It's a political problem as complex as any in the modern era: inflation.
This week, President Donald Trump may have made the problem even more difficult for himself and his Republican Party as they prepare for midterm congressional elections next fall.
Nearly 11 months into his second term, President Trump began the week by giving the economy a perfect score: “More-more-more-more-more.”
Why did we write this
With economic leadership's approval ratings falling in polls, President Trump has sought to downplay voters' concerns about affordability. The same problem that baffled Joe Biden is now plaguing Trump.
Then, in a speech Tuesday in rural Pennsylvania billed as the launch of an “affordability tour” aimed at convincing voters on the economy, Mr. Trump ridiculed the idea of affordability.
After a few moments, he changed his mind.
“I can't say that affordability is a lie,” the president said in a packed ballroom at a casino resort in Mount Pocono, Pennsylvania.
In real time, Mr. Trump is playing out the classic conundrum of a president-elect seeking to avert the fate of many of his predecessors: a midterm election defeat that severely limits his ability to push his agenda through Congress.
For now, the president is trying to convince voters that their economic situation is not so bad, even if they are struggling to make ends meet. Despite optimism based on lower interest rates and a strong stock market, inflation remains difficult to curb. It continues to be relatively hot at 3% as of September, according to the agency. latest monthly report available from the Bureau of Labor Statistics. This is well above the Federal Reserve's target rate of 2%.
President Trump's challenge is to acknowledge reality while helping voters maintain hope.
Douglas Holtz-Eakin, president of the conservative think tank American Action Forum, says Trump needs to voice the reality voters face.
“It's ineffective to tell people they're wrong about how much they pay for things,” Mr. Holtz-Eakin says.
Falling indicators of economic leadership
Recent opinion polls have clearly demonstrated the problem facing Trump. AP-NORC Study The president's approval rating for economic leadership was just 31%, released Dec. 11, down from 40% in March. The December figure is his lowest economic approval rating in this poll in either his first or second term. RealClearPolitics poll average Likewise, the President is showing that the economy is in trouble.
Mr. Trump's overall job approval rating is now 36%, down from 42% in March, according to AP-NORC. Among Republicans, he remains relatively strong at 69%.
But the overall numbers reflect the president's challenge as voters weigh their personal circumstances against their voting preferences.
“Essentially, I think the problem is that voters are still [ticked] “Trump is frustrated by this fact because there is little he can do to sharply reduce them across the board,” says Ryan Bourne, an economist at the libertarian Cato Institute.
Mr Bourne adds that wages have risen faster than prices for most of this year, but “despite this, people are still angry”.
Another important factor that could influence voters' calculations is health care. The Senate on Thursday rejected proposals from both Republicans and Democrats to address health care subsidies set to expire at the end of the year with the Affordable Care Act, also known as Obamacare. With Congress recessed, this effectively guarantees that the more than 20 million Americans who receive health care through the Obamacare exchanges will see their premiums rise substantially on January 1st.
Managing Expectations
For Trump, his administration and the Republican Party, the challenge will be to live up to expectations. At his rally in Pennsylvania this week, the president gave a 90-minute speech that was classic Trump speech: part prepared remarks, part greatest hits of his campaign, part apparent stream of consciousness.
Whether this is effective messaging is an open question. MAGA believers are happy he is again holding rallies in the United States after a first year in office that was dominated by foreign travel and diplomatic ventures. But a president's favorability ratings depend heavily on the economy, fair or not, and Trump is now trying to convince voters he supports the cause.
Following his controversial statements at a rally in Pennsylvania, it was unclear how the president's “accessibility tour” would continue.
The White House announced Friday that Vice President J.D. Vance will visit Allentown, Pennsylvania, on Dec. 16 to “give a speech highlighting President Trump's economic success and the administration's commitment to lower prices and higher wages.”
The key is to motivate Trump supporters to turn out for the midterm elections next November, when Republicans are in serious danger of losing the House of Representatives. Taking back the Senate, while a more achievable goal for Democrats, is out of the question.
Additionally, Trump's second term focused on decorating the White House – build a grand ballroomgilding the Oval Office, turning the Rose Garden into a garden cafe – and communication with billionaires it may not help his image among the swing voters he will need to win over.
Message Management
The overall message to voters must be realistic, said Mr. Holtz-Eakin, a former director of the Congressional Budget Office.
“If I were on the economics team in this White House, I wouldn't talk about prices or inflation at all,” he says. “I would talk about overall policies in general to make sure that Americans get good jobs with rising wages so they can afford the things they value.”
Mr. Bourne, the Cato economist, sees opportunities for Democrats to take advantage of Mr. Trump's controversial statements on affordability, which in Pennsylvania included repeating his infamous comment that “my daughter doesn’t need 37 dolls. Two or three are quite good.”
Democrats can exploit the fact that “people are frustrated that Trump can't get price levels back to where they were in 2019,” Mr. Bourne says.
“For some people directly affected by the president's tariffs, whether households or businesses, it may feel like Trump has unnecessarily made things worse in some areas.”
