6 Ways a Trump or Harris Presidency Could Change a Recession

For well over a year now, experts have worried that a recession might be on the horizon. No one knows for sure whether an economic downturn is coming. The best you can do is prepare yourself financially in case it occurs.

But how would the two main presidential candidates — former President Donald Trump and current Vice President Kamala Harris — try to turn things around if a recession does indeed come to pass?

Here is a look at several major policy areas, and how either a Trump or Harris presidency could change a recession.

The 2017 Tax Cuts and Jobs Act lowered income taxes across the board. But these tax cuts are scheduled to expire at the end of 2025.

Trump has said he would like to extend all of the tax cuts. Harris wants to keep some of the reductions, but has only pledged not to raise taxes on anyone making under $400,000 a year.

Harris has also said she would like to expand the child tax credit, a concept that Trump’s vice presidential pick — JD Vance — has promoted as well.

The 2017 tax cut legislation reduced corporate income taxes, and Trump wants to push them even lower. He is proposing to lower the corporate rate by 1%, to 20%.

On the other hand, Harris has unveiled a proposal to raise the corporate tax rate to 28%.

Harris plans to expand the efforts of current President Joe Biden to reduce the price of prescription drugs. For example, she wants to place a monthly cap of $35 on out-of-pocket insulin costs for all Americans.

In addition, Harris would like to see out-of-pocket prescription drug costs limited to $2,000 annually.

Trump has not talked a lot about his health care policies. He has pledged not to cut Medicare, and has said he will keep the Affordable Care Act "unless we can do something much better."

Nearly three-quarters of Americans are worried about the high cost of housing, according to a survey conducted by the National Housing Conference.

Trump has said that by cutting energy costs and advocating for lower interest rates, he will make housing more affordable.

At an event in Iowa, the former president said, "We'll get the prices way down and then the interest rates down and then the home builders will start building again, because nobody can get money from the bank because the interest rate's high."

Harris has been more detailed in her plans to create affordable housing. She is calling for:

• Construction of 3 million new housing units over the next four years
• New tax incentives for builders who construct “starter homes”
• $25,000 in down-payment assistance to working families

Of course, it’s important to note the president doesn’t control interest rates, the Federal Reserve does. In addition, any proposed tax incentives likely would need congressional approval before they become reality.

Harris has put forth a plan to place a federal ban on “corporate price gouging” in the area of groceries. Currently, 37 states already have price-gouging policies in place.

When he was president, Trump also supported moves he said were intended to prevent price gouging. In March 2020, he issued an executive order to protect sanitizing products and personal protective gear from excessive pricing.

Nevertheless, Trump — who has not put forth his own plan to reduce grocery prices — has criticized the current vice president’s proposal to lower grocery costs as both “socialist” and “communist.”

This is one area where Harris and Trump are in agreement: Both candidates want to end all federal taxes on tips.

While service and hospitality workers may be excited at the prospect of tax-free income, it’s uncertain what impact such a change would have on the economy.

Each candidate spoke about their respective plans during rallies earlier this year in the battleground state of Nevada, which has the highest concentration of tipped workers in the U.S.

Presidential candidates can make promises, but that doesn't mean they will become policy.

President Biden’s difficulties in wiping out student loan debt offer a perfect example of how tough it can be to enact policies, despite campaign promises.

Still, these proposals give you some sense of how each candidate would try to combat a recession. For your part, you can prepare for a possible economic downturn by working to get ahead financially.