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Bill considers capping grocery prices
Grocery prices remain a major strain on household budgets, but a new proposal from national policy researchers aims to bring food costs down.
SEATTLE - Grocery prices continue to be a major strain on household budgets. A new proposal from national policy researchers aims to bring food costs down, giving families some relief at the checkout line.
On Thursday, Center for American Progress (CAP) announced its proposal to the federal government to reduce sticker shock at the grocery store and make food more affordable.
"Grocery prices are up 30% compared to where they were in 2020. The typical household of four is now paying about $1,000 a month in groceries, which is the highest it's been on record," said Michael Negron, a senior fellow for economic opportunity with CAP.
The Center for American Progress is left-leaning public policy institute and advocacy organization based in Washington D.C. CAP combines research and communication to develop ideas on issues like climate, health care, and the economy.
Why are groceries so expensive?
By the numbers:
Negron said, for decades, food inflation outpaced earnings.
"Your dollar went farther at the grocery store than it did just a few years before. And in the inflationary spike of 2021–2022, that was completely inverted. The inflation so significantly outpaced wages that I think a lot of people experienced just a real shift in what they had come to expect," said Negron.
While that spike in food inflation has leveled out some, Negron said shoppers can’t ignore the fact that some food items were once 30 to 50 percent cheaper not long ago.
"We think the basics should be affordable to people, and we think the federal government should use every power available to do just that," said Negron.
Big picture view:
CAP developed a three-part plan to make food more affordable.
"We lay out a full plan and expect to have good conversations with people on the Hill to lay out those ideas, and we expect to see some of them make it into legislative proposals," said Negron, one of the co-authors of the report.
First, the plan would provide short-term relief through temporary price caps on basic food items, like eggs, milk, bread, and produce. This first step would also include incentives for food companies to participate, like relief on tariffs.
"We think exempt the food industry from tariffs to help bring them to the table, and that is just by our estimates of 12 to $14 billion reduction in cost for the industry," said Negron.
Second, the plan calls for stronger enforcement against anti-competitive practices in the food industry, which Negron said drives prices higher for consumers while squeezing farmers.
"We suggest some reforms to support small farmers through more cap, more access to loans, to invest in more research and development so that farmers are more productive and they're more resilient, so that in the future, they'll be more resistant to the types of price spikes that we saw," said Negron.
Third, the plan focuses on long-term fixes. Modernizing agricultural policy to make the food system more resilient to future issues like climate change, disease outbreaks, and supply chain breakdowns.
The other side:
Negron said CAP he recognizes critics may argue implementing the plan could be challenging and receive pushback from large food companies. However, he said CAP’s plan could ease the pressure families are feeling to feed their households.
"By our estimates, it would save the typical family of four about $134 a month," said Negron.
Jared Bernstien, chair of former President Joe Biden’s Council of Economic Advisers, and Kyle Ross, senior policy analyst for economic policy at CAP, were also co-authors of the plan.
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The Source: Information in this story comes from original reporting by FOX 13 Seattle reporter Franque Thompson.