Americans’ growing frustration over high prices has defined many political campaigns ahead of November’s midterm elections.

Rising costs of healthcare, gas and groceries during President Donald Trump’s second term have put Republicans on defense, not only in Washington, but in statehouse and gubernatorial races across the country.

As the political environment continues to sour for Republicans, a new analysis released by the Urban Institute on Monday underscores just how expensive everyday life has become in America: Gas and electricity prices are rising much faster than paychecks. Housing, childcare and healthcare are becoming a bigger strain for millions of people. 

And affordability pressure is worsening in once-affordable havens such as Atlanta; Louisville, Kentucky; and Rochester, New York, where costs of housing, groceries and healthcare are increasing faster than the national average.

The latest installment of The American Affordability Tracker from the left-leaning think tank details how costs of food, housing, energy and healthcare have changed across all 50 states over recent years. High prices are pinching people across income brackets, with an estimated 49% of families unable to afford the basic costs of living. That’s according to Urban Institute’s true cost of economic security calculation, which measures how much is needed to live securely.

“We’re not saying that 49% of people are poor. We’re saying that they’re not secure,” said Gregory Acs, an Urban Institute fellow who worked on the research project. “Even if they’re paying all their bills, they’re paying all their bills at best.”

He said the analysis confirms that the economic angst so many people feel is justified — despite strong national economic indicators such as low unemployment and growing gross domestic product.

“They are not crazy. They’re not making it up,” Acs said. “They’re not being marketed into feeling bad. They really do have struggles.”

Among other findings, the report shows that average annual childcare costs for two young children have risen $6,600 over the past decade. Since January 2025, gas prices have risen by 33% — an average increase of $1.02 per gallon nationally. And premiums for benchmark plans on the Affordable Care Act Marketplace are up 22% since last year, now averaging $611 per month.

Affordability politics

Those struggles have become a political liability for Republicans, who control the White House, both chambers of Congress, most state legislatures and a majority of governor’s offices. 

All midterm elections, as a referendum on the sitting president, are difficult for incumbents in the majority. But this cycle is particularly charged because of Trump’s promises to improve the economy during his 2024 campaign, said Todd Belt, a professor of political management at The George Washington University.

“He hasn’t done that. In fact, in a lot of ways, he’s made things worse,” Belt said, citing Trump’s unilateral war in Iran and tariff policies — both of which have driven up costs. “And so Donald Trump is bringing down the Republican ticket.”

Some Democrats have proposed new policies to help lower costs, following the lead of New York City Mayor Zohran Mamdani whose winning campaign last year promised free buses and childcare. But many others are simply benefiting from the sinking approval ratings of the president — driven largely by high prices. 

“For the Democrats, it’s enough to not be Donald Trump,” Belt said. “People are feeling it, and you can’t out-message it. You can’t out-message what people are feeling in their finances and what they know prices to be as they go to the gas station every week, as they see it in the grocery store.”

Republican officials have recognized the political drag of rising prices. 

Vice President JD Vance has publicly acknowledged Americans’ growing frustration with high prices, particularly for gas, telling voters “we’re working on it,” during a CBS News town hall in Michigan earlier this month. 

But Trump has often downplayed such concerns, calling affordability “a hoax” promulgated by Democrats. Campaigning for Kansas Republican Sen. Roger Marshall last week in an unexpectedly competitive race, Trump blamed previous President Joe Biden for rising prices. Trump pledged that the war in Iran would end soon.

“And when it does, you’re going to see the biggest drop in oil that anyone’s ever seen,” he said. 

Wide-ranging impacts

Rising prices are hitting consumers and businesses alike.

Earlier this month, Small Business for America’s Future, a coalition of business owners across the country, released results of a new survey that found many small employers are struggling with high costs of utilities, fuel, business supplies and employee healthcare.

Nearly two-thirds of the 1,171 businesses owners surveyed said they had recently cut or skipped their own pay to keep their operations afloat. Nearly half said customers are spending significantly less, and more than two-thirds said they had delayed, canceled or scaled back investments because of uncertainty about federal economic policy. 

Walt Rowen, co-chair of that coalition, said in a news release his own business exemplified the challenges facing Main Street operations across the country. He’s the president of the 116-year-old Susquehanna Glass Company in Columbia, Pennsylvania. Tariffs have disrupted supply chains, he said, and driven up heating oil costs.

“We’ve lived through the Depression, wars, and recessions,” his statement said. “Heating my factory in this current economy is some of the hardest math I’ve ever had to do, and I’m expecting the bill to jump 30% to 40% this winter.”

High prices are hitting consumers across demographic and geographic borders.

Acs, the Urban Institute researcher, said rising prices squeeze more than just the poorest Americans. Many middle income earners are struggling to cover the costs of healthcare, higher education and housing, “feeling like they’re on a treadmill at best,” he said. 

The Urban Institute’s recent analysis also highlighted rising price challenges in regions long considered affordable. 

In Arizona, gas and electricity price increases are outstripping other parts of the country: Arizonans pay an average of $219 per month for electricity, the highest in the U.S. and nearly $50 more than the national average. 

In the battleground state of Wisconsin, where gas and electricity costs are well below the national average, parents face disproportionately high costs for childcare: Parents there spend an average of $30,800 per year for care for two young children — $6,900 more than the national average.

“I think there is an old story that affordability really is a coastal problem,” Acs said. “What we’re trying to illustrate is that it’s not just high-cost areas where costs are an issue. Costs are an issue throughout the country.”

Stateline reporter Kevin Hardy can be reached at khardy@stateline.org.

With Election Day less than a month away, lawmakers in several states are suspending gas taxes or rolling back regulations on diesel fuel as voters grow increasingly frustrated with rising fuel costs amid President Donald Trump’s war with Iran.

On Tuesday, Trump issued an executive order to expand access to tax-free diesel fuel nationwide, following the lead of several governors who have taken the same step.

Trump signed the order at a Nebraska rally, promising U.S. Sen. Pete Ricketts and Gov. Jim Pillen, both Republicans, that “this should absolutely ensure your election, I guarantee you that,” the Associated Press reported.

In at least four states — Georgia, Indiana, Ohio and Utah — leaders have moved to temporarily suspend or reduce the state tax on gasoline.

Ohio lawmakers voted last month to approve a 90-day gas tax holiday, a move called for by both the Democratic and Republican candidates for governor.

While many Democrats joined with Republicans to pass the bill, some Democratic leaders called the measure a last-ditch effort to salvage the GOP’s electoral prospects, the Ohio Capital Journal reported.

“If this had been so important, we would have acted (earlier this year), but we didn’t,” said Senate Minority Leader Nickie Antonio, a Democrat. “They said we have nothing more to take up until after the election, and then suddenly they got polling numbers, and the polling numbers told them they were behind.”

Georgia Republican Gov. Brian Kemp suspended the state’s gas tax with an executive order, as did Indiana Republican Gov. Mike Braun.

And Utah lawmakers voted earlier this year to temporarily reduce the gas tax by 15%.

Tennessee governor lets farmers use untaxed diesel on roads after Trump defers federal enforcement

Meanwhile, 10 states had reduced restrictions on the use of tax-exempt diesel fuel prior to Trump’s order that loosened those restrictions nationwide.

That fuel, known as red-dyed diesel, is normally only allowed for off-highway agricultural, industrial and railroad use, according to the North Dakota Monitor. Some governors have issued executive orders expanding the use of red-dyed diesel, which is not taxed like regular diesel,  in a bid to help farmers and truckers with transportation costs.

North Dakota, Nebraska, Oklahoma, Texas, Missouri, Arkansas, Louisiana, Alabama, North Carolina and Indiana have all issued similar orders, according to the Associated Press.

“Texas agriculture and freight run on diesel,” Texas Republican Gov. Greg Abbott said in a statement, according to the Texas Tribune. “Record prices put both industries at risk and raise costs for every Texas family.”

Tennessee Republican Gov. Bill Lee also issued an order Tuesday allowing farmers and loggers to use red-dyed diesel on public roads, at the urging of state lawmakers.

In other states, leaders are facing pressure to take similar action.

Legislative leaders in North Carolina have called for a special session on fuel prices. Some lawmakers there have suggested that the state could use surplus revenue from state reserves to pay for road projects while temporarily suspending the gas tax.

The Iowa Corn Growers Association is urging lawmakers there to follow suit, while asking them to push the Trump administration to release oil from the U.S. Strategic Oil Reserve.

In Kentucky, Republican Agriculture Commissioner Jonathan Shell has asked Democratic Gov. Andy Beshear to also roll back restrictions on untaxed diesel. And Connecticut Republicans have proposed a three-month holiday on fuel taxes, while Democrats have countered that they should focus on ending Trump’s war with Iran.

Stateline reporter Alex Brown can be reached at abrown@stateline.org.

A leading Democratic campaign committee is projecting confidence in U.S. Senate toss-up races four weeks before Election Day, though it has yet to commit resources to the reddest states that have recently entered the Senate map.

Senate Majority PAC, which is run by allies of Senate Democratic Leader Chuck Schumer of New York, has bought ad time, or has commitments to do so, in nine states, Lauren French, the group’s chief spokesperson told reporters Tuesday. 

Those states — Alaska, Georgia, Iowa, Maine, Michigan, New Hampshire, North Carolina, Ohio and Texas — show Democrats are competing this cycle in typically Republican places. Elections analysts generally say those states are toss-ups or lean Democratic.

The Democratic super PAC’s slate, though, is not as expansive as some of the latest public polls and forecaster ratings show could be in play.

The group is “watching really closely” the races in GOP strongholds of Florida, South Carolina, Mississippi and Kansas, French said. 

At least one of those states, Kansas, could be in play for the first time in decades, according to elections forecaster The Cook Political Report with Amy Walter, which moved it into the toss-up category Tuesday.

“Broadly, we are very pleased with the state of the race right now,” French said. “We are invested in nine battleground states and are looking very closely at some of the expansion states that are coming (into) play as we get four weeks from the election and the environment continues to be increasingly rough for Republicans.”

An expanded Senate map is available to Democrats because of President Donald Trump’s unpopularity, especially tied to the Iran war and related high gas prices, French said. Trump’s approval rating is lower than his disapproval rating “in every battleground state,” she added.

North Carolina moves

Opportunities for Republicans appear to be shrinking, with North Carolina moving further toward Democrats. 

Cook shifted the race from lean Democrat to likely Democrat on Tuesday, after the Senate Leadership Fund, a Republican super PAC, said last week it was freezing future spending in the state.

French said the Senate Majority PAC also canceled its television and digital spending this week in the race for the seat left open by retiring Republican Thom Tillis. The group has not made decisions on spending in the Tar Heel State beyond this week, she said.

Republicans hold cash edge

While the national political environment favors Democrats, the GOP and its fellow campaign groups maintain a massive cash advantage against Democrats.

Trump’s super PAC, MAGA Inc., held more than $400 million at the end of August, according to records filed with the Federal Election Commission. Senate Majority PAC showed around $57 million on hand in the same report.

Fundraising numbers for official party committees also significantly favor Republicans. 

The Republican National Committee and the party’s campaign groups supporting House and Senate candidates outraised their Democratic counterparts by about $100 million through Aug. 31, according to an analysis by nonpartisan elections analyst Ballopedia. 

Republicans have largely aimed to portray Democrats as too far to the left to capably manage Congress.

“Voters have a clear choice this November between Republicans who will fight for them and radical, socialist Democrats who would serve as rubber stamps for Chuck Schumer’s Washington machine,” Bernadette Breslin, a spokeswoman for the National Republican Senatorial Committee, said in a statement.

Rare pickup opportunities

Still, the Senate Majority PAC’s bullish sentiment broadly matches expert opinion, as forecasters continue to see a strong case for Democrats to pick up Senate seats. Republicans now control the Senate with 53 seats.

The elections handicapper Sabato’s Crystal Ball moved two Senate races in Democrats’ direction Tuesday. 

The group labeled Alaska as leaning toward Democratic former U.S. Rep. Mary Peltola in her challenge to incumbent Republican Dan Sullivan, and shifted U.S. Sen. Darline Graham’s race in South Carolina from safe Republican to likely Republican. Graham was appointed to the seat when her late brother died, won a Republican primary election and is now seeking a six-year term.

Overall, Sabato’s Crystal Ball, which operates at the University of Virginia’s Center for Politics, rates 49 seats, including those of incumbents not on the ballot this year, as at least leaning toward the Democrat, with four seen as toss-ups. 

Democrats, who now hold 47 seats, would need to net 51 seats to win a majority because Vice President JD Vance casts tie-breaking votes.

A flip in control of the chamber would significantly slow Trump’s nominees to the federal bench and executive branch posts. 

About a month and a half out from the midterm elections, gubernatorial Republican candidate Tom Tiffany is taking some small steps to distance himself from President Donald Trump and the rising gas prices that are resulting from the war in Iran. Meanwhile, Democratic candidate David Crowley is seeking to highlight Tiffany’s history of loyalty to the two-term president. 

Tiffany and Crowley made comments about gas prices, the Iran war and Trump’s recent media bans while talking to reporters at the Wisconsin Counties Association on Tuesday after pitching local county officials on why each is the right candidate to lead the state.

Tiffany , who is endorsed by Trump, told reporters that he thinks it is “time to “wrap up” the war in Iran, even though he has voted in Congress against measures that would have directed Trump to end the military engagement and respect the constitutional warmaking authority of Congress. Most recently, Tiffany did not join the seven House Republicans who broke ranks last week and voted to stop  Trump’s war with Iran unless Congress approved further action.

Trump pondered on Monday whether to “annihilate” Iran while addressing the United Nations General Assembly.

Tiffany explained that he voted against the measures ending the conflict because he believes the “president has that authority, and so he should exercise that authority.” 

Congress holds the sole power to declare war under the U.S. Constitution. 

“The president has final say in regards to this, but I just believe that we should be exiting Iran,” Tiffany said. “It’s time to move on. We’ve degraded their nuclear facilities. We degraded their military. Most of their ships are on the bottom of the ocean. Time to come home, take care of business here in America.”

The Iran war has driven diesel prices to a record high average of $6.51 per gallon this week with the Midwest outpacing the rest of the country. In Wisconsin, the average prices of a gallon of diesel hit $6.56 on Monday, according to AAA.

Asked whether the gas prices will hurt Republicans in the midterms, Tiffany said “we’ll see what happens” and said the U.S. needs to work to become energy independent. He argued that Crowley would not help the issue given his support of “net zero.” 

“No diesel fuel, no gasoline, no crude oil. Do you think he’s gonna fix the problem? Clearly he won’t,” Tiffany said. 

Crowley has been targeting Tiffany on the issue this week, visiting a farmer in Baraboo to talk about the issue and releasing an ad that blames Tiffany for contributing to the rise in diesel and gas prices.

“Tiffany has proven with every vote that he works for Donald Trump and the billionaires trying to buy this election, not for the families, farmers, and small business owners paying the price at the pump,” Crowley said in a statement. “Five times he has had the chance to end the war that’s driving our prices up, and five times he’s chosen Trump instead. Tom Tiffany’s only loyal to Trump — not us, Wisconsin.” 

Tiffany said he would not restrict media access on a state level. The Trump administration banned three media outlets, CNN, Politico and MS Now, from covering him in the White House. The outlets are suing, and other major outlets are boycotting by halting TV coverage of the White House. 

While Tiffany said he believes in a free press, he also immediately turned to criticize “slanted” media outlets and told a reporter from the Milwaukee Journal Sentinel that despite his belief that her outlet is “slanted,” he would “continue to allow” her to cover him.

“I did not deter anyone here from joining us today and I don’t plan on doing that. I believe in open free press that they be able to ask us questions,” Tiffany said. “The principle that I live with is that I just expect all of you to be fair, and as long as you’re fair in your writing, I always welcome the press here. It’s when the press is slanted, that’s what’s frustrating,” he said, echoing Trump’s criticism of much of the U.S. media.

“Even when the press has been slanted, as we’ve seen with the Journal Sentinel… we still have them here today,” Tiffany added.

Crowley said he would “absolutely not” implement any statewide media ban as governor and said he was glad to see major outlets supporting the other outlets by boycotting coverage.

“We want to make sure that we have the freedom of the press. I think it’s extremely important,” Crowley said.

WASHINGTON — The Federal Reserve raised interest rates Wednesday for the first time in three years as inflation continues to dog the economy, largely driven by soaring gas and fuel oil prices while the war in Iran drags on.

The central bank’s Federal Open Market Committee voted 12-0 to increase its benchmark interest rate by a quarter of a percentage point, reaching the new range from 3.75% to 4% and making the cost of borrowing more expensive for Americans.

The committee released an upbeat statement touting economic growth at “a solid pace.”

“While uncertainty remains elevated owing, in part, to geopolitical developments, domestic spending has been resilient. Productivity growth is strong, and capital investment is robust. Job gains have kept pace with the workforce, and the unemployment rate has changed little,” according to the statement released Wednesday afternoon.

“Inflation remains elevated. Today’s policy action will support a timelier return to the Committee’s 2 percent goal. The Committee will deliver price stability,” the statement continued.

Federal Reserve Chair Kevin Warsh, four months into his tenure, described Wednesday’s unanimous decision to raise rates as “sober.”

“The plain fact is that inflation is too high, and has been for too long,” Warsh said during a press conference following the Fed’s meeting.

“This summer’s inflation readings do not tell me that underlying trends have meaningfully improved. … Too many categories are still posting increases above 3 percent on both a six and 12-month basis,” Warsh said.

Trump campaign for lower rates

President Donald Trump publicly pressured and name-called Warsh’s predecessor Jerome Powell for months for not lowering interest rates. 

The public attacks escalated into a federal probe of Powell and the Fed for costly renovations at the Fed’s headquarters in Washington. The administration eventually dropped the investigation.

Trump criticized the rate increase on his Truth Social platform Wednesday afternoon, saying the U.S. rates “should be 1%, or less, because we are the Best Credit in the World — BY FAR.”

“Our Country is BOOMING with new Investment! If we stopped Trading with every country that we have a Deficit with, which is most of them, we would make, at least, 1.5 Trillion Dollars a year. The word “Deficit” is nothing more than a fancy word for LOSS. We are “carrying” almost every country in the World, and that cannot go on any longer. LOWER THE INTEREST RATES FOR THE UNITED STATES OF AMERICA, AND FAST!,” he wrote.

Warsh declined to answer questions from reporters about Trump’s previous calls for lower interest rates.

“Part of the independence of the Federal Reserve is we stay in our lane,” Warsh said.

The interest hike comes less than a week after the government’s latest consumer price index revealed the cost of food, energy, housing and other goods and services rose 0.4% from July to August. The cost of all items over the past year has risen 3.4%.

Rep. Jason Smith, the Republican chair of the tax-writing House Ways and Means Committee, criticized the decision, saying in a statement that “interest rates should be coming down, not going up.”

The Missouri Republican praised the Trump-led “big beautiful bill” tax law passed last summer for delivering “larger paychecks” to Americans, and he blamed former President Joe Biden for past higher inflation.

“After years of elevated borrowing costs, a rate increase is the opposite of the relief families and small businesses need. As President Trump works to restore stability in the Middle East and bring down energy prices, the Fed should recognize the progress,” Smith said in a written statement Wednesday afternoon. 

Soaring gas prices

Spiking energy prices caused by the war in Iran were the main driver behind higher costs. Gasoline alone rose 3.9% over the month of August. 

As of Wednesday, Americans were paying an average of nearly $4.37 a gallon at the pump, according to AAA. Diesel prices reached a record high of $6.31.

The price of a barrel of oil surged above $100 in recent days, including Wednesday afternoon, when it reached $105, as fighting flared in the Middle East. 

The United States and Iran continue launching rockets in the Strait of Hormuz, where one-fifth of the world’s petroleum traveled prior to the war. U.S. Central Command claimed Sept. 8 that it “destroyed” five Iranian crude oil carriers as part of its naval blockade aimed at damaging Iran’s economy.

The conflict spilled over in July into another key waterway for Saudi Arabian oil exports. Iran-backed Houthi rebels restarted an assault on commercial vessels in the Red Sea for the first time since 2024, and are fighting for control of the Bab al-Mandab strait. The group also directly struck targets in Saudi Arabia, a U.S. ally, beginning in July, and is threatening more strikes, according to Houthi spokesman Yahya Saree. The United Nations Security Council is warning of the likelihood of a humanitarian crisis. 

When asked by a reporter at Wednesday’s press conference how incremental rate hikes will help when geopolitical events do not show signs of improvement, Warsh said the Fed “cannot affect any individual price, whether it be oil prices, whether it be foodstuffs at the grocery store.”

“But what we can do and will do is ensure that any change in relative prices don’t broaden out, don’t have second and third order effects on the economy. That’s what we’re tasked to do, and that’s what we will do,” Warsh said.