Veepstakes Low Sizzle

Update 480 — Veepstakes Low Sizzle
Highlights Economic Policy Contrasts

Senator Kamala Harris and Vice President Mike Pence took the stage Wednesday night in Salt Lake. The first and only vice presidential debate was a welcome return to sustained discourse after the spectacle of the first presidential debate. 

Pence played the Trump administration’s economic policy card better than his boss, but neither has outlined a vision for the recovery. The discussion on corona relief was scant — Trump’s equivocations this week made it moot anyway. But the contestants’ contrasts on tax policy, job creation, and the election were on full display. See below.

Good weekends, all…

Best, 

Dana

—————————————————

No New (Middle Class) Taxes

After spending the first 20 minutes trading jabs over their running mates’ COVID plans, Harris reminded viewers that President Trump paid just $750 in income taxes in 2016 and 2017. Pence responded by echoing Trump’s claims that this was false and that he paid “tens of millions of dollars in taxes” — obscuring the issue by including Trump’s payroll and non-federal property taxes over a nebulous period of time.

From there, the conversation moved to tax policy. Pence trotted out the usual GOP talking points about cutting taxes, holding up the 2017 tax cuts (commonly referred to as the “TCJA”) as a boon for the middle and working classes. Harris retorted that the TCJA primarily benefited “the top one percent and the biggest corporations of America [and lead] to a two trillion dollar deficit.” 

Harris echoed Vice President Biden’s claims from last week’s debate that repealing Trump’s tax cuts would be a top priority for the new administration. Pence jumped in, claiming that “Joe Biden and Kamala Harris want to raise your taxes,” whereupon Harris promised that changes to the tax code would not increase tax burdens for anyone earning less than $400,000. 

As we wrote in Wednesday’s update, Biden’s plan is not to immediately reverse the entirety of the TCJA but rather to repeal its most regressive portions. Specifically, Biden has promised to reinstate the 39.6 percent top marginal tax rate on personal income over $400,000. This would create a much more progressive income tax schedule and would impact just the top 1.8 percent of households — a group projected to earn almost a quarter of all adjusted gross income in 2021. 

Crickets Heard on COVID Recovery

Although the pandemic has dominated our lives for the past six months, the resulting recession and the policies needed for recovery garnered little attention during Wednesday’s debate. Pence erroneously asserted that the administration has “spared no expense to help the American people” and the country is experiencing a “V-shaped” recovery. 

• Trump Can’t Strike a Deal: The claim that the Trump administration has spared no expense is almost laughable given the developments over the past week. Trump unilaterally scuttled relief negotiations by tweet on Tuesday afternoon only to walk back this departure by tweet on Tuesday night after markets took a dive. If the administration truly spared no expense on economic relief, Trump would have signed the House Democrats’ HEROES Act back in May.
  
  Not hammering Pence on the administration’s failure to pass more relief was probably the biggest missed opportunity of the night for Harris, who said little on the bungled economic recovery and the futility of relief efforts. The Trump administration has foundered for months, reversing on its vacillations and finding unwilling partners in the GOP controlled Senate. 

• V vs. K Recovery: While Wall Street has recovered since bottoming out in March, many workers face a much different economy. The September jobs report showed that Americans experiencing long-term unemployment of at least six months increased by 48 percent since August to 2.4 million individuals. Over the past couple of weeks, Walt Disney Co., American Airlines, United Airlines, and Cineworld announced they were laying off a combined 80,000 workers.
  
  The recovery is much closer to being “K-shaped” as Vice President Biden stated in the first debate. The wealthy are continuing to benefit from strong capital markets while workers face difficulties reentering the labor force. 

It’s Always Infrastructure Week 

Senator Harris laid out the Biden-Harris vision for job creation primarily through infrastructure and clean energy investments. The Biden campaign’s Build Back Better plan includes a $2 trillion infrastructure investment in the first term that’s rooted in clean energy as a means to combat climate change. 

Harris stated that their plan is “…about investing in the people of our country. As opposed to passing a tax bill, which had the benefit of letting American corporations go off-shore to do their business.” Pence falsely stated that the Biden plan would “crush” American jobs. Senator Harris correctly pointed out that it would do just the opposite. 

Job Gains Under Different Election Scenarios

Sources: Bureau of Economic Analysis, Moody’s Analytics

In September, Mark Zandi and Bernard Yaros at Moody’s Analytics compared Biden’s and Trump’s economic plans. They found that the Biden plan would produce 7.4 million more jobs than Trump’s. Besides engaging in fear-mongering, Pence offered little in terms of his economic vision beyond continued tax cuts and deregulation. This was a consistent theme throughout the night, as Pence demonstrated the Trump administration has no clear plan for addressing our dual health and economic crises. 

Trust the Voting Process 

In the final moments of last week’s debate, President Trump was given the opportunity to state unequivocally that he would accept the results of November’s election once independently verified. He refused, claiming that the process was already rigged against him and casting doubt on the validity of mail-in ballots. 

Pence echoed these absurdities on Wednesday night, refusing to commit to a peaceful transfer of power and accusing Democrats of changing rules around voting “that will create a massive opportunity for voter fraud.” The Vice President then veered into full-on conspiracy mode, accusing the Obama administration and FBI of coordinating with the Clinton campaign to spy on the Trump campaign.

Harris’s message stood in stark contrast to Pence’s baseless conspiracy-mongering. She correctly accused Trump of openly attempting to suppress the vote and reiterated her running mate’s commitment to “not [letting] anyone subvert our democracy.” Harris implored viewers simply to vote, directing Americans to online resources that can help them come up with a voting plan. 

The No-Plan Plan

Despite Pence’s more somber, polished performance than his running mate, it remains clear that the Republican Party lacks an actual legislative economic recovery agenda. Pence fell back on the tired GOP tropes about lowering taxes and rolling back regulations. Harris, on the other hand, demonstrated that the Democratic ticket has a serious set of policy prescriptions to meet the moment. Voters definitively sided with Harris’s approach; in a CNN poll, 59 percent of registered voters thought Harris won, while only 38 percent thought Pence did. 

With five million ballots already cast, the election is steadily underway. As President Trump’s condition makes future debates uncertain, this week’s debate could have been one of the last opportunities for the campaigns to outline their contrasting visions. The Trump campaign needed a knockout blow to change the narrative but instead offered voters few reasons to give them another four years.