Kerby Anderson

Affordability may be a key issue in the midterm elections. President Trump’s State of the Union address and the Democratic rebuttal from Governor Abigail Spanberger illustrate the possible campaign themes.

The president reminded Americans that core inflation has been at its lowest level in more than five years. While that is true, the metric excludes food and energy because the prices of those goods tend to be more volatile. The Governor proclaimed, “Small businesses have suffered.” She concluded, “Everyday Americans are paying the price.”

Many prices are down; others are up. Gasoline prices have come down significantly. The average price of a new car hit a record high just a few months ago. The president stated that “the cost of chicken, butter, fruit . . . is lower today than when I took office.” On the other hand, the governor argued that the cost of groceries has risen.

Two actions by the president will affect affordability: gas production and tax breaks. American oil production is up substantially. Lowering the cost of oil and natural gas will lower the overall cost of many items.

Trump’s “Big Beautiful Bill” kept taxes lower for Americans and included no tax on tips, overtime, and Social Security. Many Americans should be pleasantly surprised by the size of the income tax refunds. There should also be a long-term benefit from the estimated $18 billion in new investments the president has secured.

Affordability may not turn out to be much of a blessing for Democratic candidates or much of a liability for Republican candidates. Some economists are predicting deflation later this year because of the AI boom. In that case, job loss might be a bigger issue for voters than affordability.