Debate: Is the Harris-Walz Economic Plan the Right Path for America’s Middle Class?
Experts Talk The Harris-Walz Economic Plan
Topic:
Politics
by MPeriod
Posted 2 months ago
Opening Statements
Dr. Emily Reynolds:
“The Harris-Walz plan is a forward-thinking approach that provides immediate and necessary relief for millions of middle-class families while laying the groundwork for sustainable long-term economic growth. Their tax cuts, down payment assistance, and healthcare expansions directly address the financial pressures facing everyday Americans. What sets this plan apart is its focus on creating an ‘Opportunity Economy,’ particularly through investments in affordable housing and small business growth.”
Dr. Jonathan Clark:
“While the Harris-Walz plan might provide short-term relief, it raises significant concerns about fiscal responsibility and long-term economic sustainability. The plan relies heavily on expanding social programs and tax credits without sufficiently addressing how to manage the long-term budget deficit. The spending increases, particularly in areas like healthcare, housing, and down-payment assistance, risk ballooning federal debt, which could have severe consequences for future generations.”
1. Tax Cuts and Middle-Class Relief
Dr. Reynolds:
“The most immediate and beneficial aspect of the Harris-Walz plan is the tax relief it offers to over 100 million Americans. The proposal to expand the Child Tax Credit to $3,600 per child—similar to what we saw temporarily under the American Rescue Plan—would lift millions of families out of poverty. Additionally, the $6,000 tax cut for new parents in their child’s first year provides a significant financial cushion for young families. This tax relief will increase disposable income, allowing families to save more and invest in their future.”
Dr. Clark:
“While these tax cuts sound appealing, they come with a cost. According to analyses, expanding the Child Tax Credit and other reliefs could increase primary deficits by over $1.2 trillion in the next 10 years on a conventional basis, and $2 trillion when accounting for negative economic feedback effects. If we don’t offset these cuts with meaningful spending reductions or increased revenue elsewhere, we risk further increasing the national debt, which is projected to rise to 16.3% higher by 2054 under current policy. Simply giving money without addressing structural economic issues isn’t a sustainable approach.”
Reynolds:
“Yes, but independent analyses have shown that these investments will have a positive impact on GDP growth in the short term. Increasing disposable income will stimulate demand, driving economic activity. Moody’s estimates that household disposable income will increase by up to $1,000 per year under this plan. Additionally, the corporate tax increase to 28% offsets some of these costs, creating a more balanced approach to funding these relief measures.”
2. Housing and Affordable Homeownership
Clark:
“The proposal to provide $25,000 in down-payment assistance for first-time homebuyers is well-intentioned, but it doesn’t solve the core issue: the shortage of homes. America needs to build more homes, particularly in high-demand urban areas. The Harris-Walz plan's target to build 3 million additional homes is ambitious, but it's unclear how they will achieve this without addressing zoning laws and local regulations that hinder housing development. Moreover, flooding the market with down-payment assistance without sufficient supply could drive housing prices up further, counteracting the intended benefit.”
Reynolds:
“I disagree. The plan doesn’t just offer down-payment assistance; it actively addresses the supply side of the housing crisis. By partnering with the private sector to build 3 million homes, the administration is acknowledging the importance of increasing supply. This multifaceted approach—both increasing supply and providing financial assistance—ensures that more families, especially those from historically marginalized communities, can achieve homeownership. Harris and Walz have also committed to working with states to address zoning and regulatory barriers, although the specifics are still being worked out.”
Clark:
“Even if we assume the plan’s housing expansion succeeds, there’s the issue of $138 billion in costs associated with the down-payment assistance. This spending adds to the national deficit without addressing the fact that high property prices and restrictive zoning in urban areas are the core issues driving the housing shortage.”
3. Healthcare and Prescription Drug Costs
Reynolds:
“The Harris-Walz healthcare proposal builds on the Affordable Care Act by expanding premium subsidies, which will make healthcare more affordable for millions of Americans. Their plan also focuses on lowering prescription drug prices, extending the $35 insulin cap to all Americans and accelerating drug price negotiations for Medicare. These reforms are essential in reducing out-of-pocket healthcare expenses, particularly for low- and middle-income households. By addressing one of the largest financial burdens on families, the plan frees up household income for other necessities.”
Clark:
“Healthcare affordability is an important issue, but the problem with the Harris-Walz approach is that it doesn't address the root causes of rising healthcare costs. Subsidies, while helpful, only treat the symptoms. They don’t lower the underlying cost of providing healthcare. Additionally, expanding premium tax credits and reducing prescription drug prices is estimated to cost $225 billion over the next 10 years. These costs need to be offset with more comprehensive healthcare reform that addresses inefficiencies in the system, not just by increasing federal spending.”
Reynolds:
“But by negotiating drug prices and capping insulin costs, we are addressing inefficiencies. The current system overcharges Americans for medications that cost a fraction of the price in other developed countries. By allowing Medicare to negotiate prices, the government saves billions of dollars, which helps offset the cost of subsidies.”
4. Small Business and Innovation
Clark:
“The proposal to expand the startup expense deduction from $5,000 to $50,000 is a step in the right direction, but it’s not enough to spur meaningful small business growth. The biggest barrier to new businesses isn’t just the cost of starting up—it’s access to capital. The Harris-Walz plan does little to address the challenges small businesses face in securing financing. Moreover, the potential burden of higher corporate taxes could limit small businesses’ growth potential, especially if they rely on larger corporations as clients.”
Reynolds:
“Access to capital is a real issue, but the administration’s plan is well-rounded in addressing this. By reducing regulatory burdens and providing more opportunities for small businesses to secure loans, Harris and Walz are aiming to encourage innovation. The $50,000 deduction will encourage more startups, particularly in high-growth industries. And while corporate taxes are going up, the majority of small businesses won’t be affected because they don’t fall under the corporate tax structure.”
5. Long-Term Economic Outlook and Fiscal Responsibility
Clark:
“In the long run, we need to consider the $2 trillion increase in primary deficits under dynamic economic effects. Debt projections indicate that U.S. debt held by the public could grow 16.3% higher than under current policy by 2054. The real question is, how do we reconcile these short-term relief measures with long-term fiscal responsibility? The plan's spending increases are significant, but it’s unclear how these will be managed as federal debt continues to grow.”
Reynolds:
“Yes, the deficits are a concern, but if we focus solely on fiscal austerity, we risk underinvesting in the middle class, which is the engine of the U.S. economy. Short-term investments in healthcare, housing, and small businesses will lead to long-term gains in productivity and innovation. Additionally, the corporate tax hike helps balance some of the costs, making this plan more fiscally responsible than it may appear at first glance.”
Conclusion
Clark:
“Ultimately, while the Harris-Walz plan provides much-needed relief for families, it leaves many questions unanswered about how we will sustain this level of spending in the long term. We need to be cautious about increasing debt and passing that burden on to future generations.”
Reynolds:
“This plan is about creating opportunity and security for the middle class now and in the future. By investing in families, workers, and innovation, the Harris-Walz plan paves the way for a more resilient and prosperous economy. Yes, there are challenges, but they are outweighed by the benefits of a stronger, more inclusive economy.”
