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The Cato Podcast: A Bipartisan Affordability Agenda

Ryan Bourne, R. Evan Scharf Chair for the Public Understanding of Economics at the Cato Institute, is joined by Rep. Brian Fitzpatrick (R‑PA) and Rep. Tom Suozzi (D‑NY), co-chairs of the bipartisan Problem Solvers Caucus, to discuss their affordability agenda covering the federal deficit, energy permitting, housing, and immigration.

Ryan Bourne: The term “affordability” is in almost every speech this year in Washington, D.C., as policymakers try to address people’s frustrations around the affordability crisis. Prices, rents, interest rates — they’re all up, of course, over the last five years, with consumer prices having jumped 28% since 2021. People are feeling the burden, and politicians are stepping in with their own solutions. This year the Cato Institute published a handbook on affordability, where we tackle both the monetary and fiscal issues driving aggregate inflation and call out the obstacles keeping Americans from affordable goods and services that really make up the basics of life. In a nutshell, we defend making things easier to produce and increasing competition, alongside sound macroeconomic policy, to steer us away from bad solutions like more regulation or subsidies or price controls that primarily shift the costs to all taxpayers or other consumers. But to answer the question of what politicians are doing about it, I had a chance to talk to Representatives Brian Fitzpatrick from Pennsylvania and Tom Suozzi from New York. They are co-chairs of the Problem Solvers Caucus, the only bipartisan caucus in Congress, and they’ve recently introduced a bipartisan affordability agenda to address the drivers of rising prices in health care, housing, energy, child care, and food. So what are their proposals? And how do they compare to the proposals in Cato’s own handbook? You can now listen to my conversation with the representatives on the front lines of the affordability battle. I’m Ryan Bourne, and this is the Cato Podcast.

Representative Brian Fitzpatrick, to my immediate right, is a Republican representing Pennsylvania’s first congressional district. He serves on the House Ways and Means Committee — a very important committee — and the House Intelligence Committee. Representative Tom Suozzi is a Democrat representing New York’s third congressional district. He also serves on the Ways and Means Committee too. And that agenda is particularly interesting, I think, because it both addresses the macroeconomic component that I talked about and some of these microeconomic issues too. So, representatives, your agenda starts with quite an admission — it says both parties are responsible for at least part of the affordability challenge we now face. But I want to know, when you go back to your districts, when ordinary voters tell you that they’re struggling with the cost of living, what do you really think they’re getting at when they highlight that affordability challenge? Is it just the legacy of inflation? Is it specific sectors? How do you interpret this, and how do you narrow down what you’re trying to achieve?

Rep. Brian Fitzpatrick: Well, I think it’s how hard is it for them to make ends meet, right? Half the country, perhaps more, live paycheck to paycheck. And they are sitting down at the kitchen table every week, sometimes more often than that, figuring out how to make their budgets work. And those are the people that we really need to be mindful of when we’re making policy decisions. And when we talk about affordability, it’s kind of become a buzzword, and oftentimes when that happens, you get away from actually understanding what’s at the root cause of it. Really, I think it’s three things: it’s the cost of products and goods, it’s supply and demand, it’s interest rates. But I think the most important component of it is what side of the ledger are you on in terms of compound interest? Is compound interest working for you — meaning you have money to invest and it’s working to benefit you — or are you on the other side of the ledger, where compound interest is working against you because you have credit card debt or other debt and you’re paying interest on existing debt? And that dichotomy is really the bifurcation mark, I think, in our economy and our society in terms of how hard it is for people to get ahead.

Ryan Bourne: Now, there’s probably one area of bipartisan agreement, unfortunately, on Capitol Hill: it’s to run large budget deficits year after year. But an area where the Cato handbook and your affordability agenda agree is that large budget deficits and unsustainable, long-term fiscal projections are putting pressure on families’ budgets already, through the interest rate channel, and arguably through the inflation channel we’ve just lived through as well. How do we start turning that question around? How do we start getting the rest of the policymaking community in D.C. interested in trying to reduce budget deficits?

Rep. Tom Suozzi: Part of the deficit issue is educating the public that high deficits cause upward pressure on interest rates. So when you have high interest rates, it’s harder to buy a house. When you have high interest rates, it’s harder to lease a car. When you have high interest rates, it’s harder for you to borrow, to buy goods for your company, for your small business. So we need to do a better job educating the public that deficits — which just seem like, “hey, that’s a Washington thing, they’re always talking about deficits and debt” — are affecting your life. The massive deficits we are experiencing right now — actually, record deficits right now — are having a tremendous upward pressure on interest rates and inflation as well. So we just need to do a better job of connecting the dots. And one of the things that Brian and I support is the idea of a fiscal commission, to look at the deficit and come up with a solution in a bipartisan way. Because everybody can have all these debates back and forth — I’m trained as a CPA, but you don’t have to be a CPA to know that there’s only two choices. Brian’s trained as a CPA too — we’re both CPAs and lawyers, that’s one of the things we share in common. There’s only two choices: raise revenues or cut expenses. That’s it, or both. But there’s no other magic. You either have to come up with more money for the federal government, or reduce expenses, or a combination of both. And of course, it’s going to require a combination of both to solve this problem.

Ryan Bourne: So let me ask you about that, because your caucus has endorsed a couple of different potential pieces of legislation — the Fiscal Commission Act and the Sustainable Budget Act. Now, they’re quite different in the way they go about dealing with this problem. The first sets a target for the debt-to-GDP ratio that economists tend to care quite a lot about, and tries to make entitlements solvent over the long run, but it puts a lot of power in the hands of the commission itself. Whereas the second act, the Sustainable Budget Act, is much more about trying to balance the day-to-day federal budget within a decade, giving the President considerable control. Now, they’re very different proposals, but I’m guessing the reason you’ve endorsed both of them is that at this stage you’re really trying to bring attention to the issue. But what red lines would you say are necessary in the formation of any commission? What would you be looking for it to achieve?

Rep. Tom Suozzi: Well, number one, I think ideally it’s set up like the 9/11 Commission, which I think is really the model commission, at least in my lifetime. They came up with 41 or 42 recommendations — they were entirely bipartisan, equally bipartisan, no currently serving elected officials. And for any subpoena to issue, any decision to be made, it had to be a two-party solution — it had to be bipartisan. And they came up with tremendous recommendations that, thankfully, have kept a terror attack from occurring on our shores for 25 years. So I think that’s really the model. And you pointed out the difference between the two bills — one deals more with the long-term debt, the other deals more with current annual budget deficits, and we have to tackle both. We have to look at the debt-to-GDP ratio — I believe it ought to be a percentage rather than a numeric dollar amount, because all we keep doing, all Congresses have kept doing for decades, is lifting it. And if you’re going to have a debt ceiling, which arguably you should, because the argument there is you’re debating whether or not you should pay debts you’ve already incurred — that doesn’t seem to be a very logical debate to me — but it should be a percentage of GDP, because there have been only two times in our nation’s history where debt-to-GDP has exceeded 100 percent: World War II and today. And unfortunately, a lot of the advantages we had coming out of World War II — demilitarizing, bouts of inflation, high economic growth — we’re facing headwinds on all of those different fronts right now.

I want to go back to your first question, that you asked Brian — I didn’t answer that question. It’s very important for us to recognize that for some Americans, the economy is booming, and it’s been booming for 50 years. The Dow Jones has gone up dramatically over the past 50 years. GDP has gone up dramatically over the past 50 years. The problem is that we’ve concentrated the wealth amongst a smaller portion of the population, and another part of the population has just been left behind. There are a lot of people who go to work every single day — they work really hard, at least 40 hours a week, 50 weeks a year, they get two weeks’ vacation. Many people work more than that — husbands and wives, spouses working. But there are two different worlds that we’re living in. And so when they talk about the “K economy” — I don’t know if it’s backwards this way, but you’ve got one group going up and they’re really happy, and there’s one group going down and they’re really unhappy. It’s a tale of two cities — it’s a completely different thing. The stock market is booming, corporate earnings are coming in, they’re doing fantastic, and they’ve been doing well for years, but we’ve hollowed out the middle class. We have a lot of good programs that protect the lowest-income Americans, and we’ve just abandoned this chunk of people, and they’re unhappy, and they’re looking for an answer. And the solutions being offered to them — whether from the MAGA movement or from the DSA movement — is that the whole system stinks, the whole system’s rigged, let’s tear the whole thing down. And those messages have been appealing to people. I think that Brian and I are in similar camps in that we think that’s not the answer — just to tear everything down. The answer is we have to fix what’s broken. I’m not defending the status quo — the status quo is not working for a lot of Americans. We have to fix this hollowing-out of the middle class, and it’s going to require us to do a better job articulating solutions to those problems, recognizing the status quo is not working. But tearing the whole thing down is not going to work either.

Ryan Bourne: Yeah, and there’s a lot of false solutions out there. Both parties have had senior people advocate various forms of price control, which we know, as economists, tend to have very deleterious effects on economic activity — lots of new subsidies that are mainly about transferring costs from one group to another rather than dealing with the underlying problems. So let’s move on to some of those specific underlying problems.

Rep. Tom Suozzi: One other thing — I’m sorry, I’m just reading this now, I haven’t even discussed this with you before. A lot of very wealthy people are paying a lot in taxes — people making a million dollars a year, or two million dollars a year, or even more, but they’re getting it as a salary, as a lawyer or a doctor — they’re paying a lot of taxes. That’s not the problem. The problem is the people who have accumulated wealth and are having enormous wealth accretion, but they don’t take any salary from it, they don’t sell any of their assets so they don’t have to pay capital gains, and they’re often living off of borrowing so they can deduct their interest expenses — but they have this enormous wealth. They’re accreting value, but they’re not paying much in taxes because they’re not taking it out. That’s what we have to figure out how to solve.

Ryan Bourne: I think tax reform is probably one of the areas that would be most difficult to find agreement on in Washington, but one area where, at least if you believe prediction markets, there’s a pretty good chance of doing something is on permitting reform for energy. You have a lot about this in your agenda — strict deadlines, judicial review, less duplication for linear infrastructure, and being neutral across all forms of energy generation, trying to get as many new projects of many different forms of energy generation as possible. We similarly think that delay and litigation risk are major barriers to getting abundant, reliable, cheaper energy. When you think about that seeming likely over the next year, where do you think there are possible areas where we can get bipartisan reform? What are the big things you’re looking for in the energy area where you think we could really do something over the next 12 months?

Rep. Tom Suozzi: We have to make it easier to build things. There’s a Democrat named Scott Peters — used to be the mayor of San Diego, or La Jolla, he was a mayor — he’s a get-things-done type of guy, and I’ve asked him to really take the lead on this. I’d defer to him on a lot of the specifics, but he’s also working with a Republican on Problem Solvers, and we brought the environmental groups in to meet with us — just the Democrats’ side did that. And we said, listen, we have to fix this problem. The demand for energy has either been flat or going down over the past 20 years, and for the first time in 20 years, the demand for energy is going up dramatically, particularly because of data centers. So we’ve got this rising demand and we don’t have a commensurate increase in supply. And I’m upset about a lot of the projects that were canceled that were funded under — I forget the name of the bill now, the Inflation Reduction Act, inappropriately named — but that canceled a lot of the green energy credits. So at a time when we have increasing demand for energy, we cut some of the potential supply. But what I said to the environmentalists is: we have to make it easier to build things. And for every 10 projects, you’re going to end up with seven or eight green projects, and you’ll end up with some fossil fuel projects too — but so be it, we have to build more energy supply in this country. And to do that, we have to reduce some of these permitting barriers. So we need dramatic permitting reform.

Rep. Brian Fitzpatrick: And this has been a really fascinating development — permitting reform becoming a bipartisan issue, which we think is great news. It’s interesting to see how it came to fruition, because permitting reform historically was associated with fossil fuels, right? You saw a lot of people more aligned with the right side of the continuum pushing permitting reform to advance pipelines or what have you. Now, with the expansion of green and renewable energy, a lot of our Democratic colleagues who wanted to see programs like the IRA and the ARP move forward need permitting reform too. So you’ve kind of now got a bipartisan issue around the need to cut the red tape and speed up the process to let these projects — that people on both sides care about — come to fruition. But to Tom’s point, if you believe in “all of the above,” in order to meet our demand — because we have a supply-and-demand issue, that’s why we’re seeing energy costs go up — that’s one key way to do it. And it’s a good development to see it become a two-party issue.

It’s important to understand where a lot of these protections, or regulations — depending on how you view it, one person’s protection is another person’s regulation — how do they come about? If you’ve ever read the book The Power Broker, about Robert Moses — who’s read that book? He built so many major projects, mainly throughout the New York area — enormous projects, it’s amazing he accomplished so much. But some of the things he did — he’d just put a road right through the middle of somebody’s neighborhood, and it divided the neighborhood in half and really destroyed its character in the process. And so people said, we have to put rules in place to prevent this from happening — we have to get input from the community, we have to look at the history of the area before we do this. So now we have all these rules in place. The same thing happened with a lot of the environmental movement — if you look at what happened in the country through the ’60s and ’70s, before the environmental movement there was a violent reaction against a lot of the bad things that were happening, so we put all these rules in place. Then we started enforcing the rules in the ’80s, then in the 1990s we realized we had to start implementing these rules, and then we realized it had become very, very difficult to get things done. Now we’re finally coming around to: well, we still need protections, but we need to make it easier to do the things we think are positive. Up until now this has been a bipartisan problem too — one administration delays or cancels pipelines, for the next one it’s wind or transmission projects. So it’s really hopeful that we’re actually seeing some bipartisan agreement about the need for permitting reform, and hopefully we can take some of that presidential veto power away from these decisions on individual projects.

Ryan Bourne: Now, one area where my Cato colleagues have been pushing quite hard relates to the data centers you just talked about — we’d like to see the permitting reform process fold in some principles that say, if a new data center or factory wants to bring on board its own power, kind of become a grid of one, or share that power source with a couple of other factories, we should look at reforming regulations around the way the electricity system works to allow them to do that — so that those pressures are less on the formal grid, and something they can absorb into their own manufacturing process. I don’t want to put you on the spot, but just an area that might be worth exploring as you continue to look at this issue.

Now, one area where we have seen a bipartisan accomplishment of late is on housing — we’ve just seen the 21st Century ROAD to Housing Act become law on July 11th. Our scholars here at Cato have mixed feelings on the legislation — we really like some of the deregulatory aspects, but are a bit more uncertain about the effectiveness of reforming some of the existing federal programs that we opposed to begin with. But it does do a lot of deregulatory things, or some deregulatory things. So which parts of it do you expect to result in actual house-building, as opposed to just changing who receives help for their housing or renting, or how those homes are financed? What bits are you really excited about for increasing the supply of homes?

Rep. Tom Suozzi: Well, I’m excited personally about the expansion for veterans — both the expanded use of VA loans and the expansion of the home availability they’re eligible for. I like what it does for lower-income people in terms of rental assistance and expanding their opportunities there. Personally, I think in terms of biggest impact — and not many people are tracking this — just allowing builders to offer pre-approved plans, rather than having to go through that process over and over again. It sounds like a minor detail, but it’s going to have a sea-change effect on that industry. Everybody working in that industry has told me it’s a provision nobody’s talking about, that I think is actually going to have the biggest impact on lowering, or at least containing, the cost of housing.

Ryan Bourne: And how far would you be willing to countenance federal involvement to try to get states and localities to change their own zoning and land use rules? There’s a difficult question there from a federalist perspective.

Rep. Tom Suozzi: In my particular district, that’s the kiss of death — you’re never going to be able to override local control where I am. But I think the federal government and state government should be providing incentives to local governments to encourage them to create more density in certain locations, especially in downtowns around mass transit — something I’ve been working on for years. I’m home to one of the first mass-produced suburbs in America — Levittown. Brian’s got a Levittown too, in Pennsylvania — that’s the other thing we share; he lives in Levittown, I represent Levittown. Nassau County was one of the first — we were one of the fastest-growing places in America. Mr. Levitt started the Levitt homes in 1947 as affordable housing for returning veterans. From 1950 to 1960 we went from 400,000 people to 1.2 million people in our county — the fastest-growing county in the country — up to 1.5 million people in the 1970s. Now our population is actually a little less than that, because we have the same number of homes — we’re suburban-sprawled — but family sizes are much smaller than they were back in the ’50s, ’60s, and ’70s.

When you’re suburban-sprawled — I looked at this a lot when I was the Nassau County Executive — we want to keep most of our land mass, literally 95 or even 99 percent of it, the same as it is now: single-family homes, parks, open spaces, beaches. But that one, two, three percent of our land mass in our downtowns, near our train stations, we need to go up. We need to create what I call “cool downtowns” — places where young people can afford to live and where they want to live, where it’s fun. People used to get married in their 20s; now if you get married, you get married in your late 20s or early 30s. Nobody from 20 to 30, who’s single, is looking to move out to suburbia. The things we love about suburbia — it’s quiet, crime is low, everything shuts down at 10 o’clock at night or even earlier, we shut the roads down for the Little League parade — young people are going to say, “that’s boring, I want to go out to a bar, I want to meet somebody, I want to have fun, but I’ve got to get to work in the morning.” We have to create these environments within traditional suburban communities — while preserving the suburban character and quality of life that made people move there in the first place — but create housing in the downtown areas near mass transit.

Ryan Bourne: So do you think this recent bill is about as good as it gets, or do you expect other bills to come forward on housing?

Rep. Tom Suozzi: I think, with bipartisan support — first, we need leadership where people say affordability is the problem. Okay, we’re saying it, Cato’s saying it, many other people are saying it — some people are still saying affordability is a hoax. I don’t think that when you go to the grocery store, or the gas station, or when you have to pay your health insurance premiums, or when you’ve got to pay the interest on your mortgage, you think affordability is a hoax — it’s a real issue. So I think there will be more to happen. And I really think that even more than legislation, reducing interest rates is really the biggest thing that has to happen.

Ryan Bourne: So one area the caucus explicitly recognizes the difficulty in is finding labor in sectors like agriculture, construction, health care — I’d probably chuck in child care as well, and how that raises prices too. You’ve endorsed the Dignity Act, which combines border and asylum measures, mandatory E‑Verify, and legal status for certain long-term residents. So I’m guessing you’d argue a serious affordability agenda has to combine resolving the status of people already here with expanding the future legal supply of workers as well.

Rep. Tom Suozzi: Absolutely. Go ahead.

Rep. Brian Fitzpatrick: Well, we talk a lot about the great power competition between China and the United States, Russia, Iran, and whoever else you want to include — but mostly that’s viewed through a national security lens. The biggest advantage we have is that everybody wants to come here. Nobody’s busting the doors down to move to China, or Russia, or any of these other countries — everybody wants to come to the United States. We have a potentially endless, limitless labor supply, which isn’t just huge for the affordability issue — it’s important for economic security, it’s important from a national security standpoint, because it strengthens our economy. We are a nation of immigrants — all of us, unless you’re a Native American, are immigrants to this country; the only question is how many generations back, and what part of the world you can trace your lineage to. It’s made us the greatest country in the world. It’s allowed us to become the world’s economic superpower 103 years after the signing of the Constitution, and the world’s currency standard about 50 years after that, because of this brilliant system of government our founders gave us. Immigration is a big part of that — a big part of our economy, a big part of our country. And it’s been one of the most frustrating things I’ve seen out of Congress — you keep hearing this term “comprehensive immigration reform.” How many times has this gang of eight, or this bipartisan, bicameral group, said “we’re going to have comprehensive immigration reform”? And because they can’t get 100 percent of the way there, they get nothing — they can’t break it up into singles and doubles and get incremental victories. That’s what I believe the Dignity Act does — it’s a two-party bill, relatively limited in scope, not huge, but it touches on a number of areas. I think we have to view it as a huge advantage that people want to come to this country — we can attract the best and brightest of every industry if we so choose, and also still let people in who are claiming asylum, which is becoming of American values — but also view it as a huge economic engine for our country.

Ryan Bourne: Yeah, I mean, a lot of contemporary Republicans would say something like, well, letting in more people is going to put downward pressure on wages — but that’s actually not what most of the literature shows. These people are also consumers, and they tend to complement the existing workforce, raising productivity. Immigrants from all over the world help build America, and they’re big sources of entrepreneurship and innovation as well. Now, it’d be remiss of me, from a Cato perspective, not to signal where we politely disagree on certain things — you have sections on health care, food, and child care where your agenda proposes tax credits and subsidies and investigations of food prices. I guess we’d argue those policies may help some people pay the bill, but they don’t reduce the bill itself — they transfer it to another group, often with some unintended consequences. We tend to focus on liberating supply as much as possible — allowing more qualified foreign doctors here, recognizing safe medicines approved in other parts of the world, removing some of the protectionism we have around tariffs, marketing orders, and ethanol mandates that raise the price of food. But we’re probably not going to agree on that.

Where I’d be interested is how you define success. Economists tend to define affordability as how much you can buy with your income. But even prior to the Iran conflict, real wages actually went up on average in 2025, and yet the salience of the affordability issue grew stronger over time. That says to me that people are really annoyed about the widespread increase in prices and the legacy of inflation. But none of us want to court deflation, either — you don’t want to squeeze spending across the economy and risk a recession. So what’s a more tangible target we should actually be looking for? If we came back in a year’s time and reconvened this session — if I were to ask you whether the last year was a success in terms of improving affordability — how would you define that? What metrics would you really look at?

Rep. Tom Suozzi: For me, it’s the values we were brought up with in this country — that if you work hard and play by the rules, you will always be able to afford the necessities. You’ll be able to afford to educate your children, take your family on vacation, and do the things that are sort of core to the nuclear family in America. I think that’s the metric of success. And I would hope we’d all agree it should never be the case that somebody working 40-plus hours a week can’t afford the basic necessities to live — clearly there’s a breakdown in the system if that’s the scenario. So that’s how I define it. For me, success is when left-wing progressives and right-wing conservatives all agree that, in return for working hard, you make enough money to afford to buy a house, educate your kids, pay for health insurance, and retire without being scared. That’s it.

Ryan Bourne: This is certainly a topic we’ve explored at Cato over many years — I remember I wrote a paper back in 2018 arguing that a really good, sustainable way to get to a real living wage would be to work through all these different sectors and find ways of lowering the cost of living, rather than always talking about topping up people’s incomes with wage controls or subsidies. So we really appreciate you both being here, and all the work you’re doing on this — really glad to have this engagement.

That was my conversation with Representatives Brian Fitzpatrick from Pennsylvania and Tom Suozzi from New York. Now, while there’s plenty we disagree with in their agenda — on the scope of government especially — there are also clearly areas where I think all sides can agree that existing policy makes life more expensive than necessary for ordinary people. We heard there about the potential for energy permitting reform to lower costs, as well as some of the positive benefits of liberalizing immigration reform. So thank you all for listening to today’s episode of the Cato Podcast. If you enjoyed today’s discussion, please subscribe and leave a review wherever you get your podcasts. To learn more about the ideas and research discussed in this episode, visit cato​.org.