With prices soaring for everything from gas to washing machines to eggs, survey after survey say the same thing: The No. 1 issue on voters’ minds this election season is inflation.
Since Democrats now control the White House and (by a razor-thin margin) both chambers of Congress, local GOP candidates in competitive races are blaming liberals for inflation that, as of this month, remains close to a 40-year high.
Roughly a third of the tweets sent by campaign accounts for Orange County’s two House Republicans, Reps. Young Kim and Michelle Steel, since April 1 have been about inflation or rising prices, with posts alternately pointing fingers at President Joe Biden or Democratic House Speaker Nancy Pelosi.
Scott Baugh, viewed as the top GOP challenger in the new coastal 47th District, told voters in a recent tweet that if they’re tired of “runaway inflation,” they should “send Katie Porter packing” and help Republicans take back the House.
Porter, meanwhile, recently drew headlines after sharing that she skipped buying bacon on a recent shopping trip after seeing its high price tag. She’s using the incident to talk about how Democrats need to do a better job of speaking to voters about issues that matter most to them; Republicans are mocking the two-term House member for “finally” noticing inflation that’s been rising for nearly a year.
Economists say prices have been driven up, particularly in the U.S., by a mix of external events and internal political decisions. And while they insist there’s not much House members and state legislators can do to quickly improve inflation numbers, economists also say lawmakers could make the problem worse.
The Register asked local candidates for state and federal office how they would address high gas prices, which are on the rise yet again. We also asked local House candidates about their views on the broader problem of inflation. And we took a look at how much of an impact the issue might have on local elections this year.
What can lawmakers do about it?
Only one candidate in the running for six House seats that include portions of Orange County echoed economists’ take that there’s not much lawmakers can do to bring inflation rates down anytime soon.
“No one can stop inflation,” said Long Pham, a Republican who’s challenging Steel in CA-45. “But a stable economy would effectively dampen the effect of inflation when heading to the downturn of the economy and make it easier for recovery.”
Asked what she’d do to address inflation, Steel mentioned a need to “lower taxes on the American people.” Economists generally agree that it’s actually raising taxes that would lower inflation by reducing consumer demand, though Sfeir said that’s not viewed as politically viable by either side.
Kim on Thursday introduced a bill with Florida Rep. Michael Waltz that would require the National Science Foundation to study the impacts of inflation and make related recommendations on government spending.
Democrats largely focused their plans for addressing inflation on longer-term fixes. Porter, for example, touted efforts to boost competition.
“Market consolidation has resulted in higher costs for families, lower wages, and less innovation,” she said. “I support antitrust enforcement to restore competition, which will bring prices down. And I have called out Big Pharma, Big Tech, Big Ag, and Big Oil.”
Reps. Mike Levin and Linda Sánchez both mentioned the $1.2 trillion infrastructure bill approved in late 2021. Improving the country’s infrastructure will generally help to lower transportation costs and alleviate bottlenecks, said Eric Swanson, an economics professor at UC Irvine. But he noted it will take years for the projects funded by that bill to, say, increase the capacity of our ports and otherwise make a dent in supply-chain disruptions.
While immediate fixes to the inflation rate are elusive, economists say top-down attempts at imposing price controls, as Presidents Richard Nixon and Jimmy Carter did to address inflation in the 1970s, could quickly make the situation worse. Same for offering up any additional form of economic stimulus. But California has been weighing that very option for months in reaction to pressure over spiking gas prices.
Democrats have largely pushed to send residents cash payments of $200 to $400 to offset gas prices. Gov. Gavin Newsom reiterated that proposal in his updated budget plan released Thursday, May 12, and a dozen local Democratic candidates for state and federal office say they’d support a rebate to provide relief from gas prices.
Meanwhile, Republicans, including 18 local candidates, have called for at least temporarily suspending the state’s gas tax of 51 cents a gallon. And a few local candidates on both sides of the aisle — including Democrat Henry Bouchot in the SD-30 race and Republican Soo Yoo in the AD-67 contest — said they support both gas rebates and gas tax holidays.
When it comes to inflation, Swanson said, rebates and suspending gas taxes would have similarly negative impacts by helping to drive up consumer demand.
A few Democrats, including Porter and SD-32 challenger Brian Nash, instead discussed fees for oil companies that are sitting on unused drilling permits or failing to drop gas prices even when crude oil prices plummet.
As for long-term solutions to high gas prices, which can play a substantial role in inflation, local GOP candidates largely called for increasing domestic oil production while Democrats urged a focus on the move to electric vehicles.
Why is inflation so high?
When it comes to why prices have spiked globally, economists say there’s plenty of blame to spread around.
It’s been more than two years since the coronavirus pandemic disrupted global supply chains. Factories and transportation companies shut down or lost workers, which made goods harder to get and therefore more expensive. And supplies have remained sporadic ever since, with lockdowns in China again now due to new COVID-19 outbreaks.
Oil prices also spiked, which impacted the cost of goods and services globally. And both issues got worse when Russia invaded Ukraine in February, limiting the supply of products such as oil, wheat and copper.
Those problems are driving up the price of goods around the world. But inflation is particularly high in the United States, reaching a 40-year peak of 8.5% in March before dipping slightly to 8.3% in April. And economists say two primary factors have exacerbated the problem here.
First, even on a per capita basis, the U.S. government approved much larger COVID-19 relief packages than other nations, noted Raymond Sfeir, economics professor at Chapman University. President Donald Trump, with bipartisan support from Congress, approved roughly $4 trillion in aide that included sending two rounds of direct payments to most Americans. Then in March 2021, Biden and the Democrat-controlled Congress approved another $2 trillion and a third round of stimulus checks. All Republicans, including Steel and Kim, voted against that aid.
With no such relief, Sfeir said the U.S. could have fallen into a depression. But he argues that the three rounds of stimulus checks coupled with increased unemployment payments and other support went too far, triggering “too much money chasing too few goods” as supply issues from the pandemic persisted.
Most of local GOP House candidates say they’d tackle inflation primarily by pushing to rein in “government spending,” and they’re laying blame for that spending primarily at Democrats’ feet. But Brian Burley, a Republican challenger in CA-47, blamed current high prices on “the spending spree that both administrations and both sides of the aisle participated in.” He also called for the U.S. to “stop printing all this money.”
Adjusting the money supply and interest rates are the responsibility of the Federal Reserve Board, which has two appointees each from Trump and former President Barack Obama.
To offset economic woes from the pandemic, the Federal Reserve in 2020 dropped interest rates and pumped more money into circulation. Economists raised flags about how such moves might cause inflation, but Federal Reserve Chair Jerome Powell argued at the time that any spikes would be “transitory” and correct themselves as the pandemic subsided.
That hasn’t proven true. So in May, the board raised interest rates by half a percentage point. And they’re looking at two more such hikes later this year, which should drive down consumer demand by making it more expensive to borrow money.
While economists disagree over how much the growth of the money supply impacts inflation, conservative candidates including CA-49 challenger Christopher Rodriguez called it the “root cause” of the “cost of living spike we are seeing right now.” And Nick Taurus, a far right candidate challenging Kim in CA-40, said he’d tackle inflation by pushing to “abolish the Federal Reserve” altogether.
How might inflation affect the midterms?
Most economists seem to think inflation has peaked. With the Federal Reserve raising interest rates, Sfeir said prices could dip slightly before the June 7 primary. By November, we might see inflation drop by as much as 2 percentage points.
But a rate of 6% is still well above the 2% rate generally considered healthy for an economy. And that doesn’t bode well for Democrats in the midterms, with Mike Berg, spokesman for the National Republican Congressional Committee, predicting voters will hold the party responsible for the “high prices consumers are paying.”
But Mike Madrid, a former political director for the California GOP who split with the party over Trump, argues that inflation will have less of an impact in Orange County’s most competitive congressional races. That’s because CA-40, CA-45 and CA-47 all are more affluent areas, where Madrid argues voters will be more motiviated by issues such as efforts to unwind federal protections to abortion access.
“These are people where a woman’s right to choose is far more motivating than paying another 40 cents a gallon for gas,” he said.
Elections officials started mailing ballots to all registered voters May 9. Visit OCVote.gov to learn more.
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