Election Watch 2026

The likelihood that Republicans retain their narrow majority in the House is low given the tendency for the president's party to lose seats in the midterm elections, but especially given the president's low job approval rating. Redistricting will benefit Republicans but will likely prove insufficient to overcome the party’s low favorability. The Supreme Court’s decision to limit portions of the Voting Rights Act remains a wild card that will continue to develop. Several Republican states have used the decision to redistrict, but the ramifications of the Supreme Court’s decision are likely to have a bigger impact in the 2028 cycle.

Fiscal
Republicans likely attempt to use reconciliation to achieve targeted spending goals and tax cuts, but narrow majorities and wide budget deficits curtail ambitions. Fiscal drag from cuts to Medicaid and food assistance programs would take effect after the midterms as scheduled. Small growth in annual budget spending continues.

Trade
Unlikely to see Republicans mount a challenge to the president's trade agenda, consistent with the first two years.

Debt limit
Fewer fireworks over raising the debt ceiling under unified Republican control of government, even if some members demand deeper spending cuts under reconciliation as part of any agreement.

Transportation & energy
Continued push away from renewable energy sources such as solar and wind via a combination of administration agency actions and congressional Republicans removing renewable energy tax credits that survived the One Big Beautiful Bill Act or imposing fees and taxes such as an EV tax to help fund the Highway Trust Fund. Additionally, a partisan permitting reform bill is on the table which would lead to a rollback of current environmental protections in exchange for quicker approval of infrastructure projects, especially for traditional energy projects.

Artificial intelligence (AI)
The priorities in President Trump's National AI Legislative Framework continue to be brought up in Congress; however, the need for 60 votes in the Senate means success is unlikely. Federal preemption of state AI laws will still be a policy priority for Republicans.

Housing
If Republicans are unable to pass their signature housing legislation this year, a similar variation of it will be proposed again in 2027. 

Democrats face a tougher uphill climb in the Senate where they would need a net gain of four seats to obtain a majority. Thirty-three Senate seats are up for reelection together with two special elections for the Senate seats vacated by Marco Rubio (R, FL) and JD Vance (R, OH) joining the administration. Battleground states held by Republicans include Alaska, Iowa, Maine, Ohio, North Carolina, and Texas. Battleground states held by Democrats include Georgia, Michigan, and New Hampshire.

Fiscal
Partisan differences complicate budget appropriations and effectively remove the possibility of using reconciliation to achieve fiscal goals. Higher risk of government shutdowns and debt limit brinkmanship, but some potential for bipartisan agreement to postpone planned spending cuts to social programs in exchange for higher defense spending. Potential for 5% increases in the annual budget.

Trade
Democratic efforts to challenge the president's trade authority don't reach the Senate floor for a vote. House Democrats likely to perform aggressive oversight on the administration's use of tariffs including more frequent hearings with US Trade Representative Jamieson Greer.

Debt limit
Greatest potential for conflict over lifting the debt limit likely brings deadline down to the wire as in earlier episodes, rekindling concerns over technical default risk.

Transportation & energy
A bipartisan permitting reform bill is possible but difficult. Such a bill would keep more environmental protections than a Republican-only bill but would aim to speed up the permitting process for domestic infrastructure. Notably, a bipartisan bill would likely aim to speed up energy projects across the board, including renewables. The balancing act to both pass Congress and get signed into law by President Trump is difficult. Nuclear energy will continue to gain interest from lawmakers on both sides of the aisle.  

Artificial intelligence (AI)
House oversight will be exercised on the executives of AI companies, and there will be significant interest in hearings to learn more about the Pentagon's decision to drop Anthropic. However, there will also be significant interest in bipartisan legislation to tackle the rising energy prices caused by data centers. Legislation that tackles both permitting reform for data centers while legislating the burden of the costs onto the companies using these data centers is plausible.

Housing
If no housing bill is passed this year, then Democrats flipping the House would lead to an opportunity to pass the bipartisan crafted 21st Century ROAD to Housing Act. 

The potential for a Democratic sweep has increased since the Iran war, but the competitiveness of some elections will hinge on each party’s nominees. A narrow Democratic majority in the Senate would constrain legislation without the consent of the minority except for judicial appointments and budget reconciliation. 

Fiscal
Democrats use reconciliation in an attempt to postpone or reverse Medicaid and food assistance cuts enacted to fund 2025 tax cut package. President Trump would likely veto such a package, but it could serve as a starting point for negotiations. Republicans agree to compromise on increased defense spending, leading to wider deficits and less fiscal drag. Democratic push for higher taxes likely faces insurmountable obstacles. Potential for 5% increases in the annual budget.

Trade
Without a veto-proof majority, Democratic challenges to the president's trade agenda are unlikely to become law. 

Debt limit
Debt limit deadline forces agreement between White House and Congress on a package of increased defense spending and postponed cuts to social programs enacted in the 2025 tax cut legislation.

Transportation & energy
Democrats pass legislation focused on restoring tax credits for energy efficiency and renewable energy, which will be vetoed by President Trump. The potential for a bipartisan compromise still exists after partisan attempts fail.

Artificial intelligence (AI)
Without a veto-proof majority, Democratic priorities are unlikely to advance. However, there will be interest in passing messaging legislation designed to protect American workers and hold AI companies accountable for the actions of their platforms. If polling continues to find Americans' opinion of AI souring, this will likely become a potent issue in the Democratic presidential primaries with candidates who are sitting senators introducing anti-AI legislation.

Housing
A more partisan housing bill that has a negative focus on corporate landlords and Wall Street is likely to emerge and gain steam, especially with affordability being the driving political issue. This bill would be unlikely to gain a veto-proof majority but could appeal to President Trump who has focused on curbing institutional investors in the housing market. Even if he were unwilling to sign a Democratic bill, the potential for a compromise bill could emerge.