Election Watch 2026

The likelihood that Republicans retain their narrow House majority is low, given the usual midterm penalty for the president’s party and the president’s low job approval rating. Redistricting will benefit Republicans but is unlikely to fully offset the party’s low favorability. The Supreme Court’s 29 April decision in Louisiana v. Callais materially narrowed Section 2 of the Voting Rights Act: map challenges now require a strong inference of intentional discrimination. The ruling has already prompted new mapmaking, although filing deadlines and litigation limit its 2026 effect; the larger impact is likely in 2028.

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, but congressional Republicans will likely face difficulty 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. A scaled-back permitting reform bill could gain bipartisan support, but a partisan effort that sharply curtails environmental protections in exchange for quicker approval of infrastructure projects is unlikely to advance in the Senate without the needed 60 votes.

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
Republicans would oversee implementation of the bipartisan 21st Century ROAD to Housing Act. The agenda would likely emphasize supply expansion, streamlined permitting, manufactured housing, financing reforms, and a possible increase in the capital-gains exclusion for sales of primary residences.

Democrats face a tougher uphill climb in the Senate where they would need a net gain of four seats to obtain a 51-seat majority. Recall that VP Vance remains the tie-breaker in a 50-50 Senate. 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. There is 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
Substantive Democratic efforts to challenge the president's trade authority are not likely to reach the Senate floor for a vote. House Democrats are likely to increase 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 package remains possible but difficult. The House Energy and Commerce Committee advanced data-center and permitting legislation in August, showing an active legislative path, but enactment would still require Senate support and President Trump's signature. A divided Congress would likely preserve more environmental safeguards while accelerating approvals across energy technologies, with growing emphasis on making data-center developers bear grid and infrastructure costs. Nuclear energy is likely to retain bipartisan support.  

Artificial intelligence (AI)
House Democrats would exercise oversight of AI companies. Legislation on data-center permitting and electricity costs has moved beyond a conceptual stage: the House Energy and Commerce Committee advanced a package in August. A divided Congress could therefore pursue a narrower bipartisan deal that speeds permitting while assigning more grid-upgrade costs to data-center developers, although final enactment remains uncertain.

Housing
A bipartisan permitting package remains possible but difficult. The House Energy and Commerce Committee advanced data-center and permitting legislation in August, showing an active legislative path, but enactment would still require Senate support and presidential approval.

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 Democratic majority (51 or more seats) in the Senate would constrain legislation without the consent of the minority except for judicial appointments, presidential nominations, 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 likely 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
The Trump administration would continue to oversee implementation of the bipartisan 21st Century ROAD to Housing Act; however, Democrats will have the ability to pursue additional affordability measures. These could potentially include restrictions on large institutional landlords and stronger tenant protections. Measures beyond the enacted supply-and-finance package would still face President Trump's veto unless negotiated as a bipartisan compromise.