Former Council of Economic Advisers Chairman Kevin Hassett responds to Vice President Kamala Harris’ economic plan and price control proposal on “The Evening Edit.”
According to 132 of the nation’s top economists, whichever president wins the White House in November needs to put three policy items at the top of their “to-do” list.
“The majority of panelists identified the fiscal deficit and immigration reform as the top two policy challenges facing the next administration,” said Ellen Zentner, president of the National Association for Business Economics and chief economic strategist and global head of thematic and macro investing at Morgan Stanley Wealth Management.
NABE’s August survey, released Monday, also listed the overall economy as the third priority.
Economic Policy Survey August 2024 (NABE: Economic Policy Survey, August 2024)
Fifty-nine percent of respondents cited the budget deficit as their biggest problem. The U.S. has borrowed more than $1.5 trillion through the first 10 months of fiscal 2024, including borrowing more than $240 billion last month, according to the Congressional Budget Office’s monthly budget review.
Maya McGuineas, chair of the Committee for a Responsible Federal Budget, urged the president-elect to waste no time tackling these issues.
“Our nation’s fiscal trajectory cannot be left on autopilot. The risks and consequences of allowing the national debt to continue to rise indefinitely are too great,” she warned at the report’s release.
US National Debt Tracker
The national debt, which measures how much the United States owes its creditors, topped $35 trillion as of last week, according to the Treasury Department. Forty years ago, it averaged just over $900 billion.
“Given the magnitude of the challenges we already face — interest costs that threaten to exceed our defense and Medicare budgets, a budget deficit approaching $2 trillion, and no plan to turn things around — how can we afford to continue doing nothing?” she added.
VP Harris’ plan would add trillions of dollars to U.S. debt: watchdog group
Democratic U.S. Presidential candidate and Vice President Kamala Harris spoke at the Hendrick Center for Automotive Excellence about her policy platform, which includes improving living standards for people across the nation and lowering the cost of living for middle-class families. (Photo: Peter Zai/Anadolu via Getty Images/Getty Images)
Vice President Kamala Harris unveiled a sweeping economic plan on Friday that she called the “Reduce Costs for American Families Plan,” which includes a $25,000 stimulus check for first-time homebuyers, several homebuying incentives, and an expansion of the Child Tax Credit and Earned Income Tax Credit.
After their announcement, the Committee for a Responsible Federal Budget (CRFB) concluded that these plans would increase the federal budget deficit by $1.7 trillion over the next decade.
A shopper browses items on display at a grocery store in Washington, DC, on February 15, 2023. – U.S. retail sales rebounded in January, posting the biggest increase since the start of 2021, according to government data. Policymakers have (Stefani Reynolds/AFP via Getty Images/Getty Images)
Ahead of the plan, she unveiled the first federal price lock-in plan for businesses as part of a sweeping effort aimed at reducing food prices and other everyday expenses as inflation remains high. But as Fox Business reported, economists are skeptical that such a plan would work.
Trump and Harris support ending tip taxes: What do the experts think?
Vice President Harris also followed former President Trump’s pledge to repeal the federal tax on tips. The CRFB noted that her plan could increase the deficit by up to $200 billion, while former President Trump’s plan would increase the deficit by up to $250 billion. Other factors that could come into play, such as how employers and workers would reclassify this income, remain “uncertain,” the CRFB noted.
Former President Trump was answering a question at the National Association of Black Journalists’ annual conference in Chicago on July 31, 2024. (Photo: KAMIL KRZACZYNSKI/AFP) (Photo: KAMIL KRZACZYNSKI/AFP via Getty Images) / Getty Images)
On immigration, as detailed in the survey, no respondents said the policy was “fine the way it is.”
But more than 60% said the number of people entering the country legally should be increased to accommodate the expansion of high-skill and low-skill visa programs, and that border security still needs to be strengthened.
Economic Policy Survey August 2024 (NABE: Economic Policy Survey, August 2024)
On the economy, the group remains optimistic, estimating the likelihood of a U.S. recession next year at 25%, slightly higher than the 22% it had in its February survey.
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Federal Reserve Chairman Jerome Powell is expected to provide further details on the interest rate cuts planned for September in a keynote address on Friday at the Kansas City Federal Reserve Bank’s economic policy symposium in Jackson Hole, Wyoming.
