Issue explainer
Economy and Cost of Living
Independent information project. Not an official government website.
What is the issue?
Economic policy covers the prices families pay, the taxes they owe, the jobs and wages available to them, and how much government spends and borrows. Inflation measures how quickly prices rise over time. The federal deficit is the gap between what the government spends and collects in one year, and the national debt is the total of past borrowing. Housing costs, taxes, and retirement programs such as Social Security and Medicare affect household budgets in different ways. Voters often weigh near-term relief against long-term costs, so the same policy can look different depending on the time frame and on who is affected. Many outcomes also depend on forces no single office controls, such as global markets and Federal Reserve decisions.
What decisions are being debated?
How should government respond to high prices and housing costs?
- Tax changes or direct assistance to households, which can ease budgets quickly but may add to deficits.
- Expanding the supply of housing and goods through zoning, permitting, or trade changes, which can take years to have an effect.
- Leaving interest rates to the independent Federal Reserve, which influences prices but also borrowing costs and hiring.
What level of taxes and spending is appropriate?
- Lower tax rates to encourage work and investment, which reduces revenue unless spending falls.
- Higher taxes on some incomes or wealth to fund programs or reduce deficits, which may change incentives.
- Restructuring or cutting spending, which lowers costs but changes services people rely on.
How should Social Security and Medicare stay solvent?
- Raise revenue, for example through payroll-tax changes.
- Adjust benefits or eligibility ages.
- Combine measures; the program trustees publish funding projections, and the timing of changes affects who bears the cost.
What can government do?
- Congress and federal agencies
- Congress writes tax law, sets federal spending, and funds Social Security and Medicare. The President signs or vetoes bills and agencies administer them. The Federal Reserve, an independent agency, sets short-term interest rates.
- States
- State legislatures and governors set state income, sales, and property-tax rules and state budgets, and may set a minimum wage above the federal level.
- Counties and cities
- Cities and counties control most zoning and permitting and set local property-tax rates.
- Shared or limited authority
- Housing combines federal funding, state law, and local zoning. No single level of government controls prices.
Relevant elections:
- U.S. Senate and House races: Congress sets federal taxes, spending, and retirement programs.
- State election pages: States set state taxes, budgets, and housing law.
What evidence should voters consider?
- Consumer Price Index (external site, opens in new tab)
(U.S. Bureau of Labor Statistics; Official data)
- Budget and economic projections (external site, opens in new tab)
(Congressional Budget Office; Official data)
- Trustees Reports summary (external site, opens in new tab)
(Social Security Administration; Official data)
- Monetary policy (external site, opens in new tab)
(Board of Governors of the Federal Reserve System; Official data)
Where do candidates stand?
Candidate comparisons for this issue are not available yet. They appear only for races where each position is backed by a source we have verified. A missing position is not support, opposition, or neutrality. Candidate filings for every race are listed on the federal races pages.
Learn more
- Tax Policy Center (external site, opens in new tab) (Urban-Brookings Tax Policy Center; Independent research)
- HUD USER housing research (external site, opens in new tab) (U.S. Department of Housing and Urban Development; Official data)