Trump ordered the U.S. government to lower prices for Americans. Can he deliver?
President Trump vowed during his campaign to end “Inflation nightmareOn Monday, he signed an executive order requiring “all executive departments and agencies to provide emergency price relief to Americans,” signaling his concern about the high cost of living in the United States.
Mr. Trump’s January 20 Order Trump has blamed a surge in pandemic-era inflation on multiple factors that have left many households feeling the pinch, including high federal spending and the cost of new regulations under the Biden administration.
“It is critical to restore the purchasing power of American families and improve our quality of life,” the executive order states.
To achieve that goal, Mr. Trump ordered executive branch departments and agencies, including the Departments of Commerce, Health and Human Services, Labor and Energy, to take action to lower prices on everything from housing and health care. Food and fuel.
Given the consistent attitude of American voters last fall, Trump’s mandate carries a lot of weight Ranking The economy and inflation are their top concerns. But some economists say it’s uncertain whether Trump’s order will provide a meaningful boost to inflation.
“Trump’s cost-of-living order fails to address the root causes of inflation, which are corporate profiteering and broken supply chains,” said Lindsey Owens, executive director of the Foundation Partnership, a progressive economic think tank. “This order is just a talking point, Rather than a plan.”
recent economic Research Former Federal Reserve Chairman Ben Bernanke and others have found that price spikes in 2021 and 2022 stem from factors such as supply chain disruptions and higher commodity prices that any president, including Trump, would struggle to solved. to control.
The Trump administration did not immediately respond to a request for comment.
Meanwhile, inflation has cooled sharply since reaching a 40-year high in June 2022, although the Consumer Price Index Still stubbornly aloof The Fed’s annual interest rate target is 2%. A December report from Bankrate found that while prices are rising at a slower pace, more than 4 in 10 Americans are pessimistic about their economic prospects next year due to the lingering impact of inflation. opinion poll.
Mr. Trump’s plan: Deregulation, cheaper housing and more
Trump’s order targeting prices highlights several areas for federal attention, including reducing the number of federal regulations that Trump administration officials say drive up the cost of living for American families.
“All told, the Biden administration’s unprecedented regulatory crackdown is estimated to have cost the average American family nearly $50,000,” the order said.
That refers to an analysis by University of Chicago economist Casey Mulligan, who Research The Biden administration’s rules could result in additional costs totaling about $47,000 per household over time, the study found. Fuel emissions rules from the Obama and Biden administrations are also expected to add $6,000 to the cost of each vehicle, Mulligan estimated.
But Owens said eliminating federal regulations that protect workers and consumers won’t lower the cost of living. Americans have been grappling with cost-of-living issues for decades, from soaring health care costs to rising home prices—trends rooted in structural issues such as Shortage of available housing and the nation’s complex for-profit health care system.
To be sure, Mr. Trump acknowledged some of these problems in his order, requiring federal agencies to “reduce housing costs and expand housing supply” and “eliminate unnecessary administrative expenses and rent-seeking practices that increase health care costs.” “.
While these are ambitious goals, tackling housing costs is notoriously difficult because new construction is often restricted by state and local laws, ranging from zoning restrictions to environmental regulations — issues on which the federal government is unlikely to have a hand. Too much influence.
Lowering health care costs could help American families spend more money Spends more on health care than any other developed country. Yet Mr. Trump also signed a executive order Undo the Biden Administration on January 20 Efforts to reduce prescription costswhich seemed inconsistent with his cost-of-living directive.
Separately, Mr. Trump signed a separate executive order on January 20 announcing that national energy emergencyIt’s part of his government’s plan to boost domestic energy production and reduce costs.
“The inflationary crisis is caused by massive overspending and rising energy prices,” Trump said on Monday. “That’s why today I’m also declaring a national energy emergency. We’re going to have a drill, baby, a drill.”
Mr. Trump may have something compelling to do, and he has a recipe for lowering prices. only about Two out of 10 Americans They are “very” or “extremely” confident Trump will be able to make progress this year on lowering the cost of groceries, housing or health care, according to one report. opinion poll From The Associated Press-NORC Center for Public Affairs Research. About 2 in 10 people have “moderate” confidence.
in a interview Mr Trump, named Time magazine’s 2024 Person of the Year, acknowledged that lowering food costs will be a difficult challenge.
“I want to knock them down. It’s hard to knock them down once things get up. You know, it’s very difficult. But I think they will,” he said.
