Diary

GOP Leaders Capitulate on Price Controls

Rep. Ted Budd (R-NC) knows the retail business. He owns a thriving gun store in Rural Hall, North Carolina, a small town of about 3,000 on the outskirts of Winston-Salem. Unlike most politicians, Budd, who conquered a field of 17 primary candidates to win his first elected office last year, has actually operated a business.

So you can imagine his surprise when he recently learned the National Retail Federation (NRF), which claims to represent the interests of store owners, would be running radio ads in his district targeting him.
The NRF is trying to make an example of Budd because he’s holding fast to the principles he campaigned on, refusing to support the group’s push for Venezuela-style price controls on the payment processing fees stores pay to the credit card companies.

“As someone who was a retailer before being elected to Congress, I understand that the only party supporting the free market principles, tax cuts, and limited government necessary for our economy to thrive is the Republican Party,” Budd said in a letter penned in response to the ads. “That is why I ran as a Republican.”

Budd’s actions in response to a well-funded bullying campaign by the NRF are a profile in courage, but it’s too bad the same can’t be said about GOP leadership, which folded like a house of cards in the face of the NRF’s lobbying blitz.

Rather than stand up for free markets, GOP leadership capitulated, amending a Dodd-Frank reform bill scheduled to come to the House floor this week to keep the price controls in place.

As a conservative, I guess you could say I’m used to politicians who promise one thing to get elected and then do something else when they get to Washington. Still, this is a particularly egregious case, for several reasons.

First, the specific price controls in question are just the absolute worst type of rent-seeking crony capitalism dressed up with embarrassingly thin excuses. Democratic Sen. Dick Durbin (D-IL), a true Chicago school machine politician, cooked up this idea in 2010 and got it into Dodd-Frank in 2010 when Democrats were at the height of their power in the Obama years.

Since then the policy has basically taken around $10 billion from one group of people and given it to another, more politically-connected group of people with no economic justification.

Think about it: we are in the middle of a “fintech” revolution that is as innovative as it is disruptive. Five years from now you might pay for things with Venmo, Bitcoin, your phone number, or something you don’t even know about yet. The idea the government has to step in to referee the prices for handling store payments is just ridiculous.

Second, the GOP’s capitulation isn’t coming in the face of Democratic opposition – it’s coming in the face of Republican opposition. The Dodd-Frank bill was always going to be relatively difficult to pass in the face of Democratic opposition, meaning the initial House GOP bill is likely to be the “high-water mark” as far as conservative priorities are concerned.

How pathetic is it that Republicans killed this free market reform, betraying the principles they’ve campaigned on literally for generations.

Third, GOP leadership is showing no fight whatsoever as they march toward voting to uphold price controls in betrayal of their principles.
The liberal Republicans who did in the reform provision have been careful to stay in the shadows. Personally, I’d like to know who is on which side in this fight. Why not a vote on these price controls themselves? It would be clarifying.

Instead, leadership is surrendering without a fight, quietly and passively affirming the left-wing vision of Durbin and Democratic lobbyists enacted when Democrats ran Washington.

What a shame.