Kamala Harris freshens up message on US economy as Trump, Republicans go after her on inflation

Harris is putting a bigger priority on what she says could be ahead.

“In our vision of the future, we see a place where every person has the opportunity not just to get by but to get ahead – a future where no child has to grow up in poverty, where every senior can retire with dignity, and where every worker has the freedom to join a union,” Harris told the American Federation of Teachers on Thursday.

Data from the US Department of Labour shows that consumer prices are up 19.2 per cent since Biden took office, while average hourly earnings have risen 16.9 per cent.

Republican Party leaders are openly saying Harris contributed to the inflation, without specifying how she managed to do so other than by being vice-president.

“Vice-President Harris owns this administration’s record,” said Senate Minority Leader Mitch McConnell. “Her fingerprints are all over the past four years of failure.”

Past and current officials who worked with Harris said in interviews that there was an expectation that criticism on inflation would not stick to her because for many voters she represented a fresh voice after nearly eight years with either Trump or Biden in the Oval Office.

Now it’s time for Harris to spell out her own policy positions on economic matters.

Some of those officials, who spoke on condition of anonymity because they were not authorised to publicly discuss political matters, said Harris was likely to stay in line with Biden’s 2025 budget proposal and its plan to increase the corporate tax rate to 28 per cent from the 21 per cent set by Trump’s 2017 tax overhaul.

Her emergence as the Democratic nominee has overlapped with positive economic news.

The US Commerce Department said on Thursday that the economy grew at an annual pace of 2.8 per cent in the second quarter. On Friday, it reported that the personal consumption expenditures measure of inflation eased to an annual 2.5 per cent, with financial markets now expecting a Federal Reserve interest rate cut in September.

“She’s a capitalist at heart – she wants businesses to do well,” said Yasmin Nelson, a former senior adviser to Harris. “But she recognises that the scales have been tipped towards them during the Trump administration. In her view, she wants to even the playing field.”

Trump, at a rally in North Carolina on Wednesday, called Harris “the most incompetent and far left vice-president in American history”.

Vance went after her policies in an interview on Friday on Megyn Kelly’s SiriusXM programme.

“We cannot let people who are going to destroy the American manufacturing and energy economy take over the reins of power,” Vance said. “It’s going to be a lot worse when you get somebody who’s even more liberal than Biden in there.”

Republican lawmakers also say that Harris would raise taxes, which is only what Biden’s 2025 budget plan would do for wealthier households and corporations.

The Harris campaign said that she did not support a fracking ban. During the 2020 vice-presidential debate, she stressed multiple times that Biden would not end fracking.

The Energy Information Administration shows that both natural gas and oil production have increased to record levels during Biden’s presidency after a pandemic driven dip. But the Biden administration’s policies are more restrictive than what the Republican Party wants.

The bigger risk for Harris might be how the persistence of inflation shapes voters’ views of the economy. Many economic models used by financial firms to analyse the election are based on the incumbent’s party, not the candidate herself in this case.

The consultancy Oxford Economics said in an analysis on Monday that the odds favoured Trump. The forecast is based on models that use economic data. It does not necessarily account for social issues such as abortion and gun control that Democrats say will help them in the election.

The analysis stressed there is a high degree of uncertainty and noted that a lot could happen in the months ahead, though it is fairly straightforward in concluding that inflation is still a drag for the vice-president.

“I doubt that Harris will significantly change how swing voters think of the economy,” said Bernard Yaros, an economist at Oxford Economics. “She still carries that same baggage of presiding over the high inflation of 2021 and 2022. Like Biden, her approval took a hit during that inflation surge.”