- Mark Zandi says newly elected Democrats have tools to address the affordability crisis.
- The Moody's Analytics economist doesn't anticipate relief immediately.
- But, Zandi sees a path to end the Iran war and reverse spending cuts to things like Medicaid.
There's an all-important question hovering over Democrats' sweeping midterm election victories: what can they actually do to address the affordability crisis that caused Americans to turn on the GOP?
According to Mark Zandi, the chief economist at Moody's Analytics, the options are few, but Democrats do have tools they can use to ease some of the forces putting upward pressure on prices when they get into power in Washington next year.
"The new Congress has some levers," he wrote in an X post on Sunday. "Expect Democrats to use hearings, oversight, and a war powers resolution vote to build pressure to end the war in Iran, which we estimate has cost the typical household $2,200 so far."
First, Zandi flagged the cost of the Iran war on US households throughout this year as the war has dragged on. The figure has steadily risen as oil prices have crept up, pushing up costs for US households and businesses.
After last week's election, Zandi sees the possibility that war ends soon. though he acknowledged that most of the necessary legislative changes would require Donald Trump to be on board.
The second way for Democrats to address affordability is largely dependent on what the current Congress does between now and January, when newly elected members are sworn in.
"If Republicans can pass a budget and raise the Treasury debt limit on their own through reconciliation, Democrats will have less leverage," Zandi added. "But if they fall short, the President will need Democratic votes, and Democrats could use that clout to restore enhanced Affordable Care Act subsidies and reverse cuts to SNAP and Medicaid."
Zandi said it would be a long shot for Republicans to achieve both of those things before January, giving Democrats an opening to pursue their own agenda when the new Congress convenes in the new year.
Voters delivered resounding victories for Democrats in the midterms, driven partially by negative views of the economy and affordability during Donald Trump's second term. Zandi said that incoming lawmakers will have opportunities early on to deliver on campaign promises of bringing down the cost of living.
"Given the Rs' paper-thin House majority, and just how demoralizing the midterm results were for them, odds are reasonably good that they will fall short," he said. "The Ds would then be able to make some progress on addressing the nation's affordability crisis."
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