DORAL, Florida — The economic fallout from President Donald Trump’s decision to go to war with Iran is imperiling the GOP’s legislative sales pitch ahead of the midterms, with energy price spikes threatening at least some of the pocketbook gains Americans are seeing from the sweeping tax cuts Republicans enacted last year.
Analysts with the Wall Street advisory and investment firm Evercore ISI estimated Monday that the impact on household costs attributable to the current crisis could erase the tax benefits from the “big, beautiful bill” for at least the bottom 30 percent of Americans — even if oil prices come off their $100-plus-per-barrel highs.
Some top Republicans acknowledged rising energy prices are cause for political concern.
“The price of gas is always kind of a benchmark,” Senate Majority Leader John Thune told reporters on Capitol Hill Monday. “I do think the fact that we’ve increased our supply here domestically will help ease it, but it’s something obviously we’ve got to pay attention to. And hopefully the operations in Iran … won’t be an extended situation.”
The impact of higher gas prices is hitting just as House Republicans gather for their annual policy retreat at Trump’s resort in Doral, Florida. The evidence could be seen just outside the gates, where regular gas was retailing at multiple stations for $3.59 per gallon — up about 70 cents from the Miami-area average on Jan. 1, according to GasBuddy.com.
The hope among Republicans gathered at the resort is that the crisis is short-lived, with several saying they believed Trump’s assurances that the supply bottlenecks caused by Iran’s effective blockade of the Persian Gulf would soon ease.
“I believe there’s a lot of emotion built into energy prices,” Rep. Chuck Edwards (R-N.C.) said in an interview. “I would look for things to settle down very soon.”
But other Republicans granted anonymity to speak candidly expressed real alarm as crude oil prices surged to nearly $120 a barrel overnight before settling later in the day below $90 — still about 30 percent above recent lows.
“If you are a Republican and not concerned right now, you are stupid,” one House Republican said, adding, “Hopefully, we will square this away sooner than later.”
Another House Republican, asked if the wartime crisis threatened to overshadow the benefits of the GOP megabill, replied, “Hell yes.”
“The most sensitive thing amongst most driving Americans is the price of gasoline,” the person added, saying it threatens to send Americans “right up the wall.”
Trump is scheduled to address lawmakers in Doral shortly after markets close Monday, and they will be listening closely to his message on the hostilities in the Middle East and his plans to address high energy prices. He has announced plans to get oil shipments moving through the Gulf again, including by providing naval escorts for tankers and backstopping insurance for vessels.
White House spokesperson Taylor Rogers said in a statement that oil prices will “drop dramatically once the objectives of Operation Epic Fury are achieved.”
“President Trump and his entire energy team have had a strong game plan to keep the energy markets stable well before Operation Epic Fury began, and they will continue to review all credible options,” she said.
But the president so far has shown little interest in pushing his party to foremost focus on legislation tackling affordability, as some of his political aides have advised. Instead, Trump is pressing Senate Republicans to pass a sweeping GOP elections overhaul bill — adding on demands for a near-complete ban on mail voting and unrelated policy provisions like banning transgender surgeries for minors.
Hours before taking the stage in front of House Republicans at his Florida resort, he reiterated his request.
Even before the oil price shock, Trump’s agenda had come with a hefty price tag for consumers. Analysts at the Tax Foundation have already determined that the president’s trade policies cost Americans $1,000 on average last year, matching the average size of refund checks that Trump officials say will ease cost-of-living concerns.
The Supreme Court struck down many of Trump’s tariffs, but those that remain are projected to cost households $600 on average this year, according to the nonpartisan think tank.
House Republican leaders are hoping to keep the annual policy retreat focused on their legislative priorities ahead of the midterms. Rep. Lisa McClain of Michigan, the GOP Conference chair, said ahead of the retreat she hoped to firm up the party’s messaging around last year’s megabill.
But going into the Doral resort Monday, members were trained on all the reasons they hoped the politically perilous price spike would be short-lived.
House Natural Resources Chair Bruce Westerman (R-Ark.) said in an interview that reopening the Iranian-controlled Strait of Hormuz “would be even better for energy prices, although we’re seeing obviously a peak right now with the war going on.”
Rep. Riley Moore (R-W.Va.) said the supply crunch was “not an existential threat to us because of all the things we’ve done to make ourselves self reliant in terms of energy resources,” while acknowledging the “fungible” nature of the global oil market. He was hopeful about more ships navigating the Strait of Hormuz.
Rep. Carlos Gimenez (R-Fla.) said in an interview a “short-term gas price hike is … not what’s important.”
“What’s important is the long term benefits of having a peaceful Iran that means that gas prices will drop dramatically for the long term,” he said. “I’m not that concerned about it.”
Sam Sutton contributed to this report.
