Goldman Sachs has concluded that if Vice President Kamala Harris becomes the Democratic presidential nominee, her economic proposals will likely not differ significantly from those of President Joe Biden.
This analysis comes amidst increasing calls for Biden to step aside after his difficult debate performance against former President Donald Trump, leading him to announce he will not seek the Democratic nomination. He subsequently endorsed Harris, who has expressed her intention to pursue her candidacy. Several notable endorsements followed, including those from California Governor Gavin Newsom, Pennsylvania Governor Josh Shapiro, and New Jersey Governor Phil Murphy.
Goldman Sachs economists, led by chief economist Jan Hatzius, indicated that they do not anticipate any substantial changes in the Democrats’ fiscal and trade policy agenda should Harris emerge as the nominee.
The transition from Biden to Harris raises the chances of a Democratic win in the presidential race slightly, though it remains under 40%, according to Goldman. They previously highlighted the expected focus on taxes in the next election cycle due to the upcoming expiration of personal income tax provisions from the Tax Cuts and Jobs Act at the end of 2025. This means the next administration will play a crucial role in deciding the fate of tax cuts and potential new tax implementations.
Goldman also shared specific fiscal policy forecasts should Biden secure a second term, including potential tax rate increases for high earners and corporate tax adjustments.
In the event Harris is nominated, prediction markets suggest potential vice presidential candidates could include Governors Shapiro, Roy Cooper from North Carolina, Andy Beshear of Kentucky, or Arizona Senator Mark Kelly.