Attorneys General Ask Congress to Intervene in Price Gouging
WASHINGTON — Sixteen attorneys general are asking congressional leaders to take action to prevent price gouging as popular opinion polls show inflation is becoming a major concern of consumers.
Rising grocery prices top their list of complaints. Housing is another one.
“Individual states face heightened challenges when protecting consumers from price gouging when so many product supply chains are nationwide,” says a letter the attorneys general delivered Wednesday to House and Senate leaders.
More than 40 states have laws forbidding price gouging but constitutional limits on their authority mean they cannot enforce them outside their own borders.
“A federal price gouging prohibition would provide critical partnership to state enforcement and protect consumers and small businesses alike,” says the letter led by New York Attorney General Letitia James.
Price gouging refers to charging customers exorbitant prices for goods or services when extreme circumstances result in high demand and limited supplies. States normally enforce their bans after natural disasters.
Price gouging was an issue last month before two hurricanes hit Florida. Hotel room rates, gasoline and groceries shot up in some places just outside the evacuation zone, according to the Federal Trade Commission.
Supply chain disruptions caused by the wars in Ukraine and the Middle East are adding to the inflationary trends.
The Bureau of Labor Statistics reported this month that the price of “food at home” has increased by 21.6% since President Joe Biden’s term started in January 2021.
The consumer complaints started during the COVID-19 pandemic.
“Those consumers were angry about retailers jacking up the price of essential goods like household disinfectants,” the attorneys general wrote.
They argue in their letter that national restrictions on price gouging would discourage hoarding and encourage manufacturers to increase production to avoid shortages.
The state attorneys’ general request to stop price gouging is essentially the same as pledges by presidential candidates Vice President Kamala Harris and former President Donald Trump.
“My highest priority is to bring down prices, to bring down costs,” Harris said during an ABC News interview Wednesday.
Trump recently made an appearance in a Kittanning, Pennsylvania, grocery store where he told shoppers worried about food prices, “We’re going to do this for you from the White House.”
Trump wants to raise tariffs, following a theory that high tariffs on imports creates incentives for domestic production that would result in lower prices.
Harris proposes lowering consumer prices through regulatory enforcement and executive orders.
During an Aug. 16 campaign stop in Raleigh, North Carolina, Harris said, “I will work to pass the first-ever federal ban on price gouging.”
She added, “My plan will include new penalties for opportunistic companies that exploit crises and break the rules, and we will support smaller food businesses that are trying to play by the rules and get ahead.”
Economists warn that both strategies could disrupt normal trends of supply and demand, perhaps resulting in the same kind of inflation the presidential candidates hope to avoid.
Some Democrats and Republicans in Congress have sought to control consumer prices recently but so far have been unable to reach agreement on legislation.
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