Vice President Kamala Harris presented her economic agenda in a speech on Friday in Raleigh, North Carolina.
The Democratic presidential candidate laid out plans including a proposal for a federal ban on price gouging on food, as well as a $25,000 down payment for certain first-time buyers and tax breaks for home construction. She also spoke at length about lowering drug costs and criticized the platform of her Republican opponent, former President Donald Trump.
Here’s a closer look at some of their promises and claims.
HARRIS: Trump “wants to impose a de facto national sales tax on everyday products and basic necessities that we import from other countries. … And you know, economists have done the math. Donald Trump’s plan would cost the average family $3,900 a year.”
THE FACTS: Harris was referring to Trump’s proposal to impose tariffs of 10 to 20 percent on all imports – he cited both figures – and up to 60 percent on imports from China.
Most economists believe the tariffs would raise the prices of many goods. The Tax Policy Center, a joint project of the Urban Institute and the Brookings Institution, estimates that average incomes for the top 60 percent of earners would fall by 1.8 percent. And the Center for American Progress Action Fund, a progressive advocacy group, has calculated that the higher tariffs would cost households an additional $3,900 annually. Trump has said, however, that revenue from the tariffs could be used to cut other taxes, which would lower the overall cost of the policy.
HARRIS: “I will lower the cost of insulin and prescription drugs for everyone.”
THE FACTS: Harris made this promise in reference to the Inflation Reduction Act of 2022, which allows Medicare to negotiate drug costs directly with pharmaceutical companies. While it’s difficult to predict whether she can keep that promise, especially without more details, recent policy may provide some clues.
For example, the White House announced Thursday that it had struck deals with manufacturers that could save taxpayers billions of dollars by lowering the list prices of 10 of the most expensive Medicare drugs. But there are a number of factors – from rebates to the patient’s Medicare drug plan copayments – that determine the final price a person pays when they pick up the drugs at their pharmacy.
Powerful drug companies tried unsuccessfully to stop those negotiations with lawsuits. They eventually held talks, and executives indicated on conference calls in recent weeks that they do not expect the new Medicare drug prices to affect their profits. But manufacturers warned that the Inflation Reduction Act could drive up prices for consumers in other areas.
Both the Trump and Biden administrations have capped insulin copayments at $35 for certain Medicare beneficiaries. Biden’s caps have a broader reach because they apply to all insulin products covered by a Medicare Part D or Part B plan, according to the nonprofit health policy research organization KFF. Trump’s caps applied only to some insulin products covered by a voluntary subset of Part D plans.
HARRIS: “As president, I will address the high costs that matter most to most Americans. … And I will work to ensure that the first federal ban on food price gouging is passed.”
THE FACTS: Although food prices are 25% higher today than they were before the pandemic four and a half years ago, they have stabilized recently and it is not clear whether price gouging is currently occurring.
Over the past 12 months, food prices have risen by an average of just 1.1%, comparable to pre-pandemic price increases. Moreover, prices for most goods and services generally do not fall significantly except in deep, painful recessions. Instead, most economists expect wages to rise enough to allow Americans to adjust to higher costs. Yet prices overall are still higher than they were a few years ago.
HARRIS: “And by the end of my first term, we will end America’s housing crisis by building three million new owner-occupied and rental homes. … While we work on the housing crisis, my administration will provide first-time homebuyers with $25,000 to help them make a down payment on a new home.”
THE FACTS: These promises may ultimately prove to be contradictory. Harris’ proposal to subsidize down payments would help more Americans afford homeownership, almost certainly increasing demand at a time when estimates suggest there are already three to seven million homeless people in the United States.
Harris’ proposal to encourage developers to build more homes and apartments through tax incentives would be one answer to this problem. But experts cite many reasons for the housing shortage, including restrictive zoning laws, higher costs for building materials and even a shortage of construction workers. Tax incentives cannot fix these.
Harris also promises to reduce red tape for new construction. However, this is primarily a matter for states and municipalities, and many municipalities are already taking measures to make it easier to build housing.
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