In her major economic speech last Friday, Vice President Kamala Harris declared that “building up the middle class will be a defining goal of my presidency, because I strongly believe when the middle class is strong, America is strong.” Her approach follows in the footsteps of her Democratic predecessors -- Presidents Clinton, Obama and Biden all embraced versions of a middle-out approach to build the American economy.
But in a Pew poll conducted earlier this year, 9 out of 10 Americans agreed that "dealing with problems of poor people" should be an important priority for the president and Congress in 2024. Over half of Democrats said it should be a top priority. Have we heard much about poverty-related problems during this presidential campaign? Barely a whisper.
Instead, the candidates are offering inclusive policies that would, in theory, benefit a wide range of Americans, including those with low incomes. Though appealing in many ways, this approach suffers from at least three problems: some of these policies would hurt the poor and near poor; a heavy reliance on inclusive policies gets expensive in a hurry; and some people genuinely need more help than others. Sometimes, targeting aid is a more realistic and defensible approach.
A Trump presidency would make life harder for people at the bottom of the economic ladder. He has promised tariff increases and tax cuts that, studies show, will make people with below-average incomes worse off. And Trump’s plan to stop taxing Social Security benefits might sound great for all retirees, but it would only help those with above-average incomes because the rest don’t pay taxes on these benefits anyway, all while threatening the program’s financial health.
Meanwhile, Democrats are betting heavily on “middle-out economics,” sometimes called progressive economics. Government should do more to help middle-class Americans prosper, Democrats argue, which will benefit the whole economy.
The 2021 infrastructure bill and the 2022 Inflation Reduction Act are recent examples of this approach, both designed to increase the number of good-paying jobs. Harris is sticking with this message. In her speech last week, she vowed to “be laser-focused on creating opportunities for the middle class that advance their economic security, stability and dignity.”
Harris never referred to the working poor, food insecurity, evictions, homelessness, inequality or discrimination. She did talk briefly about child poverty, and to her credit declared that no child should grow up poor. But most Americans living in poverty are adults, not children, and they were never mentioned.
Harris’s speech is part of a larger pattern. Democratic officials have not said much about poverty-related problems for years.
So, what will Democrats do to help people who are struggling to pay their bills? For at least a decade, Democrats have been promising to build the economy “from the middle out and the bottom up,” and this phrasing appears prominently in the draft 2024 Democratic Party platform.
For Harris, this means expanding the child tax credit so that more low-income families could enjoy the benefits that middle-class families have been receiving for two decades. She proposed a new tax break for all families during the first year of a child’s life. She wants government to provide first-time homebuyers with up to $25,000 to help cover their down payment. And she pledged to keep lowering the costs of prescription drugs and working to reduce medical debt, which would help a wide range of Americans.
There is a clear political logic to this strategy. Democrats want to emphasize class lines over racial lines. They don’t want to be known chiefly as the party of racial minorities; they want to build cross-class coalitions.
In this election, the policies Harris is promoting could appeal to Republicans with below-average incomes who want help but hate anything that looks like “welfare.” Programs that cut across class lines feel less stigmatizing. Moreover, relying on the tax code to deliver benefits might help politically by limiting recipients’ contact with social welfare agencies.
However, delivering on all these promises will not be easy. An inclusive approach is more expensive than targeting aid at the poor and near poor. According to one estimate, Harris’s economic plan would require an additional $170-200 billion in revenue per year.
Those numbers could easily go higher. In her first presidential rally last month, Harris also spoke in favor of paid family leave and affordable childcare for all. During her 2020 campaign, Harris endorsed universal preschool. Many Americans support these objectives but achieving them won’t be cheap. Moreover, Social Security will need more revenues soon if we want to avoid painful benefit cuts.
Harris has not discussed financing in much detail. Like Biden, she has promised not to impose additional taxes on those making less than $400,000 a year, which excludes most people. Politically, it is hard to imagine that everything on Democrats’ wish list will be paid for by millionaires, billionaires and wealthy corporations.
If and when money becomes an obstacle, Democrats could consider following the path of the Earned Income Tax Credit, which was initially available only to the poor and later expanded to people with incomes up to twice the poverty threshold. Or Democrats could target benefits within an inclusive program, giving larger subsidies to those with lower incomes. In effect, this would prioritize those with the most pressing needs.
Targeting assistance to the poor and near poor is not, as many believe, a political dead-end. Robert Greenstein, a leading expert on fiscal policy, has shown that spending on the largest means-tested social programs grew faster than the largest inclusive programs between 1979 and 2019.
The Affordable Care Act relied on Medicaid, not Medicare, to expand health insurance coverage to millions of Americans. And expansions to means-tested programs were a big reason why child poverty rates dropped by half in recent decades. While inclusive programs are important, more targeted efforts are also needed to make a real difference in the lives of low-income Americans.
Christopher Howard is the Pamela C. Harriman Professor of Government and Public Policy at the College of William & Mary. His latest book is “Who Cares: The Social Safety Net in America” (Oxford University Press, 2023). He is a member of the National Academy of Social Insurance and the Scholars Strategy Network.
