Inflation, gas prices spur political fight in KC and US

“MKT” — for market price — used to be a label reserved on restaurant menus for the most-expensive dishes, like fresh lobster and choice-cut steaks.

But Bill Teel, executive director of the Greater KC Restaurant Association, said he’s noticing the three-letter phrase more often at establishments across the metro. It’s a consequence, he said, of higher and unstable prices.

“Every expense area has had increases in prices, which flows through to the bottom line,” Teel said.

Inflation is becoming a more dominant concern in Kansas City and nationally, as the United States’ economic recovery out of the pandemic downturn is now paired with rapidly increasing costs for gasoline, food and other goods. On Friday, the U.S. Labor Department reported inflation surged 8.6% in May from 12 months earlier – the biggest yearly increase since 1981. Food prices experienced a 10.1% year-over-year increase, while gas prices have risen 50% over the past year.

It’s also becoming a potent political issue.

Facing a tough re-election race, Democratic Rep. Sharice Davids has made addressing inflation and prices a regular part of her messaging. Davids is seeking her term in Kansas’ 3rd Congressional District, which encompasses most of the Kansas side of the Kansas City metro. Republican state legislators redrew Davids’ district this year, adding swaths of conservative-leaning rural areas to what was already the most competitive district in the region.

On Thursday, Davids touted an IRS decision to increase the size of gas mileage tax deduction for small business owners. The decision came after Davids and Arizona Democratic Rep. Ruben Gallego asked the agency in May to take the step. Davids is also helping negotiate, along with Kansas Republican Sen. Jerry Moran, supply chain and manufacturing legislation that she says is aimed at reducing inflation.

Davids is a member of the New Democrat Coalition, a centrist pro-business, fiscally moderate group, which on Wednesday released a plan to fight inflation that includes reducing tariffs, continuing to release oil from the Strategic Petroleum Reserves and more resources for affordable housing, among other measures.

“Rising costs are hurting Kansans, which is why I’ve been pushing for immediate relief through suspending the federal gas tax and long term fixes like the bipartisan supply chain legislation I’m helping negotiate,” Davids said in a statement.

“Today’s data shows the lingering effects of the pandemic are pushing up prices, making it even more urgent that both parties come together to pass the concrete solutions I’ve been leading: investing in domestic chip manufacturing, fixing our supply chains, and making more here at home.”

Davids’ anticipated Republican opponent is Amanda Adkins, a Johnson County businesswoman and past chair of the Kansas Republican Party. Adkins ran against Davids in 2020 and lost by a little over 10 percentage points, but has been repeatedly attacking Davids over rising prices.

That has included an effort to tie Davids to President Joe Biden on the issue of energy specifically. Biden’s May job approval rating was 41%, according to Gallup.

“Inflation has reached a 40 year high of 8.6% due to Joe Biden and Sharice Davids’ reckless spending. The American Rescue Plan alone was a $1.9 trillion federal spend, and it’s no coincidence we’re seeing record inflation just over a year later,” Adkins said in a statement, referring to the pandemic relief bill Biden signed into law in March 2021.

Adkins, a former Cerner executive, said Democrats were warned by Democratic economists such as Steven Rattner, who served in the Obama administration, that their policies would spur inflation. The most important and most effective action Congress should take to help Kansans suffering financially is to stop “reckless spending,” she said. Adkins also called on Congress to increase American energy independence .

Politically, it’s unclear how inflation will ultimately affect this year’s elections, said Bob Beatty, a political science professor at Washburn University in Topeka. That’s because inflation hasn’t been a significant issue since the presidency of Jimmy Carter, a Democrat who served one term after losing re-election, in the late 1970s and early 1980s.

Some candidates have tried to capitalize on high gas prices in the past, however. Beatty said in 2006 Kansas Republican Jim Ryun ran for re-election and released an ad blaming “liberals in Washington” for high prices even though Republicans controlled Congress and the White House. The ad showed a “tone-deaf campaign” and Democrat Nancy Boyda defeated Ryun that year as Democrats won the House in a wave.

“Obviously it will be important for Davids that she not make Ryun’s mistake and blame Republicans for inflation when the Dems have control of the government right now,” Beatty said in an email. “She’ll need to offer solutions without casting partisan blame on this issue given the GOP tilt in her district.”

Biden’s response to inflation

Biden on Friday sought to place much of the blame, especially for rising gas prices, on Russian President Vladimir Putin’s invasion of Ukraine.

“Prices at the pump are a major part of inflation, and the war in Ukraine is a major cause of that,” Biden said in a statement.

The United States is on track to produce a record amount of oil next year, he said, adding that the White House is working to accelerate output.

“We all have work to do to get inflation down. What will not help is the plan by some Republicans in Congress to raise taxes on the middle class and working families. That would be a step in the wrong direction, and I strongly oppose it,” Biden said.

He was referring to a plan put forward by Florida Republican Sen. Rick Scott that would have required low-income Americans to pay some federal income tax. Scott, the National Republican Senatorial Committee chair, publicly backed away from the idea on Thursday.

For all the fighting over inflation, the power of Congress or the White House to quickly and dramatically reduce inflation is likely limited.

The most powerful tool the United States has to control inflation is interest rates, which are set by the Federal Reserve. Friday’s inflation report will place additional pressure on the central bank to continue raising rates.

“The only one with the really strong lever is the Fed and they can raise the interest rates to the point where businesses stop investing and consumers stop buying homes or buying cars,” said Frank Lenk, director of research services at the Mid-America Regional Council. “And when that happens, it’s easy to overshoot and have the economy go into recession.”

Lenk said that while he isn’t currently forecasting that will happen, “it’s a risk and the Fed knows it’s a risk.”

Teel said exactly how to bring down inflation is probably “above my pay grade.” But he said wants to see definitive action and not excuses.

“’Well, it’s not our fault because of Putin or because of whatever’ – I get that,” Teel said. “But we need some positive steps taken, not just excuses.”

The Associated Press contributed reporting

Jonathan Shorman is The Kansas City Star’s lead political reporter, covering Kansas and Missouri politics and government. He previously covered the Kansas Statehouse for The Star and Wichita Eagle. He holds a journalism degree from The University of Kansas.