- Reuters/Mike Segar
- Today’s top five Democratic candidates have plenty of ideas on how they’ll keep the ongoing, historically strong period of economic expansion alive.
- Many fear a recession in 2020, and only some candidates have laid out specific plans on how they’ll avoid economic downturn.
- Here’s a rundown of the economic stances adopted by each of the five top candidates.
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Fears of a 2020 recession continue to grow as Federal Reserve indicators and experts find new reasons for future economic downturn. The current economic cycle is the longest in history, and is sure to be popular topic ahead of next year’s presidential election.
Here’s where some of the top candidates in the Democratic primary stand when it comes to the economy, a possible recession, and how they’ve approached economic policy in the past.
Over the course of two policy speeches in 2018, former vice president Biden highlighted a handful of ideas focused on workers’ rights and helping the middle class.
He mentioned a free college plan during a speech at the Brookings Institution, as well as a $15-an-hour minimum wage and eliminating noncompete agreements. Biden has also said the current tax code coddles investors while workers are in greater need of a helping hand.
However, when compared to other candidates like Senators Bernie Sanders and Elizabeth Warren, Biden hasn’t proposed a tax against America’s super-wealthy citizens. He has instead called for a more widespread tax on the rich and on investment gains to fuel proposed tax credits for the middle class.
Biden is the only candidate who can take credit for helping the White House in its efforts to recover from the Great Recession, which included the Obama administration’s $831 billion stimulus package.
However, Biden hasn’t directly addressed fears of a 2020 recession or released any policy proposals specific to avoiding a similar downturn.
The former vice president is linked to many policies promoting free global trade. Biden was among the Democrats to vote for the North American Free Trade Agreement in 1993. President Donald Trump said he would renegotiate NAFTA terms shortly after taking office, but the pact between the US, Canada and Mexico was preserved in 2018.
Biden was also a strong supporter of the Trans-Pacific Partnership during the Obama administration.
- Hollis Johnson/Business Insider
Vermont senator Bernie Sanders is perhaps best known for his decades-long effort to bolster social programs and eliminate economic inequality. He hopes to pass a progressive estate tax on the nation’s super-rich, end tax breaks on capital gains and dividends for the 1%, and increase the top marginal tax rate for income over $10 million.
Sanders said to ABC in May that “the economy is doing well,” but that the cause can’t be attributed to Trump’s tax policy.
“The truth is that half of the people in this country today, despite the good economy, are living paycheck-to-paycheck,” he added.
Several economists see the record level of student loan debt as a serious threat to the economy. Sanders has proposed cancellation of all student debt and free college for all – totalling about $2.2 trillion – and paying for the policy by taxing Wall Street on a per-trade basis.
The Vermont senator also looks to increase regulation of banks, Wall Street and large corporations to prevent an economic collapse similar to the 2008 crisis. He wrote in his 2016 book that the recession was “bound to happen” after Washington turned its eye away from banks and their risky bond products.
Sanders voted in support of a 2009 bill to spend $192 billion on anti-recession stimulus after voting for the Obama administration’s stimulus package. He also introduced legislation in 2015 designed to break up banks deemed “too big to fail,” targeting the financial institutions bailed out during the financial crisis.
Sanders introduced a bill to incrementally raise the federal minimum wage to $15-an-hour in 2015, but it wasn’t passed. The senator has worked to raise the minimum wage for more than two decades.
- Reuters/Rachel Mummey
Sen. Elizabeth Warren is the latest candidate to detail her stance on the economy, and the forecast isn’t bright. She detailed in a Monday post that rising household and corporate debt threaten the current economic cycle.
Her campaign has argued for a $15-an-hour minimum wage, a tax on families with income greater than $50 million and the inclusion of employees in corporate boardrooms.
Warren predicted Monday that household debt, corporate debt and a manufacturing recession are the three biggest threats that could weaken the economy in 2020. To ease household debt, the senator proposed canceling as much as $50,000 in student-loan debt, lowering rent costs and making public college free.
Warren also sees leveraged lending as a source of “systematic risk” in the economy. She seeks to appoint the Financial Stability Oversight Council – created in 2008 to respond to the last financial crisis – to monitor risk and apply guidelines for such products.
In an effort to reinvigorate the nation’s struggling manufacturing sector, Warren hopes to invest $2 trillion in green manufacturing, research and exporting. She predicts the plan would create a million jobs in growing industries and fight climate change.
Warren worked under President Obama as a special assistant for establishing the Consumer Financial Protection Bureau in 2010. The agency is tasked with enforcing rules for financial institutions, collecting consumer complaints and monitoring markets.
She’s also worked on legislation to give employees 40% representation on boards of corporations making over $1 billion per year. Warren argues such a law would bolster corporate responsibility and fairness for those outside the C-suite.
- Charley Gallay/Getty Images for The Human Rights Campaign
During the first democratic debate, Sen. Kamala Harris explained that, while President Trump flouts a strong economy, “people in America are working – they’re working two and three jobs.”
Harris hopes to reinvigorate the economy by supporting the middle class, calling for a $15-an-hour minimum wage and a tax credit of up to $6,000 a year. The senator says her plan would be paid for by repealing certain provisions of the GOP’s 2017 tax cut, while other candidates believe a wealth tax is a more effective fundraising tool.
While Harris hasn’t commented directly on the prospect of a recession in 2020, she’s repeatedly noted that recent low unemployment figures hide the fact that many Americans are working several jobs to make a living wage. She’s also supported subsidized job training for those displaced by industry automation.
After the financial crisis of 2008, Harris secured a settlement worth more than $20 billion from national banks while she served as California’s attorney general. The funds went to homeowners affected by foreclosures during the recession.
Since becoming a senator, Harris has supported de-scheduling cannabis, single-payer healthcare and a lowered tax burden for lower- and middle-class citizens. She is also well known for her to-the-point questioning during Congressional hearings.
South Bend, Indiana mayor Pete Buttigieg told CNBC in April that the collection of economic power in a shrinking group of corporations has decreased competition and weakened economic strength.
He proposed that investment in education, infrastructure and health must come from corporations “that are not contributing the way that they should.” Buttigieg has also joined the growing group of Democrats calling for a simpler tax filing process.
Though Buttigieg hasn’t directly addressed the prospect of a 2020 recession, he has commented on some issues economists see as a threat to the US economy.
The mayor supports expanding the Public Service Loan Forgiveness program to help alleviate some of the nation’s student debt. He also supports a Green New Deal that would include a carbon dividend for Americans and make jobs in environmentally friendly industries.
As mayor of South Bend, Buttigieg spent millions to reinvigorate the city’s infrastructure and homes, bringing business back after the Great Recession left South Bend reeling.
Since he became mayor, the city has seen its unemployment rate drop from more than 12% in 2010 to 3.7% in May, according to data from the St. Louis Federal Reserve.