Tuesday’s midterm elections will determine control of Congress for the remainder of President Donald Trump’s term. American voters will decide whether Mr. Trump maintains the Republican Party’s iron grip on Washington or retreats to lame duck status after a Democratic victory.
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If the Republicans win, Mr. Trump could have two more years of pushing through major policies with little resistance from Congress. If Democrats win one or both chambers, the president’s remaining legislative priorities could be seriously challenged, and even the basic functions of government could be brought to a standstill.
Oddsmakers and polls show Democrats are well-positioned ahead of Election Day, especially in flipping the Republican-controlled House of Representatives. Still, the balance of power will not be decided until the votes are counted, and this process could take days or even weeks to complete. The Senate is expected to be particularly close, and if the balance of power swings to Alaska, the country could have to wait until the state makes a key decision.
“The election results could trigger an immediate market reaction, especially as the Senate results become clearer,” Stifel’s Washington Policy Strategy Group wrote in an analyst note on Sunday, predicting a Democratic victory in the House, although the Senate remains too close to call. “However, the market’s haphazard trading could be reversed as investors realize that an impasse remains the most likely outcome of policy in either case.”
Republicans also control the Senate, where they have a larger majority than the House.
If Democrats control one chamber of Congress, policymaking in Washington will become even more gridlocked. Tight margins in Congress would preclude single-party budget reconciliation legislation, the procedural tool for most major spending and policy changes. Advancing the bill will require bipartisan cooperation, making must-pass legislation such as government funding, defense spending and the impending debt ceiling hike more important and more controversial.
In a divided Congress, the party that does not control the White House typically uses opportunities such as government funding or raising the debt ceiling to extract concessions from the majority party, which can lead to brinkmanship.
“If Republicans maintain their Senate majority, contrary to conventional wisdom, we would expect relief rallies in areas that may react negatively to Democratic victories,” Stifel wrote. “Democrats would still control the House and gridlock would prevail. In this scenario, Senate Republicans would serve as a check on both the Democrats and President Trump’s many populist impulses.”
Democrats are also widely expected to use their majority in Congress to launch investigations into the White House and companies that collaborated with the Trump administration. The majority party gains subpoena power in parliamentary committees.
Polls show that Democrats could win the House and Senate. In that case, Democrats could more aggressively pursue partisan reconciliation measures that would not become law but would give the party a megaphone heading into the 2028 presidential election. President Trump still has the power to veto any bill passed by Congress, which would significantly limit the chances of Democratic legislation becoming law.
If Democrats control both chambers, it will be a little easier to pass essential legislation. But any deal would still require White House mediation, and the Senate filibuster threshold of 60 votes could still be a hurdle that would require bipartisan support. Whichever party wins the Senate majority is highly unlikely to win at least 60 seats.
Democrats in both houses of Congress would jump at the chance to lead investigations into the White House and corporations if given the chance.
Analysts expect the gridlock in Congress will increase Trump’s use of executive orders, whether with a divided Congress or a unified Democratic Congress.
There is a possibility that Republicans will maintain a majority in both houses of Congress. In that case, the rest of President Trump’s legislative agenda could continue to pass, maintaining the status quo.
Democrats will still have some influence, largely because the Senate filibuster threshold is 60 votes, but scrutiny of the White House and businesses will be limited.
