Kamala Harris just unveiled her economic plan to 'lower the cost of living.' Would it work — and how does it compare to Trump's?

Vice President Kamala Harris speaks in Raleigh, N.C., on Friday. (AP Photo/Mike Stewart)

During a speech Friday in North Carolina, Vice President Kamala Harris, the Democratic Party’s new presidential nominee, unveiled an aggressively populist economic agenda focused primarily on “lowering the cost of living.”

The speech marked the first time Harris has delved into any significant detail about her governing vision — and clearly tried to differentiate herself on policy from President Biden, the man she recently replaced atop the ticket.

“Today, by nearly every measure, our economy is the strongest in the world,” Harris said. “Still, we know that many Americans don’t yet feel that progress in their lives. Costs are still too high [and] it feels too hard to get ahead.”

A quick guide to what Harris is proposing, and why.

What was at stake for Harris on Friday?

Heading into an election, voters almost always say the economy is their top concern — and that’s especially true today, after pandemic-era disruptions triggered a painful spike in inflation.

But Biden, 81, struggled to connect on the issue. In part that was because he was president when prices shot up; in part it was because, by the time inflation started to fall again, many Americans no longer saw him as competent or commanding enough to deserve much credit; and in part it was because he spent a lot of time focusing instead on the rosier aspects of his economic record, like low unemployment, robust growth and efforts to revive American manufacturing.

Last month’s Biden-to-Harris swap seems to have given Democrats a real chance to reset. Earlier this week, a Financial Times poll showed that about as many Americans now trust Harris on the economy (42%) as trust former President Donald Trump, the Republican nominee (41%). Other surveys have found that “Harris has trimmed between six and nine points off Biden’s previous deficits to Trump on the economy,” according to the Washington Post.

Do these numbers mean that Harris will suddenly dominate Trump on economic issues? No. But they do suggest that voters are at least open to her in a way they weren’t open to Biden. And on Friday, she used that openness as an opportunity to say her economic focus as president would be a little different than Biden’s — and a little more in line with what voters say they want.

“The bills add up,” Harris said. “Food, rent, gas, back-to-school clothes, prescription medication. After that, for many families, there’s not much left at the end of the month.”

“As president,” she continued, “I will take on the high costs that matter most to most Americans.”

What policies did Harris propose?

The vice president and her campaign floated more than a dozen economic policies Friday. They include:

Combating “price gouging” on groceries and food by authorizing the Federal Trade Commission to impose large fines on grocery stores that impose “excessive” price hikes on customers.

Eliminating medical debt for millions of Americans, possibly by using federal funds to buy and forgive outstanding debt from health providers.

Capping the out-of-pocket cost of insulin at $35 per month for all Americans.

Limiting Americans’ annual out-of-pocket spending on prescription drugs to $2,000.

Providing up to $25,000 in down payment support for more than 1 million first-time home buyers.

Calling for the construction of 3 million new housing units over the next four years.

Expanding an existing tax incentive for developers who build affordable rental housing.

Removing tax benefits for Wall Street investors who bulk buy single-family rental homes.

Preventing corporate landlords from using algorithmic price-setting tools to increase rents by large margins.

Passing a child tax credit that would provide $6,000 per child to families for the first year of a baby’s life.

Expanding the Earned Income Tax Credit for lower-wage workers by up to $1,500.

Notice that every one of Harris’s proposals is designed to cut the cost of living — whether in terms of food, medicine, housing or child care. And nearly all of her plans are “populist” as well, involving government intervention against corporate interests on behalf of consumers.

“I know that most businesses are playing by the rules and creating jobs,” Harris said Friday. “But some are not, and we need to take action when that is the case.”

Citing her work to fight corporate price-fixing as California attorney general, Harris vowed to “go after the bad actors” if elected in November.

Progressives have applauded. “Harris has made a set of policy choices over the last several weeks that make it clear that the Democratic Party is committed to a pro working-family agenda,” Felicia Wong, president of the Roosevelt Forward, a left-leaning think tank, told the Washington Post. “The days of ‘What’s good for free enterprise is good for America’ are over.’”

Are Harris's policies new?

Many of Harris’s proposals build on the work of the Biden administration; several go a step further. For instance, the caps on insulin costs and annual out-of-pocket prescription drug spending currently apply to Medicare recipients; Harris would extend them to all Americans. Biden has called for the construction of 2 million housing units over the next four years; Harris is calling for 3 million units. Harris’s $6,000 newborn tax credit is new — but she also wants to revive Biden’s $3,600 child tax credit for lower-income and middle-class families that expired during the pandemic.

Would Harris's policies work?

Harris’s plans to shore up the social safety net and expand the housing supply are generally considered sensible. But mainstream economists have doubts about the efficacy of a price-gouging ban — and they are skeptical that Harris can avoid adding to the deficit without raising taxes on Americans making less than $400,000 a year (which she has vowed not to do). Then there’s Congress to contend with. Unless Harris wins big Democratic margins in the House and Senate, how many of these measures would she actually be able to implement?

What did Harris say about Trump?

Protectionist tariffs are the cornerstone of Trump’s economic agenda. Seeking to give U.S. manufacturers a leg up, the former president has repeatedly called for an across-the-board 10% tax on all foreign imports — and a 60% tax on Chinese goods.

Together, those tariffs could cost a typical middle-income U.S. household an additional $1,700 a year, according to an estimate published by the Peterson Institute for International Economics in May.

Trump “wants to impose what is, in effect, a national sales tax on everyday products and basic necessities,” Harris said Friday. “It will mean higher prices on nearly every one of your daily needs. A Trump tax on gas. A Trump tax on food. A Trump tax on clothes. A Trump tax on over-the-counter medication. … At this moment when everyday prices are too high, he will make them even higher.”

Harris also criticized Trump’s plans to extend his 2017 tax cuts even for high earners and to further lower the corporate tax rate from 21% to 15%.

“If you want to know who someone cares about, look who they fight for,” Harris said. “Donald Trump fights for billionaires and large corporations. I will fight to give money back to working Americans.”

How did Trump respond?

The former president previously claimed that Harris’s economic plans are dangerously liberal.

“She is running on the Maduro plan,” Trump said at a news conference in Bedminster, N.J., on Thursday, referring to Nicolás Maduro, the autocratic left-wing president of Venezuela. “We call it the Maduro plan. Like something straight out of Venezuela or the Soviet Union.”

But according to a recent Data for Progress poll, 77% of Americans — including 87% of Democrats, 80% of independents and 65% of Republicans — agree that the U.S. “should do more to take on corporations that unfairly and illegally raise prices on consumers.”