The Democratic ‘Affordability’ Ruse

0:00If you're an RIA, Schwab Advisor Services is the Watson to your homes. Smart, dependable, always has your back. With all the wealth services, technology, and support your firm needs, the difference is so obvious, it's Schwabius. Follow the clues at schwabius.com. From the opinion pages of The Wall Street Journal, this is Potomac Watch. The smart money in Washington says that Democrats will retake Congress in November, and the Republican panic on Capitol Hill is palpable. The top issue, as ever, is the economy. But as voters start to focus on their choices on the ballot, what are Democrats actually proposing to do about high prices for groceries, houses, and health care?

0:42Is there any reason to think a Democratic Congress will make your life more affordable? And related to that question, do Democrats regret going, quote, woke, or do they merely regret the political price they have paid for it? Welcome to Potomac Watch. I'm Kate O'Dell, your host on this Wednesday. We have two of truly my favorite colleagues here to chat with us. First, we have Matt Cottonetti, who is a columnist for our daily newsletter, Free Expression. And we also have Jack Butler, who edits that newsletter and contributes widely to our editorial pages. So thanks to you both. Matt, looking at the polling that we have ahead of November right now, it looks as though Democrats will retake Congress.

1:22The polls are showing even in bright spots like the Senate map showing Republicans struggling in states like Texas and Iowa with others like Ohio looking even even less favorable. So I guess my starter question to you to kick it off. What are Democrats even running on on the campaign trail right now in terms of the economy, which really is what voters are unhappy with and seem to want change on? Well, Kate, I think Democrats are running on a single word and the word is affordability. It's become something of a mantra to Democrats. They just repeat it over and over again, affordability, affordability, affordability.

1:58But they never really say what they mean. To the extent they define it, it's in negative terms. So they'll say that they won't do what Trump wants. There'll be a check on Trump. They're calling on Trump to end the conflict with Iran, though they don't say how they would do it if they were behind the resolute desk. When you actually press Democrats to say what they're for, what an actual Democratic Congress would do next year, or a Democratic House at the very least would do, I think their answers would be disappointing to many Americans. The top of their agenda is restoring those Affordable Care Act subsidies, the Obamacare subsidies that phased out at the beginning of this year after a government shutdown over them.

2:44They also say that they want to rescind all of the work requirements imposed on able-bodied Medicaid recipients as part of the one big, beautiful bill that Congress passed last year. When you get beyond that, they say that, well, they want to raise the minimum wage nationwide so that red states no longer have the competitive edge in attracting labor that they now enjoy with a lower minimum wage than in blue states. So what Democrats are doing is campaigning on generalities, on a negative attitude toward Trump, which you don't need me to tell you is fairly widespread in the country at the present moment.

3:26But when they get down to brass tacks, I think a lot of Americans would say, well, didn't we already go through the Democrats' affordability agenda under Biden? And do we really want to repeat that experience? Yes, Jack, I'm going to put the same question to you because I want to know what you're seeing from Democrats on this as well, particularly, you know, in close Senate races like in your home state of Ohio, where John Husted is trying to keep his seat against Sherrod Brown, the former senator challenging him. What is working for Sherrod Brown there that he seems ahead in the poll on this affordability issue?

4:00And is it anything different from the Democratic agenda, like Matt says, of the past 20, 30 years that we've already seen? Well, there's one major difference that's arisen from the fact that technology is different, and that's data centers, which are becoming a huge issue in that Ohio Senate race. The connection of that issue to affordability is tenuous. tenuous. I can't quite fully explain it, but for the moment, it seems to be working in some respects for Mr. Brown as he tries to end his time in political exile in Ohio, wandering around Mahoning Valley and wherever it is that he goes. But there's even that, as Matt said, there's generalities there that in this sort of political environment that's unfavorable for Republicans, generalities can get you very far.

4:47But Peter, just a little bit under the surface, like we as astute political observers, at least the two of you, are capable of doing. And there's some worrying contradictions, some defects to this democratic message. So just to stay focused on this data center thing, this is working for Sherrod Brown because John Husted, when he was lieutenant governor of Ohio, encouraged these facilities to come to the state. And now they've become politically toxic with the increasing association of them with AI. However, there's a fascinating wrinkle. Sherrod Brown, union guy, that's what he's been all of his career.

5:23That's what he's made his political bones out of. Unions tend to be pretty supportive of the building of these facilities because they create jobs. They get more of their guys working. So like Matt said, there's generalities that can get you pretty good distance, but pure just a little bit under the surface with the message that some Democrats are advancing. And you see problems with what they're saying that probably aren't actually going to be exposed until these guys actually get powered and actually have to do things. So that's what I'm seeing. And if I can just add, Kate, briefly, you know, I live in a non-competitive house district in a bluish state, Virginia, but I've been struck about how kind of small ball the issues are in the commercials that are being run as I watch, you know, the NFL every Sunday.

6:11It's the only time I see political commercials. Mark Warner, for example, who doesn't really have a serious challenge in his Senate reelection, is running campaigns against a so-called surveillance pricing, where prices differ depending on the data that various retail outlets have compiled on a user. And Eugene Vindman, the congressman from District 7, Abigail Spamburger's old district, is running this ad, a very soft ad. It's him driving around with his daughter. And basically, the whole message of the ad is, you know, it's hard teaching a teenager how to drive, but it's also hard to fight for banning stock trades in Congress.

6:50So it's issues that are not on the top of our heads at all. You know, I mean, now they've been poll tested. And I think most Americans not knowing much about either issue say, oh, that surveillance pricing sounds unfair. And of course, we don't want congressmen making money off their position. Hello, Nancy Pelosi. But the actual overall theme of the election does not really match with what you're actually hearing from the Democrats. And I think that's because Democrats are aware that if they were actually direct about what they want to do, which is raise taxes, increase government spending, restrict natural gas and oil exploration and resource development, voters would say, no, no.

7:35What is the consistency of what you just said? How does this relate to what you argued for the journal, what was it, last week, that the local nature of certain races could mean that Republicans could prevail where the conditions separate from the national trends? But if Democrats, as you say, are trying to run these small ball, sometimes highly localized campaigns, are they forsaking the advantage the national trends could give them? Well, I don't think Virginia is exemplary because it's not a battleground in this election. But it is true that just looking at the polls, Republican candidates are doing better the closer you get to the Canadian border, which is very unusual because the Republican Party is a southern sunbelt party.

8:13And yet it's the Sunbelt Republicans who are in the most trouble, candidates in North Carolina, Georgia, and of course, Texas. And what explains that? Well, I think it's because the Northern Republicans, Susan Collins, Sununu in New Hampshire, Michelle Tafoya in Minnesota, even Mike Rogers, who's neck and neck with Abdul El-Sayed in Michigan. They have profiles that are separate from President Trump, and they have local reputations. They're fighting on local issues. In Minnesota, of course, the welfare fraud scandal has rocked the entire political establishment, which has been dominated by liberals.

8:48It's a very liberal state. And so the local issues of these races can help Republicans. It's the Republicans who are most closely tied to Trump, like Ken Paxton in Texas, like Mike Collins in Georgia, like Mike Watley in North Carolina, that are having the largest troubles because we have right now an anti-Trump mood in the electorate. Hang tight. We're going to take a quick break from Potomac Watch. This episode is brought to you by Charles Schwab. Decisions made in Washington can affect your portfolio every day. Washington Wise from Charles Schwab is an original podcast that unpacks the stories making news in Washington.

9:24Listen at schwab.com slash Washington Wise. This is Matthew Hennessey, the editor of Free Expression. I want to personally invite you to come check out what we're doing. Signing up for the newsletter couldn't be easier. Just go to our homepage. Directly below the Wall Street Journal logo, you'll find the magic words. Free Expression, wedged between opinion and arts. There's an option to sign up for the newsletter right at the top of our section. Just hit that button and you'll start getting the world's hardest working newsletter delivered directly to your inbox Monday through Friday. If you aren't a journal subscriber, the newsletter is free, but we are going to need your email address.

10:05There's a lot of fun stuff in the newsletter that you can only read in the newsletter, and I don't want you to miss any of it. Sign up for free expression today. We'll see you in your inbox. Welcome back. I'm chatting with Matt Continetti and Jack Butler about whether Democrats are really going to make American life more affordable. The one thing, looping all the way back to Jack's point about data centers, I think do have a real affordability connection because we're not going to make American life more affordable by deliberately lowering our living standards. So I think that is one core affordability issue of the campaign that it would be nice if Republicans were less scared of.

10:41But turning to kind of what we could expect a Democratic Congress to actually do, Matt, put a couple things on the bulletin board for us, including Obamacare subsidies and the work requirements in Medicaid, which is not going to do anything to make more life affordable, just to make more people reliant on the federal government. But Matt, can you elucidate for us more? What do you think what else would be on the agenda? A couple of things that come to my mind that I think voters should know about. One is on housing, that there was recently a bill from the senators from Oregon, Jeff Merkley and Ron Wyden, to give people$50 ,000 for a house down payment.

11:17This is just, you know, pure juicing demand for houses does not increase the supply of them is exactly what you would do if you wanted to drive up housing prices. But I wanted to ask too about healthcare beyond just they want to spend more on the Affordable Care Act. You know, 10, 12 years ago when the Affordable Care Act passed, Medicare for all was politically toxic and it was considered very, very progressive. And even a public option was, which, you know, halfway to single payer was considered just not achievable politically because the public wouldn't tolerate. But now you have candidates like Al-Said in Michigan who are open about supporting Medicare for all.

11:55First of all, what do you think Democrats, would they try to do anything more than those Obamacare subsidies? And do you think Medicare for all is no longer as much of a liability for the party? Or is it just not the voters not really turn their attention to what it would mean yet? I think Medicare for all remains a liability for the Democrats if Republicans campaign against it. And right now, what I see is some far left candidates, including El-Sayed, Trump at Medicare for All, I don't really see Mike Rogers hammering home on the issue because the fact remains Medicare for All is a political loser.

12:30When you tell voters, okay, we'll give you Medicare health insurance for everyone, but that means you're going to lose your current health insurance and you're going to be kicked off whatever special plan you have if you're part of the labor union and we're going to raise your taxes exponentially in order to pay for it. voters quite sensibly reject it. But that's not happening right now in the campaign. And just as Jack mentioned that Brown has issues with the labor base over opposition to data centers, El-Sayed, of course, has an issue in Michigan, which is a very union-heavy state, where auto workers have very nice health care plans that they've arranged with the big auto companies, and that would be thrown out the window if Medicare for All became law.

13:18So you're looking for people to actually campaign against it. Now, this is one area where the 2027 Democratic agenda is going to potentially clash with the 2028 Democratic presidential candidates. I've noticed that someone like Cory Booker, for example, the senator from New Jersey who ran for president in 2020 and was very open to a Medicare for all type plan for a little bit, he has since backed off as he's planning another run in 2028. And so you're going to see this conflict break out at the presidential level over Medicare for all, but it'll also be played out at the congressional level where the leadership of the Democratic Party, Hakeem Jeffries, the majority leader from New York, who would likely become the speaker if the Democrats win the House of Representatives, and Chuck Schumer, the senator of New York, who would be the majority leader should the Democrats take the Senate as well.

14:11Well, both of them are very leery of Medicare for all, but their majorities, if these majorities emerge, are going to be heavily reliant, or at least the marginal member will be from one of these deep blue squad-like districts of socialists. And so you're going to see this fight play out on both axes of the presidential, but also the congressional. On a democratic agenda for the next Congress, in many ways, it's the agenda that dare not speak its name because what the Democrats will be forced to do is launch impeachment investigations into President Trump. There too, when you listen to what their leaders are saying, they have this euphemism where they say, well, impeachment's just one tool in the toolkit.

14:54We're going to do other things. And I've heard Democratic leaders say, well, you know, what's the good of impeachment? Because J.D. Vance is waiting in the wings if we were actually to remove Trump, which of course is extremely unlikely. And Vance is, if anything, more ruthless and, better focused than President Trump. So why would we engage in that? But the fact remains that the energy in the Democratic Party right now is so anti-Trump, so desirous of punishing Trump any way they can, that I expect just as happened in 2019, when Nancy Pelosi initially tried to tamp down the impeachment flames, they would erupt again in the next Democratic Congress.

15:31And then the other thing we have to think about as well is foreign policy, that the Democrats are going to immediately move to defund our operations in Iran. And there will be a fight over Iran, just as there was a fight over appropriations for Iraq when Democrats took over the Congress after the 2006 elections. And in addition, there will be a slew of bills sanctioning the state of Israel, America's closest partner. And this is truly fascinating and disturbing because even when candidates of the far left move away from some of their socialist positions, take defund the police, for example, the one thing they don't move away from is opposition to Israel and flirting with anti-Semitism.

16:15Well, staying with you for just a moment, Matt, because I want to get jacking on this, but is the Iran war a singular problem for Republicans? When you look at Trump's approval rating in a chart, you can't tell exactly where the war started versus where, if you look at a a chart of President Biden's approval rating, you can pick out where the withdrawal from Afghanistan was. And so my question is, Republicans are coming on this theory that the Iran war is at the center of their problems. And some candidates are running afraid from it. How would you be advising Republican candidates to handle that?

16:46And to your point, what are Democrats proposing to do to end the war other than, like you said, that they have no theory of themselves how to get out of it other than to defund it, which they're already doing, by the way, by refusing to give more money to the Pentagon to backfill what it costs. Well, the closest I've heard for a specific to actually end the war came from Congressman Ro Khanna, likely 2028 Democratic presidential candidate, who said on one of the Sunday talk shows last weekend that, look, if we just promise the Iranians that we will no longer pursue regime change, then they will reopen the strait.

17:19Now, I think that is highly naive because the Iranians don't care. What they want is money. That's the only thing that they're going to do to promise to reopen the strait. And by the way, they've promised to reopen the strait in April, and then they fired on ships. They promised to reopen it in June, then they fired on ships. They're not reopening it. America has reopened it through our own naval operations there. But that's the closest thing. So otherwise, they're very vague. They just want the bad thing in their view to end. I heard another congressman say, well, you know, it's been eight months.

17:51This is a forever war. Eight months? I mean, we just left Iraq. It gets forever early out there these days. We were in Iraq back and forth for 20 years, eight years of occupation and intense fighting. Then, you know, if eight months is your standard, I mean, that's the end of 1861. I guess that was too much time to prosecute the Civil War. That's like the mid-year of 1942. I guess, oh, we got to go home. So they don't have many specifics. But Jack, I think Matt is identifying here where the Democrats want to go on most issues. And the impeachment machinery, of course, is going to get rolling immediately.

18:27But I guess I also worry that there might be places where Democrats try to work with Trump, particularly on blowing out federal spending. The health care subsidies we were talking about earlier are they're going to really pressure the president that we need to just keep funneling money into this program because people don't like that their premiums are going up. We're not going to fix anything underneath it. What other areas do you see where there could be some unfortunate bipartisan cooperation in divided government that might grease the wheels for a lot more spending or other bad policy ideas?

19:00Well, I've already seen and we've already seen some instances of bipartisan agreement between the Trump administration or members of the Trump administration and Democrats. I mean, some Democrats are very interested and very appetized by these various stakes that the Trump administration is taking in private companies. There was reporting in Politico about this. Many Democrats are licking their chops about this idea. And they probably will have different companies that have different reasons for doing it. But maybe there could be some common ground on meddling in the affairs of private corporations, which is not something that I would be very excited about and something that I'm not I'm already not very excited about.

19:38When Vice President Vance released his family plan a couple of weeks ago, there were Democrats quibbling with where he wanted to send the money and to whom he wanted to prioritize in disbursement of funds, married versus single parents, etc. That seems like haggling not over principle, but over price. So I could see also a great scope for agreement on now that apparently welfare payments are a bipartisan cause, whereas back in the 1990s trying to decrease welfare was a bipartisan cause. I could see some scope for agreement on that. So when you get the word bipartisan thrown around, it has this nice, gauzy aura about it sometimes.

20:20But sometimes, in fact, maybe most of the time, some of the worst ideas in Washington are the bipartisan ones. And that is what gets me concerned is when the two parties cross the aisle to grow the state. And I could see great scope for that in the remainder of Trump's term if this is what the political balance is. But it would be fascinating to see impeachment hearings on one day and then hearings about some new welfare bill on the next. But D.C. is a strange place. I think it's a line from the great laid P.G. O 'Rourke that, you know, the two most frightening words in Washington can be bipartisan consensus.

20:57We'll take one more quick break. This episode is brought to you by Charles Schwab. Decisions made in Washington can affect your portfolio every day. Washington Wise from Charles Schwab is an original podcast that unpacks the stories making news in Washington. Listen at schwab.com slash Washington Wise. Don't forget, you can reach the latest episode of Potomac Watch anytime. Just ask your smart speaker. Play the Opinion Potomac Watch podcast.

21:27From the Opinion pages of The Wall Street Journal, this is Potomac Watch. And we're back with Potomac Watch. Let's switch gears a little bit here. We had an editorial in the Wednesday newspaper about, are Democrats, do they regret going woke? And by woke, we mean their particular preoccupation with identity and race and their cultural overreach on issues and like women's sports. We're going to take a quick listen to a bit of an old clip, but a good one of Alexandria Ocasio-Cortez talking about woke one, as she calls it, and whether Democrats thought maybe that got a little out of hand. I have a local city councilman that has this saying woke one was crazy.

22:14And I think that what's important is that we have to assess what it is saying. Did the movement go too far with some of those positions? I mean, you briefly supported the idea of defunding the police. Well, you know, I think that during this time and especially during COVID, there was a huge opening of the Overton window. We were shut down. There was some of the highest unemployment rates that we have seen because of those shutdowns. And I think that the doors were really open in trying to entertain any and every policy that was going to get us to a better place. And I actually think that the discussions that were had in that time were quite fruitful.

22:57Some hard-hitting questions from Jonathan Karl there. Yes, and I might rely on you, Matt, to translate for us what exactly she said toward the end there. But I mean, it looks like, oh, let's have a good laugh about that time that we talked about canceling Thanksgiving. Matt, you wrote about this for us a few weeks ago. What would be the signs for voters that the Democratic woke agenda is more in more than a tactical retreat, is in more than just hiding until they retake power? Is there any evidence that Democrats have changed their mind on some of the fundamental issues around equity and gender and identity?

23:32Well, I mean, the evidence would be a Democratic candidate who rejected the nostrums of woke, who rejected DEI, who rejected the trans ideology or certainly trans procedures for minors, who rejected Medicare for all and the idea of socialism. That's not what we're hearing. The mainstream of the Democratic Party, if anything, has shifted red. It's becoming more left. And now you have not only what we said, kind of the renormalization of Medicare for all, but now you have establishment Democrats like Kamala Harris and Pete Buttigieg talking about packing the Supreme Court. So the type of radical structural reforms that have always been part of the DSA agenda for the DSA candidates, it's everything from abolishing the Electoral College and the Senate to defunding the Department of War.

24:25And the presidency. I think that in the DSA proposal. platform, you're right. The legislature takes the president. Yeah. So we'd have a parliamentary system, I guess, essentially. I mean, that kind of anti-American attitude, right, to just tear down the total structure of the government. That was president woke one. I mean, amidst the laughter, I didn't hear AOC talk about the riots that spread across the entire United States and left several people dead, much less billions of dollars in damage during the summer of 2020. It's no laughing matter. Fiery, but mostly fruitful discussion. Yeah, the fiery but mostly peaceful protests, as they were described by the mainstream media at the time.

25:03I have to tell you, you see AOC in clips like that, you listen to her, and you see her beginning to lay the groundwork for a major campaign in 2028, whether that is challenging Chuck Schumer in a primary or, as I think is increasingly likely, running for president of the United States. She has great weaknesses for sure, but she also does have strengths. Jack, I mean, if we take Matt to be correct, and I think he is that this is not a sincere conversion here, what's really animating this for AOC and others to try to pump the brakes on this? Is it just purely to try to win in November? Matt puts a good point about larger presidential ambitions.

25:41But what's driving this? And do you think the fever can break? There's any signs that some Democrats are gaining traction who want to take the party in a more constructive direction? Well, what's driving it is, as you've said, a kind of embarrassment about those awkward years that became associated with a political that turned into a political brand that lost very momentously in 2024. for. What's also driving it, I feel like every time I come on here and talk about the new crop of Democratic candidates or the new things that the old crop of Democratic candidates are saying, I reach into history and cannot help but notice certain similarities between the way these figures are acting now and the way that certain other left-wing figures have acted in the past.

26:27I think of the way that, say, communists, when they get into power, make tactical concessions, such as Lenin's new economic policy, a moment of dialing back the socialism, the communism, and then just to prepare yourself for going all in on it later. And yeah, go ahead, accuse me of red baiting. But now you have all of these people who are expressing open admiration for figures like this. And I can't help but see some sort of consonants. So it strikes me as entirely tactical, entirely driven by concerns of messaging. This is one thing that drives me crazy is whenever I hear a candidate asked about some prior statement or action that he or she now regrets.

27:09And if you ever hear this person say something like, oh, well, the time wasn't right for that message, or I could have phrased that better. That is not a sign of contrition. That is a sign of a tactician who is just waiting for a better moment actually to get what he or she wants to. And that is what I think we're seeing now. So laying all that out, I don't think we're going to see Leninism in this country, probably for now. But the actual animating beliefs of these people haven't really changed. Maybe they've shifted. I don't think in 2020 the anti-Israel animus was anywhere near as strong or as high a priority as it is among these types of people now.

27:50The fact that that's an entirely post-October 7th phenomenon is both, it's just bizarre that that is what has shifted it up. But we have to recognize that it's there now, and that's a difference. But I don't think that's a sign of moderation. I think Matt outlined well the things that you have to look for to see evidence of someone on the left actually standing up against this in a meaningful way. You have occasional people who pop up and stand up against it. But Rahm Emanuel, who appears in our pages occasionally, seems to offer some sensible things. But I think probably some Democrats see him as a figure out of the Obama-era neoliberal past who has nothing useful to offer today.

28:30So I'm with Matt and not being convinced by what I'm seeing. Rahm's made, I think, a signature issue of education, which we didn't even touch on in this conversation, which is, I think, a central thing that Americans are unhappy about. And a Democrat who would put forth a reasonable platform to try to get children to learn math and reading in public schools, I think, would do a big public service. So anyway, we're going to leave it there for today. We've covered a lot of ground. Thank you to Matt and Jack for joining us. And we'll be back on Thursday with more Potomac Watch. Your financial life rarely fits between nine and five.

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