Trump Is Addressing Housing, Groceries, Education Expenses in Different Ways

And you heard it just now, President Trump saying in his prime time address that the state of the union is strong. Joining us now to discuss is attorney Alan Mendenhall. He's a research fellow in the Thomas A. Rowe Institute for Economic Policy Studies and senior advisor for the Free Enterprise Initiative at the Heritage Foundation. So good to have you here today, Alan. Again, let me do something a little bit different. I'll let Governor Abigail Spanberger ask the first question. Here she is, what she said yesterday in the official Democratic response. And let me ask you, the American people watching at home, three questions. Is the president working to make life more affordable for you and your family? Is the president working to keep Americans safe both at home and abroad? Is the president working for you? All right, so Alan, your response is the president working to make life more affordable. The answer is yes. So when we're talking about affordability, we're talking about things like housing, groceries, food, college and education expenses. And the president is addressing each of those in different ways. So the issue with things like housing or just all these issues of affordability is you have people like me going on TV and talking about how great the stock market is, the S&P hitting 7000 in January, the Dow hitting 50000 this month, and saying these are record-breaking milestones, this is amazing stuff. But then you have over half of working Americans that don't have employee-sponsored retirement plans with matches. And of the working population, you've got like 43% that don't have 401ks. And so these people hear the numbers that I'm throwing out there and they think, I don't care. Why should I care if I don't even have any money to invest? Well, that's why President Trump last night introduced this new plan for those very people so that they can have some federal version of a diversified index style investment that is like a federal version of a 401k. I think these were inspired by the Trump accounts and those appear to have been very popular so far. I think we're going to see a lot of people taking advantage of those during this tax season. And they're kind of modeled off the thrift savings plan for federal workers. And we've definitely got a housing shortage. We're anywhere in the range from three to five million houses. But guess what? They're in places like blue cities. They're in states like Virginia that are turning blue. That's where the housing crisis is the worst. Go find blue mayors, blue governors, and you're way more likely to find a worse housing problem. Okay. So I do want to ask you a question about the proposed plan by President Trump to create a retirement program that will give Americans without 401ks access to similar accounts. So, you know, one of the factors when it comes to retirement is not income alone, right? It also depends on your employment, whether your job offers a good retirement plan. So do you think this proposal by President Trump entirely addresses that problem? What are your comments? Well, nothing entirely addresses any problem. There are always problems, but this one definitely addresses the problem. This will be where government matches up to a thousand dollars a year if workers contribute. And that's significant because if workers contribute, eligible workers contribute, then you have more savings getting poured into equities and the stock market improves. And so all boats are rising in that situation. So I think that's outstanding. I think that's a first step toward addressing some of these problems. The president's great at spotting what regular people want and need, not people who are wealthy, not people who are on Wall Street, whatever. He recognizes what the family in small town Nebraska, the family down the street from me in Alabama, what we need to improve our lives and institutions. And I think we saw that in the one big beautiful bill. I mean, to me, that is a resounding success, making permanent those 2017 tax cuts, but also doing a lot of other things that we don't hear a lot of people talking about when it comes to educational stuff. So I was an administrator in higher ed for a decade. I was an associate dean at a law school. I was associate dean in a business school. And I saw a lot of students taking on a lot of student loan debt and then graduating and not getting really high paying jobs. And they're saddled with student loan debt. Well, the president has introduced strict borrowing caps, and that's an attempt to curb the excessive debt with these young people coming out of college with debt that they can't pay off. Graduate students are limited to $20,500 annually. We have professional students limited to $50,000 annually. All this stuff is designed A, to make sure that students don't get into debt, but B, to make sure these institutions of higher education are not taking advantage of vulnerable people by telling them college is necessary, college is necessary. You have to go to college. And then these young people go to college and they get saddled with debt and then they get jobs where they're getting paid what they would have gotten paid had they never gone to college whatsoever. And so they start off life behind. And those are the very people who are getting hurt the most from the housing shortages. Okay, so Alan, you did bring up the big, beautiful bill and President Trump talked about it yesterday. I brought a clip here with me about that. Here's what the president said. All Democrats, every single one of them voted against these really important and very necessary massive tax cuts. They wanted large scale tax increases to hurt the people instead. But we held strong and with the great, big, beautiful bill, we gave you no tax on tips, no tax on overtime, and no tax on social security for our great. So Alan, your reaction and how has the big, beautiful bill helped the economy? Yeah, I mean, more than $4 trillion would have hit the American people totally in a tax increase, basically, if the tax cuts were not made permanent. And this leaves the average family about $1,700 better off each year. So this is huge. You mentioned, the president mentioned no tax on tips. I mean, these are not tax cuts for the wealthy or whatever the Democrats might try to portray them. These are tax cuts for the families, people that have families, people that have small businesses, people on Main Street. This is a tax cut for the American people. Okay, so another thing, Spanberger said yesterday, President Trump's trade policies have forced American families to pay more than $1,700 each in tariff costs. Is that the case in your view? Look, I don't have the math on tariff costs and all that kind of stuff. What I can say is, if we lived in a perfect world, where all countries behaved the way they ought to behave, and we could have free trade across the board, that would be wonderful. That would be a great situation. Every country could leverage its comparative advantage, and we'd all be hunky dory. But we don't live in a perfect world, unfortunately. And that means there are historical realities, political contingencies, all kinds of things that make trade deficits. It's just the reality. So put it this way, if I were to hire somebody to perform some service for me, I don't know, pick a service, any service, and this person started breaching the contract, and was breaching the contract every day, and every day, and every day, basically cheating, would I continue to employ that person, or would I do something about it? The analogy holds with trade. If you've got countries like China that are cheating, you don't just let things go on the way they've always gone on. You do something about it, and tariffs are a tool. And it's not just President Trump that used tariffs. President Biden used tariffs against China too. He actually maintained and increased the tariffs against China that President Trump had instituted in his first term. So are tariffs a panacea? No. Are they a tool in the equipment of a very complex world where we have complicated political dynamics? Yes, they are. Okay, Alan, just finally, you bring up China's unfair trade practices. Just talk to us a little bit more about that, because the Chinese regime has subsidized companies that are not necessarily profitable, and are able to sell at prices that are artificially low into the United States. And talk to us about how these tariffs perhaps have been used to protect U.S. companies from these unfair trade practices. Yeah, well, I mean, the tariffs are meant to do a few things. They're meant to get China to behave, and they're meant to decouple the American economy from the Chinese economy, and to get our consumers, our producers, our businesses to find new trade partners that maybe have better trade deals. And by the way, these tariffs have enabled the president's administration to negotiate a lot of really good trade deals, trade deals that were better than we had before the tariffs existed. So as I say, tariffs are not a principle. They don't represent necessarily protectionism or something like that. And yes, in an ideal world, we would have free trade across the board, but tariffs can be a political tool, and they can be a political tool to actually free up trade, which is what I think we're seeing. We're negotiating trade deals with some of our best trading partners. Even after last week's Supreme Court decision and learning resources case, where the Supreme Court struck down the president's powers to issue tariffs under IEPA, we see the president immediately pivot to other bases for his tariffs. And guess what? These trade deals that he's made with all these other countries, these bilateral trade deals, they are still in force. They're still being held up, and the countries are not trying to renegotiate them. I think they've realized that the president has other tools at his disposal to keep the tariff regime going, and they're just trying to maintain good relationships, maintain the trade partnerships they have going. And I think what we see is actually over the last, I don't know, eight months or so, countries becoming more mutually beneficial to each other and reaching trade deals that are, in fact, better than the ones that they had four years ago.