[Salon] The Kamala Harris Agenda to Lower Costs for American Families

The Kamala Harris Agenda to Lower Costs for American Families

August 16, 2024

Vice President Kamala Harris released a document today – the Agenda to Lower Costs for American Families – that outlines a number of proposals she would aim to enact if elected President. Taken together, we estimate the policies in this plan would increase deficits by $1.7 trillion over a decade. That figure would grow to $2.0 trillion if temporary housing policies were made permanent. The Harris campaign has said this would be paid for through taxes on corporations and high earners and that they support the revenue raisers in the President’s Fiscal Year (FY) 2025 budget but has not put forward specific offsets as part of their Agenda to Lower Costs for American Families.

While several of the proposals focus on regulatory changes aimed at lowering prices, the agenda also includes several tax credits and spending changes with significant fiscal implications. These include a $1.2 trillion expansion of the Child Tax Credit (CTC), a $400 billion extension of enhanced health insurance subsidies, a $150 billion expansion of the Earned Income Tax Credit (EITC), and $200 billion in support for affordable housing and first-time homebuyers, partially offset by $250 billion of prescription drug savings.

US Budget Watch 2024 is a project of the nonpartisan Committee for a Responsible Federal Budget designed to educate the public on the fiscal impact of presidential candidates’ proposals and platforms. Through the election, we will issue policy explainers, fact checks, budget scores, and other analyses. We do not support or oppose any candidate for public office.

On August 16, Vice President Harris’s campaign released elements of a first-100-days agenda that it says would “cut taxes for the middle class, reduce grocery costs, take on price gouging, lower the costs of owning and renting a home, continue to bring down the costs of prescription drugs, and relieve medical debt for millions of Americans.”

Much of this agenda is regulatory, including a ban on “price gouging” of food and groceries. The tax and spending elements of the agenda include:

Expanding the Child Tax Credit by making it fully refundable, increasing the base credit from $2,000 to $3,000, and further increasing the credit to $6,000 for children in their first year of life and $3,600 for other children under six years old.

Extending the enhanced Affordable Care Act subsidies that reduce premiums paid by households buying health insurance on the exchanges, which expire at the end of 2025.

Expanding the Earned Income Tax Credit by increasing the credit available to workers who do not have child dependents for tax purposes.

Establishing a First-Time Homebuyer Tax Credit of up to $25,000 to help cover the cost of a down payment.

Further supporting affordable housing with tax incentives for building starter homes, an expansion of existing tax credits to support the development of affordable housing, and a $40 billion housing innovation fund.

Lowering prescription drug costs by capping the cost of insulin, accelerating drug negotiations, and increasing transparency and competition among drug manufacturers.

The fact sheet released by the Harris campaign states that most of the housing-related policies would be in effect during the four years of the next presidential term, while the other policies appear to be permanent. Although the fact sheet is lacking certain details that would be necessary for a full analysis of these policies, many of them resemble proposals in the Biden-Harris Administration’s most recent budget.

Based on our understanding of these policies, we estimate the new tax credits and spending would cost about $1.95 trillion over ten years from Fiscal Year (FY) 2026 through 2035, or $2.25 trillion if the housing policies were made permanent. This is partially offset by roughly $250 billion of savings from lower prescription drugs costs – assuming the Harris plan closely matches the Biden-Harris Administration’s recent proposals. On net, this means the agenda would add $1.7 trillion to deficits as written (before interest). The Harris campaign has emphasized that the major housing policies would only be in effect for four years. However, if they were extended permanently, the fiscal impact would grow to $2.0 trillion.

Although the Harris campaign does not specify how these proposals would be financed, the fact sheet says that Vice President Harris and Governor Tim Walz would “fulfill their commitment to fiscal responsibility, including by asking the wealthiest Americans and largest corporations to pay their fair share – steps that will allow us to make necessary investments in the middle class, while also reducing the deficit and strengthening our fiscal health.” The campaign has also communicated to us that Vice President Harris continues to support all of the revenue-raising provisions in the President’s FY 2025 budget. The Committee for a Responsible Federal Budget will analyze the fiscal impact of any such offsets once they are released.

Importantly, Vice President Harris’s Agenda to Lower Costs for American Families represents just one part of her overall campaign agenda. Previously, Vice President Harris has proposed eliminating taxes on tips and raising the minimum wage, which we estimate would cost between $100 and $200 billion over a decade. She has also said she will release plans supporting education, child care, and long-term care, among other policies.

We will continue to analyze plans from Vice President Kamala Harris and former President Donald Trump as they are released.

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Throughout the 2024 presidential election cycle, US Budget Watch 2024 will bring information and accountability to the campaign by analyzing candidates’ proposals, fact-checking their claims, and scoring the fiscal cost of their agendas.

By injecting an impartial, fact-based approach into the national conversation, US Budget Watch 2024 will help voters better understand the nuances of the candidates’ policy proposals and what they would mean for the country’s economic and fiscal future.

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