Today, in “Democrats Promised to Fix the Economy. What Can They Really Do?” (WSJ), Grossman, Whalen and Bade argue that Democrats can do very little to lower the cost of living.
Whether they can [make the economy work] isn’t assured, despite the party’s pending control of the House and Senate. Many demands are beyond the reach of lawmakers to fix. The main tools of Congress, taxes and spending, are limited and slow-moving—and lawmakers still face Trump’s veto.
The new majority may struggle to stop the war in Iran, which has driven up energy prices in the months since President Trump’s decision to attack. Gasoline prices, largely set by global energy markets, could remain high even if the war ends.
In the Senate, Democrats are teeing up votes to repeal Trump’s tariffs on Canada, part of his global trade war that has contributed to rising prices. Yet they acknowledge that stricter limits to presidential tariff authority—which Trump has taken to its limits worldwide—could be vetoed and would likely have to wait for another administration.
I’ll just make one observations, based upon the top item on my list of cost of living reduction measures :
The effective tariff rate is now down from the highs of the past, in part through the failure of subsequently implemented measures to make up for the “reciprocal tariffs” implemented in 2025. Further backsliding (despite the 301 cases wending their way through).
Source: Pawel Skrzypczynski.
If Congress can pressure the administration on this widely unpopular (and possibly legally contentious) policy program, one major price pressure will be mitigated (although some effects will linger, such as the hit to fertilizer prices hitting agriculture around the the world).
I’m less sanguine about Congressional pressure to mitigate the Administration’s anti-immigration program (conflicting signals from Trump, but talk is cheap), as well as coming to a resolution of passage through the Strait of Hormuz. But who knows.
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