Kamala Harris shares her plan to address the high cost of living. How would it work?
In her first major policy speech since becoming the Democratic nominee, Vice President Kamala Harris outlined several components of her economic agenda Friday.
Acknowledging that while the economy as a whole has recovered well since the pandemic, “costs are still too high,” and that for too many people, “no matter how much they work, it feels so hard to just be able to get ahead,” Harris said she’ll make it a “top priority” to reduce the cost of living and “increase economic security for all Americans.”
The policies Harris unveiled during her speech at Wake Tech Community College in Raleigh on Friday emphasized the need to address anti-competitive practices by large corporations that Harris said had rebounded after the pandemic and saw their profits reach record levels, but have maintained high prices, and failed to pass along savings to consumers.
She pointed to examples across sectors, including the food and grocery industries, the pharmaceutical industry and the housing market.
As Harris announces these and other policies, many details remain unclear, including how much the proposals will cost and how they will be paid for, and how the Democrat would go about trying to pass and implement them while working with a Congress that’s likely to remain divided.
Housing help
While talking about one of the proposals her campaign announced this week, to provide first-time home buyers who have paid their rent on time for two years with $25,000 in down-payment assistance, Harris said she would also push for a law to crack down on corporate investors and landlords buying properties and renting them out at “extremely high” prices, or in some cases, colluding with each other to set “artificially high rental prices.”
The new down-payment assistance policy goes beyond the Biden-Harris administration’s previous proposal of providing that dollar amount only to 400,000 first-generation home buyers. The Harris campaign said it was simplifying and expanding that plan by giving on average $25,000 to all eligible first-time home buyers and ensuring all first-generation home buyers are covered.
Over four years, the campaign estimated, more than 4 million first-time home buyers would receive significant down-payment assistance.
Calling for the construction of 3 million new homes, Harris also urged Congress to pass legislation to disincentivize large investors from buying homes in bulk by removing existing tax benefits, and crack down on corporate landlords that use price-setting tools.
Jim Parrott, a nonresident fellow at the Urban Institute and former senior adviser to the National Economic Council under former President Barack Obama, is advising the Harris campaign on housing policy. He told The News & Observer that while the down-payment assistance Harris is supporting could help many home buyers, it’ll be crucial to address the housing-supply shortage first; otherwise “you’re probably just going to jack up home prices, and not solve your affordability problems.”
Price gouging
Harris also called for a federal ban on alleged price gouging on food and groceries, and her campaign said she would secure new authority for the Federal Trade Commission and state attorneys general to investigate and penalize corporations.
Several states have some kind of laws against companies raising prices excessively, but the Harris campaign noted that there is no such law at the federal level.
The Trump campaign, responding to Harris’ plan on Friday, questioned whether price increases were meaningfully affected by “corporate greed,” pointing to a May study by the Federal Reserve Bank of San Francisco that found that corporate price gouging was not a “main driver of the recent surge and subsequent decline in inflation.”
The study was “a clear rebuttal of the theory that corporate profiteering has been a main cause of higher prices,” Reuters reported at the time.
Child tax credits and drug costs
Other policy proposals Harris mentioned in her address in Raleigh include:
▪ Restoring the expanded child tax credit that provided families with up to $3,600 per child;
▪ Providing an even greater $6,000 tax credit for families with newborn children;
▪ Limiting the cost of insulin to $35, and out-of-pocket costs for prescription drugs to $2,000, for all Americans;
▪ Working with states to cancel more medical debt.
Getting the policies through Congress
Parrott said it will be “very important” for a potential Harris administration to sit down with Congress and figure out how these policies are paid for, but added that he wasn’t surprised the campaign is focusing on the policies Harris wants to pursue rather than listing “the ways you’re going to pay for it.”
In a release criticizing her economic plan, the Trump campaign said Harris was embracing policy solutions that have repeatedly failed to bring down prices and improve affordability in the past.
“It’s hard to overstate how disastrous of an idea it is to let D.C. bureaucrats dictate the price of groceries in cities, suburbs, and rural communities across the country — dismantling necessary supply-and-demand signals of the free market and ultimately leading to higher prices for consumers,” the campaign said.
While Republicans were quick to criticize Harris’ policy platform as full of misguided economics, there are some areas where the two major campaigns appear to agree.
Former President Donald Trump, for example, has been calling to end taxes on tips since he proposed the idea during a rally in June in Las Vegas. Harris also expressed her support for eliminating taxes on tips while rallying in Las Vegas on Saturday, leading Trump to accuse her of copying him.
The Harris campaign said her proposal would also come with a call for Congress to raise the minimum wage, CNN reported.
There also seems to be some bipartisan agreement on expanding the child tax credit, with U.S. Sen. JD Vance, Trump’s running mate, saying on Sunday that the tax credit should be more than doubled to $5,000, and should “apply to all American families,” Bloomberg reported.
It’s not clear if that view is shared by Trump as well.
This story was originally published August 16, 2024 at 8:33 PM with the headline "Kamala Harris shares her plan to address the high cost of living. How would it work?."
