Our nation’s longest federal shutdown has ended. Families who rely on federal subsidies to afford health insurance have lost.
The issue that instigated the shutdown—the American affordability crisis—is the same reason many Senators found a long-term shutdown untenable. As the shutdown dragged on, American families were desperately hurt by just a temporary breakdown in programs—from childcare subsidies and nutrition assistance, to housing vouchers and small business loans.
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The deal to reopen the government fails to address the urgent needs of American families. Tax credits to help families afford health insurance expire at the end of the year, and The Commonwealth Fund estimates that nearly 5 million Americans will lose health insurance next year as coverage becomes unaffordable.
But this crisis is not new, and it extends across all essential household costs. A study this year by the Economic Policy Institute found that the cost of child care now exceeds the price of college tuition in 38 states and the District of Columbia. My team’s analysis of Bureau of Labor Statistics data suggests that Americans’ annual food spending increased 36% from 2014 to 2024. Plus, inflation-adjusted house prices rose 65% from 2000 to 2020—all far outpacing wage growth.
The Republican-controlled federal government has simply not shown up for the fight against the cost of living crisis. What’s more, they have made it worse.
The Trump Administration’s tariffs are raising costs across the board, federal support for health care costs is evaporating, and Congress has eviscerated social support programs like Medicaid and food stamps.
If the cost of living continues to rise faster than wages, the country risks more than personal hardship. We risk an economy that cannot sustain growth, a diminished middle class that can no longer anchor communities, and a weaker position on the global stage.
States showing the way forward
In the absence of federal leadership, many states are stepping in to test new policies that directly address rising household costs.
This month, New Mexico made history as the first state in the nation to offer no-cost childcare for all residents. The program—announced by Democratic Governor Michelle Lujan Grisham in September and which took effect Nov. 1, is funded by the state’s Land Grant Permanent Fund, as well as revenue surpluses from oil and natural gas. State estimates suggest that families will save an average of $12,000 a year—treating child care not as a social program, but as essential economic infrastructure.
In New Jersey, Governor-Elect Mikie Sherrill has championed efforts to reduce utility costs for working families, pledging on day one to declare a formal State of Emergency on Utility Costs freezing rates for families across the state. Her plan to hold down costs long-term includes promoting renewable energy infrastructure, and holding utility companies accountable for rate increases.
In New York, as part of her 2026 budget, Governor Kathy Hochul pushed several measures meant to alleviate rising costs for families—including a middle class tax cut that brings levels to their lowest point in 70 years; an increased child tax credit starting next year; inflation refund checks for 8.2 million people; and free school meals across the state.
Even the most forward-thinking states face limits—unlike the federal government, states are required to balance their budgets every year, and they’re reliant on federal funding that has been increasingly gutted in favor of tax cuts for the wealthy. Despite this, state-level innovation remains one of the most promising tools for addressing the household cost of living crisis.
What works
State leadership and innovation is critical, but can not replace the federal government’s role in coordinating, financing, and scaling policies that ensure inclusive prosperity across all regions. We know solutions that can work, that should have broad, bipartisan support:
- Building a stronger economic development infrastructure through an expanded network of community development financial institutions that channel capital directly to underserved communities, small businesses, and affordable housing projects.
- Expanding earned wage access so workers can access their earned wages before payday without predatory fees, reducing reliance on costly payday loans and overdraft charges that drain household budgets.
- Scaling universal child care to more states, recognizing that affordable, quality child care is not just a family issue but an economic imperative that allows parents to work, saves families thousands annually, and supports early childhood development.
- Attacking housing costs comprehensively by addressing not just home prices but the full cost of homeownership—including property insurance rate reforms, equitable property tax structures, and zoning reforms that increase housing supply.
- Expanding 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 allows workers to purchase retiring owners’ businesses rather than seeing them close or consolidate.
There is an opportunity to put policies in place that are not just about surviving the latest economic crisis, but rather about building a stable, inclusive economy that works for all households. The choices made now will determine whether the United States remains a nation of broad opportunity or becomes one where economic security is increasingly out of reach.
The post The Federal Government Shutdown Highlighted America’s Affordability Crisis appeared first on TIME.
