The classic campaign catch-phrase — "It's the economy, stupid" — coined by a Democratic strategist working on Bill Clinton's 1992 successful presidential campaign, is still extolled as political gospel.
For years, the assumption has been that if a candidate wins the debate on the economy, he (or she) will ultimately win the election. And while, according to polls, the economy continues to be the most important issue for many voters, Americans increasingly view the economy through a partisan lens.
Most Republican voters believe Democratic politicians are bad for the economy. And that's the main message you're hearing from the 2024 GOP presidential field. Republican candidates are calling for cuts to federal spending and promising to slash taxes while also loosening government regulation. They're also specifically attacking subsidies for clean energy that were prioritized by the current Democratic administration.
They blame President Biden for a weak economy, even though many economists rightfully point out that a number of economic indicators are strong: wages are growing, consumer confidence is increasing, and unemployment has remained low (below 4% for a record number of consecutive months).
But despite those metrics, many voters still give President Biden poor reviews on his handling of the economy, and much of that seems to be tied to high costs. In the summer of 2022, following the COVID pandemic, inflation reached a four-decade high of 9.1%.
Over the last several months, the economy has experienced a dip from that record-level of inflation. And, at the same time, a long-predicted spike in unemployment didn't materialize. The standard inflation metric, known as the consumer price index, has fallen — down to 3.1% — as of November 2023.
Although there has been no major economic downturn under Biden, the persistence of inflation has been a major problem for this White House. Many Americans continue to feel frustrated with costs on everything from health care to housing to groceries.
So, Republican presidential candidates are eager to blame Biden and his big spending bills (such as the American Rescue Plan and the Inflation Reduction Act) for creating this inflation problem.
They contrast their economic agenda with that of the White House, though it's not clear what they would or could do to improve the inflationary outlook of the country. Curbing inflation is largely the purview of the Federal Reserve, and it is supposed to operate independently from any influence of the president.
Traditionally, presidents have not publicly criticized the Fed, but this cycle, Republicans seem more willing to brazenly break those norms and blame the Fed for both high inflation and, more recently, high mortgage rates. Florida Gov. Ron DeSantis has been particularly vocal in his critique, describing the Fed's actions as a "total failure."
What is the role of the Federal Reserve?
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For Republicans, another major culprit behind inflation is excessive government spending. Former South Carolina Gov. Nikki Haley, who majored in accounting in college, routinely brings up this issue of big spending and cites her academic credentials as proof that her presidency would be different. "Wouldn't it be nice to have an accountant in the White House?" she told the NH Journal.
The former U.N. ambassador is trying to create a contrast not just with Biden, but with her former boss, former President Donald Trump, the frontrunner in the 2024 primary.
"Joe Biden is proving [that] reckless spending is the road to socialism," Haley said at an event in New Hampshire. "But he's not the only culprit. Joe Biden, Donald Trump and Barack Obama added more to our national debt than the previous 42 presidents combined."
It's a message DeSantis and former New Jersey Gov. Chris Christie are also trying to sell.
"We really have not had a president that has pushed back on spending since Ronald Reagan in the '80s," the Florida governor said at a similar event in New Hampshire.
"The problem with Donald Trump — same way as Joe Biden was: no control of spending," Christie said in an interview with CNBC.
Should Social Security be reformed?
Under no circumstances should Republicans cut a single penny from Medicare or Social Security."
This is the major economic question where GOP presidential candidates disagree the most.
Biden's White House has been eager to broadly portray Republicans as the party that would cut long-treasured social safety net programs, like Social Security or Medicare.
But Trump, the leading Republican presidential candidate, has explicitly said he will not "touch" Social Security, instead saying that he'll keep the program running by expanding U.S. oil production. "We have money laying in the ground far greater than anything we can do by hurting senior citizens with their Social Security," he said.
His stance is part of his conviction that the GOP shouldn't make entitlement reform a defining part of the party's platform. When lawmakers were negotiating the debt ceiling last January, Trump issued a video message with a warning: "Under no circumstances should Republicans cut a single penny from Medicare or Social Security."
His fellow Republicans have more complicated views. Back when he first ran for Congress in 2012, DeSantis expressed support for privatizing Social Security and changing eligibility thresholds for younger Americans for some social safety programs — a conservative principle that shaped his early political career. That stance has come back to bite him as Trump has criticized the governor in recent months.
Talking about making changes for people in their 30s and 40s so that the program's viable, that's a much different thing."
And he's now distancing himself from it, insisting he's not going to touch benefits for the elderly.
"We're not going to mess with Social Security as Republicans," DeSantis said in clarifying his position. "I think that's pretty clear." He is, however, open to reducing benefits for younger citizens, telling Fox, "Talking about making changes for people in their 30s and 40s so that the program's viable, that's a much different thing."
Both Haley and Christie favor raising the retirement age for younger people, out of, they say, financial necessity.
"We have got to have this conversation," Christie said. "And other than me, nobody in this race is willing to talk about it. It's ridiculous." Otherwise, Christie added, "In 11 years, Social Security will be bankrupt," as the fund supporting Social Security will become insolvent in a decade. Additionally, he's advocated for limiting benefits to only those who make under an income threshold.
Haley's reforms include changing how annual cost-of-living adjustments are calculated, and expanding Medicare Advantage plans. She criticizes Biden's 2024 budget plans to support a Medicare trust fund by raising taxes for those earning more than $400,000 a year, and letting Medicare negotiate more drug prices. "Joe Biden now is basically saying the only way to deal with entitlements is to raise taxes. He doesn't care that it runs out in five or 10 years, he's not going to be there anymore," she said.
Tech entrepreneur Vivek Ramswamy has, perhaps, the murkiest position in the field. During the third GOP debate, when candidates discussed what to do with Social Security, he said that instead of touching the current system, he'd rather reform government budgeting, which would include reducing the number of government employees. He also said that he would shrink foreign military and economic aid that he says have been given "willy nilly."
Beyond extending the 2017 Trump tax cuts, should additional tax cuts be enacted?
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A hallmark of Republican economic policy for decades has been the mantra - no new taxes. When he was in office, Trump signed a $1.5 trillion tax package that permanently slashed the corporate tax rate from 35% to 21%.
Some of those tax cuts are due to expire in 2025, and nearly every candidate in the GOP field wants to fully extend them. It's worth pointing out that Biden also wants to keep a portion of the Trump tax cuts, specifically for people making less than $400,000.
But Republicans want to go further. A number of GOP candidates also want to maintain the cap on state and local tax deductions, known as SALT. The 2017 law capped the deduction at $10,000 per year. Christie argues that other states in the country shouldn't have to pay for "excessive taxes" that are in place in certain states.
Haley seems to want to eliminate SALT from the tax code entirely. She suggests it's an unfair distortion that benefits the rich.
There's a lot of debate about this deduction, and it's been criticized as a handout for wealthy people in high-tax cities and states. An analysis by the Brookings Institution argues that lifting the SALT cap could be more "pro-rich" than Trump's tax bill," but eliminating it entirely could also more directly target blue states than red states, and so it's difficult to ignore the partisan divide on this issue.
Haley and Trump seem to want to take tax cuts the furthest. Haley's economic plan calls for eliminating the federal gas tax and reducing income taxes for working families.
The Washington Post has reported that Trump's economic team is plotting new tax cuts to build on his 2017 law. In theory, this would come from revenue Trump expects from the increase on tariffs on foreign imports. Research has shown U.S. consumers and American companies have borne the brunt of tariff costs. Trump is also proposing even deeper cuts to the federal corporate tax rate, possibly as low as 15%.
In an interview with CNBC's Last Call, Christie talked about how he, as governor, was able to keep taxes low — and that's what "strong leadership" is capable of. But he did not elaborate what kinds of tax policies he would enact if president.
Should the U.S. limit its economic ties to China?
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Trump changed the calculus of traditional conservatism when he became president, mixing the pro-business orthodoxy with economic populism.
He upended years of traditional bipartisan consensus on free trade policy and instigated a trade war with China, eventually slapping tariffs on more than $300 billion worth of goods.
And he's promising to expand his protectionist agenda if he wins a second term with "universal baseline tariffs on most foreign products."
In an interview on Fox Business, Trump suggested an automatic, minimum 10% tariff. "I think we should have a ring around the collar," Trump said.
The goal of these new tariffs, he says, would be to boost American manufacturing and "phase out all Chinese imports of essential goods – everything from electronics to steel to pharmaceuticals."
Other Republicans have begun echoing Trump's vision. DeSantis has promised to revoke China's preferential trade status that paved the way for its membership into the World Trade Organization in 2001.
Most of the GOP field wants to weaken U.S. economic ties with China, but there are differing views on how to accomplish that.
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