Former President Donald Trump is attacking Vice President Kamala Harris’ plan for a federal ban on price gouging by grocery stores and food suppliers as “Soviet-style” controls.
But Republican state officials across the country have embraced the idea of capping excessive prices for years.
GOP state attorneys general, as well as many of their Democratic counterparts, have moved to stop companies from charging what they view as exorbitant increases in the cost of some goods in certain circumstances.
In Texas, Attorney General Ken Paxton, a Republican, sued a large egg supplier for raising prices by about 300 percent at the height of the pandemic lockdowns in 2020.
Kris Kobach, the Republican attorney general of Kansas, is suing a large natural gas supplier over allegations that it gouged consumers in the aftermath of a 2021 winter storm. And in storm-prone Florida, state officials widely publicize a law that prohibits sharp price increases in essential items during emergencies.
“Nobody likes to be gouged when they’ve lost their roof,” said Trish Conners, a former chief deputy attorney general of Florida now in private practice at the firm Stearns Weaver Miller. The state laws address the “fundamental public safety role that state AGs have, and it’s largely bipartisan. You don’t see too much difference between AGs in that regard.”
The state laws underscore some of the benefits and challenges that Harris may face in selling her plan. It is broadly popular for politicians to shield consumers from excessive prices — even if many economists disagree with the approach. But at the same time, most states have limited their intervention in the market to a far narrower set of circumstances, and Harris’ plan for a national approach would likely represent a major expansion of the role of government in prices.
Some 37 states have laws to address price gouging, according to the National Conference of State Legislatures. Most of the laws have specific triggers — such as a state of emergency or disaster — and prohibit sellers of certain essential goods from jacking up prices beyond a certain threshold. Some states have a numerical threshold of, say, 15 or 25 percent, while others have vaguer prohibitions on “excessive” or “unconscionable” increases.
Florida Republican Attorney General Ashley Moody vowed to vigorously enforce the price gouging law as hurricane season began earlier this year. Her office has a dedicated hotline, app and website for consumers to report instances of gouging during emergencies.
But Moody says her efforts to keep prices low on essential goods during emergencies aren’t close to what Harris is proposing at the national level.
“There is no comparison between Florida’s price gouging laws that are in place to protect people in emergency situations and what Harris is proposing which, from the limited information she is providing, appears to be communist-style price control,” Moody said in a statement to POLITICO. “The reason Americans cannot afford groceries is because of Biden-Harris inflation, not price gouging.”
A wide range of red and blue states ramped up enforcement of their price gouging laws during the Covid-19 pandemic. And Trump, without a national law in place, signed an executive order to stop “the price gouging and hoarding of critical supplies needed to combat the coronavirus.” Trump directed the Justice Department to set up a task force to pursue some price gougers during the pandemic.
Harris has released few details of her plan, which her campaign described as the “first-ever federal ban on corporate price-gouging” targeting food prices that Americans face at the grocery store.
The proposal has drawn mixed reviews from economists, including both Democratic and Republican scholars, who pan the idea of the government interfering in market-set prices. They also question progressive arguments that food price inflation has been fueled in part by corporate greed and companies hiking prices well beyond their increases in costs.
In unveiling her proposal as a central component of her nascent economic agenda, Harris invoked her experience in policing price increases as California attorney general. “I went after companies that illegally increased prices, including wholesalers that inflated the price of prescription medication and companies that conspired with competitors to keep prices of electronics high,” she said.
Michael Strain, director of economic policy studies at the American Enterprise Institute, said that while the widespread state laws are “obviously related” to what Harris is proposing, they are sharply different in their scope.
The state laws are typically triggered by specific emergencies and limited to certain goods for a limited amount of time. “That’s just very different than empowering Lina Khan and the Federal Trade Commission to determine prices in a much less targeted, time-limited, or restrictive manner,” Strain said.
Because Harris hasn’t said what would trigger her price gouging law, Strain said, the lack of specificity “opens the door to concern that she’s actually talking about letting the government engage in price controls.”
At the same time, Harris’ plan has energized some Democrats who want to see the party do more to take on corporate power. Sen. Bob Casey (D-Pa.), who has pushed a bill to create a federal ban on price gouging along with Sen. Elizabeth Warren (D-Mass.), touted Harris’ plan during a speech at the Democratic National Convention on Thursday.
“Prices are up because these corporations are scheming to drive them up. Most companies are good companies,” Casey said. It’s the food conglomerates that sit behind the supermarkets, the faceless wholesalers, they’re the ones who are extorting families at the checkout counter.”