The nation’s longest federal government shutdown has now concluded. However, families relying on federal aid to afford health insurance have experienced losses.
The core issue that triggered the shutdown—the affordability crisis facing Americans—was precisely why many Senators deemed a prolonged shutdown unsustainable. As the impasse continued, American families suffered significantly from even a temporary disruption in vital programs, ranging from childcare subsidies and food assistance to housing vouchers and small business loans.
The agreement reached to restart government operations does not adequately address the urgent needs of American families. Tax credits designed to help families afford health insurance are set to expire by year-end, and The Commonwealth Fund estimates that nearly 5 million Americans will lose health insurance next year as coverage becomes financially inaccessible.
This crisis, however, is not new and affects all fundamental household expenses. A recent study by the Economic Policy Institute revealed this year that childcare costs now exceed college tuition in 38 states and the District of Columbia. Our team’s analysis of Bureau of Labor Statistics data indicates that Americans’ annual spending on food increased by 36% between 2014 and 2024. Additionally, inflation-adjusted house prices surged from 2000 to 2020—all significantly outpacing wage growth.
The Republican-controlled federal government has largely failed to engage in efforts to combat the rising cost of living crisis. Moreover, their actions have exacerbated the situation.
The Trump Administration’s tariffs are causing broad price increases, federal support for healthcare costs is diminishing, and Congress has severely cut social safety net programs such as and .
Should the cost of living continue to climb faster than wages, the country faces more than just individual hardship. We risk an economy incapable of sustained growth, a weakened middle class no longer able to bolster communities, and a diminished standing on the global stage.
States Leading the Way Forward
In the absence of federal leadership, numerous states are stepping up to implement and test new policies directly addressing escalating household costs.
This month, made history by becoming the first state nationwide to provide no-cost childcare for all residents. The program, announced by Democratic Governor Michelle Lujan Grisham in September and effective November 1, is funded by the state’s Land Grant Permanent Fund, along with revenue surpluses from oil and natural gas. State projections suggest families will save an average of $12,000 annually, reframing childcare not as a social program but as essential economic infrastructure.
In New Jersey, Governor-Elect Mikie Sherrill has championed initiatives to lower utility costs for working families, pledging on her first day to declare a formal State of Emergency on Utility Costs, thereby freezing rates for families statewide. Her long-term strategy to contain costs includes promoting renewable energy infrastructure and holding utility companies accountable for rate hikes.
In New York, as part of her 2026 budget, Governor Kathy Hochul advanced several measures aimed at alleviating rising costs for families—including a middle-class tax cut that brings rates to their lowest in 70 years, an increased child tax credit effective next year, inflation refund checks for 8.2 million residents, and free school meals across the state.
Even the most progressive states encounter limitations—unlike the federal government, states must balance their budgets annually and depend on federal funding that has been increasingly reduced in favor of tax cuts for the wealthy. Despite these constraints, state-level innovation remains one of the most promising avenues for tackling the household cost of living crisis.
Effective Strategies
While state leadership and innovation are vital, they cannot replace the federal government’s crucial role in coordinating, funding, and expanding policies that ensure widespread prosperity across all regions. We have identified effective solutions that should garner broad, bipartisan support:
- Strengthening economic development infrastructure through an expanded network of community development financial institutions that direct capital to underserved communities, small businesses, and affordable housing projects.
- Expanding access to earned wages so workers can receive their pay before payday without incurring predatory fees, thereby reducing reliance on costly payday loans and overdraft charges that deplete household budgets.
- Scaling universal childcare programs to more states, recognizing that accessible, high-quality childcare is not merely a family concern but an economic necessity that enables parents to work, saves families thousands each year, and supports early childhood development.
- Addressing housing costs comprehensively by tackling not only home prices but also the full expenses of homeownership—including reforms to property insurance rates, equitable property tax structures, and zoning adjustments to increase housing supply.
- Fostering pathways to employee and community ownership through tax incentives for Employee Stock Ownership Plans, support for worker cooperatives, and funding for business succession planning that enables workers to acquire businesses from retiring owners rather than seeing them close or consolidate.
There is an opportunity to implement policies that do more than merely help households survive the latest economic downturn; they can build a stable, inclusive economy that benefits everyone. The decisions made today will determine whether the United States continues to be a nation of widespread opportunity or one where financial security becomes progressively out of reach.
