On Sunday, President Joe Biden dropped out of the race for president in 2024 and immediately backed Vice President Kamala Harris.
Investors should expect a Harris administration to support the economic policies that Biden put in place during his term. These policies include the Inflation Reduction Act’s subsidies for electric cars and green energy projects, more money for the IRS to go after wealthy tax cheats, taxes on stock buybacks, and a 15% corporate minimum tax for big businesses.
A Harris presidency would basically be the same as the Biden administration, according to Isaac Boltansky, director of policy research at BTIG. He told MarketWatch.
He said, “From a Democratic point of view, I think that’s a feature, not a bug.” He also said that worries about a Biden-led ticket were “not because of his policies, but because of his health and capacity.”
Analysts say it’s likely that Republicans will take back the Senate, which will make it harder for Harris to sign partisan legislation even if she beats Trump in November.
It would be up to her right away to negotiate an extension of the 2017 tax cuts, which temporarily lowered individual income tax rates and raised the child tax credit.
Biden has promised to keep these tax cuts in place for families making less than $400,000 a year, and experts think Harris will likely do the same.
Henrietta Treyz, director of economic policy at Veda Partners, says that investors should expect a bit more fiscal restraint if there is a Democrat in the White House and Republicans control at least one chamber of Congress. This is because of the possibility of a Trump victory or a Democratic sweep.
“There is no serious fiscal restraint or deficit reduction conversation happening on Capitol Hill, and we don’t see any coming up unless Biden wins reelection and Republicans go back to the harsh fiscal conservatism they preached in 2011,” she wrote in a recent client note.
It’s possible that this would lead to the kind of bluffing over the deficit and debt ceiling that happened when the White House and Congress were negotiating under Obama, she said.
It took several years of talks to extend the Bush tax cuts. There were serious threats that Congress would not raise the debt ceiling, the government shut down for a record-long time, and S&P lowered the rating of U.S. debt securities BX:TMUBMUSD10Y.
It’s not a sure thing that Democrats will choose Harris as their nominee at their convention next month. The more than 4,000 delegates who are in charge of officially choosing a candidate next month will make the decision.
Democrat Elaine Kamarck, an expert on conventions and a member of the DNC’s rules panel, told Politico, “As soon as [Joe Biden] is not a candidate, they are officially uncommitted.”
In spite of this, analysts think Harris is the clear favorite to win the nomination.
“Because of time and space issues, it will be hard for any Democrat [besides Harris] to set up a campaign and raise money,” said Brian Gardner, chief Washington strategist at Stifel, in an email.
“Ms. Harris could take over the Biden campaign infrastructure, including the campaign’s money,” he said. This is also why we think the Congressional Black Caucus will support Vice President Harris…It will be hard for other Democrats to beat these advantages.
Harris has mostly been a prosecutor, so she doesn’t have a lot of experience with economic policy. However, her short time as a senator and 2020 presidential candidate may give you an idea of how she feels about it.
As California’s attorney general, she helped get a $25 billion settlement for homeowners who had been wrongfully foreclosed on during the financial crisis. She did this by not taking part in national talks that would have given people from other states less money.
She also pushed for California’s “homeowners bill of rights” law. These two actions made her a better known consumer advocate before she ran for office in 2020.
Harris also paid attention to the problems of low- and middle-income renters. When she was running for president, she suggested a tax credit in the form of a monthly check for families that spend more than 30% of their income on rent and utilities.
The fact that Harris has a long history with big tech companies is another important fact about her life. She has close ties to big tech companies like Meta META, 2.50% and Alphabet, which owns Google GOOG, 2.62% GOOGL, 2.69% because she is a politician from San Francisco. This was seen as a weakness in the 2020 Democratic primary, but it could be good news for tech investors if she wins the presidency.
During that campaign, Harris also had a hard time coming up with a consistent message on IYH policy for healthcare. Before she ran for office, she supported Sen. Bernie Sanders’ “Medicare for All” platform. But as she ran for office, she changed her mind and said that Americans should be able to keep their private health insurance and also sign up for a publicly provided alternative if they wanted to.
