U.S. economic agenda calls for growth and labor participation reset

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US economic agenda reset

Highlights

The proposed U.S. economic agenda seeks to pair faster growth with increased labor participation via research investment, market openness, and targeted tax reforms.
Policy recommendations include expanded earned income tax credits, individualized worker retraining, wage insurance for displaced workers, and federal support for community colleges.
The analysis rejects broad trade barriers and high-skilled immigration restrictions, arguing these harm growth and public support for AI-driven productivity improvements.

Policy pillars for a new economic strategy

As reported by Financial Times, the argument for a new bipartisan economic agenda centers on pairing faster growth with broader participation in the labor market after the midterms expose dissatisfaction with the status quo.

The analysis says the traditional drivers of expansion, technological change and globalization, have also produced disruptions that leave many workers and regions feeling excluded from economic gains. It adds that the AI revolution is intensifying those concerns, even as earlier pro-investment tax measures, including the 2017 Tax Cuts and Jobs Act and the 2025 One Big Beautiful Bill Act, support parts of a pro-growth framework.

The proposed agenda calls first for stronger federal backing for basic scientific research and for applied research centers across the country to help turn innovation into commercial activity. It also argues that AI-assisted research can lift future productivity, making reforms to modernize and expand electricity transmission an important part of the growth agenda.

A second pillar is renewed support for open markets. The analysis says national security and critical supply chains can justify some exceptions, but broad trade barriers are counterproductive because across-the-board tariffs raise costs for key intermediate goods and leave U.S. consumers and businesses bearing most of the burden.

It also points to tax reform as a way to strengthen incentives for companies to invest domestically. A cash flow tax, under which investment is expensed and interest is not deductible, is presented as a way to encourage investment, reduce leverage and better tax the profits of large firms with market power, while border adjustments would reduce incentives to move assets, jobs or profits abroad.

The third growth plank supports tougher action against illegal immigration while opposing broad restrictions on high-skilled immigration. The analysis cites recent attacks on H1-B visas and optional practical training for non-U.S. students as measures that work against growth.

Cost-of-living pressure shapes economic debate

The participation side of the agenda focuses on reconnecting people to work as technological change and trade reshape the labor market. Proposed measures include an expanded earned income tax credit, more individualized training through personal re-employment accounts and federal support for community colleges as local retraining hubs.

Workers facing long-term job losses could also receive wage insurance that covers part of the gap between a previous salary and a lower starting wage in a new occupation. The analysis argues that such steps could help build public support for AI investment by easing fears that productivity gains will come at the expense of future employment.

Politically, the agenda is framed as an alternative to populist economic nationalism by combining support for open markets and growth with policies aimed at people shut out of the labor market. In that reading, the midterms show that affordability remains the dominant public concern, and that a growth-and-participation approach offers a potential bipartisan answer.

In our earlier article on rising U.S. toy prices ahead of the holiday season, we explained how import duties on Chinese-made goods and higher oil-, commodity-, and shipping-related costs pushed toy inflation well above several other consumer categories. We also noted that earlier tariff increases can keep showing up on retail shelves with a delay, while persistent logistics and input-cost pressures continue to squeeze major manufacturers and keep affordability politically sensitive.

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