WASHINGTON– Vice President Kamala Harris is taking aim at high food and housing prices as her campaign delivers an economic policy speech in North Carolina on Friday. She is pledging to push for a federal ban on gouging on food and laying out plans to reduce other costs, seeking to address one of voters’ biggest concerns.
Year-on-year inflation has hit its lowest level in more than three years, but food prices are 21 percent higher than they were three years ago. Republican presidential candidate Donald Trump has called inflation a major failure of the Biden administration.
Housing costs are another major driver of inflation. If elected, Harris plans to use federal funds to encourage the construction of three million new housing units, pass legislation to slow rising rents and provide first-time home buyers with a $25,000 down payment.
Harris is increasingly approaching President Joe Biden’s legislative and economic performance, portraying her initiatives as a continuation of the work her administration has done over the past three and a half years.
The Harris housing plan would create a tax credit for developers who build first-time homes for first-time buyers and double the Biden administration’s $20 billion “innovation fund” for housing. The down payment assistance would significantly expand Biden’s proposal to provide government assistance to first-time buyers.
Early Thursday, Biden and Harris celebrated their efforts to lower prescription drug prices at an event in Maryland, marking Harris’ first appearance with Biden since she replaced him as the top Democratic candidate nearly four weeks ago.
They announced that drug price negotiations will reduce the list prices of 10 of Medicare’s most popular and expensive drugs by hundreds – in some cases thousands. The program was created by the health care and climate-focused Inflation Reduction Act of 2022. Harris’ vote in the Senate as vice president helped Democrats overcome unanimous Republican opposition and pass the bill into law.
“Kamala’s deciding vote,” Biden told the audience, “made this possible.”
He added that Harris “will be a damn good president.”
Biden made his own efforts to curb rising food prices, for example by establishing a “Competition Council” to try to reduce costs by increasing competition within the meat industry, in an effort to show that his administration is committed to fighting inflation.
Asked if he feared Harris might try to distance herself from his economic record, Biden told reporters on Thursday: “She won’t do that.”
When it comes to handling the economy, Americans are more likely to trust Trump than Harris, but the difference is small: 45 percent say Trump is better able to handle the economy, while 38 percent say that about Harris. About one in 10 don’t trust either Harris or Trump to handle the economy better, according to the latest poll from the Associated Press-NORC Center for Public Affairs Research.
Trump argued Thursday at his golf club in Bedminster, New Jersey, that Harris was proposing “communist price controls” that would lead to shortages, hunger and more inflation. He was surrounded by popular grocery stores and tried to draw attention to rising food prices.
Harris’ housing plan also includes cracking down on data-sharing and pricing tools that landlords use to set rents, and eliminating a tax incentive that has led investment firms to buy up large swathes of the nation’s housing stock. She intends to distinguish her plan from that of Trump, who was sued by the Justice Department for housing discrimination five decades ago.
Consumer confidence surveys show that despite a cooling of inflation, high prices remain a source of frustration for shoppers, especially among low-income Americans. Overall, prices are about 21% higher than before the pandemic. Average incomes have risen slightly more, fueling spending even as Americans report a gloomy economic outlook.
Some meat prices have risen even more than general inflation: Beef prices have risen nearly 33 percent in the four and a half years since the pandemic began, while chicken prices have shot up 31 percent. Pork is 21 percent more expensive, according to government data.
One reason for the price increases was supply disruptions during the pandemic. Many meat processing plants had to temporarily close after COVID-19 outbreaks occurred among their workers.
But the Biden administration accuses the meat processing industry of allowing corporate consolidation to play a larger role by allowing a small number of companies to raise their prices more than their costs.
Four major companies control 55 to 85 percent of the beef, chicken and poultry market, the White House said in late 2021, including Tyson Foods and JBS. Several of the largest meat companies have collectively paid hundreds of millions of dollars to settle lawsuits accusing them of manipulating chicken, beef and pork prices, but they have not admitted any wrongdoing.
Some economists argue that large food and consumer goods companies have taken advantage of the disruptions during the pandemic. Economist Isabella Weber of the University of Massachusetts at Amherst spoke of “seller inflation.” Others called it “greed inflation.”
Harris’s price-gouging suggestions come at a time when there are signs that “seller inflation” is easing. Consumers have become more sophisticated and are foregoing some high-priced purchases while looking for cheaper alternatives.
Food prices rose by an average of only 1.1 percent nationwide last year, corresponding to the price increase before the pandemic, the government said on Wednesday.
The meat industry has been defending itself against accusations of price gouging and price fixing for years, and major players deny the idea that extreme consolidation in the industry is responsible for the high prices.
Glynn Tonsor, an agricultural economist at Kansas State University, said: “The cost of raising the animals, the cost of processing them into meat and the cost of getting the meat to people is higher than before.”
“Yes, consumers are seeing higher prices, but that doesn’t necessarily mean someone is ripping them off,” Tonsor said.
The head of the trade group Meat Institute, President and CEO Julie Anna Potts, said Harris’ idea would not solve the problem of inflation, which drives up the prices of everything.
“Consumers are affected by high prices caused by inflation on everything from services to rent to cars, not just the grocery store,” Potts said. “A nationwide ban on price gouging does not address the real causes of inflation.”
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AP Business Writers Josh Funk in Omaha, Nebraska, and Chris Rugaber in Washington, and Associated Press writer Darlene Superville in Largo, Maryland, contributed to this report.
