Happy Wednesday, and a happy 89th birthday to Social Security, which was signed into law by President Franklin Delano Roosevelt on this date in 1935. Here’s what’s happening.
Trump Tries — Really, Really Tries — to Focus an Economic Attack on Harris
Economic issues are moving front and center in the presidential race this week, as both candidates stump in battleground North Carolina. Or at least the campaigns want to highlight those issues. Donald Trump may have other ideas.
At an event in Asheville on Wednesday, on stage with signs reading “NO TAX ON SOCIAL SECURITY” and “NO TAX ON TIPS,” Trump gave a speech that his campaign said would focus on “the economic hardships created by the Harris-Biden Administration.” The former president did indeed talk up the economy he led and attack Vice President Kamala Harris on the current administration’s economic record — but he often veered off to other favorite topics as well.
Trump started his remarks by talking about polling, “fake news,” the MAGA movement and President Joe Biden dropping out of the race. He attacked Kamala Harris and complained about the media coverage she’s received before pivoting to what he called an “intellectual speech” about the promised subject, the economy.
“Her radical liberal policies have caused horrific inflation, decimated the middle class and gutted the finances of millions and millions of American families,” Trump said of Harris. He said that real incomes are down by $2,000 a year and credit-card debt is at a record high, winding his way to the question his campaign wants to drive home: “Are you better off now with Harris and Biden than you were with a person named President Donald J. Trump?” he asked. “Does anyone here feel richer under Kamala Harris and Crooked Joe than you were during the Trump administration? Is anything less expensive under Kamala Harris and crooked Joe?”
A messaging reset? Frustrated Republicans have been publicly pleading with Trump to demonstrate a modicum of messaging discipline – to “quit whining” about the changing shape of the race, stop questioning the size of Harris’s campaign crowds and zoom in on policy rather than personality-based attacks.
“The path forward is to focus on policy. Those are three words for the Republican Party that I think is a path to success — focus on policy. Who’s going to secure the border? Who’s going to grow the economy? Who’s going to stay out of World War III?” former Republican presidential candidate Vivek Ramaswamy advised Trump in an NPR interview Tuesday.
Of course, a focus on GOP policy could also have some drawbacks for Trump, as Harris and Democrats have regularly sought to tie him to the conservative Project 2025 agenda and hammer him for those plans.
Trump made clear Wednesday that he was trying to stay on topic. “Today we're going to talk about one subject,” he told the crowd. “They say it's the most important subject. I'm not sure it is, but they say it's the most important. Inflation is the most important, but that's part of economy.”
Still, even when discussing the economy, Trump littered his remarks with a litany of off-teleprompter riffs and ad hominem attacks as well as false and misleading claims. He called his economy the strongest in history, for example, and his tax cuts and the largest ever. “When I left office I handed Kamala and crooked Joe Biden a surging economy with no inflation,” Trump said, ignoring the devastation of the Covid pandemic. He later added: “I gave Harris and Biden an economic miracle and they quickly turned it into an economic nightmare, with a nation-wrecking agenda ripped straight out of Kamala’s San Francisco liberal playbook.”
Trump promised to sign an executive order directing officials to do everything they can to rapidly drive prices down and said he’d create an economic boom. “It will be a whole-of-government effort to raise the standard of living and make American life affordable again,” he said.
Yet he spent far more time on name-calling, personal attacks and dour predictions than on laying out an affirmative economic agenda or specific plan beyond increasing fossil fuel production and eliminating income taxes on tips and Social Security wages. He did suggest he’d impose tariffs of 10% to 20% on foreign goods, which economists say would be inflationary and disproportionately affect lower-income consumers.
“No matter what he says, one thing is certain: Trump has no plan, no vision, and no meaningful interest in helping build up the middle class,” Harris communications director Michael Tyler reportedly wrote in a campaign memo.
What’s next: Trump scheduled another press conference for tomorrow, and Harris is scheduled to lay out her own economic plan at an event in North Carolina on Friday.
The bottom line: Trump may struggle to stay on message, but he and his campaign are trying to tie the negative perceptions of Biden’s economy around Harris’s neck. But the fact that Harris is also campaigning in North Carolina this week and that Democrats have renewed hope there highlights just how much the campaign has shifted in recent weeks. In a close race, Harris now leads in six of seven swing states, according to the Cook Political Report.
Inflation Falls Below 3% for First Time Since March 2021
Consumer prices rose 2.9% in the 12-month period ending in July, the Labor Department reported Wednesday. It was the first time in more than three years that the 12-month inflation rate as measured by the Consumer Price Index dropped below 3%, and it may clear the way for the Federal Reserve to start lowering interest rates at its meeting in September.
On a monthly basis, prices rose 0.2%. The core CPI rate, which ignores volatile food and fuel prices, was also 0.2% on a monthly basis, and 3.2% on an annual basis — the lowest reading for that measure since April 2021.
The price of used cars and trucks showed a particularly large decline, falling by 10.9% over the last year. Housing costs were a notable exception, as the cost of shelter rose 5.1% over 12 months and 0.4% from June to July.
The White House celebrated the good report. Asked by a reporter if the U.S. has “beaten inflation,” President Joe Biden said, “Yes, yes, yes. I told you we’re going to have a soft landing ... My policies are working. Start writing that way, OK?”
Bharat Ramamurti, former deputy director of the National Economic Council in the Biden administration, noted that the CPI data comes on the heels of reports showing that wholesale inflation is softening, as are inflation expectations among consumers. “We’ve won the battle against inflation,” he wrote on X. “It’s time for the Fed to begin cutting rates.”
Wall Street analysts also gave the report positive reviews. “Investors and policymakers alike will find this report mostly good for markets and the economy,” said Jeffrey Roach, chief economist at LPL Financial, per Bloomberg. “As inflation decelerates, the Fed can legitimately cut rates yet keep policy restrictive overall.”
Sung Won Sohn, who teaches finance and economics at Loyola Marymount University, told CNN that the July report represents a key milestone. “Breaking the 3% barrier is a key psychological positive,” she said. “It shows that inflation is not only trending down, but disinflation is on track.”
At the White House, officials were careful to note that they are aware that even though inflation is easing, high prices remain a problem that needs to be addressed. Jared Bernstein, who leads the Council of Economic Advisers, said the administration was not taking any “victory laps” after the report. “Our work is not done, because even as we get inflation back down to pre-pandemic levels, we still have to be mindful that too many families are facing too many high costs,” he told reporters.
Fiscal News Roundup
- Harris to Release First Economic Plan – CBS News
- Harris Gains Swing State Edge Over Trump: Cook Political Report – Axios
- As Trump and Harris Call to End Tip Taxes, a Wider Minimum Wage War Heats Up – NBC News
- Harris Blindsided Democrats With ‘No Tax on Tips’ Plan – The Hill
- Harris Campaign’s New $90 Million in Battleground Ads in August Aims to Sharpen Contrast With Trump – Associated Press
- Kamala Harris’ Complicated History With Medicare for All Becomes a Trump Campaign Attack Line – CNN
- Trump’s Continued Attacks on Harris’ Rise Stir Fears He Could Question Election Outcome if He Loses in November – CNN
- Annual US Inflation Falls to 3-Year Low, Clearing the Way for the Fed to Begin Cutting Rates – Associated Press
- Top Official Says Federal Reserve Can’t Risk Being Too Late With Rate Cuts – Associated Press
- Grocery Prices Are Now Barely Increasing – NBC News
- Cooling Price Growth Has Democrats Tasting Victory Over Inflation – New York Times
- ‘I’m Down to Eating Ramen’: Social Security Benefits Aren’t Keeping Up With Inflation – CNN
- Biden Admin to Spend Billions to Blunt Spike in Medicare Drug Premiums – Politico
- States Scramble to Replace Gas Tax Cash – Politico
- WHO Declares Mpox Outbreaks in Africa a Global Health Emergency as a New Form of the Virus Spreads – Associated Press
Views and Analysis
- Yes, Inflation Is Going Down. But Here’s Why Prices Aren’t – Simmone Shah, Time
- The Little-Known Project 2025 Tax on Employee Benefits – Josh Bivens, EPI Action
- Harris Cuts Trump’s Advantages on Economy, Immigration – Aaron Blake, Washington Post
- Does Harris Need a Serious Policy Agenda? Only if She Wants to Win – Matt Bai, Washington Post
- Elon Musk Is Gunning for a Role in Government if Trump Wins — It’s a Terrible Idea – Aron Solomon, The Hill
- Republicans Are Stuck With Trump's Obsessions – Chuck Todd, NBC News
- Is It Working? Evaluating the First Round of Medicare Drug Price Negotiations – Laura Tollen, Health Affairs
- Republicans Must Fix, Not Repeal, the Inflation Reduction Act – Former Rep. Ryan Costello (R-PA), The Hill