Let the Affordability Bidding War Begin

Donald Trump won reelection in 2024 by vowing to overturn the established order in Washington with bold policies—including huge tariffs and mass deportations of illegal immigrants—that would improve the economic circumstances of America’s hard-pressed majority. A year into his second term, his record is mixed at best. He’s done what he said he would on tariffs and immigration, and the cost of eggs and gasoline are down. But he’s otherwise failed to deliver on his oft-repeated campaign promise to “bring prices down.” Inflation remains elevated. Prices for most groceries as well as for utilities, health care, and durable goods like appliances are soaring. Manufacturing jobs are down and unemployment is up. Trump’s poll numbers on the economy are underwater by double digits, and a sizable portion of his own voters think he and the GOP are failing to deliver economic relief.

Democrats, meanwhile, swept off-year elections last November by running on “affordability” issues of the kind this magazine has long championed. Mikie Sherrill won the governor’s race in New Jersey with a plan to freeze electricity rates and prosecute price gouging by food companies. Abigail Spanberger did the same in Virginia by promising to make data centers “pay their own way” and to target pharmacy benefit managers, the middlemen who inflate prescription drug costs. In New York City, Zohran Mamdani earned the keys to Gracie Mansion by pledging to make buses free and build publicly run grocery stores. And just this week, Democrat Taylor Rehmet, running on a populist agenda, won a Texas State Senate seat by 14 points in a district Trump carried by 17 points in 2024. 

Trump has responded to these losses with a version of what lawyers call “arguing in the alternative.” The economy, he insists, has never been better; “affordability” is a “Democratic hoax”; and he, Donald Trump, has the best ideas to fix the affordability problem. Among the new policies he’s recently floated (with little detail) are capping credit card interest rates at 10 percent, lowering home prices by banning institutional investors from buying up large quantities of single-family residences, and reducing health care costs by sending federal subsidies directly to eligible Americans rather than to insurance companies. He’ll presumably offer more ideas in his upcoming State of the Union address.

What we now have, in other words, is a bidding war between the two parties, each trying to outdo the other with proposals to deliver a more affordable economy. That’s a good thing; it’s how democracy should work.

But it also poses a trap for Democrats. If they cooperate with Trump, they risk salvaging his reputation and weakening their midterm prospects, since presidential popularity strongly correlates with success for the president’s party. If, however, they resist his ideas, they risk angering voters who want to see Washington do something to ease the economic pain they have been suffering for years.

Democrats can avoid this trap in three ways.

First, they should reject out of hand ideas that won’t work and that voters will increasingly dislike as the details emerge. For instance, Trump’s proposal to divert health care subsidies to individuals will likely leave more Americans without insurance or with poorer-quality coverage.

Second, Democrats should embrace Trump’s worthy ideas with all deliberate (as in “unhurried”) speed. Complaints by big banks and libertarian editorial boards notwithstanding, there’s a case to be made for capping credit card rates—indeed, it was Joe Biden’s administration that raised the idea. But the second- and third-order effects could be bad—a loss of credit for the working poor, for instance—and the details need to be thought through. If that requires Democrats to withhold support for legislation that would allow federal regulators to cap interest rates until after the midterms, well, them’s the breaks.

Third, and most importantly, Democrats must recognize that when you have the stronger hand in a bidding war—as Democrats do, being the opposition—the smart move is to see the other party’s bet and raise it.

Consider electricity. In January Trump joined governors of 13 mid-Atlantic and midwestern states—including Josh Shapiro of Pennsylvania and Wes Moore of Maryland, both possible 2028 Democratic presidential hopefuls—to support a plan that would force tech companies to pay their share of electricity costs for data centers. That’s a good first step. But it’s likely to bring only modest relief to ratepayers in those states, and none to the rest of the country.

What’s needed, as the Washington Monthly argued last year, is a new federal agency modeled after the Tennessee Valley Authority to construct and manage low-cost renewable power generation and transmission lines, which investor-owned utilities refuse to do because they want to protect the profits from their fossil fuel–based plants. Democratic officials and voters, being pro–federal government and pro–renewable energy, could rally around such a plan. It’s hard to imagine most Republicans doing the same, even if the idea proved broadly popular. Democrats would therefore go into the 2026 and 2028 elections with a stronger message on a crucial voter concern.

The new issue of the Washington Monthly offers three additional ideas that address voters’ biggest affordability worries. One is to bring down grocery prices by enforcing the Robinson-Patman Act—a Depression-era law that prohibits large corporations from using their market power to charge different prices for the same goods. For half a century, Robinson-Patman kept a lid on grocery price gouging even as it allowed the spread of bigger, more convenient supermarkets. Federal regulators, however, stopped enforcing the law beginning in the late 1970s as deregulatory thinking took hold.

Biden’s FTC chair Lina Khan revived the statute and sued the food behemoth PepsiCo for violating it. Trump’s second-term FTC abandoned that suit last May, but as Kainoa Lowman reports, Khan had a hell of a case. Recently unredacted documents from the suit reveal that PepsiCo secretly worked with Walmart, its biggest customer and the nation’s largest grocer, not only to give the behemoth retailer discounts unavailable to other chains but to jack up those competitors’ prices.

After the GOP’s November election shellacking, Trump ordered the FTC and other agencies to investigate “price-fixing and anticompetitive conduct across the U.S. food supply chain.” Whether that means enforcing Robinson-Patman or is merely a threat to extort corporate tribute—as Trump’s antitrust policy generally has been—remains to be seen. What is clear is that by deep-sixing the PepsiCo case the Trump administration robbed itself of the best tool it had to crack down on grocery price gouging before the midterms. Between now and then, Democrats would be wise to demand that Robinson-Patman be enforced, and the law itself strengthened, as New Jersey Senator Cory Booker and others have proposed.

Another policy that Democrats should advocate to lower grocery prices—one that would make Republicans spit out their coffee—is to create a national chain of publicly owned supermarkets. Municipally owned food markets like those Mamdani proposes have a poor track record. By contrast, the U.S. military has been successfully operating a vast network of grocery stores, called commissaries, since 1867. These use the federal government’s buying power to provide service members and their families with sharply discounted food.

A civilian equivalent, argues Claire Kelloway, could “inject more competition into the broader grocery market and bring down food prices for all Americans in the long term, which is what hard-pressed voters desperately need and say they want in every poll.”

A third cause Democrats should champion is lowering the cost of employer-provided health insurance. For months, congressional Democrats have been laser focused on a different issue: extending Obamacare tax credits, which the GOP failed to include in last year’s tax bill. That’s given Dems some political traction, and Republicans are worried enough to be engaged in ongoing bipartisan talks on the subject. But the truth is, the credits are a niche concern for most voters. Only 5 percent of working-age Americans get their health coverage from Obamacare. On the other hand, 70 percent are insured through their employers. And those costs are rising 6.7 percent this year, on top of a 6 percent rise in 2025, primarily due to growing monopolization in the health care sector. Employees are increasingly feeling those cost increases in the form of ever-higher premiums, deductibles, and co-pays.

In our new issue, the veteran health care journalist Merrill Goozner offers a plan to address this mounting burden. It builds on Maryland’s successful experiment in setting limits on what hospitals, doctors, and other health care providers can charge. If implemented nationally, Goozner argues, such a system would control long-term costs and deliver immediate relief of $1,500 to $4,000 to the typical working American family.

These new ideas share common attributes. They address voters’ immediate affordability worries but also the long-term structural causes that underpin them. They are bolder than what moderate Democrats have typically espoused—though moderates’ appetite for boldness seems to be growing. But because they are grounded in successful American precedents, they are likely to be more politically salable, and to work better in practice, than much of what the Democratic left has hitherto championed—though there is a growing taste for pragmatism on the left, too. Indeed, these ideas can unite the center and left because they involve the classic Progressive Era/New Deal governing approach of using federal tools—including new government agencies—to make markets work better for ordinary people.

The contrast to the current administration couldn’t be starker. Trump has been very effective at dismantling agencies and programs, but he’s barely tried to create anything that will outlast his presidency, as Bill Scher writes in this issue. He lacks the patience to move complex policies through Congress and has therefore achieved fewer legislative wins in his first year than any modern president despite GOP control of both houses. Instead, he’s issued a gusher of executive orders, many of which have been blocked by the courts, and the rest of which are likely to be overturned if a Democrat wins the White House in 2028.

Still, Trump is an ideological chameleon who cares most of all about winning. He sees that Democrats have popular affordability policies and wants to claim some as his own. You see that most clearly in his weird budding bromance with Mamdani, with whom he now texts regularly. “Some of his ideas are really the same ideas that I have,” he gushed when the mayor-elect visited the Oval Office in November.

Now is the time for Democrats to raise the stakes, by championing significantly bolder affordability ideas for their candidates to run on in the midterms—a new TVA to bring down electricity rates, new civilian commissaries and price-gouging laws to bring down grocery costs, and price controls on monopoly hospitals to bring down health care costs. If those ideas prove popular with voters (as I suspect they will) and Democrats take back at least one house of Congress (as I also suspect will happen), it’s not unimaginable that Trump will glom onto them, too. If he does, then the last two years of his second term might yield bipartisan legislation that improves the lives of average Americans. If he doesn’t, then going into the 2028 elections voters will have a clear choice of which party is on their side.

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