Permitting deal could ease energy prices through added supply

Brown, Acton and Benson put household-cost plans forward

The latest version of legislation moving through Congress to streamline permitting for energy projects and other infrastructure represents a deal between Senate Republicans and Democrats and could ease energy prices by boosting supply, The Wall Street Journal reported. Michael Faulkender, who served as deputy Treasury secretary in the Trump administration last year, said the bill shows the parties can find some common ground on economic measures. “If you look at who negotiated the permitting reform, there’s quite a bit of ideological breadth,” Faulkender said. “It shows we can come to a compromise.”

Permitting could add energy supply, but Democrats may struggle to stop the war in Iran, which has driven up energy prices in the months since President Trump’s decision to attack. Gasoline prices, largely set by global energy markets, could remain high even if the war ends. In the Senate, Democrats are preparing votes to repeal Trump’s tariffs on Canada. The Journal described those tariffs as part of Trump’s “global trade war,” which it said contributed to rising prices. Democrats acknowledge that stricter limits on presidential tariff authority, which Trump has taken to its limits worldwide, could be vetoed and would likely have to wait for another administration, the Journal reported.

Democrats are set to control both chambers next year, but their main tools—taxes and spending—are limited and slow-moving, many demands are beyond lawmakers’ reach, and President Trump can veto legislation. Most bills require 60 votes to overcome a Senate filibuster, a tactic used to stall legislation. Democrats have won 54 Senate seats so far, with votes still being tabulated in two other races. Sarah Bianchi, a strategist at Evercore ISI who held senior economic roles in the Obama and Biden administrations, said, “I think it’s going to be really tough to move the needle.” She added: “They don’t have 60 votes, and they have the president, who’s not going to sign everything. Even if those weren’t constraints, making things more affordable is actually really hard.”

Michigan Rep. Debbie Dingell said reversing Trump’s cuts to Medicaid and Affordable Care Act subsidies, which were part of last year’s One Big Beautiful Bill, is one of House Democrats’ first goals. She was huddling with fellow lawmakers about ranking legislative priorities. “We’re going to have a 100-hour agenda, and a 100-day agenda” after Democrats take control of Congress on Jan. 3, she said in an interview. Expanding benefits could provide immediate relief to struggling households, but it could raise inflation over the longer term and add to the deficit unless offset by higher taxes.

Curbing data centers and slowing AI might dent the U.S. economy and harm many of the same voters who want to rein them in, The Wall Street Journal reported. The Nasdaq plunged on Thursday, driven by investor fears that the new Democratic-controlled Congress would crush the AI boom that had powered markets.

Simple arithmetic helps explain why affordability became a driving force in the midterm election, The Wall Street Journal said. Inflation was 3.7% for the 12 months through September, lifted by surging gasoline prices from the Iran war, tariffs and price spikes tied to the AI boom, according to the Labor Department. Through October, average earnings rose 3.1%. Over the past three months, the U.S. added an average of 137,000 jobs a month and unemployment remained low. Yet hiring cooled compared with past years, and millions of Americans could not find full-time employment in their fields. The Labor Department also reported that the proportion of economic output going to workers in salary and benefits was the smallest in data going back 80 years. A larger share of growing national income went to investors rather than employees. The Journal said the economy’s overall strength had not changed the mood of Americans who were sharing little in its growth.

The Federal Reserve sets the benchmark interest rate, which influences borrowing costs. Policymakers raised it by a quarter percentage point in September, pushing borrowing costs higher. Many investors expected another increase the next month, although they had recently pared bets on how high the Fed might bring rates the following year. Borrowing costs were already high, and the Fed’s moves heavily influence them; with mortgage rates around 7%, many would-be home buyers are locked out. The Fed raises rates to tamp down inflation or lowers them to boost employment; inflation, rather than unemployment, was the problem at present, and investors expected rates to move higher.

Don Schneider, a former economic adviser to congressional Republicans now at investment bank Piper Sandler, said, “For politicians, if you can make real wages rise consistently, that’s your path to victory and success.” He said prices had been rising “too fast for things that are really important to voters, like groceries and going out to dinner” relative to incomes. Democrats have discussed raising minimum wages or making it easier for workers to form unions and gain bargaining power. The other path is lowering inflation so price increases consume less of household paychecks. Beyond Democrats’ efforts to repeal tariffs and end the war in Iran, some economists argue for shrinking the federal budget deficit to lower inflation.

Democrats’ leverage to pass legislation has increased because Republican lawmakers who remained after the midterms are likely to be more open to working with the majority, Jared Bernstein, a top economic adviser to former President Joe Biden, said. “I think a potentially impactful outcome of this election is the recognition by Republicans that tying your future to Trump is a losing strategy,” Bernstein said. “If that’s the case, I could perhaps see Republicans joining with Democrats on affordability issues.”

Democratic state lawmakers and elected officials around the U.S. might have more leeway than their congressional counterparts to set policies on housing, wages, taxes and data-center development. Democrats won control of the governor’s seat and both houses of the state legislature in at least six states, including Michigan, Arizona and Nevada. Newly elected Democratic governors Gina Hinojosa in Texas, Amy Acton in Ohio and Keisha Lance Bottoms in Georgia all campaigned on restricting data centers. In Michigan, Jocelyn Benson successfully ran for governor on promises to lower costs, raise wages and end corruption. Benson plans to pass a $5,000 tax credit for caregivers, expand medical-debt relief and establish a prescription-drug affordability board with the authority to approve price increases. Benson also wants to guarantee teachers a minimum starting salary of $60,000 a year, she said.

The Wall Street Journal said the voters who powered the Democrats’ midterm victory delivered a blunt message: “Make the economy work for us. Now, Democrats must deliver.” Tom Green, a 29-year-old software engineer and a Columbus, Ohio voter, cast his vote last week in the Democratic Party’s midterm election with a wish list of tougher rules on AI data centers, universal health care and better job protections. He helped elect Sherrod Brown to the Senate and Amy Acton to the governor’s office, and both Democrats pledged to stop energy-hungry AI data centers from raising consumers’ electricity bills. Brown aims to cap utility-rate increases and control prescription-drug prices, while Acton promises to forgive medical debt and deliver tax breaks to families. Green was laid off seven months ago from an $89,000-a-year software-engineering job at a bank. After sending out 500 résumés, he had been invited to only a dozen interviews—a common complaint among job seekers. He put his home-buying plans on hold and, without health-care coverage, pays cash for his medications. “The economy doesn’t seem great, at least from my perspective,” Green, a Democrat, said.

David Conklin, 61, of Delaware County, Ohio, had been a Democrat for many years but voted for an independent candidate during the 2024 presidential election because he didn’t like Trump or former Vice President Kamala Harris. In the midterm election, he swung back to the Democrats to vote for Brown and Acton. He said he was motivated partly by Brown’s pledge to curb data-center construction. Conklin also wants Democrats to end the war in Iran, though he is unsure they can. Friends Kim Bell and Tiffany Weiser in Delaware County said they backed Democrats partly in hopes the party would end tariffs and help bring down the cost of groceries and other goods. Weiser, 51, said she gave up on renovating her front porch this summer because “the cost of wood and everything went up so much just from last summer.”

Matt Molyneux, a 47-year-old handyman for commercial properties in the Davenport, Iowa, area, said his finances are in good shape now but that he did not like Republican cuts to the social safety net. He received food stamps in the past, and that experience prompted him to vote after sitting out elections since 2020. “I was one of those people, at one point in time, and I needed that help,” he said. “I want to make sure that keeps going.” Christina Bohannan, one of the Democrats Molyneux voted for, said reversing the cuts should be a priority for the new Congress and that voters shared cost-of-living worries during her House campaign. “The Medicaid cuts are going to have potentially catastrophic effects on our hospitals here in Iowa,” Bohannan said. She expects some Republican lawmakers to support restoring the funds.

Some newly elected Democrats know firsthand how quickly they can lose their posts if they fail to deliver on their promises. In 2022, Republican Jen Kiggans told voters in southeastern Virginia that she had a plan to fight inflation and lower the cost of living. Voters elected her, and she defeated two-term Democratic Rep. Elaine Luria. On Tuesday, voters gave Luria her old job back. Luria said the four congressional campaigns sharpened her understanding of the stakes, especially on pocketbook issues. “Republicans broke their promises,” Luria said after her win last week. “I took back my seat from someone who went to Congress promising a lot of things, but who backed policies that made people’s lives a lot harder.”

Green is counting on promises by newly elected Michigan Democratic Sen. Abdul El-Sayed to back Medicare for All, a single-payer national health insurance system. The Wall Street Journal reported that Republicans were dead-set against it. “There has to be evidence that changes are being made or attempts at changes are being made,” Green said. Otherwise, he added, “I’m afraid the electorate will swing right back.”