- Biden picked Kamala Harris to be his vice presidential running mate on Tuesday, putting a former primary rival on the ticket.
- Harris appears to possess a simple economic instinct: The government should step in and give people more money.
- She supports $2,000 monthly stimulus checks for Americans during the pandemic, and introduced a plan during her campaign for a significant middle-class tax cut.
- Visit Business Insider's homepage for more stories.
Joe Biden picked Sen. Kamala Harris as his vice presidential running-mate on Tuesday, putting on the Democratic ticket a former campaign rival with economic plans further to his left.
The California senator waged an unsteady presidential campaign last year. Harris cast herself as a progressive though one with cautious instincts. She backpedaled on her support for single-payer healthcare after Medicare for All drew increased scrutiny in the primary, and struggled to hone a message for voters.
Now the economic downturn caused by the pandemic rivals the Great Depression of nearly a century ago. The state of the economy is very likely to be near the top of voters' concerns in November with millions of Americans on unemployment and the jobless rate in the double digits.
Harris appears to possess one simple idea guiding her economic views: The government should step in and give middle-class and low-income people more money. She's long backed efforts in Congress to provide many with a stronger foothold in American society through a robust redistribution of federal dollars.
"[Harris] is not only highly sensitive to challenges in affordable housing and the inadequate income growth for low and middle-income households, she's absolutely put out some of the most ambitious and detailed proposals that would not just begin to tackle these issues but address them," Indivar Dutta-Gupta, co-executive director of the Georgetown Center for Poverty and Inequality, told Business Insider.
She diverges from Biden, who has carved out more moderate positions on the economy and healthcare. Harris initially favored Medicare for All before rejecting the plan and backing a decade-long transition to a government-run healthcare system. Biden supports a public option instead.
Read more: RBC lays out 6 trades to make now ahead of a possible Democratic sweep in the elections — and says waiting until November is the wrong move
"The values fundamentally align, whatever the specific policies are," Dutta-Gupta said. The Biden campaign did not respond to a request for comment.
Harris backs monthly stimulus checks and cash transfers for the middle class
A former district attorney and attorney general, Harris was elected to the Senate in 2016. While much of her focus has been on criminal justice issues, she's raised concern about the gulf between the wealthiest people and everyone else.
"For so long, really for generations, the rules have been written in a way that have excluded working people and have excluded middle-class families," Harris told The New York Times last year. "And we've got to address that."
With alarm over widening inequality on the rise in recent years, Dutta-Gupta said, an increasing number of Democratic lawmakers support measures to transfer cash directly to people.
That has gained even more backing because of the pandemic. In May, Harris introduced legislation alongside Sens. Bernie Sanders and Ed Markey to give every American $2,000 a month throughout the coronavirus pandemic, and continue the payments for three months after it ends.
However, Democrats didn't push for recurring payments during stimulus negotiations that collapsed last week. Instead they favored another one-time round of $1,200 stimulus checks along with Republicans. The plan for monthly payments hasn't gained traction.
Brian Riedl, an economist at the conservative-leaning Manhattan Institute, estimated a one-year $2,000 monthly check program would cost $6 trillion.
The California Democrat also rolled out legislation last month to ban all evictions and foreclosures for a year. Those steps are coupled with barring rent increases and utility shutoffs while the outbreak is ongoing.
Though it wasn't a campaign centerpiece, the economic anchor of Harris' platform was a middle-class tax-cut plan called the LIFT Act. It sought to provide $3,000 to individuals earning below $50,000 through a refundable tax credit, doubled to $6,000 for married couples. The legislation has a hefty price tag of $2.8 trillion over a decade, and Harris said it would be financed by repealing the 2017 Republican tax cuts.
The proposal leaves out the lowest-income households that don't earn enough to benefit, a threshold that's drawn criticism from progressives. But the middle and working-class stand to gain the most from it, according to an analysis from the nonpartisan Tax Policy Center.
"Whether it will become part of Biden's own tax plan is unclear – but it does demonstrate Harris's longstanding commitment to increasing the incomes of low- and middle-income workers," said Elaine Maag, an expert at the organization, said in a blog post.
That was not the only cash-transfer plan Harris endorsed. She was also the first senator to sign onto the American Family Act, a dramatic expansion of the existing child tax credit sponsored by Sen. Michael Bennet of Colorado. It's garnered majority support from Democrats in the House and Senate.
Read more: MORGAN STANLEY: The government's recession response has the stock market heading for a massive upheaval. Here's your best strategy to capitalize on the shift.
The bill is a European-style monthly cash allowance for children, providing $3,600 annually for children younger than 6 and $3,000 yearly for kids aged 6 to 16. It'd phase out for households earning above $100,000 a year.
"There's been an emphasis on the left with aggressive child-based support," Douglas Holtz-Eakin, president of the conservative American Action Forum, told Business Insider. "Whether it's universal pre-K, child allowances, paid parental leave, there's a big menu of things there, some of which can become quite pricey."
"That's not a crazy thing to expect to get proposals on, but it's far from a lock that it would go through" if there were a Biden administration, he said, adding it depends on the makeup of House and Senate.
"The reality is it's what Biden proposes that matters"
A vice presidential candidate can have differing policy views compared to the presidential candidate leading the ticket. But the VP candidate normally conforms to the platform. Now the pair have to craft a consistent message in their campaign against President Donald Trump.
"The reality is it's what Biden proposes that matters," said Holtz-Eakin, who was a top economic aide in John McCain's 2008 presidential campaign.
Adam Ruben, the director of the Economic Security Project, an organization in favor of cash payments, said Harris is at "the forefront of a lot of fresh thinking" on the ability of cash payments to both alleviate hardship and boost the economy.
"I think having Senator Harris in the White House would be a significant step to ensuring low- and middle-income families in the US have financial security to meet their basic needs, especially in this crisis," Ruben told Business Insider.
There are some differences in their approach. Biden backs a government partnership with states and cities to ensure people get some form of rental relief but not a ban on evictions like Harris sought up to now.
Biden seeks to ramp up taxes on high-earning Americans and businesses to fund a collection of federal programs that strengthen the middle class. His pandemic platform leaves the door open to further cash payments and tax relief down the road.
"There is a clear and concerted effort to tackle racial inequality on a scale we haven't seen in generations," Dutta-Gupta said. "There is a clear willingness to raise substantial revenue from the highest-income households in a way we haven't seen for decades."
Republicans are not likely to sign onto many aspects of Biden's ambitious economic agenda. It's up in the air how much of it will manifest into reality should there be another era of divided government.
"The question is how much of that looks like political positioning and how much looks like preparing to legislate," Holtz-Eakin said. "That is the only interesting question."
Source: Read Full Article