Harris Allies Push Back on Critics of Price Gouging Proposal

Plus: Schumer talks SALT ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ [The Fisc](   By Yuval Rosenberg and Michael Rainey Good evening! President Joe Biden is vacationing in the Santa Ynez Valley in Santa Barbara County, California, today after delivering his emotional Democratic National Convention speech late last night and passing the torch to Vice President Kamala Harris. “I gave my best to you,” Biden told the crowd and the country. Tonight’s DNC program is slated to feature speeches by Sen. Bernie Sanders, Senate Majority Leader Chuck Schumer, second gentleman Doug Emhoff and former President Barack Obama and first lady Michelle Obama. Several anti-Trump Republicans will also take the stage. But Harris and her running mate, Minnesota Gov. Tim Walz, will start the evening with a rally at the Fiserv Forum in Milwaukee, the site of last month’s Republican National Convention. Donald Trump, the Republican presidential nominee, made a campaign stop Tuesday in Michigan, where he based an appeal to suburban women on a promise to be tough on crime, resurrecting his vision of American carnage. “When I return to the White House we will stop the plunder, rape, slaughter and destruction of our American suburbs, our cities and towns,” Trump [said](. Here's what else is happening. Harris spoke briefly on the first night of the DNC. (USA Today Network) Harris Allies Defend Her Plan to Stop Price Gouging The economic platform Vice President Kamala Harris [outlined]( last week includes a proposal to limit price increases for consumer basics including food. In the wake of the inflationary surge that drove prices higher during the pandemic, Harris pledged to “advance the first-ever federal ban on price gouging on food and groceries,” as well as providing federal standards defining “excess profits” and beefing up antitrust efforts in an industry that has become increasingly concentrated. The response to Harris’s proposal, which was extremely short on details, was swift and severe, with both conservative and liberal critics clamoring to condemn it. The New York Post denounced what it called “KAMUNISM,” while Donald Trump predicted on social media that “SOVIET Style Price Controls” would ruin the economy. Meanwhile, Washington Post Columnist Catherine Rampell accused Harris of spouting “economic gibberish,” and warned the Democratic nominee that she was only helping her adversaries: “If your opponent claims you’re a ‘communist,’ maybe don’t start with an economic agenda that can (accurately) be labeled as federal price controls,” Rampell wrote. The Harris campaign, along with a handful of less excitable economists, say the critics are getting it all wrong. As The Washington Post’s Jeff Stein [reports]( Harris allies, including Illinois Gov. JB Pritzker, have pointed out that numerous states already have laws in place to limit price increases on essentials in the event of a disaster. Additionally, there are laws that empower the president to limit price gouging on certain goods in short supply during an emergency — a power that former President Donald Trump himself used to crack down on price gouging on medical supplies during the pandemic, which began while he was in the White House. A standard “center-left agenda”? Economist and New York Times Columnist Paul Krugman defended Harris’s economic platform, saying it is anything but radical, even if detractors insist it is. “The usual suspects are claiming that Harris revealed herself to be an extreme leftist,” he [wrote](. “Even some middle-of-the-road economic commentators have been hyperventilating, saying that she’s essentially calling for price controls, which is odd, because she didn’t say anything like that.” Krugman argues that Harris is calling for legislation that bans price gouging on groceries in some circumstances, not a Soviet-style price-fixing board. Although Harris has provided only a bare outline, making the whole debate more difficult than it would be otherwise, Krugman says a bill introduced this year by Democratic Sen. Elizabeth Warren provides a possible template. The “surprisingly mild” legislation would ban price gouging on food during emergencies and is similar to laws on the books in several states. “For example, Texas (yes, Texas) prohibits many businesses from ‘demanding an exorbitant or excessive price’ on things including food and fuel during disasters,” Krugman writes. Axios’s Emily Peck [notes]( that 38 states have passed similar laws, including California and New York. The laws take effect only during emergencies, at which time price hikes are limited to something like 10%, and typically apply only to large retailers such as grocery store chains. “If banning price gouging is communist, then the U.S. went Marxist long ago,” Peck says. Peck also notes that economists and their acolytes in the media usually hate these kinds of laws, since they interfere with market price signals. “Still, most Americans intuitively understand the rationale behind them, and Harris is trying to appeal to voters — not academics or newspaper columnists,” Peck says. Would a price-gouging ban apply now? The debate raises the question of whether Harris’s plan would make any difference in grocery prices today. After all, the pandemic is over, so a law governing price increases during an emergency would likely have no effect. It could be that, as some critics have suggested, the Harris proposal is more about signaling to voters that she is on their side than actually reducing prices here and now. Still, high food prices remain a problem for many Americans, with prices more than 20% higher than they were before the pandemic. Economist Ernie Tedeschi, formerly with President Joe Biden’s Council of Economic Advisers, [told The Wall Street Journal]( that the profit margins at food retailers rose during the pandemic, and remain elevated (see the chart below). Are higher margins at food retailers a sign of ongoing price gouging? The higher margins could reflect new consumer demand for more profitable goods, Tedeschi told the Journal. At the same time, “economists need to be curious about this and figure out what is going on.” The bottom line: Until we see the details of Harris’s proposal, it’s impossible to say whether her plan would help reduce grocery prices moving forward or only apply during some future emergency. But there is little reason to think that Harris is mulling a Soviet-style revolution at the supermarket, even if that’s what her critics seem pleased to imagine. Schumer Eyes an End to SALT Deduction Limit After 2025 Senate Majority Leader Chuck Schumer told reporters Tuesday that he backs the pledge by President Joe Biden and Vice President Kamala Harris not to raise taxes on people earning less than $400,000 a year — and he insisted that he won’t allow the $10,000 cap on state and local tax deductibility to be renewed after its scheduled expiration at the end of next year. That $10,000 limit has been a point of contention for residents and representatives of high-tax states including New York, New Jersey and California since it was first introduced to help offset the cost of the of the 2017 Republican tax cuts. Schumer was reportedly asked Tuesday about Democrats’ chances of winning key races on Long Island, the New York City suburbs that helped Republicans take control of the House in 2022. “One of the issues that people care about on Long Island is state and local deductibility,” Schumer said, according to [The Hill](. “We Democrats, as long as I’m leader, when state and local deductibility expires, it will be gone.” Schumer reportedly also said he’s looking to end some of the other 2017 tax cuts and partially reverse the GOP’s lowering of the corporate tax rate from 35% to 21%. “To deal with our fiscal problems, we want to undo some of the Trump tax cuts, which went to the very wealthy,” Schumer said. The bottom line: The 2024 elections will help determine how the 2025 tax policy fight plays out. Number of the Day: 3,596,017 Just under 3.6 million births were registered in the United States last year, according to [data]( published Tuesday by the Centers for Disease Control and Prevention. That represents a 2% decline from 2022 and 2021. The general fertility rate fell 3% last year to a historic low of 54.5 births per 1,000 women aged 15 to 44, down from 56 in 2022. “Since the most recent high in 2007, the number of births has declined 17%, and the general fertility rate has declined 21%,” the CDC says. --------------------------------------------------------------- Send your feedback to yrosenberg@thefiscaltimes.com. --------------------------------------------------------------- Fiscal News Roundup - [In a Speech at the Democratic Convention Tonight, Barack Obama Will Aim to Resurrect a Movement]( – New York Times - [Kamala Harris Eyes Guardrails on Plan to Eliminate Taxes on Tips]( – Washington Post - [Kamala Harris Allies Say Plan to Ban ‘Price Gouging’ Has Been Misconstrued]( – Washington Post - [Food Industry Pushes Back Against Kamala Harris’s ‘Price Gouging’ Plan]( – Wall Street Journal - [Kamala Harris Wants to Ban Price Gouging. What Do Economists Say?]( – Wall Street Journal - [Harris Is Rolling Out Her Agenda. She'll Need a Democratic Congress to Pass It]( – NBC News - [Trump Defends Fed Criticism: ‘It Doesn’t Mean That They Have to Listen’]( – The Hill - [Walz, Favorite of Labor Unions, Opposed UAW-Backed Auto Bailout]( – Roll Call - [Biden: 'You Always Think You Could've Won']( – Politico - [Schumer Pledges to End Cap on SALT Deductions After 2025]( – The Hill - [Trump’s Suggestion of 20% Tariffs Elevates Trade Issues Again in the 2024 Campaign]( – Yahoo Finance - [Republicans Worry Trump Blowing Their Chances for Senate Majority]( – The Hill - [Fed Confronts Up to a Million US Jobs Vanishing in Revision]( – Bloomberg - [More Pregnant Women Are Going Without Prenatal Care, CDC Finds]( – NBC News - [Officials Still Don’t Know What Broke America’s Busiest Rail Corridor]( – Politico Views and Analysis - [Fact-Checking Day 1 of the Democratic National Convention]( – FactCheck.org - [Kamalanomics, Revealed: A Solid Center-Left Agenda]( – Paul Krugman, New York Times - [Harris One-Ups Trump on Populist Plays]( – Aaron Blake, Washington Post - [Harris’ Price Controls Are a Solution in Search of a Problem]( – Nir Kaissar, Bloomberg - [Why Harris’s Housing Plan Won’t Work]( – Megan McArdle, Washington Post - [The Era of Good Economic Policy Is Over]( – Andy Laperriere, Wall Street Journal - [The Legislative Priority Question]( – David Dayen, American Prospect - [Biden’s Emotional Goodbye Launches a New Era for Democrats]( – Jennifer Rubin, Washington Post - [Convention Night One Showed the Snap Evolution of the Democratic Party]( – Philip Bump, Washington Post - [Recession Guesswork Is Just as Reliable as It Sounds]( – Jonathan Levin, Bloomberg - [How to Fix America’s Federal Finances]( – David M. Walker, The Hill - [The GOP’s Greatest Skill: Taking Credit for Things Democrats Did]( – Catherine Rampell, Washington Post - [Fixing the Broken Inspector General System]( – Mark Moyar, The Hill Copyright © 2024 The Fiscal Times, All rights reserved. You are receiving this newsletter because you subscribed at our website or through Facebook. The Fiscal Times, 399 Park Avenue, 14th Floor, New York, NY 10022, United States Want to change how you receive these emails? [Update your preferences]( or [unsubscribe](