WASHINGTON — As Americans struggle with the affordability crisis, a panel of top Democratic‑aligned economists at the Center for American Progress on Tuesday debated whether price controls should be the centerpiece of an affordability agenda.
The think tank gathered the economists at a time when people want leaders who will address the affordability crisis because of “the underlying sense that things that are really important for middle class life, including health care, housing, child care, just the price of goods food, are just increasingly much more expensive and increasingly out of reach,” said Neera Tanden, President and CEO of the Center for American Progress.
The economists disagreed about whether price control would be an effective policy to address affordability concerns. In the panel, Neale Mahoney of Stanford and Bharat Ramamurti, formerly of the White House National Economic Council, said that carefully designed, time-limited price caps on essentials like rent, utilities and insulin could provide immediate relief.
“I see price controls as a bridge, not a destination. I don’t think we should be aspiring for a world where we’re using price controls all the time, but we have to accept the fact that we’re in a world where affordability is front of mind for people and creating real harm in their everyday lives,” said Mahoney.
On the other side, Tara Sinclair of George Washington University and Ben Harris of Brookings Institution countered that price controls risk repeating past mistakes by creating shortages, distorting price signals, hiding inflation and attacking the suppliers. They urged policymakers to instead build more housing and energy supply and expand income-based support such as extended child tax credit.
The child tax credit allows eligible taxpayers to reduce their federal income tax liability by up to $2,200 per qualifying child, which is indexed to inflation.
Harris emphasized that the credit was enormously effective at addressing affordability concerns for families, especially after the pandemic. “And you can design that much easier to go to exactly the people who need it most,” said Harris.
He also specified that such policies could be created in a revenue-neutral way so it doesn’t spark excess demand and could be implemented on any level of the government with a taxing authority.
Opposingly, Ramamurti pointed to the $35 Medicare insulin cap as proof that well-designed price controls on essentials can be both popular and effective.
“I think that often the choice is, should we do a pairing of a temporary price control with the supply side measure, or should we do nothing? Or should we just keep waiting and biding our time, letting the supply side issue worsen in the process to reach that perfect political moment?” he said.
He also pushed back on the idea that such measures always get extended, noting that they can be time-limited. Ramamurti cited Mexico’s post‑COVID experience, where aggressive caps on gas and groceries helped contain costs and contributed to the incumbent party’s reelection.
“And as somebody who’s sitting here living through the second Trump administration, I wish that we were a bit more open minded than the Biden administration about those types of aggressive maneuvers,” said Ramamurti.
However, Sinclair contended that the insulin price cap addressed a unique market failure and exemplified the benefit of highly specific, interventionist policies. She warned that using such a model as a blueprint for housing or electricity would be problematic, as general price controls fail to address the more complex, systemic issues inherent in those broader sectors.
“Nothing is not the other option here,” said Sinclair. “Those [alternatives] allow those demand signals, like the normal economic models of putting money in people’s hands, letting them spend it on what they want and where they want it.”