Trump Rails Against Focus on ‘Affordability’

Trump and Hegseth at the Cabinet meeting
Reuters
By Yuval Rosenberg and Michael Rainey

Happy Tuesday! The political world will be watching the results tonight of a special election in Tennessee's 7th congressional district, where Republican Matt Van Epps is expected to win a race to replace former Rep. Mark Green, who resigned in July - but the outcome and the margin will be seen as a sign of how both parties are faring as they head toward the 2026 midterms.

Here's what else we're watching today.

Trump Rails Against Focus on 'Affordability'

President Trump hosted a lengthy Cabinet meeting today at which he made news - and not just for appearing to doze off at times shortly after criticizing a recent New York Times report that questioned his stamina. "Trump is sharp," he insisted early in the meeting. Here are five takeaways.

Trump calls focus on affordability "a fake narrative": The president touted the state of the economy and bashed the recent focus on affordability, calling it "a Democrat scam" and "a fake narrative that the Democrats talk about."

Trump insisted he has largely halted inflation, which rose to 3% in September, the latest government reading, and said that he's reduced some drug prices by an impossible 500% to 900%. But he bristled at the focus on prices. "The word affordability is a con job by the Democrats," he said.

Democrats have indeed been talking about it, increasingly so after the issue helped them win key elections last month. But some of Trump's Cabinet secretaries seemed to see the issue as a real concern, too. Treasury Secretary Scott Bessent, for example, said it has been a great year for the economy and added that the Republican domestic policy bill signed by Trump in July will help deal with what he labeled a crisis. "The best way to address the affordability crisis is to give Americans more money in their pockets, which is what this bill has done," he said.

Trump offers little clarity on healthcare: The president again criticized the Affordable Care Act and said that his party is "united" in healthcare negotiations with Democrats. But hopes are fading for any bipartisan deal to extend the enhanced ACA subsidies set to expire at the end of the month. "Conversations continue," Senate Majority Leader John Thune told reporters on Tuesday. "I don't think, at this point, we have a clear path forward. I don't think Democrats have a clear path forward."

Republicans have yet to coalesce around a healthcare plan. A tentative proposal from the White House that paired a two-year extension of the expiring subsidies with new eligibility limits was quickly pulled in the face of opposition from GOP lawmakers. Trump on Tuesday reiterated his preference to send ACA funds directly to individuals, and GOP lawmakers are working on proposals along those lines.

But some lawmakers reportedly acknowledge that, unless Trump gets more engaged and approves some plan to extend the subsidies, the Senate vote next week on a Democratic bill is doomed to fail, as is a possible parallel vote on a GOP alternative. The result would be that millions of Americans are hit with massive increases in premium payments.

Trump again promises tariff refund checks: Trump said that next year is projected to be the largest ever for tax refunds and again promised that he'll be issuing refunds out of the tariff revenue being collected. "We're going to be giving back refunds out of the tariffs," Trump said, "because we've taken in literally trillions of dollars and we're going to be giving a nice dividend to the people in addition to reducing debt."

The math there simply doesn't work. Trump's claim wildly overstates the amount of tariff revenue coming into the government, estimated by the Bipartisan Policy Center to total about $259 billion so far in 2025. The Tax Foundation recently estimated that sending $2,000 tariff refunds could cost anywhere from $280 billion to $607 billion, depending on how the payments are designed. That means the refunds could add to the deficit rather than reducing it - a key reason that lawmakers on Capitol Hill are reportedly very skeptical of the idea.

That hasn't stopped Trump from touting it - and making even bigger promises. "As time goes by, over the next two, three, four years, those numbers are going to go up and I believe that at some point in the not-too-distant future, you won't even have income tax to pay because the money we're taking in is so great."

A new Fed chair: Trump again lashed out at Federal Reserve Chair Jerome Powell, calling him "incompetent" and "a real dope" while also reiterating his push for lower interest rates. The president said that he'll likely be announcing his choice to succeed Powell before long. "We'll be announcing somebody, probably early next year, for the new chairman of the Fed," he said.

Trump joked that he spoke to Bessent about taking the job but said that the Treasury secretary prefers to stay where he is. The president indicated that the search for Powell's successor has concluded. "We have it down to one," Trump said, without naming his pick.

White House National Economic Council Director Kevin Hassett is widely seen as Trump's likely choice.

Hegseth says he didn't see second strike on boat: Lawmakers in both the House and Senate have launched inquiries into the administration's strikes on alleged drug boats in the Caribbean, with a particular focus on a so-called "double tap" strike in September that experts have said meets the criteria for a war crime.

Defense Secretary Pete Hegseth said at Tuesday's Cabinet meeting that he watched the first strike that September attack and did not see any survivors before leaving to attend other meetings. He said he later learned about the second strike on the same boat, which was ordered to kill survivors of the first hit. Hegseth defended the strike and Admiral Frank "Mitch" Bradley, who the administration says ordered it. "Admiral Bradley made the correct decision to ultimately sink the boat and eliminate the threat," Hegseth said. "We have his back."

Trump had Hegseth's back. "Pete's doing a great job," he said.

Costco Sues Trump Administration Seeking Tariff Refund

As the Supreme Court deliberates over the question of whether a broad set of tariffs imposed by President Trump on trading partners around the world is legal, retail giant Costco has sued the Trump administration to recover the tariffs it has paid.

The lawsuit filed Friday challenges Trump's use of the International Emergency Economic Powers Act to authorize the new tariffs, which Trump has referred to as "reciprocal tariffs," arguing that the 1977 law does not give the president the power to override Congress on tariff policy.

"The text of IEEPA does not use the word 'tariff' or any term of equivalent meaning," the lawsuit says. "Because IEEPA does not clearly authorize the President to set tariffs ... the Challenged Tariff Orders cannot stand and the defendants are not authorized to implement and collect them."

Costco said it is seeking a "full refund" of all import fees paid under IEEPA authority, though it did not cite a specific amount.

The U.S. Court of International Trade and the U.S. Court of Appeals for the Federal Circuit in Washington ruled earlier this year that Trump's IEEPA tariffs are illegal. The IEEPA tariffs have generated roughly $90 billion in revenues overall so far this year, per the Associated Press. Numerous other companies, including Revlon, Ray-Ban and Bumble Bee Foods, have sued to recover the tariffs they have paid.

Trump has warned that if the Supreme Court rules against his tariffs and says he overstepped his authority in imposing them, it would threaten national security and could "literally destroy" the country.

Retroactive Tax Break Worth $16 Billion: Report

Companies will claim $16 billion in new tax breaks for depreciation this year for investments made before the Republican tax bill became law on July 4, according to an analysis by the Joint Committee on Taxation.

The One Big Beautiful Bill Act provides 100% depreciation for companies making investments in areas such as technology, equipment and buildings, with those breaks retroactively taking effect on January 19, 2025 - the day before President Trump was sworn into his second term in office.

In a September letter to the JCT on the issue, Democratic Sen. Elizabeth Warren slammed the generous depreciation rule as "a massive corporate giveaway" and an "outsized boon to big business."

Warren questioned the supposed benefits of the depreciation rule, which supporters say will encourage greater investment. The Massachusetts lawmaker noted that the tax law makes the depreciation benefit retroactive, challenging the idea that it is meant to inspire future investment decisions. "This blatant corporate handout will do nothing to encourage additional investments, as it is impossible to incentivize economic activity that has already happened," Warren wrote.

Steve Wamhoff, federal policy director at the liberal-leaning Institute on Taxation and Economic Policy, agreed with Warren's assessment. "It is quite obvious that if an incentive is retroactive, it is not actually an effective incentive," he told The Washington Post. "You cannot change what a company did in the past, so that half-year of retroactive effect of the provision is just a windfall to companies. That part is just ridiculous."

Defending the provision, Republican Sen. Mike Crapo, chair of the Finance Committee, told Fox Business earlier this year that more generous depreciation would help generate "capital formation in this country."

Michael and Susan Dell Pledge $6.25 Billion for Children's Accounts

Tech billionaire Michael Dell and his wife Susan announced Tuesday that they will give 25 million children $250 each in individual investment accounts, totaling $6.25 billion overall.

The gift is modeled on the "Trump accounts" that were created by this year's Republican tax bill and will provide $1,000 for all babies in the U.S. born during the four years of President Trump's second administration, from January 1, 2025, to December 31, 2028.

The Dell pledge targets a different group of children, focusing on those up to 10 years old living in households in zip codes where the median income is less than $150,000. Details are expected to be worked out by next summer.

At a press conference with the Dells, Trump called the accounts "real trust funds for every American child."

Quote of the Day

"Rather than dodge this Committee, we ask that you come forward in the light of day and give the American people answers about the impact of your policies - including higher costs and a worsening unemployment rate. If you truly stand by this agenda, and have found ample time to meet with House Republicans behind closed doors, you should have no difficulty doing so in front of the full Committee."

− Rep. Brendan Boyle and other Democrats on the House Budget Committee, in a letter sent Monday to White House budget director Russell Vought, demanding his immediate testimony before the committee.

The Democrats wrote that if Vought fails to appear before the committee by the end of the year, it would be the first time in the last 50 years that the head of the Office of Management and Budget hasn't done so.

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