Cost-of-living crisis kicks off the Harris, Trump debate

Former President Trump and Vice President Harris led off the high-stakes presidential debate Tuesday with a discussion about the cost-of-living crisis and economic challenges Americans are facing.

The first faceoff between the two, held in Philadelphia and hosted by Disney-owned ABC News, kicked off with a question posed by moderator David Muir to Harris about whether Americans are better off than they were four years ago in terms of the economy and the cost of living under the Biden-Harris administration.

Vice President Harris said her economic plan is "about lifting up the middle class and working class of America" and wants to build an "opportunity economy" before discussing elements of her economic platform.

"We know that we have a shortage of homes and housing, and the cost of housing is too expensive for far too many people," Harris said. "We know that young families need support to raise their children, and I intend on extending a tax cut for those families of $6,000 — which is the largest child tax credit that we have given in a long time — so that those young families can afford to buy a crib, a car, but clothes for their children." 

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Harris noted her plan to give a $50,000 tax deduction to those starting businesses and criticized Trump's tax cut plans and tariffs.

Former President Trump responded and said inflation wasn't a problem when he left office despite the tariffs, which he noted the Biden-Harris administration left in place, adding inflation "has been a disaster for people" under his successor.

"We've had a terrible economy because inflation, which is really known as a country buster, it breaks up countries. We have inflation like very few people have ever seen before, probably the worst in our nation's history," Trump said. "We were at 21%, but that's being generous because many things are 50%, 60%, 70% and 80% higher than they were just a few years ago."

The cost of things like beef, eggs and auto insurance have seen volatile double-digit increases in recent months. 

As of May, the consumer price index — a broad measure of the price of everyday goods, including gasoline, groceries and rent — was up more than 19.4% from January 2021, when the Biden-Harris administration took office. Year-over-year inflation was at 1.4% in January 2021 and peaked at 9.1% in June 2022 but has since declined to 2.9% as of July 2024. 

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Harris was given an opportunity to respond and said, "Donald Trump left us the worst unemployment since the Great Depression. Donald Trump left us the worst public health epidemic in a century."

During the COVID pandemic, the unemployment rate peaked at 14.8% in April 2020 as lockdown orders were enacted at the state and local level. The labor market gradually recovered, and the unemployment rate had fallen to 6.4% in January 2021, when the Biden-Harris administration took office. It has since trended down to 4.2% as of August 2024. 

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Trump responded and said the economy was strong before the onset of the COVID pandemic and that the economy was recovering by the time the Biden-Harris administration took office.

"We had the greatest economy. We got hit with a pandemic. The pandemic was not since 1917 where 100 million people died has there been anything like it. We did a phenomenal job with the pandemic," Trump said. "We handed them over a country where the economy and the stock market was higher than it was before the pandemic came in. Nobody's ever seen anything like it."

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The S&P 500 had reached 3,380 in February 2020 before the onset of the pandemic and bottomed out at 2,304 in March. By January 2021, it rebounded to 3,824 before the Biden-Harris administration took office. It has since crossed above 5,000 amid expectations the Federal Reserve will cut interest rates this month. 

Trump said the jobs created in the Biden-Harris administration were "bounce-back jobs" that were recovered after the pandemic, adding that "I created them. They know it, and so does everybody else."