Trump Seeks to Convince Public on Costs11/07 06:24

   

   WASHINGTON (AP) -- President Donald Trump is adjusting his messaging 
strategy to win over voters who are worried about the cost of living with plans 
to emphasize new tax breaks and show progress on fighting inflation.

   The messaging is centered around affordability, and the push comes after 
inflation emerged as a major vulnerability for Trump and Republicans in 
Tuesday's elections, in which voters overwhelmingly said the economy was their 
biggest concern.

   Democrats took advantage of concerns about affordability to run up huge 
margins in the New Jersey and Virginia governor races, flipping what had been a 
strength for Trump in the 2024 presidential election into a vulnerability going 
into next year's midterm elections.

   White House officials and others familiar with their thinking requested 
anonymity to speak for this article in order to not get ahead of the 
president's actions. They stressed that affordability has always been a 
priority for Trump, but the president plans to talk about it more, as he did 
Thursday when he announced that Eli Lilly and Novo Nordisk would reduce the 
price of their anti-obesity drugs.

   "We are the ones that have done a great job on affordability, not the 
Democrats," Trump said at an event in the Oval Office to announce the deal. "We 
just lost an election, they said, based on affordability. It's a con job by the 
Democrats."

   The outlook for inflation is unclear

   As of now, the inflation outlook has worsened under Trump. Consumer prices 
in September increased at an annual rate of 3%, up from 2.3% in April, when the 
president first began to roll out substantial tariff hikes that suddenly 
burdened the economy with uncertainty. The AP Voter Poll showed the economy was 
the leading issue in Tuesday's elections in New Jersey, Virginia, New York City 
and California.

   Grocery prices continue to climb, and recently, electricity bills have 
emerged as a new worry. At the same time, the pace of job gains has slowed, 
plunging 23% from the pace a year ago.

   The White House maintains a list of talking points about the economy, noting 
that the stock market has hit record highs multiple times and that the 
president is attracting foreign investment. Trump has emphasized that gasoline 
prices are coming down, and maintained that gasoline is averaging $2 a gallon, 
but AAA reported Thursday that the national average was $3.08, about two cents 
lower than a year ago.

   "Americans are paying less for essentials like gas and eggs, and today the 
Administration inked yet another drug pricing deal to deliver unprecedented 
health care savings for everyday Americans," said White House spokesman Kush 
Desai.

   Trump gets briefed about the economy by Treasury Secretary Scott Bessent and 
other officials at least once a week and there are often daily discussions on 
tariffs, a senior White House official said, noting Trump is expected to do 
more domestic travel next year to make his case that he's fixing affordability.

   The White House is keeping up a steady drumbeat of posts on social media 
about prices and deals for Thanksgiving dinner staples at retailers like 
Walmart, Lidl, Aldi and Target.

   "Affordability is much better with the Republicans," Trump said Thursday 
night. "The only problem is the Republicans don't talk about it.

   But critics say it will be hard for Trump to turn around public perceptions 
on affordability.

   "He's in real trouble and I think it's bigger than just cost of living," 
said Lindsay Owens, executive director of Groundwork Collaborative, a liberal 
economic advocacy group.

   Owens noted that Trump has "lost his strength" as voters are increasingly 
doubtful about Trump's economic leadership compared to Democrats, adding that 
the president doesn't have the time to turn around public perceptions of him as 
he continues to pursue broad tariffs.

   New hype about income tax cuts ahead of April

   There will be new policies rolled out on affordability, a person familiar 
with the White House thinking said, declining to comment on what those would 
be. Trump on Thursday indicated there will be more deals coming on drug prices. 
Two other White House officials said messaging would change -- but not policy.

   A big part of the administration's response on affordability will be 
educating people ahead of tax season about the role of Trump's income tax cuts 
in any refunds they receive in April, the person familiar with planning said. 
Those cuts were part of the sprawling bill Republicans muscled through Congress 
in July.

   This individual stressed that the key challenge is bringing prices down 
while simultaneously having wages increase, so that people can feel and see any 
progress.

   There's also a bet that the economy will be in a healthier place in six 
months. With Federal Reserve Chair Jerome Powell's term ending in May, the 
White House anticipates the start of consistent cuts to the Fed's benchmark 
interest rate. They expect inflation rates to cool and declines in the federal 
budget deficit to boost sentiment in the financial markets.

   But the U.S. economy seldom cooperates with a president's intentions, a 
lesson learned most recently by Trump's predecessor, Democrat Joe Biden, who 
saw his popularity slump after inflation spiked to a four-decade high in June 
2022.

   The Trump administration maintains it's simply working through an inflation 
challenge inherited from Biden, but new economic research indicates Trump has 
created his own inflation challenge through tariffs.

   Since April, Harvard University economist Alberto Cavallo and his 
colleagues, Northwestern University's Paola Llama and Universidad de San 
Andres' Franco Vazquez, have been tracking the impact of the import taxes on 
consumer prices.

   In an October paper, the economists found that the inflation rate would have 
been drastically lower at 2.2%, had it not been for Trump's tariffs.

   The administration maintains that tariffs have not contributed to inflation. 
They plan to make the case that the import taxes are helping the economy and 
dismiss criticisms of the import taxes as contributing to inflation as 
Democratic talking points.

   The fate of Trump's country-by-country tariffs is currently being decided by 
the Supreme Court, where justices at a Wednesday hearing seemed dubious over 
the administration's claims that tariffs were essentially regulations and could 
be levied by a president without congressional approval. Trump has maintained 
at times that foreign countries pay the tariffs and not U.S. citizens, a claim 
he backed away from slightly Thursday.

   "They might be paying something," he said. "But when you take the overall 
impact, the Americans are gaining tremendously."