Is government overspending the prime cause of Americans’ affordability woes? Responses to one survey suggest a possible nexus between the two.
Granted, the conflict with Iran and the temporary shortages it has created in oil and gas markets also play a role in the financial squeeze on Americans’ wallets. But if, as the polling data indicates, the public takes our budget deficits more seriously than Congress does, it provides an opportunity to right our fiscal house in ways that could improve affordability for struggling families.
Survey: Deficits Matter to Americans
A recent Pew Research Center report, based on a survey taken in late April, revealed some interesting findings:
73% of adults now say the affordability of health care is a very big problem for the country, up 6 percentage points from February of last year. 64% view the federal budget deficit as a very big problem, up 7 points from last February. Inflation also continues to loom large for the public: 66% say inflation is a very big problem, up modestly from 63% last year.
The deficit numbers seem shocking. Washington continues to run deficits approaching $2 trillion per year, and lawmakers haven’t truly focused on controlling deficits and debt in decades — yet nearly as many voters thought the federal budget deficit a major problem as did inflation.
Unsurprisingly, however, partisanship appears to play a role in these numbers. The percentage of Democrats viewing the deficit as a big problem nearly doubled, from 35 percent in April 2024 (i.e., during the Biden presidency) to 66 percent this April. Similarly, the ratio of Republicans considering inflation a major issue dropped by 25 percentage points, from 80 percent in the April 2024 survey to only 55 percent this April.
Given Democrats’ sudden interest in controlling the deficit as soon as President Trump took office, a cynic could wonder whether they will still object when provisions of last year’s reconciliation bill that will slow the growth of Medicaid spending begin to take effect this year and next. For that matter, if they object to Congress’s extension of tax relief, they could always decline those rate reductions and choose to pay higher taxes instead.
How Government Affects Affordability
Regardless, the polling results give conservatives an opportunity to emphasize the linkages among federal deficits, inflation, and affordability. First, as I recently noted, persistently high deficit and debt levels tend to push up interest rates, making mortgages, credit cards, and loans more expensive for families and businesses alike. Indeed, bond rates and the mortgages linked to them have recently risen, which will place a further squeeze on households struggling to buy their first home. (It could also raise the cost of servicing the national debt by another $2 trillion compared to Congressional Budget Office projections.)
Second, government spending doesn’t just raise federal deficits but actually harms affordability for things like health care. The enhanced Obamacare subsidies, which expired as of Jan. 1, provided taxpayer-funded subsidies to “low-income” families making hundreds of thousands of dollars per year. Like morphine to a cancer patient, these subsidies did not bend the cost curve down but instead masked underlying premium costs — premiums that regulations imposed by Obamacare had caused to skyrocket.
Other government policies also make health care less affordable. As none other than Sen. Elizabeth Warren, D-Mass., previously observed, Obamacare encouraged insurers to buy up physician practices and pharmaceutical benefit managers because profits on insurers are capped by Obamacare’s medical loss ratio regulation, but profits on other health care businesses are not. As a result, Democrats’ own law has encouraged consolidation among major health care conglomerates, driving up prices and making health care less affordable for families.
An Opening for Conservatives
The Pew survey results suggest that conservatives can and should make the case for why deficits matter and how controlling government spending can help not just Washington’s affordability crisis but the crisis facing families across our nation. Democrats will spend the midterm election campaign trying to equate “affordability” with more government spending programs. Conservatives should make the contrasting case and explain how Washington continuing to spend money it doesn’t have will only make our entire nation poorer in the end.
