will keep President Joe Biden's promise not to raise taxes on American households earning $400,000 or less annually. She also supports tax increases on top earners and corporations, according to the New York Times.

No tax on tips: Harris also supports a plan to eliminate the tip tax on food service workers, echoing a proposal by former President Donald Trump that was criticized by some experts. However, a campaign official told CNN that tips would still be subject to payroll taxes and would include an income limit and safeguards to prevent people like hedge fund managers from profiting from the rule.

Prices for prescription drugs: Harris on Friday proposed capping the cost of insulin at $35 and limiting prescription drug copayments to $2,000 a year. She also said she would speed up Medicare negotiations on prescription drug prices – after the Biden administration announced a deal to reduce the costs of 10 drugs – and crack down on anti-competitive practices in the pharmaceutical industry that lead to higher prices.

Healthcare: As part of her campaign, Harris also announced her intention to work with states to cancel Americans' medical debt and proposed expanding subsidies for plans under the Affordable Care Act, which could save people on average $700 in health insurance premiums.

Paid vacation: Harris has not put forward a specific proposal for paid leave, but she previously co-sponsored a bill with Senator Patty Murray (D-Washington) for 12 weeks of paid leave, Politico notes. She told the magazine, “I firmly believe that when they're in office, we'll finally get a paid leave bill in place.”

Minimum wage: Harris called for an increase in the minimum wage in a speech in Las Vegas in early August, but her campaign team has not commented on how high they think it should be.

Independence of the Fed: Harris has vowed to maintain the independence of the Federal Reserve after Trump said he believed “the president should at least [a] “I have no say” in the Federal Reserve's decisions and Harris told reporters: “The Fed is an independent institution and as president I would never interfere in the Fed's decisions.”

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Key quote

Harris told CNN anchor Dana Bash in an August interview that her priority on “day one” as president would be to begin implementing her economic agenda. The vice president said one of her “highest priorities is to do everything we can to support and strengthen the middle class,” arguing that while she believes the Biden administration has done “a good job” on the economy, “there is more to do.”

News Peg

Harris will debate Trump in Philadelphia on Tuesday night. It will be the first time the two candidates have faced each other or even met in person. The economy is expected to be a major topic of the debate because of the importance of the issue to voters. Harris is expected to highlight her existing economic policy proposals during the debate, ABC News reports, while Trump campaign adviser Jason Miller said in a statement that the vice president must “explain… the damage she has done to the economy.”

How do Harris' policies compare to Biden's?

Harris' economic agenda largely mirrors Biden's economic program, with some changes to emphasize issues she feels more strongly about, such as the child tax credit. “Same values, different vision,” a Harris aide told The Guardian. “She's not straying far from him on that, she's going to emphasize the things that matter most to her.” But Harris's campaign's initial plans also suggest the vice president wants to be more aggressive in her policies than Biden, as polls show voters have a negative opinion of the president's handling of the economy. While Biden has also spoken out against price gouging, Harris' proposal to allow the FTC and U.S. prosecutors to go after companies that hike up their 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 has spent.

Contra

Harris' economic agenda does not go into depth about her proposals, which is intentional, according to the New York Times. The Times reported before Harris unveiled her agenda that the Harris campaign chose “strategic vagueness” for her economic proposals, believing that a more “blank slate” could fend off attacks and gain more support from business groups.

How do Harris' policies compare to Trump's?

Trump's economic agenda largely focuses on raising tariffs on imported goods, which Harris says he opposes. The former president has also called for tax cuts and regulatory measures to reduce inflation, including a cut in the corporate tax rate. He has also called for increasing oil production to lower energy prices. In addition to his proposal to impose “no tax on tips,” which Harris also supports, Trump has called for eliminating taxes on Social Security benefits, to which Harris has not yet responded. Experts believe the former president's proposal could hasten the insolvency of Social Security and Medicare. The Committee for a Responsible Federal Budget estimates that exempting taxes on Social Security benefits would result in Social Security and Medicare receiving $1.6 trillion less in revenue between 2026 and 2035. The Trump campaign on Wednesday contradicted reports about Harris' economic proposals. Spokesman Steven Cheung said in a statement: “Kamala Harris cannot hide from her disastrous record of skyrocketing inflation… Americans are struggling with the economy under Biden and Harris, and now she wants to make them believe her blatant lies.”

Large number

42 percent. That's the share of voters who trust Harris more to get the economy under control, according to an August 11 poll by the Financial Times and the University of Michigan. In comparison, 41 percent trust Trump more. That's a drop from Trump's lead over Biden, which was six percentage points in July. However, the poll also found that 42 percent believe a Trump presidency would leave them better off financially, while only 33 percent said the same for Harris.

Important background

Harris became the presumptive Democratic presidential nominee in July after Biden suddenly withdrew from the presidential race following weeks of pressure amid growing concerns about his mental health. Although the vice president quickly won support among Democrats and rose in the polls, Harris released few concrete policy proposals in the early weeks of her campaign — earning her some criticism. The vice president has made releasing a program of economic proposals her top priority and delivered a speech in early August laying out her economic program that was her most substantive policy statements yet. Her focus on the economy comes as polls have repeatedly shown it to be the most important issue for voters this election cycle, and the vice president hopes to win support amid low approval ratings for Biden's handling of the economy. Harris' Aug. 16 speech also came days after news that inflation fell to its lowest level in more than three years in July. Federal data show that inflation was 2.9% in July, the first time it was below 3% since March 2021.

More information

ForbesThis is how Americans see Harris and Trump on the economic issue – Harris is narrowly ahead in the latest pollFrom Derek Saul
ForbesKamala Harris defends the Biden administration's economic record in her first major interview – but says “more needs to be done”From Alison Durkee
ForbesHow the economy really fared under Biden and Trump – from jobs to inflationFrom Derek Saul
ForbesConsumer price index inflation is at 2.9% – better than expected, interest rate cuts in focusFrom Derek Saul
ForbesBiden administration reaches agreement to reduce costs of expensive Medicare drugsFrom Siladitya Ray

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