Trump focuses on affordability amid price increases
National Economic Council Director Kevin Hassett joins ‘Sunday Morning Futures’ to discuss the potential economic fallout if Trump’s tariffs are cut by the Supreme Court and rising tensions over China’s rare earths.
Democrats’ favorite word lately is “affordability.” They have painted the false narrative that the election of Socialist Mayor Zohran Mamdani in solid blue New York City or Democrat Abigail Spanberger in solid blue Virginia were somehow referendums on President Donald Trump’s agenda. This misconception not only ignores the recent past, but also ignores the facts right before us that Trump’s policies are making America affordable again.
Prices soared during the Biden administration. Inflation rose at an annual rate of almost 5% during his term. Such a disaster is second only to the severe Carter-led inflation of the 1970s, which collapsed US living standards. Compare this to Trump’s first term, when inflation rose less than 2% annually.
The memory of low inflation and strong economic growth during Trump’s first term inspired Americans to re-elect him for a second term. Voters are trusting Trump’s stewardship after four disastrous years of economic hardship under Biden. Immediately after taking office, Trump began laying the foundation for a Golden Age economy. While there is still much work to do to help Americans get out of the hole created by the Biden administration, we are making progress.
The first step was passing the One Big Beautiful Bill (OBBB), which will help make America affordable again. There are three important provisions in the OBBB that will increase the pay of homeworkers.
TRUMP FLIPS DEMS’ ‘AFFORDABILITY’ SCRIPT, AND TURNS BUZZWORD INTO MAGA MATERIAL AS MAMDANI VISITS LOOMS
President Donald Trump meets with newly elected New York Mayor Zohran Mamdani (L) in the Oval Office of the White House on November 21, 2025 in Washington, DC. (Andrew Harnick/Getty Images)
First, there is the permanent full expenditure of business investment, or what is commonly called capital expenditure (or “capex”). Thanks to this bold tax incentive, companies can now write off the entire cost of purchasing computers, industrial machinery, software and other equipment. When businesses increase capital expenditures, productivity increases because workers have additional capital to produce the goods and services that businesses and consumers want. Greater productivity, in turn, raises household living standards by allowing companies to pay their workers more. Economic history is full of examples where rising productivity led to large increases in worker wages.
The second provision in the OBBB is in line with the investment incentive, but can be even more powerful. Companies can now deduct the entire cost of building a factory or agricultural structure in the first year of construction.
In the past, companies had to wait almost forty years before they could amortize the full costs of factories and agricultural structures. But not anymore. This new tax incentive will lead to a massive increase in industrial construction and support the recovery of our supply chains. This will create well-paying jobs in construction. And when the project is completed, there will be well-paying jobs within those structures, where workers will use the latest technologies thanks to the capital investments. The effect will be an industrial boom.
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At the same time, a boom in investment and industrial construction will increase the underlying productive capacity of the economy, which has historically been disinflationary. This means that inflation is about to fall much further, giving workers an extra boost. This is a one-two punch in restoring workers’ purchasing power, as nominal wages will rise while inflation will simultaneously fall. The result is powerful historic gains in real wages, comparable but even greater than Trump’s first term.
The third provision that will improve affordability is no tax on tips or overtime. Eliminating these taxes will allow working Americans to keep more of their hard-earned income. This is critical to rebuilding household finances for lower- and middle-class families, who suffered disproportionately under the previous administration. After-tax real wages for workers are about to rise thanks to Trump’s policies and economic vision.
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From higher take-home pay for hardworking families to tax breaks that will trigger a disinflationary boom, the One Big Beautiful Bill is designed to make America affordable again. This historic tax reform will ensure that Main Street thrives alongside Wall Street in President Trump’s Golden Age economy.
