How Democrats Will Attack Trump on the Economy – The New York Times

It took more than 90 minutes for the moderators of the Democratic presidential primary debate on Wednesday night to turn to the economy, which polls show is a top issue on voters’ minds and is one of President Trump’s strengths as he seeks re-election.

The candidates wasted no time attacking him on it.

Over two nights of debates in Detroit, candidates assailed Mr. Trump’s record on trade, tax cuts and wage growth, accusing him of perpetuating economic inequality and a “rigged” system that favors the wealthy and powerful. It was a preview of the economic arguments that are likely only to grow as the 2020 race escalates.

“Donald Trump came in making a whole lot of promises to working people that he did not keep,” Senator Kamala Harris of California said. “He said he was going to help farmers. He said he was going to help autoworkers.”

Ms. Harris said that farmers were now staring down bankruptcy, that hundreds of thousands of autoworkers could soon be out of work and that the chair of the Federal Reserve, Jerome H. Powell, had just “admitted” that the central bank cut interest rates by a quarter point on Wednesday because of economic uncertainty created by Mr. Trump’s trade wars.

“Because of this so-called trade policy that this president has, that has been nothing more than the Trump trade tax that has resulted in American families spending as much as $1.4 billion more on everything from shampoo to washing machines,” Ms. Harris said, a reference to the tariffs Mr. Trump has imposed on foreign metals, washing machines and $250 billion worth of Chinese imports.

The attacks came amid the lowest unemployment rate in a half-century and a steady, though slowing, pace of economic growth. Polls show voters give Mr. Trump higher marks on the economy than almost any other issue. The president proclaims the economy to be stronger than at any point in American history, while also clamoring for the Fed to advance it further by cutting interest rates even more than it did this week.

Economists widely see that rate cut as an effort to sustain the economic expansion that began more than a decade ago and now faces challenges from a global manufacturing slowdown and Mr. Trump’s trade fights.

In that economic mix, Democrats see opportunity. Here are some of their likely economic attacks on the president.

This is now the longest economic expansion in American history. But while it has been durable, it has not been particularly strong, especially in terms of delivering big wage gains. Now it is again downshifting, suggesting the economy may have peaked.

The gross domestic product grew 2.5 percent last year — below Mr. Trump’s 3 percent target — despite a jolt of energy from the Republican tax cuts and increased government spending. Now that boost is fading. This spring, the G.D.P. grew at a 2.1 percent rate, and forecasters expect about the same from the current quarter. Job growth has also cooled, and some common recession signals are flashing warning signs.

The slowdown is particularly acute in manufacturing, a potential vulnerability for Mr. Trump given his frequent promises to bring back factory jobs. Manufacturing did experience a rebound early in Mr. Trump’s term, but it has since lost momentum under the weight of tariffs, trade tensions and slowing global demand.

After averaging close to 20,000 jobs per month during Mr. Trump’s first two years in office, manufacturing job growth has fallen below 8,000 jobs per month so far this year. Factory output has fallen, and other measures of the industry show it either barely growing or contracting outright. The fallout has hit politically important places in the Midwest particularly hard. General Motors this year idled its plant in Lordstown, Ohio, a symbolically important move that drew Mr. Trump’s ire when it was announced.

Several Democratic presidential candidates accused Mr. Trump of breaking his promise to factory workers. “Donald Trump is malpractice personified — we’ve got to point that out,” John Hickenlooper, the former governor of Colorado, said Tuesday night. “Where’s the small manufacturing jobs that are supposed to come back?”

Candidates also pressed the case that growth was not lifting American workers nearly as much as it was helping the rich. “The major issue that we don’t talk about in Congress, you don’t talk about in the media,” Senator Bernie Sanders of Vermont said Tuesday, “is the massive level of income and wealth inequality in America.”

Republicans promised that Mr. Trump’s $1.5 trillion tax cut, which featured large reductions for corporations and other business owners, would supercharge business investment in the United States. And it did — but only briefly.

Nonresidential fixed investment grew at an annual rate of nearly 9 percent in the first quarter after the tax cuts were enacted, its highest rate since 2012. That growth trailed off in the second half of 2018 and slid further at the start of 2019. This spring, it turned negative — in part because investment in America is increasingly linked with the price of oil, and oil prices have fallen sharply from a peak last fall.

The tax cuts, which lowered individual income tax rates, delivered benefits to most Americans. Democratic candidates are not acknowledging those gains in the debates. Instead, they are focusing on high earners, companies and shareholders, who enjoyed the largest benefits from the cuts.

“Since 2001, we have cut $5 trillion worth of taxes,” Senator Michael Bennet of Colorado said Wednesday. “Almost all of that has gone to the wealthiest people in America. We have made the income inequality worse, not better, through the policies of the federal government.”

Senator Amy Klobuchar of Minnesota promised on Tuesday to pay for an infrastructure bill by raising capital gains rates and “doing something when it comes to that regressive tax bill that left everyone behind, but really made his Mar-a-Lago friends richer, as he promised.”

The Fed chair handed Democrats a talking point at a news conference after the Fed’s rate cut on Wednesday, saying the move was “intended to ensure against downside risks from weak global growth and trade tensions” and noting that Mr. Trump’s trade fights “do seem to be having a significant effect on financial market conditions and the economy.”

Mr. Trump’s imposition of tariffs on imported steel, aluminum, washing machines, solar panels and products from China, along with threats to impose others on automobiles and even French wine, has fueled a spike in business uncertainty both domestically and abroad. The tariffs have also slightly raised prices: A recent study from economists at the Federal Reserve Bank of New York found that the tariffs on Chinese goods cost the average household $419 last year. Higher duties that took effect this year could add hundreds more to that total.

Many Democrats, like former Representative Beto O’Rourke of Texas, portrayed those tariffs as a tax on middle-class consumers.

“They’re a huge mistake,” Mr. O’Rourke said. “They constitute the largest tax increase on the American consumer, hitting the middle class and the working poor especially hard, and farmers in Iowa and across the country are bearing the brunt of the consequences.”

Senator Elizabeth Warren of Massachusetts criticized Mr. Trump’s proudest trade accomplishment: a new agreement, still pending in Congress, with Canada and Mexico.

“Anyone who thinks that these trade deals are mostly about tariffs just doesn’t understand what’s going on,” she said Tuesday. “Look at the new NAFTA 2.0. What’s the central feature? It’s to help pharmaceutical companies get longer periods of exclusivity so they can charge Canadians, Americans and Mexicans more money and make more profits.”

The low unemployment rate means that nearly everyone who wants a job can get one. But not all of those jobs are stable, well paying or full time. More than four million Americans, for example, are working part time but would prefer full-time work, a number that is significantly higher than economists would expect given the low level of joblessness. Some of the fastest recent job growth has been in low-paying sectors like warehousing and hospitality, while hiring has slowed in better-paying industries.

Wage growth, which has been anemic for much of the decade-long expansion, picked up last year, topping 3 percent for the first time since the last recession. But pay gains have not made further progress in recent months. And even now, pay growth is not coming close to keeping up with the rising cost of housing, especially in expensive cities that have many of the best jobs.

“There are a lot of Americans that are hurting,” Julián Castro, the former housing secretary under President Barack Obama, said Wednesday night, citing high rates of homelessness and the General Motors layoffs as examples. “The idea that America is doing just fine is wrong.”

Democrats have also highlighted longer-run shifts that have made workers more vulnerable, such as the declining unionization rates, the increasing automation and the rise of “gig economy” jobs that lack traditional workplace protections.

“This is about a moment when the economy is changing before our eyes,” Mayor Pete Buttigieg of South Bend, Ind., said Tuesday evening. “There are people in the gig economy who go through more jobs in a week than my parents went through in their lifetime.”

One Democratic candidate, Andrew Yang, has proposed a more drastic solution to weak wage growth: Give every American adult $1,000 a month in cash.

“We need to be laser-focused on solving the real challenges of today, like the fact that the most common jobs in America may not exist in a decade, or that most Americans cannot pay their bills,” Mr. Yang said. He said his plan would be a “game changer for millions of American families.”