President Donald Trump sought to reassure Americans anxious about the cost of living by announcing a one-time holiday payment for military service members and promising sweeping housing reforms in the coming year, even as economic headwinds continue to cloud his second term.
Speaking during a prime-time address from the White House on Wednesday, Trump highlighted what he described as accomplishments from his first year back in office while continuing to place blame for persistent inflation and affordability concerns on his predecessor, former President Joe Biden.
Holiday payments and economic promises
Trump announced to provide $1,776 payments to about 1.45 million military service members, a program Trump dubbed the “Warrior Dividend.”
The payments, timed ahead of Christmas, are meant to honor the nation’s founding year of 1776 and provide a short-term financial boost to active-duty troops and certain reserve members.
The White House said the program could cost nearly $2.6 billion and would apply to active-duty service members and reserve component members on active-duty orders of at least 31 days as of November 30.
Beyond the payments, Trump sought to bolster confidence in his economic stewardship by pointing to tax cuts passed earlier in his term and promising further relief.
He said Americans would see lower mortgage rates and benefits from housing reforms in the new year, adding that he plans to appoint a new Federal Reserve chair who supports significantly lower interest rates.
“I inherited a mess, and I’m fixing it,” Trump said, arguing that inflation and affordability problems were rooted in policies of the previous administration.
Inflation, polls and political pressure
Trump returned to office in part on voter frustration over high prices during the Biden years, but surveys now show those concerns remain.
A recent Reuters/Ipsos poll put Trump’s approval rating at 39%, near the lowest level of his second term.
The president acknowledged ongoing inflation but offered mixed signals, at times claiming prices were falling rapidly while also noting that inflation persists but is being outpaced by wage growth.
He has alternated between dismissing voter anger over affordability and highlighting lower prices for certain goods as signs of progress.
Data cited by critics underscore continued pressure on household budgets.
Electricity prices have surged amid rising demand from data centers tied to artificial intelligence, with average retail electricity prices up 7.4% in September from a year earlier.
Residential electricity prices rose 10.5% between January and August 2025, according to industry data.
Health care costs also loom as enhanced Affordable Care Act subsidies are set to expire at year’s end, with Congress deadlocked on next steps.
Trump framed his opposition to extending the subsidies as a way to challenge insurers, while promoting a plan to launch a government website for discounted prescription drugs.
Tariffs, jobs and housing strains
Trump defended his tariff regime as a tool to boost domestic manufacturing and offset costs such as the military payments, despite criticism that import taxes raise consumer prices.
Many economists say the tariffs have contributed to higher prices for some goods, though less than earlier forecasts suggested.
The broader labor market remains uneven.
Employers added 64,000 jobs in November, driven largely by health care and construction, while manufacturing shed jobs for a seventh straight month.
The unemployment rate has climbed to a four-year high, and layoff announcements have increased, adding to voter unease.
Housing remains another pressure point.
While mortgage rates have eased to around 6.22%, they remain far above pre-pandemic levels, and high home prices driven by long-standing supply shortages continue to sideline buyers and sellers.
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