Dems, GOP Evaluate 2026 Midterm Roadmap | Balance of Power 08/12/2026

Caroline Leavitt's Departure from White House [00:00:00]

• President Trump announced his press secretary, Caroline Leavitt, will leave her role at the end of the month.
• Trump stated Leavitt's departure is to allow her to spend more time with her family.
• Leavitt was a top advisor and spokeswoman for the President.

  "will be departing her role at the end of the month so she can spend more time with her beautiful young children and family, a decision I totally understand and respect."

U.S. Control of Strait of Hormuz Questioned [00:01:47]

• President Trump asserted the U.S. has "total control" of the Strait of Hormuz.
• Reports indicate Iran is reorganizing its military, suggesting preparation for a protracted conflict.
• There are frozen talks between the U.S. and Iran regarding the Strait.

  "it's just not accurate to say that the U.S. is in total control of the Strait of Hormuz because Iran has shown that it can attack ships that are going through the Strait as a way of using its leverage over that area."

Inflation Report Eases Pressure on the Fed [00:02:45]

• The July inflation report showed a subdued rise in prices.
• Core inflation rose at the slowest annual pace since March 2021.
• Falling energy and gasoline prices contributed to the trend.

  "The new number's out today, easing pressure on the Fed, with core inflation rising at the slowest annual pace since 2021."

Economic Outlook and Federal Reserve [00:04:00]

• While July's inflation report showed improvement, rising gasoline prices in August could be decisive.
• The headline CPI rose 0.1% and the core rose 0.2% year-over-year.
• Hawkish members of the Federal Reserve remain concerned about the lack of significant progress on inflation.

  "But if you look back to before the war started, that's about where we were. And so for right now, the people who were hawkish on the Fed aren't happy because there hasn't been any progress over these months."

Producer Price Index and PCE Inflation [00:05:11]

• The Producer Price Index (PPI) is expected to show a similar trend to CPI, with potential increases due to energy components and tariffs.
• Economists are closely watching categories that feed into the Personal Consumption Expenditures (PCE) inflation index, which the Fed uses for its 2% target.
• Categories like airfares increased, and the rise in portfolio management fees could impact PCE.

  "But overall, we may see either a flat or small rise in the PPI. But what economists are going to be looking for are the categories that feed into the PCE inflation index because that's what the Fed uses for their 2% target."

10-Year Treasury Auction Yields [00:06:51]

• A $42 billion auction of 10-year notes saw the highest yield since 2007.
• This suggests markets believe interest rates are appropriately priced, considering inflation and the budget deficit.
• Potential tax cuts proposed by the President could further increase the deficit, making Wall Street more nervous.

  "Well, it was a small tale from what we were expecting, but it does tell you that the markets are, at this point, thinking that interest rates are pretty appropriately priced, some of that being inflation, some of that is probably the budget."

South Carolina Senate Race Runoff [00:07:34]

• In South Carolina's special Senate race, President Trump's hand-picked successor, Darlene Graham, failed to win outright.
• Graham will head to a runoff against Congressman Ralph Norman.

  "President's hand-picked successor in South Carolina's Senate race heads to a runoff."

Mike Lindell Loses Minnesota Gubernatorial Primary [00:07:58]

• MyPillow founder Mike Lindell lost the Republican primary for Minnesota governor to Lisa DeMuth.
• Lindell is reportedly refusing to concede the race.

  "While the president's hand-picked successor in South Carolina's Senate race heads to a runoff. We'll discuss it all with former Minnesota Governor Tim Pawlenty and current Wisconsin Congressman Mark Pocan up ahead."

Economic Concerns in Midterm Elections [00:09:01]

• Economic concerns are a major focus for voters in the midterm elections.
• Voters are looking for candidates with specific plans to lower costs for essentials like gas, energy, healthcare, and groceries.
• Policies aimed at increasing the supply of energy are seen as a way to make prices more affordable.

  "We'll be moving from that macroeconomic discussion, which you just had, to household and family and individual budget economics, which is, can you make my gas and energy more affordable?"

State-Level Role in Energy Costs [00:10:17]

• State leaders can play a significant role in addressing energy costs, particularly concerning transmission bottlenecks and permitting.
• Streamlining state and local permitting processes can help bring more energy to market faster.
• This includes energy sources like solar, gas, and small modular nuclear reactors.

  "But state leaders could do a lot to make that permitting process more streamlined, quicker, so that we can get more energy to market faster, which would help these supply and demand pressures."

Election Security and Integrity Concerns [00:11:16]

• There have been isolated instances of election wrongdoing, such as non-citizens voting due to DMV system errors.
• However, widespread election problems have not been substantiated with credible evidence presented in court.
• Allegations of widespread issues require proof through legal channels.

  "But so far, there hasn't been evidence, actual evidence presented in a court, where it's been found to be credible, that there's widespread election problems."

Minnesota Democratic Senate Primary [00:12:47]

• Lieutenant Governor Peggy Flanagan won the Democratic Senate primary in Minnesota.
• The race was seen as a referendum on immigration policy and ICE, following incidents earlier in the year.
• Flanagan's victory is viewed as a reflection of the rise of progressive elements within the Democratic Party.

  "It is a little bit of a microcosm of the rise of the DSA or further left elements within the Democratic Party."

Data Centers and AI Infrastructure [00:14:06]

• The development of AI and the infrastructure required for it, such as data centers, is a significant issue.
• Leaders need to find win-win solutions that balance community needs with investment in economic engines.
• This includes ensuring data centers do not strain energy and water resources and contribute positively to communities.

  "Let's, instead of banning things that we know we need, let's try to construct a win-win solution."

Wisconsin Gubernatorial Primary Results [00:17:30]

• In Wisconsin's gubernatorial primary, moderate David Crowley defeated Democratic Socialist Francesca Hong.
• The race was unexpectedly close, with a margin of less than one percentage point.
• Republicans believe this outcome, along with the perceived extremism of some progressive policies, favors their candidate, Tom Tiffany.

  "Well, the good news is we had a unity breakfast today and all the candidates, the final four candidates running for governor, as well as Senator Tammy Baldwin, Attorney General Josh Call, myself and others showed up all together to be with David Crowley, who's the Democrat nominee."

Political Divide and Messaging [00:20:00]

• Republicans often label Democrats as socialists or communists, a tactic Democrats argue lacks credibility.
• Democrats aim to combat this by focusing on kitchen-table issues like affordability and economic prosperity.
• The effectiveness of political messaging is debated, with some arguing for a focus on local community needs over national political hyperbole.

  "Well, I think the Republicans have loved to use Democratic Socialist over and over. And now they're calling us communists."

U.S. Strategy Towards Iran [00:27:35]

• Robert Malley, former U.S. Special Envoy for Iran, discusses the complexities of U.S. strategy towards Iran.
• He criticizes shifting U.S. objectives and tactics, arguing they have been counterproductive.
• Malley advocates for diplomacy as the most effective approach to addressing Iran's nuclear program.

  "And all the while, while we put on that pressure, the Strait of Hormuz remains closed."

Diplomacy vs. Sanctions and Military Action [00:29:37]

• Malley argues that diplomacy, as seen in the JCPOA, was the most effective method for addressing Iran's nuclear program.
• He suggests that economic relief and security assurances are necessary incentives for Iran to make nuclear compromises.
• The current approach of economic strangulation and potential military action is seen as unlikely to yield desired results.

  "Of those three, only one get us closer to the objective of addressing Iran's nuclear program. That was diplomacy."

Role of Gulf States in Iran Negotiations [00:33:00]

• Gulf states have a significant role to play in mediating between the U.S. and Iran.
• They can encourage the opening of the Strait of Hormuz and foster normal relations with Iran.
• Economic leverage and investment from Gulf states could also influence Iran's actions.

  "So the Gulf today probably has a more central role to play than it has had in the past."

USS Abraham Lincoln Deployment Concerns [00:34:15]

• Sailors and Marines on the USS Abraham Lincoln have experienced multiple deployment extensions with no official return date.
• Reports indicate service members have attempted to jump overboard, with one sailor on medical hold after such an attempt.
• Approximately 5,000 personnel remain on the ship, which was originally scheduled to return in May.

  "The Lincoln has been supporting U.S. military operations in the Middle East, and now family members say multiple service members have reportedly attempted to jump overboard."

Special Grand Jury Convened by DOJ [00:35:00]

• The Justice Department has reportedly convened a special grand jury, overseen by an ally of U.S. Attorney Jeanine Pirro.
• Special grand juries focus on a single case and can issue reports even without sufficient evidence for trial.
• This move could initiate investigations into controversial cases and potentially be of interest to President Trump.

  "A special grand jury has a focus on a single case and can issue a report after its investigation, even if there isn't enough evidence to go to trial."

Trump Media Faces Lawsuit Over Truth API [00:36:00]

• Trump Media's Truth API product, offering faster access to President Trump's social media posts, faces a new lawsuit.
• Two media organizations are seeking to block the plan, calling it "extraordinary, corrupt, and unconstitutional."
• Trump Media argues that similar subscription services exist on other platforms.

  "Two media organizations filing the suit today in New York asking the plan be blocked, calling it extraordinary, corrupt, and unconstitutional, as the president is the company's largest shareholder and stands to gain financially."

Wisconsin Republican's View on Primary [00:38:30]

• Republican Congressman Brian Stile believes Wisconsin voters will see David Crowley and Francesca Hong as similar.
• He criticizes Crowley's record as county executive, citing tax increases and mismanagement.
• Stile expresses confidence that Republican Tom Tiffany will win the governorship, emphasizing common-sense reforms.

  "And so he opened up his speech today by saying, let me introduce myself. That tells you Wisconsin voters don't really know who David Crowley is."

Election Integrity and Voter Concerns [00:40:00]

• Congressman Stile supports enhanced election integrity measures like verifying citizenship and using photo ID.
• He believes voters are more concerned with current issues like lowering costs and making life affordable than with past election results.
• The contrast between Republican and Democratic policies on affordability is highlighted.

  "I think voters want to know, what are you doing for us today to bring costs down and make life more affordable?"

Political Panel Discussion on Primaries and Polling [00:42:00]

• The panel discusses the accuracy of polling, particularly in recent primaries where results differed significantly from predictions.
• They note the dynamic of progressive voices being louder in primaries, but moderate candidates often performing better in general elections.
• The importance of candidate strength and local issues over generic polling is emphasized for the upcoming general election.

  "And what happens is in the primaries, the voices that tend to be louder are looked upon as having more momentum."

White House Press Secretary Departure Analysis [00:44:30]

• The panel discusses the departure of Press Secretary Caroline Leavitt, considering personal and professional timing.
• The demanding nature of the job, especially in a White House characterized by personality-driven decisions, is highlighted.
• Leavitt's potential continued involvement in campaign work is suggested.

  "But you still need somebody that can help in the background, provide the background information that they're needing, the research, help set up off the records, help set up things."