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Forbes chairman and editor-in-chief Steve Forbes reacts to Vice President Kamala Harris economic plan and price controls proposal on The Bottom Line.
A key part of Vice President Kamala Harris' newly released economic agenda would add $1.7 trillion to America's growing national debt, according to a budget watchdog.
The plan, dubbed an "Agenda to Lower Costs for American Families," was released Friday as Harris lays out her platform in her campaign for president. It includes expansions of the Child Tax Credit and Earned Income Tax Credit, as well as an extension of the health insurance premium subsidies under the Affordable Care Act (aka ObamaCare) that are due to expire at the end of next year. It would also establish a new $25,000 tax credit for first-time homebuyers, expand tax credits for building affordable housing, create a $40 billion housing innovation fund, and seek to lower prescription drug prices through negotiations and increased transparency.
A rapid analysis by the nonpartisan Committee for a Responsible Federal Budget (CRFB) found that these plans would increase federal budget deficits by $1.7 trillion over the next decade. That figure would rise to $2 trillion if temporary housing policies the vice president has proposed are eventually made permanent.
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Vice President Harris’ plan would add $1.7 trillion to the budget deficit over the next decade, according to the CRFB. (Peter Zay/Anadolu via / Getty Images)
The think tank noted that although the fact sheet released by the Harris campaign "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 CRFB's analysis of what the Harris campaign released, the cost of new tax credits and spending would total about $1.95 trillion over fiscal years 2026 to 2035 – which would rise to $2.25 trillion if the housing policies were made permanent.
That figure would be partially offset by about $250 billion in savings from lower prescription drug costs, resulting in a $1.7 trillion increase to the deficit over that period.
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Harris’ overhaul of the child tax credit would be the most expensive component of the policy proposal she released Friday. (Elizabeth Conley/Houston Chronicle via / Getty Images)
The most expensive component of the plan would be the expansion of the Child Tax Credit (CTC) by making it fully refundable and increasing the base credit from $2,000 to $3,000, or to $3,600 for children under the age of 6.
That would cost a total of $1.1 trillion over 10 years relative to the extension of the CTC and related policies as structured under the Tax Cuts and Jobs Act, while that figure would rise to $1.8 trillion when compared to current law given that CTC policies are slated to expire.
It would also boost the credit for children in the first year of their lives to $6,000, which would cost a further $100 billion over a decade.
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Vice President Harris and her running mate, Minnesota Gov. Tim Walz, have signaled they support the Biden-Harris budget’s tax increases. (Melina Mara/The Washington Post via / Getty Images)
Extending the expansion of the ObamaCare premium tax credit would cost $400 billion over the decade. Increasing the Earned Income Tax Credit for workers without child dependents for tax purposes would cost $150 billion.
The $25,000 first-time homebuyer credit, which is scheduled to be in place for four years based on Harris' plan, would cost $100 billion over a decade based on her campaign's estimate of 4 million eligible homebuyers – though CRFB believes that number could be higher and result in additional costs.
Additional affordable housing policies included in her plan would also be in place for four years and would also cost $100 billion over 10 years, although CRFB notes that cost could differ due to not-yet-specified details of Harris' proposal.
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While the proposal released by her campaign didn't specify how they would be funded through higher taxes or spending reductions, Harris and her vice presidential nominee, Minnesota Gov. Tim Walz, have said they plan to "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."
Harris' announcement on Friday represents just a portion of her overall economic agenda. She has also said that she plans to release plans for education, child care and long-term care, among other policies.
