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HARRISBURG — By many measures, the economy is thriving.
Unemployment is low, the labor market is strong and inflation — after surging to a 40-year high in 2022 — has fallen significantly.
But you wouldn’t know it from listening to the major party candidates in the race for Pennsylvania’s U.S. Senate seat, who have channeled voters’ persistent malaise over widespread price increases.
Democratic incumbent Bob Casey, who has been in office since 2007, says the greed of “big conglomerates” is to blame for high prices for household essentials. Republican challenger Dave McCormick, a former hedge fund CEO who lost the GOP primary in 2022, said in a debate earlier this month that the economy was “weak,” with “skyrocketing prices that are putting enormous pressure on most families.”
In a Spotlight PA poll, nearly 70% of respondents identified jobs, wages and the economy as among their top issues in this election.
Casey’s campaign did not respond to specific questions from Spotlight PA about the senator’s positions, but said in a statement that the Democrat “is leading the fight to hold big corporations accountable for ripping off working people and working to put more money in Pennylvanians’ pockets.”
McCormick’s campaign did not respond to questions from Spotlight PA.
Here’s where the candidates stand on economic issues:
Inflation
As the U.S. economy recovered from the pandemic, inflation — the rate of price increases — surged to levels not seen since the early 1980s. The cost of groceries, cars and rent rose dramatically, squeezing household budgets and souring many voters’ views of how the Biden administration has handled the economy.
Since peaking in the summer of 2022, though, inflation has gradually cooled. In September, the Federal Reserve cut interest rates — a signal that the central bank no longer sees inflation as a major concern. For consumers, though, months of high inflation haven’t yet faded from memory or the marketplace: Prices for many items remain higher than those from before the pandemic.
McCormick blames federal spending for the increase in inflation — in particular, the $1.9 trillion stimulus package known as the American Rescue Plan that President Joe Biden signed into law in March 2021. (In 2020, then-President Donald Trump also signed two stimulus bills worth more than $3 trillion.)
McCormick has described federal stimulus spending as the “main driver” and the “root cause” of the increase in inflation in 2021 and 2022.
Experts say it’s more complicated.
Economists broadly agree that the American Rescue Plan contributed to inflation — although estimates of exactly how much vary. But they also agree that other factors likely played a larger role, among them supply-chain disruptions, labor shortages and Russia’s invasion of Ukraine, which sent food and energy prices soaring. Even critics of the American Rescue Plan generally acknowledge that, had it been smaller, the U.S. would still have seen a bump in inflation, which was a global phenomenon.
“This perfect storm of everything that could make prices rise happened at the same time,” said Ahmed Rahman, an associate professor of economics at Lehigh University. “That’s why there’s so much disagreement over the underlying causes.”
Supporters argue that the American Rescue Plan worked: The U.S. avoided a recession, unemployment fell and the economy recovered from the pandemic faster than in many other countries.
Casey has advanced another explanation for inflation. He argues that big companies in some sectors used inflation as an excuse to raise prices even further and boost their profit margins — so-called “greedflation,” which he has made a central theme of his campaign.
“The corporations say your prices are up only because their costs are up,” he said in a speech at the Democratic National Convention in August. “Prices are up because corporations are scheming to drive them up.” (He did add that “most companies are good companies” and that his criticisms were primarily directed at food conglomerates and wholesalers.)
Corporate profits increased sharply in the years following the pandemic, although it’s not clear how much this contributed to the overall rise in inflation. A study from the Federal Reserve Bank of Kansas City found that growth in corporate “markups” — the difference between how much it costs to produce something and the price a company charges for it — was a “major contributor” to inflation in 2021. Studies by other Federal Reserve banks have reached different conclusions, though.
Casey has introduced a bill that would crack down on greedflation by banning “grossly excessive” price increases; it does not specify the exact threshold. He has compared the bill to legislation already on the books in many states to ban price-gouging, although state-level bans typically apply only during a disaster or emergency.
Taxes
In 2017, Trump signed into law a major overhaul of the U.S. tax system.
The Tax Cuts and Jobs Act slashed the top corporate tax rate from 35% to 21% and reduced income tax rates for most Americans, among many other changes.
Taxpayers with higher incomes reaped the biggest benefits from the individual tax cuts, according to an analysis by the Tax Policy Center, a Washington, D.C., think tank.
While the corporate tax cut was permanent, the income tax cuts for individuals are due to expire at the end of 2025.
If Congress does nothing, roughly two-thirds of taxpayers would see a tax increase, said Erica York, a senior economist and research director at the Tax Foundation, a think tank that generally argues for lower taxes.
McCormick wants to keep both the individual and corporate tax cuts in place, saying they are necessary to ensure that America remains competitive.
Casey, along with every other Democrat in the U.S. Senate, voted against the bill in 2017 and has called it “a massive tax giveaway to the super-rich at the expense of the middle class.” He wants to undo the corporate tax cuts, but has indicated that he would support keeping some of the individual tax cuts.
“If we’re gonna have tax reform in 2025, it has to be a tax cut for the middle class,” he said during the debate on Oct. 3.
Trade
As president, Trump imposed tariffs — essentially a tax on imported goods — on steel and aluminum. In an unusual moment of alignment, Casey supported the tariffs, saying they would help Pennsylvania steelmakers.
McCormick said during the Oct. 3 debate that he supports using tariffs “strategically to make sure American workers get a fair deal.”
Casey, who urged the Biden administration to keep Trump’s tariffs on imported steel and aluminum, agreed that “when used in a targeted fashion” tariffs can help workers and level the playing field.
U.S. Steel
Both candidates oppose the pending sale of Pittsburgh-based U.S. Steel to a Japanese company, Nippon Steel Corp., which has become a political flashpoint. Biden, Vice President Kamala Harris and Trump have all come out against the deal as well.
Nippon has said it would invest billions to modernize and upgrade U.S. Steel plants in Pennsylvania and Indiana. U.S. Steel has warned that, if the deal does not go ahead, it would put thousands of union jobs at risk, and raise “serious questions” about whether the company would remain headquartered in Pittsburgh. The United Steelworkers union, however, opposes the deal, saying that Nippon’s pledges to avoid layoffs or plant closures contain major loopholes.
The sale is currently under review by a federal panel that scrutinizes foreign investments in the U.S. for national security risks; a final decision is not due until after the general election in November. Analysts have been largely skeptical of the national security concerns raised by opponents of the sale, because Japan is a longtime U.S. ally.
Casey, a longtime supporter of organized labor, says his opposition stems from a desire to protect union jobs in Pennsylvania. McCormick also opposes the deal, citing national security concerns — although he noted during the Oct. 3 debate that “generally speaking, my view is let’s not have government get too involved.”
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