Former Council of Economic Advisers Chairman Kevin Hassett reacts to Vice President Kamala Harris’ economic plan and price control proposal on The Evening Edit.
Whoever wins the White House in November will need to put three policy items at the top of their to-do list, according to 132 of the country’s leading economists.
“A majority of panelists see budget deficits and immigration reform as the two most important policy issues for the next administration,” said Ellen Zentner, president of the National Association for Business Economics (NABE), chief economic strategist and global head of thematic and macroeconomic investing at Morgan Stanley Wealth Management.
The overall economy was also listed as the third priority in NABE’s August survey published on Monday.
Economic Policy Report August 2024 (NABE: Economic Policy Survey August 2024)
59 percent of respondents cited budget deficits as the main problem. According to the Congressional Budget Office’s Monthly Budget Review, the United States incurred over $1.5 trillion in debt in the first ten months of fiscal year 2024, including over $240 billion in the last month alone.
Maya MacGuineas, chair of the Committee on a Responsible Federal Budget, urged the next president not to waste any time in addressing these issues.
“We cannot put our fiscal course on autopilot. There is far too much at stake and the consequences are far too severe for us to allow our national debt to continue to rise forever,” she warned in the release of the report.
US GOVERNMENT DEBT TRACKER
According to the US Treasury Department, the national debt, i.e. the debt the US owes to its creditors, amounted to over 35 trillion dollars as of last week. Four decades ago, it averaged just over 900 billion dollars.
“Given the magnitude of the challenges we already face – interest costs will exceed our defense and Medicare budgets, budget deficits are approaching $2 trillion, and there is no plan in sight to turn things around – how can we afford to sit on our hands any longer?” she added.
Regulatory Authority: Vice President Harris’ plan would increase US debt by trillions
Democratic U.S. presidential candidate and Vice President Kamala Harris speaks at the Hendrick Center for Automotive Excellence about her political program, including improving the cost of living for all Americans and reducing costs for middle-class families (Photo by Peter Zay/Anadolu via Getty Images / Getty Images)
On Friday, Vice President Kamala Harris unveiled her economic plan, titled “Cost-Reduction Agenda for American Families.” The comprehensive plan includes, among other things, $25,000 for first-time home buyers, several housing affordability measures, and an expansion of the child tax credit and the earned income tax credit.
After publication, the Committee for a Responsible Federal Budget (CRFB) found that these plans would increase federal budget deficits by $1.7 trillion over the next decade.
TRUMP AND HARRIS SUPPORT TIP TAX REPEAL: WHAT DO THE EXPERTS SAY?
Vice President Harris also followed former President Trump’s promise to eliminate the federal tax on tips. The CRFB found that her plan could increase deficits by as much as $200 billion, while former President Trump’s plan would increase them by as much as $250 billion. Other factors that could have an impact, such as how employers and employees reclassify that income, remain “uncertain,” according to the CRFB.
Former President Trump answers questions during the National Association of Black Journalists annual meeting in Chicago on July 31, 2024. ( (Photo by KAMIL KRZACZYNSKI / AFP) (Photo by KAMIL KRZACZYNSKI/AFP via Getty Images) / Getty Images)
When it comes to immigration, no respondents said the policy was “fine as it is,” the survey shows.
However, over 60% said that the number of people entering the country legally must increase in parallel with the expansion of visa programs for high- and low-skilled workers and that increased border security is still necessary.
Economic Policy Report August 2024 (NABE: Economic Policy Survey August 2024)
On the economy, the group remains optimistic, estimating the probability of a recession in the U.S. next year at 25 percent, slightly higher than the 22 percent cited in the February survey.
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On Thursday, Federal Reserve Chairman Jerome Powell will deliver the keynote address at the Kansas City Federal Reserve’s economic policy symposium in Jackson Hole, Wyoming, where he is expected to provide further details on the expected September interest rate cut.
