Special: Domestic Challenges

- Good evening and welcome to the "Washington Week Extra." I'm Yamiche Alcindor. As the Russia and Ukraine crisis dominates the headlines back at home Americans are dealing with inflation. Across the country brents have been soaring, with some cities experiencing an average price hike as high as 40%. And according to Moody's Analytics American families are spending $276 more per month on average on goods and services because of record high inflation. The price hikes are leaving many anxious and struggling to pay for necessities.

- It doesn't seem to be slowing down, which is where I'm like "That's where the real concern is." My eggs are a dollar more. And then I looked at the milk and I was like "That's a dollar 50 more for the same gallon."

- [Interpreter] There is uncertainty because when the date for paying these bills arrives and you don't have the full amount, you feel anguished.

- Meanwhile, economists are warning a Russian invasion of Ukraine will drive up energy costs. Joining me tonight to discuss this and more Dan Balz, chief correspondent for "The Washington Post" and Francesca Chambers senior White House correspondent for McClatchy. Thank you both for being here. Dan, you wrote just this week that "Rising prices, internal differences over mass mandates, and Biden's slipping approval ratings are continuing to pose threats to Democrats." Talk about how all of this with foreign policy of course included in that is really impacting and challenging rather Democrats especially possibly at the ballot box.

- Yeah, it's a tough mix for the Democrats right now. I think that they would like nothing more than to see Republicans fighting among themselves. And we know there are divisions within the Republican party but I think Democrats can take no solace out of what's going on inside the Republican party because the voters are looking in different directions and they are not focused on some of those internal Republican battles. They're focused on what's happening to them at home and to their own lives. And I think that this combination of rising prices, which people feel it every day when they go to the grocery store or the gas pump or wherever there is that. And then there is the debate that continues to intensify over what to do about moving from a pandemic to an endemic, and how you deal with such controversial questions frankly as mask mandates and particularly mask mandates in schools. And you put on top of that, the fact that as you know we've talked about before the president's approval ratings took a big hit last summer in wake of what happened in Afghanistan and have not recovered. And then you add the uncertainty about what's going on with Russia and Ukraine, and this is a very difficult mix for the Democrats to try to navigate. They expect to lose seats, but they're worried about just how large those losses could be and whether there are things that they can do to try to mitigate the losses that they're likely to face.

- Yeah, and Dan you also told our producers that in the short term it's unclear sort of what the economic impacts could be if Russia invades Ukraine, but you also said that there could be a psychological impact on Americans talking to an American who is as tired of COVID as so many other people. I wonder if you could just expand on that thinking about sort of all of these unsettling times as Americans are now dealing with this as well.

- Well, one of the measures that the pollsters and political strategists look at is this question of is the country heading in the right direction or is it seriously off track? And we know from everything we're seeing that the significant majority of Americans think that we're off track. And certainly the COVID issue is an overlay on all of this. I think everybody in their own lives and in friends that they have, and as you hear about the situation of people around the country people are tired of what we have all been through and they are looking for something better, they're looking for some light at the end of the tunnel. And they haven't yet seen it. And there is a depressing effect of all of that on people. Parents with young children have struggled mightily as we know, people of lower incomes have struggled. And every time we seem to be moving in the right direction and that things seem to be getting a little better there's a setback. There was the Delta setback last summer after we thought that we were coming out of this. And then there was the Omicron setback that we have been going through and are continuing to go through though happily those cases are coming down. But nonetheless, it's not as though this has been solved. And so it's a challenge for President Biden right now because there are members of his own party, elected officials, governors in blue states who are are moving more rapidly than he's prepared to move to lift some of these mask mandates. And so one of the interesting questions will be where are we at the time of the president's State of the Union on March 1st? Where are we certainly with what's happening in Ukraine but where are we with the pandemic? Where are we with the economy? And how is the president going to be able to talk about that? What's the message he's gonna give to the American people? At a State of the Union it's customary that you talk about all the things you think you have done well but as David Axelrod recently said, "You can't jawbone people into thinking they feel better than they actually feel."

- Hmm. That's a stark message. Francesca jump in here. Rents are soaring, so many things are up, but also inflation isn't new. But of course, these are new times, they're unprecedented times, you can't say that enough. How does the White House view this and how different do they see this moment when they think about sort of all of the different ways that past presidents have had to deal with economic struggles?

- Well, picking up where Dan just left off the White House's response to this has been consistently to tell people that they're working on inflation, they're working on these , but also it sometimes been to say, "Look, things aren't as bad as you perceive them to be." And the White House has seen that to be a message that tried to shift it and at least say that, "Look, we're putting forward a message here, versus the fact that Republicans they're not putting forward a message on how they would address these things at all. Now, the Republicans I'm hearing from are telling me that if they were back in power they would try to roll back some of the restrictions on on oil and gas and other industries like that as a way to try and lower prices for the American people. But as far as Democrats are concerned they do see opportunity in some of these House and Senate races in the Senate in particular, because of how long the Republican primaries are taking place, the messy Republican primaries as they're describing them. They see opportunity for Democratic candidates. Democratic candidates also raising large sums of money this year. So even in states where President Biden is underwater like he is nationally, they do see upsides for Democrats heading into 2022.

- And specifically on the issue of housing and rents Francesca 'cause you talked a lot about sort of all the different challenges that might impact Democrats at the ballot box, is there a plan? Does the White House have a plan for at least trying to deal with housing, some sort of way to give people relief as we're seeing people evicted and prices going up?

- Well, the way out has primarily been in focus on the prices of goods and services, but you know the White House also does say that when it comes to housing crisis, it's certainly looking that as well. And it has tried to take actions to prevent evictions throughout the administration, throughout the pandemic. Of course we saw the moratoriums before as well. One of the other ways Yamiche they've focused on some of these issues too is when you look at things like student loan debts, when you look at childcare, the White House has tried to reduce prices in other areas for the American people so that they can have the money to pay things like rent and have the money to pay things like mortgage because they're not focused on paying for some of these other very expensive goods as well.

- Yeah. And Dan, last question to you. I remember posing the question to President Biden about inflation and saying, "Well, other past presidents they haven't been able to really impact inflation because it is not just sort of easy to impact sort of how the economy is struggling. Talk a bit about the context here. Is President Biden able to really have the impact he wants to have and other presidents tried and failed or is there sort of a blueprint for success here?

- Well, it's very tough for a president and an administration to do much about inflation except in a sense to feed inflation. I mean that Larry Summers, the former head of the economic council and former treasury secretary during two democratic administrations warned earlier this year that the amount of spending that the president and the Biden administration were pushing through Congress could very well cause inflation. And that has proven to be the case. It's generally been the Federal Reserve whose responsibility is to deal more directly with inflation and that's through the raising of interest rates. And by all indications that's gonna begin to happen this spring but an administration has limited tools. This is often much more of a monetary policy rather than a fiscal policy solution. So that's the kind of unhappy fact that the administration will be dealing with. They may be able to do some things at the margins. They may be able to find some ways to make people feel as though they're getting some relief in this area or that area but in terms of really solving the inflation problem that's really the challenge and a really difficult one.

- Well, that's a difficult challenge. There are so many difficult challenges at home and abroad but we'll have to leave it there for tonight. Thank you so much to Dan and Francesca for sharing your reporting. And thank you at home for joining us. Good night from Washington.