The government now spends more on interest payments than on defense. That figure, tucked into POLITICO Magazine’s new collection of 26 ideas for solving the affordability crisis, sets the scene: a political class scrambling to lower Americans’ costs as the national balance sheet strains under old promises.
The collection argues that the 2026 election cycle marks the coming of age of an affordability-centered political era. The issue no longer looks like a lingering hangover from pandemic price shocks. It’s here to stay. The morning after Election Day last year, Donald Trump told Fox News, “You know they have this new word called affordability, and they don’t talk about it enough.” Critics mocked him, pointing out that dictionaries trace “affordable” to 1647. Google’s Ngram shows “affordability” appearing in books in 1973, 53 years ago, amid another oil crisis and wave of inflation.
The Deficit Problem
One proposal in the collection runs counter to the impulse to hand out money. Direct payments or tax cuts can put cash in people’s pockets, the article says, but in the current climate they can also drive up prices and federal debt, lifting interest rates and living costs. The 10-year Treasury rate shapes what lenders charge for mortgages and car loans. Borrowing costs have risen amid inflation and investors’ doubts that Congress will shrink the gap between revenue and spending.
There’s no painless fix. Balancing Social Security and Medicare taxes and benefits could make necessities less affordable. The choices, the article says, come down to what kind of economic pain to impose, how much of it and on whom.
Tariffs and Consumer Prices
The tariff section reads like a ledger of costs the administration has been forced to undo. Trump has exempted products from tariffs after Republican lawmakers and industries pushed back. Sens. Susan Collins of Maine and Jerry Moran of Kansas pressed for exemptions on road salt and cement to head off higher construction costs. Bulk whiskey and liquor imports got exemptions, protecting Canadian brands such as Crown Royal. An analysis by the center-right American Action Forum found the share of U.S. imports exempted from Trump’s tariffs rose from about 30% under the original “Liberation Day” duties to roughly two-thirds under tariffs imposed in July over forced-labor concerns.
The exemptions keep piling up: farm equipment and home air conditioners in June, Moroccan fertilizer that the Agriculture Department said would cut farmers’ costs by about 22%, and more than 470 products, including coffee, cocoa and planting seeds, before the July tariffs took effect. Ground beef hit record highs this summer. In August, the administration temporarily lifted tariffs on 300,000 metric tons of imports. Italian pasta makers faced proposed duties near 92%, but the final penalty landed in the single digits.
Luxury buyers haven’t escaped. Swiss watch brands raised prices by at least 5% at the start of 2026, according to WatchPro. Charles Curtis of WineAlpha said, “Rich people are still drinking great wine,” while consumers in the middle “are getting priced out of the market.” Richemont CEO Johann Rupert blamed a different culprit for jewelry: gold prices, which hit the company “more than the tariffs.”
Charity Fills the Gap
Rep. Blake Moore, a Utah Republican who launched the first Congressional Philanthropy Caucus, put it bluntly: “There is a gap with what the government can do. Our welfare programs are not going to solve everything. They never will.” A shutdown last year cut off SNAP benefits to millions, and food bank lines stretched around blocks. Claire Neal of MANNA FoodBank in western North Carolina said, “We’re seeing lots of folks who have never struggled before.” The One Big Beautiful Bill extended a charity-specific deduction for taxpayers and corporations. Moore said it could encourage donations, though nonprofits worry.
Government-Run Alternatives, and Their Price Tags
Seattle funds its social housing model with a 5% tax on employers who pay individual workers more than $1 million annually. Its Elara building, acquired this year, charges $665 for a low-income studio and $3,767 for a market-rate two-bedroom. Denmark’s plan to eliminate sales tax on produce and halve it on other foods costs $2.7 billion a year. The International Monetary Fund called it “poorly targeted,” and the tax ministry said only 70% of Germany’s food-tax cut reached shoppers. France’s €1 student meals are projected to cost taxpayers €50 million this year and €120 million in 2027. California’s CalRx, six years in the making, has moved slowly: insulin took longer than expected to reach shelves, and USC’s Geoffrey Joyce said “only a small part of the market will benefit.”
Regulators Under Pressure
Utility bills are drawing political fire. Electric and gas utilities requested $18.6 billion in rate increases through the second quarter. Indiana Gov. Mike Braun fired an official he’d appointed as chair after commissioners approved a $71 million increase. Jay Griffin of the Regulatory Assistance Project warned that governors’ campaign pledges could limit independent commissions: “If you’re a commissioner, that’s not very helpful.”
Who Gets the Blame
The POLITICO Poll found 43% of Americans blame Trump more than Biden for the economy, while 28% blame Biden more. “The window for being able to pass blame is very, very small,” said Republican strategist Kevin Madden. The article says tariffs and the war in Iran have made current concerns worse.
Why This Matters:
Affordability politics draws officials toward quick, visible fixes, but the facts in this collection expose the tradeoffs. Tariff exemptions are piling up as the administration backs away from the price effects of its own policy. Deficit-financed relief can raise the very borrowing costs squeezing households, and interest payments already exceed defense spending. Price caps, state-run programs and new subsidies bring real taxpayer costs and uneven results. Voters will judge results in November, and the lesson may be that lasting affordability comes from growth, competition and restrained spending, not the next round of government intervention.
- affordability
- donald trump
- tariffs
- consumer prices
- housing
- health care
- federal deficits
- student loans