Kamala Harris to propose ban on ‘price gouging’ for food and groceries

Vice President Kamala Harris on Friday will unveil a proposed ban on “price gouging” in the grocery and food industries, embracing a strikingly populist proposal in her most significant economic policy announcement since becoming the Democratic Party’s nominee.

In a statement released late Wednesday night, the Harris campaign said that if elected, she would push for the “first-ever federal ban” on food price hikes, with sweeping new powers for federal authorities. Harris on Friday will also announce plans to lower prescription drug and housing costs, the campaign said.

Harris’s plans amount to a sharp escalation in the economic populism of even President Joe Biden, who had already pulled the party to the left on economic policy compared with his Democratic predecessors. While offering some overtures to the business elite, Harris is attempting to respond to intense voter frustration over rising prices - particularly grocery prices - with a far-reaching proposal.

Harris’s plan will include “the first-ever federal ban on price gouging on food and groceries - setting clear rules of the road to make clear that big corporations can’t unfairly exploit consumers to run up excessive corporate profits on food and groceries,” the campaign said in a statement.

The exact details of the campaign’s plan were not immediately clear, but Harris said she would aim to enact the ban within her first 100 days, in part by directing the Federal Trade Commission to impose “harsh penalties” on firms that break new limits on “price gouging.” The statement did not define price gouging or “excessive” profits.

Republican and many Democratic economists see mandatory price controls as a counterproductive form of government intervention that discourages firms from producing enough supply to meet demand.

“This represents a return to the lazy, failed economic policies of the 1970s, when price controls proved to be a disaster for the economy,” said Brian Riedl, a senior fellow at the Manhattan Institute, a conservative-leaning think tank. “It shows Harris is pandering for easy answers on the economy, even more aggressively than Biden had. Biden had talked about price gouging but was not this aggressive, seeking reforms to actually ban it.”

Harris is also releasing a plan calling for 3 million new construction housing units, according to a person familiar with the matter, confirming a report in the Wall Street Journal. Harris’s plan will outline a series of tax incentives and other measures to encourage building homes for first-time buyers, the person said. The plan will also include a $25,000 credit for first time homebuyers, which more than 1 million people could claim. Biden previously called for building 2 million new homes. Harris’s proposals are expected to be larger versions of housing plans already introduced by Biden.

Harris’s announcement comes as Democratic policymakers have been looking for clues into her plans for the economy. Biden staffed his White House and key regulatory agencies with appointments significantly to the left of President Barack Obama’s team; and on a range of policies - antitrust, trade, labor rights, industrial policy - he shattered the party consensus that had prevailed since the Clinton administration, pushing for more government intervention in nearly every facet of the nation’s economy.

[Trump says he’s ‘entitled to personal attacks’ as he hammers Harris on inflation]

Much of Harris’s approach so far suggests continuity with Biden’s policymaking, including her selection as a running mate of Minnesota Gov. Tim Walz, who has enacted a state child tax credit and universal free school lunch, among other liberal policies.

Beyond her interest in advancing the “care agenda,” such as child care and paid family leave, Harris has also been a stalwart ally of labor unions, making one of her first campaign stops with the United Auto Workers. Within the administration, Harris was a strong advocate of reducing medical and student debt and played a role in the administration’s work to crack down on “junk fees.”

Deputy Commerce Secretary Don Graves is viewed as a potential top economic adviser to Harris if she is elected, as are Deputy Treasury Secretary Wally Adeyemo, longtime advisers Rohini Kosoglu and Mike Pyle, and top Treasury official Brian Nelson, who recently joined her campaign team, according to five current and former administration officials, who spoke on the condition of anonymity to describe private relationships.

Other advisers include Brian Deese, who served as Biden’s top economic adviser, and Gene Sperling, who previously served in the Clinton, Obama and Biden administrations and recently joined the campaign’s policy team. Grace Landrieu is the campaign’s policy director.

On many key policy questions, however, tensions are lingering within the Democratic Party over what Harris’s views are and how she might break with Biden.

The biggest potential change may be in how she approaches business. Harris met with JPMorgan chief executive Jamie Dimon in March, for instance, and has had a long-standing relationship with financier Blair Effron and Lazard President Raymond J. McGuire, an early supporter, said two other people familiar with the matter, who also spoke on the condition of anonymity to describe private conversations. The Business Roundtable, a group of the nation’s leading executives, has also invited Harris to speak and is in touch with her team. (A BRT spokeswoman pointed out that was in keeping with the organization’s policy and that it is also talking with Trump’s team. Trump spoke to the group earlier this year.)

“Her team is smart to acknowledge there’s a buildup of pressure in parts of the business community and it’s worth talking to them,” said Zach Butterworth, who led private sector engagement for the White House and is now at Lafayette Advisors, a strategic advisory firm. “She knows they’re an important voice.”

But liberals have grown concerned that these olive branches could be used to poke holes in their plans.

On antitrust policy, the Harris campaign has faced calls to make clear that she stands behind Lina Khan, the crusading former law professor whom Biden tapped to lead the Federal Trade Commission, after a top donor said he hopes Harris replaces Khan. Some advisers say it makes little sense for Harris to preemptively vow to stand by Khan - especially on a matter that they believe is of little interest to voters in the Rust Belt. But her long-standing ties to tech executives in California - often the targets of Khan and Gary Gensler, chair of the Securities and Exchange Commission - have deepened suspicions among some critics of Silicon Valley that she could reverse Biden’s tough approach to the industry, including on cryptocurrencies and AI regulation.

For now, considerations on policy will probably be driven almost entirely by ensuring Democrats win the presidential election. The Trump campaign is repeatedly attacking Biden and Harris’s work on policy, with Trump spokeswoman Karoline Leavitt on Wednesday saying in a statement: “Under Kamala Harris, everything costs 20 percent more than it did under President Trump. … America cannot afford another four years of Kamala’s failed economic policies.”

Harris last weekend endorsed Trump’s proposal to eliminate taxes on tips, despite the consensus among Democratic policy experts that such a measure is badly designed and unfair. Some advisers have also suggested to the campaign that Harris embrace a tax cut for small businesses to distance herself from the party’s liberal base, or signal a warmer view of the crypto industry than other Democrats.

But her plan to combat prices of food and groceries has suggested that Harris may even move left of Biden on some economic policies. Grocery prices have remained roughly flat over the past year, rising only 1 percent, but have jumped 26 percent since 2019, according to Elizabeth Pancotti, director of special initiatives at the Roosevelt Institute, a left-leaning think tank.

“It’s hard to get down an aisle in the grocery store without finding an example of price gouging or price fixing, and it’s costing us dearly,” said Lindsay Owens, executive director of the Groundwork Collaborative, a left-leaning think tank. “It’s wonderful to see the vice president unleash a suite of policy proposals to crack down on these cheaters and protect Americans’ pocketbooks.”