(Bloomberg) -- Republican presidential contender Nikki Haley is vowing to slash taxes, reduce inflation by cutting spending and expand oil drilling as part of an economic plan released Friday.
The former governor of South Carolina is calling for sweeping changes to Social Security and Medicare for future generations, putting her at odds with the two top polling candidates, former President Donald Trump and Florida Governor Ron DeSantis, who have been reticent to cutting programs that benefit older Americans, many of whom vote.
“Joe Biden’s socialism is making Americans poorer and more dependent on government,” according to a copy of the plan obtained by Bloomberg prior to its release. “The Chinese Communist Party is preparing for war with the United States. America will not win this war by trying to be more like China. We will win by doubling down on freedom and lifting up all Americans.”
Haley is one of the most vocal Republican candidates calling for reductions to federal spending. She has criticized Democrats — as well as members of her own party — for deficit spending, saying that Republicans are partly to blame for the rise in inflation.
She is also proposing a series of tax cuts, including lowering rates for middle-class households, preserving a 20% tax deduction for small businesses and eliminating federal gas taxes.
One of Haley’s most politically challenging tax proposals is to eliminate the politically-significant state and local tax, or SALT, deduction from the tax code. The plan calls it an “unfair distortion” that “forces low-tax states to subsidize tax-and-spend policies in high-tax states.”
The SALT deduction has been at the center of key economic battles in Congress since the write-off was capped at $10,000 in Trump’s 2017 tax cut law. Democrats and Republicans representing areas near New York City and Los Angeles — the districts that usually determine which party controls the House — have been pushing to increase the size of the SALT deduction, so far without success. Eliminating the tax break entirely, which will require Congressional approval, would likely result in a prolonged fight.
“Let’s be clear about what she’s really proposing: gutting Social Security and Medicare — critical programs that families across the country rely on — while making Trump’s tax cuts to the ultra-wealthy and big corporations permanent,” Democratic National Committee spokeswoman Emily Soong said in a statement.
Haley, the UN ambassador during the Trump administration, has called for ending normal trade relations with China, citing their export of essential ingredients for fentanyl, a drug driving the surge of overdoses in the US. Her plan, however, is silent on trade and focuses mostly on domestic issues.
Other policies she’s proposing include:
- Limit on federal spending linked to a percentage of the US economy and withhold Congress’ pay if it fails to pass a budget
- Reduce federal spending to pre-pandemic levels
- Overhaul Social Security benefits, including scaling back payments to higher-income retirees and use an indicator that measures lower inflation levels for cost-of-living increases
- Encourage the Federal Reserve, which is set up to be independent, to maintain a strong dollar
- Implement term limits for politicians and federal officials
- Require Congressional approval for regulations with an economic impact of $100 million or more
- Expand oil and gas drilling on federal lands and reinstate the Keystone XL pipeline
- Rescind subsidies for renewable energy
- Prohibit the sale of oil reserves to Russia, Iran, and Venezuela
Haley’s plan comes days before the second Republican primary debate, set for Sept. 27, which will likely play a role in winnowing the crowded GOP field. Haley had a noteworthy performance in the first debate last month, demonstrating her foreign policy knowledge and calling for the US to take tough stances against Russia and China.
Haley is currently polling fourth — with 5% support, according to RealClearPolitics average of polls. She trails Trump, DeSantis and entrepreneur Vivek Ramaswamy.
(Added DNC statement in the eighth paragraph)
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