WASHINGTON — Like many politicians, Vice President Kamala Harris is centering much of her economic talking points this election on kitchen table issues. But Harris is taking that strategy more literally than most.
Food prices have become a political liability for the Harris campaign, because while inflation has cooled in recent months groceries remain more expensive today than they were a few years ago. Harris
"The Harris campaign is being purposefully broad, which makes sense both politically and rhetorically," said Isaac Boltansky, managing director at BTIG. "Politically, keeping it at 30,000 feet keeps the tent broad and inviting."
Merchant groups — the typical adversaries of banks when it comes to policy discussions about higher prices for consumers at the register — immediately referenced the interchange fees paid to payment processors, often referred to as "swipe fees," as a reason why food prices are elevated.
"Our independent grocers, already operating on extremely thin margins, are hurting from the same inflationary pressure points as their customers," said the National Grocers Association in a statement. "Labor, rent, swipe fees, utilities; you name it, the price has increased."
Instead of targeting grocers or other merchants, the group said that the next administration should look at other factors, including swipe fees, to bring down prices.
"If Washington is serious about helping lower prices for consumers, it can help in three important ways: lower skyrocketing swipe fees, rein in excessive and burdensome regulations, and enforce antitrust laws like the Robinson-Patman Act that enhance price competition amongst retailers, regardless of size or location," the group said.
The rhetoric around food prices so far echoes many arguments between merchants and bankers over swipe fees and who should take the hit as governments seek to lower prices for consumers.
Earlier this year, for example, Illinois included a
And Sen. Dick Durbin, D-Ill., has tried to push
There could be similar compromises or political fights ahead with Harris' price gouging proposal, Seiberg said, as merchants "seek to shift the blame for higher prices to swipe fees."
"The financial sector has strong counterarguments, especially involving the cost to merchants when consumers write checks or pay with cash," he said. "Yet these political fights rarely center on the data. They are about the perception."
Craig Shearman, spokesperson for the Merchants Payments Coalition — of which the National Grocers Association is a member — said that the group hasn't talked about price gouging but is "on record saying swipe fees, as a percentage of the transaction, are a multiplier for inflation."
The extent to which the Harris campaign, or a future campaign concerned about food prices, might target swipe fees is unclear.
"Swipe fees face policy risk, but that is because they will face policy risk for as long as they exist," Boltansky said. "It is fair to assume that a Harris administration would continue the Biden administration's broader focus on junk fees, so swipe fees would be on the list, although we can debate its relative position on the list."
And Harris' campaign could be constrained when it comes to reining in swipe fees by a promise to not raise taxes for those who earn less than $400,000 a year, said Ernie Tedeschi, director of economics at Yale Budget Lab and until recently chief economist at the White House Council of Economic Advisers.
"When we were grappling with that pledge for the purposes of setting policy, the consensus was that that pledge applied to things like user fees as well, not just taxes strictly defined, but even things like swipe fees," he said. "In the Biden administration, a swipe fee would very clearly violate that pledge."
Tedeschi said that in the Biden administration, policies involving things like swipe fees were treated with caution, and that it's likely Harris would approach the topic similarly.
"Vice President Harris may interpret that differently, but that would be a constraint on her," he said.
