Vice President Kamala Harris unveiled her economic agenda in a speech Friday in Raleigh, North Carolina.
The Democratic presidential candidate laid out plans including a proposal for a federal ban on what she called excessive grocery prices, as well as $25,000 in down payment assistance for certain first-time homebuyers and tax breaks for builders of starter homes. She also spoke at length about lowering prescription drug costs and criticized her Republican opponent’s platform, former president donald trump.
Below is a closer look at some of her promises and claims.
HARRIS: Trump “essentially wants to impose a 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 a 10% to 20% tariff on all imports (he gave both figures) and up to 60% on imports from China.
Most economists expect it to raise prices for many goods. The Tax Policy Center, a joint project of the Urban Institute and the Brookings Institution, estimates it will cut the average income of the top 60% of earners by 1.8%. And the Center for American Progress Action Fund, a progressive advocacy group, has calculated that the higher rates will cost households an extra $3,900 a year. Trump has said, however, that the tariff revenue could be used to cut other taxes, which would reduce the overall cost of the policy.
HARRIS: “I’m going to lower the cost of insulin and prescription drugs for everyone.”
THE FACTS: Harris made this promise while referring to the Inflation Reduction Act of 2022that allows Medicare to negotiate drug costs directly with pharmaceutical companies. While it’s hard to predict whether she’ll be able to keep it, especially without more details, recent policy may provide some clues.
The White House announced on Thursday that it had reached agreements with manufacturers that saving taxpayers billions of dollars by lowering the list prices for 10 of Medicare’s most expensive medications. However, a number of factors — from discounts to co-insurance or co-pays for an individual’s Medicare drug plan — determine the final price an individual pays when they pick up their medications at their pharmacy.
Powerful pharmaceutical companies tried unsuccessfully to file lawsuits to stop these negotiations. Eventually, they entered into discussions and executives suggested in recent weeks during earnings calls that they do not expect the new Medicare drug prices to affect their profits. However, the manufacturers have warned that the Inflation Reduction Act could drive up prices for consumers in other areas.
Both the Trump and Biden administrations established $35 insulin copay caps for certain Medicare recipients. Biden’s caps are broader in scope, as they apply to all insulin products covered by a Medicare Part D or Part B plan, according to the non-profit health policy organization KFFTrump has only applied this to certain insulin products covered under a voluntary portion of Part D plans.
HARRIS: “As president, I will tackle the high costs that matter most to most Americans. … And I will work to pass the first-ever federal ban on food overpricing.”
THE FACTS: While grocery prices are 25% higher than they were four and a half years ago before the pandemic, they have stabilized recently and it’s not clear whether there is now significant exorbitant pricing.
Over the past 12 months, grocery prices have risen an average of just 1.1%, similar to pre-pandemic increases. Moreover, prices for most goods and services generally don’t fall significantly except during deep, painful recessions. Instead, most economists expect wages to rise enough for Americans to adjust to higher costs. Still, prices remain generally higher than they were a few years ago.
HARRIS: “And by the end of my first term, we will end the housing shortage in America by building 3 million new homes and rental units. … As we work to address the housing shortage, my administration will give first-time home buyers $25,000 to help with the down payment on a new home.”
THE FACTS: These promises could backfire. By helping more Americans afford homes, Harris’ proposal to subsidize down payments would almost certainly boost demand, at a time when estimates of the U.S. housing shortage already range from 3 million to 7 million.
Harris’ proposal to offer tax breaks to builders to encourage more home and apartment construction would alleviate that concern, but there are many reasons experts cite for the housing shortage, including: restrictive zoning plans, higher costs for building materials and even the shortage of construction workers, which tax benefits cannot provide.
Harris also promises to cut the bureaucracy that stands in the way of new construction, but that is largely a concern of state and local governments, and many municipalities are already in motion to make building houses easier.
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