Trump's USPS Plan for Mail Ballots Loses at the Supreme Court

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0:17From the opinion pages of The Wall Street Journal, this is Potomac Watch. The Supreme Court rules against President Trump's effort to have the U.S. Postal Service regulate mail ballots, at least for now. As Borders are, Tom Homan says that he has seen no plans to send immigration agents to the polls in November. Plus, Federal Reserve Chair Kevin Warsh prepares for a decision on interest rates only days after another worrying inflation report. Welcome, I'm Kyle Peterson with The Wall Street Journal. We're joined today by my colleagues on the journal's opinion pages, columnists Joe Sternberg and Alicia Finley.

0:57An unfortunate aspect of our closely divided politics these days is that both parties are constantly claiming that the other side is rigging votes and stealing elections. Former Vice President Kamala Harris recently warned that Republicans, quote, are trying to cheat and we have got to turn out in big numbers and be too big to rig, unquote, which certainly sounds to me like a bit of plagiarism of President Trump in 2024. But despite all this rhetoric, the U.S. continues to have fair elections, in part due to America's decentralized voting system and independent judiciary. And on the latter point, Joe, we got a ruling on Monday from the United States Supreme Court.

1:38President Trump wants the U.S. Postal Service to start setting some rules for ballots traveling through the mail. That was blocked by a judge. And now in an unsigned opinion, the nine justices have declined to revive that, at least for the 2026 midterms that are now only seven weeks away. Joe, what do you make of this and all of the rhetoric that this was another effort by President Trump to steal the midterm? Well, I mean, you sort of look at what was actually at issue in this Postal Service case and sort of the regulations that they were proposing. Some of them are more outrageous than others.

2:15But it wasn't clear to me that any of this was actually going to sway the outcome, which was enough to make me wonder why the Trump administration was bothering. I mean, my understanding of what was specifically at issue here, some of it were regulations about exactly how ballot mail should be marked on the outside of the envelope and various new regulations for how that mail would be handled. And my read on it is that the intent was to actually make sure that it would be handled more efficiently and you wouldn't end up with a situation where large numbers of mail ballots get lost and then discovered in the trunk of a van somewhere two weeks after the election.

2:53And the thing of it that was more of a head-scratcher for me was this notion that somehow the Postal Service should get involved in the business of collecting from state and local election administrators information about who had requested mail ballots and whether they were legally eligible to vote. I mean, that kind of federal interference is counterproductive in the U.S. I mean, it was difficult to see what effect it would have and how it could be implemented in any kind of meaningful way before this election without creating the kind of administrative hangups and hiccups that would then actually discredit the election, whoever ends up winning it.

3:34I tend to agree with that. The regulation by the U.S. Postal Service of ballot envelope design was one piece of this. The other part was the idea that states would have to give the post office in advance lists of voters that they intended to send mail ballots to. But notably, the Postal Service disclaimed any idea that it would cross check that against other information, that it was going to be in the business of deciding who was allowed to get a mail ballot. The post office was just saying, we just want the list to have it as a manifest that could be useful later, maybe if something goes wrong, maybe to investigators.

4:12And yet that is not the characterization on either side of what the USPS was doing here. Here is President Trump responding to the Supreme Court on True Social. He said it is a big loss for Republicans and America itself and makes cheating by the radical left Democrats on mail-in ballots a much easier thing to do. And they now have an open field to do so. He went on to attack the conservative justices that he himself appointed, saying these are not the people I interviewed to serve on the United States Supreme Court. They are merely a shell of their original selves. Let's listen to a bit of hype from the other side.

4:50Here is Senate Minority Leader Chuck Schumer on the floor on Tuesday. Last night, even Trump's MAGA Supreme Court shut down his unconstitutional plan to restrict mail-in voting and rig the November elections. Donald, you lost another one, and you know it's bad when even your MAGA Supreme Court can't defend you because your behavior is so egregious and so damaging to our democracy. Trump's plan was a desperate attempt to screw around with vote by mail and smother the voices of millions of Americans, all to avoid accountability at the polls. Trump's scheme was so on the nose, so un-American, so flagrantly unconstitutional that even the MAGA court had no choice but to make the right call.

5:41A MAGA court, I'll add, that has done Trump's bidding too many times. A couple of thoughts there. One, from what Schumer said on the floor, it's not clear to me that he actually knows what the United States Postal Service was even proposing to do. And two, he agrees with the Supreme Court. And, you know, yet he's going out there and attacking it as some kind of lackey for President Trump, which here's a perfect example of a case where it isn't. Right. So what the post office was trying to do, or that's really debated, or at least the intent of all these regulations, in my personal view, is that it was intended to make it more complicated and harder for states to run mail-in or ballot elections and to send ballots to everyone, like in California, in part because, at least the record suggests, that Democrats, particularly, interestingly, higher educated people, tend to vote disproportionately.

6:37proportionately, by mail-in ballots rather than in person. And the view is that that tends to benefit Democrats over Republicans. So the president has long held this view that we should get rid of this because somehow it's rigging the elections and it's helping Democrats. I think there's an argument to be made that his own attacks on all this foments distrust in the elections and could actually help suppress the Republican vote. In any case, I think this is a very hyped up political issue and both sides are trying to play to their bases here. Schumer always has AOC in shadow and is worried about a primary challenge in 2028.

7:23She doesn't run for president. So he is attacking the court and Trump at the same time. Though to your broader point, We've seen time and again that this court, it's a conservative majority, 6-3, but the conservatives have heterodox views. They don't vote or rule in lockstep. You saw that with the tariff case in which the Supreme Court struck down the tariffs. But there were differing views among the conservatives in which, you know, Justice Alito, Thomas and Kavanaugh would have upheld them. You've seen that with the birthright citizenship that the conservatives or the court ultimately locked it.

8:05But the conservatives had very different views. Some agreed, actually thought it should be upheld. But the Kavanaugh in chief disagreed. I think the one common strand in all this is that the conservatives, they come at this through not an ideological partisan lens, but often through kind of more jurisprudential. They have an originalist or textualist approach that they apply to these cases. Sometimes the issues can get technical and wonky, for instance, regarding whether they believe or agree that the plaintiffs have standing, whether a case is actually ripe, whether something can be challenged under the Administrative Procedure Act, which was one of the issues here.

8:50But they do not vote or rule in lockstep on these kinds of issues that challenge President Trump's executive orders or actions. Hang tight. We'll be right back in a moment. Congress has talked about permitting reform for decades. Now it's time to actually do it and secure our affordable energy future. Pass permitting reform now. Paid for by the American Petroleum Institute.

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10:08Welcome back. Another one of the warnings that has been circulating in recent months from Democrats is the idea that President Trump might order Immigration and Customs Enforcement agents to polling places. So notably, we got some news on that on Sunday. Here is Borders, our Tom Homan speaking on Fox News. Look, I have not seen any operational plans or any discussions on any immigration enforcement operation at polling places. This is another fear tactic. This is another attack on ICE in this administration. I mean, they don't want ICE near the polling places. They don't want to vote for voter ID.

10:44They don't want observers. What do they got to hide to begin with, right? Well, there is no plan for immigration enforcement action at polling places. It's just another attempt to smear ICE and smear the president. Joe, what I find interesting about that is not only does Holman say he has seen no plans for this, but he's characterizing it as a scare tactic and a smear tactic. By the way, only a little more than a third of votes in the 2024 election were at the polls on Election Day. And if ICE started showing up in November, I think there would be a pretty big backlash to that. So I don't even know that this idea would work in the way that it is being suggested if President Trump tried it.

11:23It becomes hard for me to know whether any of this is actually about the thing that it's supposed to be about. So, I mean, you know, we have this argument about ICE agents doing immigration enforcement at voting places. And on one hand, it is kind of silly because, you know, Democrats are always arguing that Republicans are completely fantasizing when they fret about whether you have non-citizens who are voting in American elections. And then on the other hand, you have this palaver about whether you might see some kind of immigration enforcement. And I get that sort of the concern there would be that it is actually intimidating or bothersome or vexatious for all of the people who do have a right to vote, you know, nonetheless have to potentially walk the gauntlet of these immigration officers.

12:09But, I mean, really, I think that what is going on with all of this, if you take a step back, is both sides seem to be grappling with the possibility that this midterm election is going to be closer than it should be for either of them. Trump should have been able to deliver a better economic record, but he keeps tripping over himself on issues, particularly on the economy and the tariffs and all of the rest of it. So this is not going to be an easy midterm for Republicans to win, including in states like Texas, where that Senate race should be more of a cakewalk for Republicans. But Trump sort of threw his weight behind not a great candidate there.

12:51And now all of a sudden, it's going to potentially be a close race. And I think Democrats are grappling with the fact that they are struggling to win this and walking away as they ordinarily ought to for the out-of-power party in a second-term, midterm, when voters are this unhappy about the economy. And that's because the Democrats have their own problems appealing to the electorate and suppressing the crazy in their own activist ranks in ways that many mainstream voters find very off-putting. So, if you don't think that you're going to have the obvious first choice option available of just winning the election conclusively, you start putting all of the pieces on the board so that you can argue interminably about election interference or rule changes or any of the rest of it afterwards.

13:44And I think that that is a lot of what is going on here at this moment. It's almost as if both sides are preemptively trying to explain why they lost an election, that either or both of them should have had a much better chance of winning. On the point about the economic dissatisfaction, let's turn to the inflation report on Friday, Alicia. The headline numbers were consumer prices up 0.4 % in August. and year over year, 3.4%, notably higher, as has been usual, than the Fed's 2 % target. How much of that is related to rising energy costs, the continuing war in Iran, or what else do you see, do you read in this inflation report, Alicia?

14:30You're right that the overall CPI rose up 0.4 % and 3.4 % over the last year. Most of that was due to rising fuel prices, gasoline. But nonetheless, you still did see some increases in the core index, which excludes food and energy, which rose 0.3 % with interesting shelter 0.3%. And that was interestingly, again, driven not by housing per se, it was actually driven by hotels. So those are kind of services. Used cars were up 0.4%. Daycare up 1%. Wireless phone service, which was actually one of the leading outside of the energy prices. Wireless phone service was up 5.9%. Motor vehicle maintenance and repair up 1.1%.

15:19And that's been trending up for the past year. And the question is, well, what's driving up this demand for these services? And it could be one reason is the overall financial monetary conditions aren't all that restrictive. You know, you could go on a microeconomic level and look at each individual factor. And I think, for instance, for the wireless phone service, a big contributor to that has been the rising cost of memory chips, which telecom companies use a lot of. And those have essentially, maybe not exponentially, but have risen by more than 100 % the price of those over the last year. So companies are starting to feed that to consumers.

16:02But prices are still outside of the energy bucket, are still rising much faster than the 2 % Fed target. Again, that suggests that some of that could be, in certain contexts, the higher energy prices is just flowing through to higher prices in the regular economy. And by which I mean that, for instance, when you transport goods, that requires energy. Truckers are using diesel, higher diesel costs, and so they're passing that through to their customers and all that. But you've seen over the last couple of years that inflation, again, has remained elevated over the 2 % goal. And it really hasn't come down, or at least the core hasn't come down all that much.

16:44And so I think this really tees up a potential interest rate hike at the Federal Open Market Committee meeting this week. Hang tight. We'll be right back after one more break. Congress has talked about permitting reform for decades. Now it's time to actually do it and secure our affordable energy future. Pass permitting reform now. Paid for by the American Petroleum Institute.

17:11Don't forget, you can reach the latest episode of Potomac Watch anytime. Just ask your smart speaker. Play the Opinion Potomac Watch podcast. From the Opinion pages of The Wall Street Journal, this is Potomac Watch. Welcome back. Joe, what's your read of the economic situation facing Fed Chair Kevin Warsh now? The FOMC meeting begins today. The interest rate announcement is supposed to come tomorrow afternoon. How do you think they're thinking it through? We actually know a fair bit about how Kevin Warsh is thinking it through, because despite his aversion to giving the market forward guidance, he has given several indications since he took office in May about how he thinks about the economy and what he thinks the Fed's responsibilities are.

17:59I think the most comprehensive statement was his speech at Jackson Hole in Wyoming at the end of August. And his conclusion then was that inflation is the Fed's responsibility, which suggests that he thinks that the central bank does need to act if it senses that the inflation is higher and not get into this habit of coasting in the hoper assumption that other forces will somehow cause price increases to slow down. He was also emphatic that he thinks the Fed's inflation target is 2%. It is not 2 % and a little bit more if we think we can get away with it. So it's pretty clear that he's going to be determined to bring the inflation rate down to that level.

18:43And as Alicia pointed out, we are not there right now. And I think that the other thing that he was pretty clear on is the consequence of this being the Fed's responsibility also is that you aren't going to look through some of these supply shocks. So, you know, Alicia was pointing out that a lot of the inflation right now is related to energy. Oftentimes, central banks, including the Fed, will say, well, because we can't really do anything about that, we're just going to wait for that price shock to dissipate and then expect that we can get back on target later. Orsch does not appear to be sympathetic to that kind of argument.

19:21So, I think that what has happened over the past few months is that he was always naturally hawkish. That's been his inclination for many years. He's written about it many times in our pages, the journal editorial page, expressing a more hawkish view on inflation and what the policy response from the Fed should be. I think the challenge has been, how are you going to bring the rest of the Federal Open Market Committee along with you? And many of these are the same people who rather controversially voted for rate cuts in 2024 and 2025 when it wasn't really obvious that the inflation data supported that.

20:04And so what he's done is I think that he has laid out the intellectual case that he would make. He has created a certain sense of inevitability in the markets if you look at what investors' expectations of the next Fed move have become, the way everyone is now pricing in a rate increase. So, I mean, you don't want to take for granted that that's what we're going to get when they make their announcement on Wednesday this week. But he has sort of set up the conditions for him to be able to do the kind of increase in the Fed funds rate that he has probably wanted to do all along. And because he was so new in the job, it was a little difficult for him to do it earlier.

20:46One question then for tomorrow, though, is whether President Trump has priced in an interest rate increase. And Alicia, I guess we'll have to watch Truth Social to see if there is a similar missive to the one he issued on the Supreme Court justices. That was not the Fed chair that I interviewed. President Trump has a pretty clear record of trying to work his Federal Reserve chairs, though, to my mind, it doesn't seem to have been very successful. Right. We know that Trump likes lower interest rates. He tried to jawbone Jay Powell during his first term to lower interest rates and faster. And he tried to do so again over the last year or so before Kevin Warsh replaced Powell as the chair.

21:35I don't think it's going to make one iota of a difference in terms of the economy, per se, or the midterm elections or the 25 point basis point increase. Most Americans won't feel it. These are short term interest rates. So there may be a slight upward adjustment in the APR credit card bills. But what really sets the mortgage rates, which President Trump is more concerned about, is the 10-year and 30-year rates on Treasury bonds, which are largely set by markets. They take into account various things, including inflation expectations, interest rate expectations for the future, growth expectations, debt issuance expectations.

22:22And the concern that I don't think President Trump appreciates enough is that easing and reducing the short-term or the federal funds rate could actually backfire to the extent that it leads markets to anticipate higher inflation going forward and resulting in higher yields on long-term treasuries, which would thereby push up mortgage rates. And I think you saw that in 2024 when the Fed cut interest rates, I think there was some projection that Trump would actually, presidency would result in higher inflation because of tariffs. And that's a separate issue. But there was also a projection that inflation might heat up.

23:07And so there was an increase in the 10-year yield, which resulted in higher mortgage rates. So I think it would be destructive and counterproductive for Trump to criticize his Fed chair because it just, one, it suggests to voters and Americans that the president really isn't all that concerned about inflation and that he just wants low interest rates. And two, I don't think Warsh is going to respond to the bullying. But I also just think it's unpresidential and it creates all kinds of uncertainty and really undermines the credibility or the independence of the Fed for the president to be constantly haranguing it.

23:52Thank you, Alicia and Joe. Thank you all for listening. You can email us at pwpodcast at wsj.com. If you like the show, please hit that subscribe button. And we'll be back tomorrow with another edition of Potomac Watch. Congress has talked about permitting reform for decades. Now it's time to actually do it and secure our affordable energy future. Pass permitting reform now. Paid for by the American Petroleum Institute.