MARY LOUISE KELLY, HOST:
Among the things this week's midterms made extremely clear, voters are fed up with high prices - prices on gas, on food, healthcare, housing.
(SOUNDBITE OF ARCHIVED NPR CONTENT)
CHUCK LOCKHART: It's requiring me to make sometimes some difficult choices.
JENNIFER BROWNING: Sometimes I have to decide between paying a bill, like the power bill, or buying groceries.
ALEX GARCIA: It feels like we're running in a marathon, and no matter how hard you work, you can't ever get to the finish line.
KELLY: That was Chuck Lockhart, Jennifer Browning and Alex Garcia, speaking with NPR earlier this year. Well, Democrats leaned into that frustration. They promised to fix the affordability crisis. Will they be able to deliver on that promise?
GARCIA: I'm so disillusioned that I don't want to make the mistake of being too excited for change, 'cause it's just - it's sad when it doesn't happen.
KELLY: To figure out what the new Congress could do to try to help bring prices down, we have called economist Martha Gimbel. She is executive director of the Yale Budget Lab and served as a senior adviser in the Council of Economic Advisers under the Biden administration. Welcome back to ALL THINGS CONSIDERED.
MARTHA GIMBEL: Thank you so much for having me.
KELLY: Let me invite you to join me on my time travel ship. We are now in January. It's day one. Democrats control the House. They control the Senate. They have control. They do not have a magic wand. Where might they start?
GIMBEL: I think the point about a magic wand is really important here because I do think addressing a lot of these affordability concerns is going to be much harder than many people are hoping. You know, if you think about what causes prices, we can go back to Econ 101, the demand curve and the supply curve. You can affect demand. No one likes that, right? I want to demand as much stuff as I demanded a year ago. And so you have to bring up supply, and bringing up supply takes time. It is not the case that you can simply flip a switch tomorrow and have 10% more houses than you had the day before. And so unfortunately for the Democrats, overall, I think it is going to take some time, even in the best of circumstances, to address a lot of the underlying issues that are causing problems here.
KELLY: So no matter what their first move in the new Congress, it's going to be a little while, just to set expectations. It's going to be a little while before people's wallets start feeling a little fatter.
GIMBEL: Yeah. I mean, it does speak to the fact that there is some pressure on Congress to act sooner rather than later because anything they do manage to get done and get the president to sign is going to take some time to come into effect. And so if they wait until 2028 to do anything, then voters probably won't see the effects of that before they go to the polls again.
KELLY: So circle back to where do they start. Where should they start?
GIMBEL: So, I mean, I think the things that will make the biggest difference in the short run are actually things that have been done via executive action, so the Iran war and the tariffs. The Iran war has played a huge role in driving up costs for American families. And so I think there's going to be a question for the Congress of how quickly they can and want to move on trying to fight the president on those executive authorities and see if they can rein those in.
KELLY: Starting there, with things like reining in some of the foreign policy moves, the war in Iran, the tariffs, they're still going to have President Trump in the White House. So realistically, what are your expectations?
GIMBEL: You know, I think people shouldn't be too defeatist here. We had a bipartisan housing bill that passed in this Congress, which was not a Congress with a lot of good feeling between many Democrats and Republicans. There's a bipartisan permitting bill on the table that would make it easier to, you know, build energy infrastructure in this country, which would bring down energy prices. And so, you know, I think sometimes people get too depressed about the possibility of bipartisan action on the Hill. But actually, even now, there is appetite for that, and so we'll just have to see what they come up with.
KELLY: What about healthcare? What can Congress do there?
GIMBEL: Healthcare is a big one. You know, Obamacare premiums are set to spike next year. We also haven't seen the Medicaid cuts from the One Big Beautiful Bill Act take effect yet. And so healthcare is probably going to be a huge source of strain for households next year. It's also one where the government does have a role to play, right? It plays a relatively big role in healthcare markets, both through directly providing health insurance and through subsidizing some forms of private insurance. Republicans have taken action to make healthcare more expensive by, you know, driving up the Obamacare premiums and taking Medicaid away from people. So we will have to see if that's a place where they want to backtrack.
KELLY: Are you hopeful this Congress will be able to lower the cost of living in the U.S.?
GIMBEL: Well, I'm an American citizen, so I'm always optimistic, but I'm an economist, so I'm always pessimistic.
KELLY: (Laughter).
GIMBEL: So some combination of those two.
KELLY: You're at war with yourself at all times.
GIMBEL: Exactly.
KELLY: So bottom line, you know, I am an American. I would love to pay less money for my gas, for my eggs, for my mortgage. Should I be hopeful that that is coming at some point in the not terribly, terribly distant future?
GIMBEL: I think the thing to really be watching is what the administration's language and posture is on the Iran war, because that is the thing where if something changes, we'll have the most and fastest impact on prices.
KELLY: All right. Martha Gimbel, economist and executive director of the Yale Budget Lab. Thank you.
GIMBEL: Thank you for having me. Transcript provided by NPR, Copyright NPR.
NPR transcripts are created on a rush deadline by an NPR contractor. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.
