The Finance 202: Pence, Harris trade jabs over jobs and taxes at economics-heavy debate

The event offered far more substance than the shout-fest between the candidates at the top of the ticket last week. The debate also featured a number of claims about the two sides’ respective economic records that stretched the truth or outright snapped it. Here’s a look at where Pence and Harris collided on taxes, the economic recovery and manufacturing jobs.

Harris was repeating a claim the Democratic nominee himself has made to explain how he would pay, in part, for some $7.3 trillion in proposed spending on new stimulus, infrastructure projects and social safety net programs.

“On Day One, Joe Biden will repeal that tax bill,” Harris said of Trump’s signature tax cut that heavily benefitted corporations and the wealthy. “He’ll get rid of it, and what he’ll do with the money is invest it in the American people.”

Biden can’t unilaterally cancel a law. He will need to earn congressional approval for that. 

But the candidates didn’t focus on procedure. Instead, Pence countered Harris by arguing such a proposal would increase taxes on middle-income earners. 

“Mr. Pence is correct that many middle-income families received significant tax cuts from the 2017 tax law, which lowered rates, nearly doubled the standard deduction and increased the child tax credit,” the Wall Street Journal’s Richard Rubin notes. He points to an analysis by the Tax Policy Center that found the middle quintile of households “received a tax cut worth 1.6% of after-tax income, less than the average for all income groups. Higher-income households did fare better.”

Yet Pence’s jab forced a clarification from Harris, backed up by the campaign’s stated plans: A President Biden would preserve benefits from the 2017 tax cuts for households earning less than $400,000 a year. 

Indeed, as Post Fact Checker Glenn Kessler notes, the Penn Wharton Budget Model estimates the average family in the bottom 90 percent of households would pay no additional taxes under the Biden plan. (That conclusion comes after stripping out the effects of Biden’s proposed corporate tax hikes, which the model finds would result in lower wages for workers.) 

“Even households between 90 and 95 percent would face only an average tax increase of $5. Nearly 97 percent of the tax increase would be paid by the top 1 percent,” per Kessler. He concludes the Democratic ticket’s plan “would raise taxes by a substantial amount, but not on every American, no matter how you slice it.”

“We’ve already added back 11.6 million jobs because had a president who cut taxes, rolled back regulation, unleashed American energy, fought for free and fair trade,” Pence said, “and secured $4 trillion from the Congress of the United States to give direct payments to families, saved 50 million jobs through the Paycheck Protection Program.”

The economy has added back 11.4 million jobs since the pandemic struck, not 11.6 million, according to the most recent Labor Department data. And the argument that Trump’s policies on taxes, deregulation, trade and energy — all of which preceded the pandemic — had much if anything to do with that snapback is tenuous at best.

And as for the PPP saving 50 million jobs, it did not salvage “anywhere close to it,” a Reuters review of a similar claim by Trump found. “Half a dozen economists put the number of jobs saved by the initiative at only a fraction of 51 million – ranging between one million and 14 million,” the outlet concluded.

Harris, for her part, pointed to a Moody’s Analytics report that found Biden’s economic plan would “create 7 million more jobs than Donald Trump’s.” That is an accurate summary of the firm’s top-line finding in comparing the two camp’s programs, which we covered here.

“When Joe Biden was vice president, we lost 200,000 manufacturing jobs, and President Obama said they were never coming back,” Pence said.

The claim is misleading. As we noted when Trump lodged a similar charge at the presidential debate last week, Obama and Biden inherited a sector in a precipitous fall as the Great Recession continued to wreak havoc across the economy. By the end of their eight-year run, industry jobs had returned roughly to their level when the administration took power.

Kessler puts a finer point on it, noting that Pence starts counting the Obama team’s record in January of 2009, though they took office toward the end of the month. “But if you start counting in February, Obama over eight years actually had a modest gain in manufacturing jobs — 4,000,” he writes.

Sleight-of-hand accounting aside, the Obama era saw the manufacturing sector plot a slow but steady grind out of the deep hole it was still digging when Democrats took power:

Harris said the Trump team has to answer for its own record on manufacturing jobs. She said the administration’s trade war with China did major damage to the sector. “You lost it,” she said of the confrontation with Beijing. “What ended up happening is because of a so-called trade war with China, America lost 300,000 manufacturing jobs.”

Harris overstated that claim. She appears to have been referring to a year-old Moody’s Analytics report that estimated the trade war had prevented the economy from adding 300,000 jobs overall. But the economic crisis sparked by the pandemic sent employment in manufacturing back to levels last seen a decade ago. Jobs have been returning since April; now they stand at 2014 levels.

The White House is now demanding Congress immediately pass piecemeal legislation: “The White House’s ever-shifting economic relief agenda lurched in a new direction as Treasury Secretary Steven Mnuchin tried to make a deal with House Speaker Nancy Pelosi to rescue the airline industry, just a day after Trump abruptly cut off talks on a broader stimulus bill,” Jeff Stein and Erica Werner report.

“Mnuchin and Pelosi had two conversations Wednesday — one in the morning and another in the evening — about the possibility of a stand-alone bill for the airline industry, which just began mass layoffs after federal aid expired. Pelosi also sounded out Democratic lawmakers on the possibility at a closed-door meeting last night.” Democratic lawmakers still want a larger bill, but lawmakers are sensitive to tens of thousands of jobs on the line for airlines. In the past, Democrats have consistently rejected one-off measures.

• Airlines hold out hope: “American Airlines and United Airlines began the furlough of 32,000 workers last week, and tens of thousands more at those airlines and others have agreed to voluntary leaves or reduced hours. Southwest Airlines has warned it will have to carry out the first furlough in its history if workers do not agree to pay cuts in the absence of federal aid,” Reuters’s Tracy Rucinski and David Shepardson report. Airline shares jumped based on the news.

Struggling Americans are staggered by the end of talks: “More than a dozen unemployed workers and struggling business owners affected by the move said that while they are familiar with Washington dysfunction, they are stunned by the latest decision by Trump and Republicans to break discussions off,” Eli Rosenberg and Heather Long report.

“Many said they are counting on an influx of financial support, as they watched bank accounts dwindle since the expiration of most of the previous aid programs in August. Two small business owners said they will be laying off workers in the coming days and one unemployed woman said she only had $13 left for groceries … ‘I was hoping for “I’m worried about us being in the dark or being without water,’ said Latonya Carter, 46, has been out of work for six months after losing her job as a cook at an Elks Lodge in Pensacola, Fla. ‘I’ve never experienced anything like this. I just don’t know how it got so bad.’”

• Lots of uncertainty looms for shoppers and retailers: “’A total retail disaster is unfolding before our eyes that is completely avoidable,’ said Andy Polk, a senior vice president at footwear industry trade group FDRA … Major retailers, including Apple, Best Buy and Home Depot, have already seen how government stimulus can benefit their bottom line. In the spring, they said they got a bounce in sales as Americans rushed to their stores and websites to spend extra money in their pockets,” CNBC’s Lauren Thomas and Melissa Repko report.

Dow jumps 530 points: “The Dow jumped 530.70 points, or 1.9%, to close at 28,303.46, for its best day since July. The S&P 500 advanced 1.7% to 3,419.45. The Nasdaq Composite closed 1.9% higher at 11,364.60,” CNBC’s Fred Imbert reports. “United Airlines closed 4.3 percent higher and Delta gained 3.5 percent, getting a boost from Trump’s comments. The two stocks also got upgrades from a JPMorgan analyst. Boeing shares advanced 3.2 percent.”

Fed to debate bond-buying program: “U.S. central bankers look poised to discuss the future of the Federal Reserve’s asset-purchase program when they meet again in November, potentially heralding a shift in what they buy, or an increase in how much they purchase,” Bloomberg News’s Christopher Condon and Matthew Boesler report.

“Minutes of the Federal Open Market Committee’s Sept. 15-16 meeting released Wednesday showed that ‘some participants also noted that in future meetings it would be appropriate to further assess and communicate how the committee’s asset-purchase program could best support’ the Fed’s dual-mandate objectives. The readiness of some officials to examine the bond-buying program signals they’d be open to altering or increasing the purchases — perhaps before the end of the year — as a way to further bolster the economy’s slowing recovery from the covid-19 pandemic.”

• At least 7,511,000 cases have been reported; at least 211,000 have died.
• 34 people connected to the White House have been infected by the coronavirus. “The coronavirus outbreak has infected ‘34 White House staffers and other contacts’ in recent days, according to an internal government memo, an indication that the disease has spread among more people than previously known in the seat of American government,” ABC News’s Josh Margolin and Lucien Bruggeman report. “The memo was distributed among senior leadership at FEMA.”
• A top White House security official contracted the disease in September. “A top White House security official, Crede Bailey, is gravely ill with Covid-19 and has been hospitalized since September, according to four people familiar with his condition,” Bloomberg’s Jennifer Jacobs reports. “The White House has not publicly disclosed Bailey’s illness. He became sick before the Sept. 26 Rose Garden event [Trump] held to announce his Supreme Court nominee Amy Coney Barrett.”
• Pandemic overshadows the debate: “Both Pence and Harris returned again and again to attacking the top of the other campaign’s ticket. Harris went after Trump’s efforts to stem the coronavirus … She called Trump’s handling of the pandemic ‘the greatest failure of any presidential administration in the history of our country’ and alluded to his statement to author Bob Woodward that he wanted to play down its threat because he did not want to create a panic,” David Weigel, Michael Scherer and Chelsea Janes report.
• Hawaii has changed its approach to travelers: “Starting next week, Hawaii will attempt to lure back tourists by allowing negative coronavirus test results to take the place of a mandatory 14-day quarantine,” Antonia Farzan reports.

• Eli Lilly shares jump: “Shares rose by more than 3 percent in morning trading,” CNBC’s Noah Higgins-Dunn reports after the drugmaker “announced it submitted a request to the Food and Drug Administration for emergency authorization of its covid-19 antibody treatment.”
• Regeneron is also seeking emergency approval: “The announcement came hours after Trump singled out Regeneron by name, saying in a video filmed at the White House that the drug had an ‘unbelievable’ effect on his recovery from covid-19,” Antonia Farzan reports. “While there is no evidence that Regeneron alone had the effect that Trump described, the experimental treatment has shown promise for reducing symptoms in people with mild coronavirus cases.”
• Chevron workers face demands to reapply for jobs: “The No. 2 U.S. oil producer has begun taking steps to streamline its organization this year to reduce costs and revive declining profits,” Reuters’s Jennifer Hiller and Devika Krishna Kumar report. The company is expected to eliminate 15 percent of its workforce.
• Ruby Tuesday declares bankruptcy. “Ruby Tuesday Inc., the struggling casual restaurant chain, filed for bankruptcy Wednesday, just three years after a private-equity buyout,” Bloomberg reports. “The chain has been negotiating with landlords to curtail or delay millions of dollars in rent payments as it copes with sliding sales, worsened by the pandemic.”

An appellate court ruling means the fight could return to the Supreme Court: “Though the district attorney has agreed not to enforce his subpoena immediately while Trump seeks a stay from the Supreme Court, the ruling marks another blow for the president, who has fought for more than a year to shield his financial records from investigators, and follows separate, jarring revelations about the enormity of his debt,” Shayna Jacobs reports from New York.

“The unanimous ruling was issued by a three-judge panel of the 2nd U.S. Circuit Court of Appeals, which concluded, ‘We have considered all of the President’s remaining contentions on appeal and have found in them no basis for reversal.’ District Attorney Cyrus R. Vance Jr. is seeking eight years of the president’s tax returns and related documents as part of his investigation into alleged hush-money payments made ahead of the 2016 election to two women who said they had affairs with Trump years prior. Trump denies the claims.”

Even the firm itself sees its offer as very unlikely to succeed: “London-based Centricus Asset Management Ltd. has revised an offer several times in recent weeks based on feedback from Zhang Yiming, CEO of TikTok parent ByteDance Ltd., and his advisers …,” WSJ’s Kirsten Grind, Bradley Hope and Georgia Wells report.

“The bid’s architects are positioning it as a backup to a deal already on the table led by Oracle Corp., which China’s ByteDance struck to appease the U.S. government and which was preliminarily approved by Trump last month … Some senior officials in both the U.S. and China are believed to be opposed to the existing Oracle deal, and there is no guarantee it will ultimately be approved by either Washington or Beijing.”

The social network is trying to limit misinformation from spreading: “Facebook said it plans to temporarily suspend all political and issue-based advertising after polls close Nov. 3, a move the company said was intended to limit confusion, misinformation and abuse of its services in the days after the presidential election,” Elizabeth Dwoskin reports.

“The social media giant also said it would remove calls for people to watch the polls when those posts use militaristic or intimidating language. Executives said the policy applies to anyone, including Trump and other officials. Trump has made calls for people to engage in poll-watching, including at the presidential debate, and son Donald Trump Jr. appeared in an ad last month urging people to ‘defend your ballot’ and join an “army” to protect the polls.”

Lael Brainard’s profile rises as a leading candidate for Treasury secretary under a Biden administration. “After six months of forging the Fed’s pandemic response, she is one of the few Democrats intimately involved in responding to the crises of both 2008 and 2020, something political and economic analysts and people close to the Biden campaign said will boost her consideration as possible Treasury secretary,” WSJ’s Nick Timiraos reports. 

The bank has agreed to fix “longstanding deficiencies”: “The Federal Reserve and Office of the Comptroller of the Currency said the country’s third-largest bank had for years failed to address the issues despite repeated warnings,” Reuters’s Pete Schroeder and David Henry report.

“It must take ‘comprehensive’ action to overhaul its risk management, data governance, internal controls and some compensation practices, the regulators said in separate orders and statements. The orders, which could curtail Citi’s ability to make acquisitions and personnel decisions, intensify challenges facing incoming Chief Executive Jane Fraser, who also needs to revive the bank’s lagging revenues and tarnished brand.”

The tech giant faces allegations it is an e-commerce “gatekeeper”: “A congressional panel took direct aim at one of Amazon Inc.’s defenses against antitrust scrutiny of its retail dominance and detailed allegations about how the company wields its market power,” WSJ’s Dana Mattioli reports.

“In a report issued Tuesday, the Democratic-led House Antitrust Subcommittee challenged the company’s stance that its share of total U.S. retail shopping is the most relevant way to understand its size. The committee asserted repeatedly that Amazon dominates U.S. e-commerce. The company’s market share of U.S. online sales is often said to be about 39 percent, but the figure is as high as 74 percent across a range of product categories, according to the report, which also called out practices of other large tech companies. (Amazon CEO Jeff Bezos owns The Washington Post.)

• The company’s response: “Amazon addressed the findings in a blog post. ‘All large organizations attract the attention of regulators, and we welcome that scrutiny. But large companies are not dominant by definition, and the presumption that success can only be the result of anti-competitive behavior is simply wrong.’”

Six chicken industry officials indicted in price-fixing probe: “The charges, made public Wednesday, target executives from several different chicken companies, including Pilgrim’s Pride Corp. , and provide new details about the alleged conspiracy. Prosecutors said the price-fixing took place from 2012 into early 2019, a longer period than the Justice Department previously had alleged,” WSJ’s Jacob Bunge and Brent Kendall report.

“Among the people charged is Bill Lovette, the former chief executive of Pilgrim’s Pride, who retired in March 2019. Mr. Lovette declined to comment. Representatives for Pilgrim’s, the second-largest U.S. chicken supplier by sales, didn’t respond to requests for comment.” 

From Bloomberg’s Tracy Alloway: 

• The Labor Department releases weekly jobless claims