Trump offers scant ‘affordability’ proposals in State of the Union as the issue remains central for upcoming elections
President Trump’s State of the Union address reaffirmed affordability as a central issue for the coming midterm elections.
But the speech also demonstrated the limited options the president has (or at least is willing to deploy) as Americans continue to express deep strain on their pocketbooks.
Tuesday night’s speech saw the president largely reiterating existing policies and doubling down on unpopular tariffs, while offering two new proposals aimed at affordability.
Trump pledged what he called new retirement account access for Americans without a 401(k).
The accounts, modeled on federal employees’ retirement plans, were already enacted into law in previous legislation signed by former President Joe Biden. A White House official told Yahoo Finance Wednesday morning that what is new are plans around “setting up a new structure using the powers passed by Congress [to encourage] greater savings stickiness.”
In the speech, Trump also announced a new “ratepayer protection pledge” negotiated with the Big Tech companies to lower Americans’ utility prices.
The president vowed that AI hyperscalers may soon “build their own power plants,” but Big Tech company promises in this arena so far have fallen far short of Trump’s suggestion.
President Donald Trump gestures as he delivers the State of the Union address on February 24. (ANDREW CABALLERO-REYNOLDS / AFP via Getty Images) ·ANDREW CABALLERO-REYNOLDS via Getty Images
What was clear from the speech is that affordability remains a vexing issue for the president.
“It was obviously a very effective word choice and a message platform that the Democrats seized on back in November,” noted Henrietta Treyz of Veda Partners Wednesday morning in an appearance on Yahoo Finance, saying the affordability buzzword has “seeped into the popular culture.”
It’s a rare turnabout for Trump, she noted, who has often been able to define the debate on his own terms.
As for the broader concerns, the president downplayed affordability worries and once again tried to push those worries onto Democrats, telling his opponents, “You caused that problem.”
The president also highlighted a series of previously announced affordability efforts and touted things like lower gas prices. He claimed that prescription drug prices had fallen dramatically — though evidence of major price changes is limited — while also asking lawmakers to pass a healthcare plan that has divided Republicans.
As Tobin Marcus of Wolfe Research put it in a note on Wednesday morning, the speech “gave little indication that there will be some big pivot or an avalanche of new policy.”
The president doubled down on tariffs that have proven unpopular with Americans.
Trump called out the Supreme Court for what he described as “a very unfortunate ruling” in a highly anticipated moment, criticizing the court even as the four justices in attendance sat expressionless a few feet away.
The president also promised tariffs will be “even stronger than before” in spite of the ruling.
President Donald Trump shakes hands with Supreme Court Chief Justice John Roberts as he arrives to deliver his State of the Union address. (ANDREW CABALLERO-REYNOLDS / AFP via Getty Images) ·ANDREW CABALLERO-REYNOLDS via Getty Images
A recent ABC News/Washington Post/Ipsos poll found that 64% of Americans disapprove of Trump’s handling of tariffs, while only 34% approve.
There was also some evidence Tuesday night that Trump’s message would have a hard time gaining traction.
Public opinion research firm Navigator Research offered real-time dial-testing results from voters in Arizona during the speech, with those respondents “not impressed” when Trump touted tariffs. Their reactions also took a dramatic downturn when he claimed America is “winning.”
It’s a divide that Democrats are clearly looking to exploit this November. Virginia Gov. Abigail Spanberger focused on affordability in the formal Democratic rebuttal Tuesday, calling tariffs a “massive tax hike on you and your family.”
Meanwhile, the two news announcements from the president remain short on key details.
The retirement account proposal would apply to around 50 million Americans without access to a 401(k).
“I’m announcing that next year, my administration will give these often forgotten American workers — great people, the people that built our country — access to the same type of retirement plan offered to every federal worker,” Trump said, adding that there will be a government match of up to $1,000 each year.
A White House official told Yahoo Finance that no new authority from Congress is needed, and changes will be announced in the coming weeks to address evidence that workers could drop out of accounts when they change jobs.
Senate Minority Leader Chuck Schumer is seen prior to President Donald Trump’s State of the Union address during a joint session of Congress on February 24. (Kenny Holston-Pool/Getty Images) ·Pool via Getty Images
Meanwhile, Trump described his other announcement Tuesday as a “new ratepayer protection pledge” that will require Big Tech companies to “provide for their own power needs.”
The policy has taken the form of new “emergency wholesale electricity auctions” more focused on locking large tech companies into long-term energy contracts to provide certainty to utilities.
Big Tech companies have responded to Trump’s pressure publicly in various ways, from Microsoft (MSFT) saying it’s willing to help “bear the cost” to some limited investments in energy, like Meta’s (META) backing of nuclear energy.
In any case, experts expect a years-long process before significant changes show up on Americans’ utility bills.
The nuance on these two issues was largely overlooked Tuesday night by Trump, who claimed, “inflation is plummeting, incomes are rising fast, the roaring economy is roaring like never before.”
Ben Werschkul is a Washington correspondent for Yahoo Finance.
