As the front-runner for the Democratic nomination, Kamala Harris will have to run on President Joe Biden’s economic record, for better or worse. That could be a problem for the vice president, who is considered the party’s almost certain choice to replace Biden. While Biden-Harris can claim many accomplishments, their legacy on inflation is what will be most remembered by voters, who are generally critical of the administration’s record. This is just one of the challenges Harris must overcome to defeat her Republican opponent, former President Trump. “She has to take some responsibility because she works for the government,” said Greg Valliere, chief U.S. policy strategist at AGF Investments. “It’s hard for her to come up with a new plan because it might be seen as disloyal. So she’s really stuck now.” Despite historically low unemployment, macroeconomic growth has exceeded long-held expectations of a recession expectations, but the economy remains Biden’s Achilles’ heel. According to recent Reuters/Ipsos polling data, only 37% of Americans approve of the president’s handling of the economy. That number has been little changed in the final years of Biden’s presidency, with consumers unhappy about the high cost of nearly everything, although inflation data have slowed in recent months. There are also debt and deficit issues: The federal deficit has ballooned to about $7.2 trillion, or more than 25%, during the Biden-Harris administration, as the government plans to widen the budget gap to nearly $2 trillion this year. These issues pose particular problems for Harris, whose economic philosophy is expected to mirror what Biden has done over the past three and a half years, assuming she is the Democratic nominee. “I don’t think her views on economic policy are that different from the administration’s views,” said Mark Zandi, chief economist at Moody’s Analytics, a Democrat who has advised administrations of both parties. Policy debates and discussions. So these are her policies,” he said, adding that any description is slight. Harris is likely to continue Biden’s efforts on multiple fronts and is expected to lead the effort to end Trump’s 2017 tax cuts when they are rolled back in 2025. “But in terms of actual policy, in terms of tax policy and policy to address the housing shortage, other cost-of-living issues, consumer protection and antitrust, I don’t think there’s a huge difference between the two.” To be sure, Harry Si will bring a positive economic impact to her campaign. Although the unemployment rate is gradually rising, it is still at a historical low of 4.1%, and non-farm employment will increase by more than 1.3 million people in 2024 alone. Consumers, who account for about two-thirds of the $28.3 trillion U.S. economy, have been strong as their retail sales rose 2.3% over the past year, based on seasonal rather than inflation-adjusted data. But inflation has been the biggest driver of voter dissatisfaction. Inflation, as measured by the consumer price index, was 3% in June, one-third of the 2022 midterm peak but more than double the 1.4% inflation rate in 2021 when Biden took office. , food costs have increased by 21% since Biden and Harris took office, energy has soared by 33%, and the median home price has soared by 18.5%. Harris will have a hard time shaking off that, although she can tout progress in bringing inflation to its lowest level in three years. The Harris campaign did not immediately respond to a request for comment. “The reality is that there’s not that long between now and the election, so it’s not particularly feasible to change the economic blueprint in any significant way,” said Joseph LaVorgna, chief economist at Trump’s National Economic Council. “She’s going to have an economic record, she’s going to have some advocacy, and I think whatever happens in her administration is going to be effective, maybe with some pruning here or there, basically a Biden presidency,” the current SMBC reporter said. added Lavogna, chief economist at Industrial Securities. Possible changes at the Fed One area of ​​disagreement between Biden and Harris could be a key one — the Federal Reserve. As a senator in 2018, when Trump nominated Jerome Powell to serve as central bank chair, Harris voted against confirmation. She is one of only 13 senators to do so. “At a time when the American people care deeply about an economy that works for everyone and a fair and transparent financial system, I have serious concerns about Mr. Powell’s commitment to strengthening rules to protect consumers and ensure the stability of our economy,” Harris said at the time. Biden renominated Powell in 2022, and the Senate confirmed him by a vote of 80-19. Powell’s term as chairman ends in 2026, and it’s unclear whether the 71-year-old policymaker would like to serve a third four-year term. Trump has said he will not re-elect Powell, and Harris may seek to make changes. Institutional consulting firm Beacon Policy Advisors said in a report on Sunday that “the decision not to appoint Powell does not necessarily have anything to do with the independence of the Fed, but rather a desire not to inherit the Fed chairmanship from two previous presidents.” Therefore, the appointment of another Fed chairman may also mark not a policy difference, but a hope for a new face to lead the central bank, which is expected to start cutting interest rates in September. Powell followed an unusual path as Fed chairman, having a strong background in financial markets rather than a PhD in economics like most other central bank leaders. “My sense is (Harris voting against Powell) was more of a political statement. It was clear he was going to be appointed and her vote wouldn’t make that any difference,” said Zandi, a Moody’s economist . “When she was California’s attorney general, she was very aggressive in going after financial institutions that were derailed before the (financial) crisis, so she was very skeptical of people who came here from Wall Street,” he added.
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