THE LOOK AHEAD – THE YEAR 2026
Produced By:
Bret Manley (bret@elevatega.com) and David Marten (david@elevatega.com)
Elevate Government Affairs (www.elevatega.com)
Balance of Power
Senate: 53 Republicans, 45 Democrats, 2 Independents Caucusing with Democrats
House: 220 Republicans, 213 Democrats, 2 Vacancies*
- TX-18: Harris County Attorney Christian Menefee and former Houston City Council member Amanda Edwards will head to a runoff after no candidate secured 50% of the vote in the November 4th special election. Gov. Greg Abbott (R-TX) set January 31st 2026, as the date for the runoff election. Rep. Sylvester Turner (D-TX) passed away on March 5th, 2025 after just arriving in Congress to fill the seat long held by former Rep. Sheila Jackson Lee until she passed away last year. This is a safe Democratic seat.
- NJ-11: Rep. Mikie Sherrill (D-NJ) resigned November 20th in advance of her swearing in as New Jersey’s next Governor on January 20th. The primary to fill the seat will be February 5th and the special election will be held April 16th. This is a safe Democratic seat.
- *GA-14: Rep. Marjorie Taylor Greene previously announced that she would resign today, January 5th. Governor Kemp (R) has 10 days to set a special election date, which must be at least 30 days after the vacancy. If nobody wins a majority, there will be a runoff. The GA Secretary of State’s office currently has March 17th for the special and April 14th for the runoff if needed. This is a safe GOP seat. Once her resignation is official the GOP will have 219 seats.
The Issues Driving the Year Ahead (As We See It)
Welcome back! We commend you on remembering how to turn on your computer. Hopefully Santa brought you everything you wanted for Christmas, and if not, you could just buy yourself whatever you want, wrap it, and write “From Santa” on it next year. Nobody is going to out you in front of the kids.
We are going to do something a little different for January and try to lay out how we see the year unfolding and the issues that will be driving the conversation and Congressional calendar.
Shutdown Politics: The question that will be on everyone’s lips in the near term. Will the government shut down again? Our view is no. To be fair, we always say that and were wrong last time…but we were right 100% of the OTHER times! Still, several things are working against a shutdown this time around:
- It’s an Election Year: You might think that increases the chances but think of this like an incumbent. If we enter another shutdown, do you want to hand your primary opponent a potent, cogent, campaign component to lambast you with at any moment!? (we try).
- FY 2027 Appropriations Season: If the government shuts down now, you’re bumping right up into the start of next year’s appropriations process. Which is to say, shutting down now risks two years of CRs (the remainder of 2026 and 2027).
- There Are *Real* Signs of Bipartisan Progress: The House just released a mini-bus of CJS, E&W, and Interior appropriations that is an agreement between both parties. The vote could come as early as this week.
- The Democrats Already Got What They Wanted: Who got blamed for the last shutdown is really irrelevant. The Democrats came out on top because we’re entering an election year talking about what they want to talk about…health care. Granted, currently events can turn this advantage rapidly into a disadvantage (anyone checked in on the Minnesota delegation?) but Congressional Democrats want the conversation to be about health care, and it looks like that is where Congress will start.
- Nobody Likes Election Year Wildcards: Election years are already unpredictable, and nobody is interested in making them more unpredictable. It’s one of the reasons lawmakers are more likely to adjourn early to go home and campaign. Take what you know about the world, freeze it in place, and campaign. A shutdown is a known unknown, to borrow a phrase from another Donald (Rumsfeld). Anything could happen, or nothing could happen. For this reason, the parachute option is passing a CR for the more contentious bills (Homeland, State, FSGG) and passing a package of Defense, THUD, Labor-HHS. Labor-HHS is usually controversial so could end up in a CR, but the tradition is that it rides along with DOD approps.
Take This Job and Shove It: The next two months are prime time for retirement watch. Why? February and March feature prominently for candidate filing deadlines in various states. You can see the full list here. Members like to do everything at the last minute…and announcing their retirement is no different. Normally, Members try to time it so it’s far enough away from a filing deadline that “anyone can run” but also close enough that preferred successors and legitimate contenders are the only ones who can get the relevant paperwork/signatures filed in time. That tends to be a few weeks to a month before the filing deadline.
Can’t We Just Give Everyone Ozempic?: When it comes to issues voters actually vote on (as opposed to things media and activist types wish they voted on), health care is the only consistent major issue where Democrats have pretty much never trailed the GOP. With the decision of four House Republicans to sign the Democrat led discharge petition on Obamacare subsidies, the House will be forced to vote on extending COVID era enhanced premium subsidies. It’s worth noting that of the 4 GOP Members: Fitzpatrick (PA) and Lawler (NY) are in seats won by Kamala Harris; and Bresnahan (PA) and Mackenzie (PA) are freshmen who won their seats by roughly 6,000 and 4,000 votes respectively.
Internally, Congressional Republicans see the world this way: None of them voted for these enhanced subsidies in the first place, and modern Congressional majorities were built on the wave of opposition to Obamacare. Every election season, Democrats run ads with some sort of message that Republicans want you to die. Fear of these types of ads isn’t a persuasive argument to them, because they’re going to see them anyways. What they will be looking at is WHO is going to be impacted by the loss of the subsidies. The lesson they learned from Obamacare was that if a real-life person loses their doctor, no amount of television advertising will convince them everything is better. So… which real-life people will lose the subsidies and is that a group of people concerning from an electoral perspective.
The wild card here of course is the revelation of massive fraud in Minnesota. $9 billion is a big big number, and common sense would tell you that fraudsters don’t go from zero to $9 billion on the first try. If you’re a Democrat, you’re likely worried that this isn’t the end of it… and it probably isn’t. What are the chances that this type of thing is limited to one program in one state? (zero…the answer is zero). What do Congressional Democrats do if the Republicans give them an extension of the enhanced subsidies tied to “waste, fraud, and abuse”?
Democrats, for their part, know this is an issue that divides the Republican party like no other issue on the Hill, and they’ll want to press that advantage. For all the caterwauling about Obamacare’s failures from Republicans…the GOP has yet to present a coherent, comprehensive replacement, to sell to voters. The Democrat bet (one that will pay off if they get the staging right) is that the GOP won’t be able to put one together this time either. The challenge of course for the Democrats is that they don’t control the WH or either House of Congress, so the tools they have to force the issue are limited. Especially without a shutdown.
As The World Turns: The big news kicking off America’s 250th birthday, the raid and subsequent arrest and extradition of Venezuelan dictator Nicolas Maduro. Maduro was originally indicted by a grand jury way back in 2020, and you can read the unsealed indictment here. The U.S. had a $50 million bounty on him, spanning both the Biden and Trump Administrations. Expect Trump to lean into this as much as possible. We’re setting the over/under at 16 minutes of Maduro talk at the State of the Union. It hits all the main themes that Trump wants to campaign on: crime, illegal immigration, drugs/fentanyl, and political hypocrisy. Maduro, of course, is a violent, repressive dictator whose chief domestic political opponent just won the Nobel Peace Prize and herself was secretly whisked out of Venezuela courtesy of the US of A.
Trump is banking on Democrats opposing this, after all, with Maduro in U.S. custody to face trial in the media capital of the world, it’s going to be a television bonanza. A modern American soap opera. Though, if you’re paying attention a divide is developing on how Democrats are responding. To that end, we’re looking at prominent Democrats who don’t oppose Maduro’s arrest and wondering if there’s a strategic, possibly forward looking, reason for it. We found Gov. Jared Polis’ statement particularly interesting.
An additional subplot of this is the effect it’ll have on Iran and its fundamentalist regime. Iran has long used Hezbollah to prop up Maduro, and in return used profits from the drug trade and Venezuelan oil to fund its operations. If those days are over, and that’s certainly more likely today than it was last week, then the Ayatollah may be living on borrowed time – particularly considering ongoing anti-regime protests, which President Trump has taken notice of. It’s possible (likely?) the world looks a lot different 10 months from now when voters head to the polls. Congress can’t really do anything about any of this (which is not new, see Syria/Libya/Bosnia/Panama/etc. etc.), except complain they weren’t notified/asked for permission, and hold a few votes on War Powers that go nowhere.
Why is this important? It’ll be a major theme of the 2026 campaign season. Foreign policy can have a major effect on elections, especially if you can tie them to domestic issues (crime/drugs/immigration). Then President Obama’s Iran nuclear deal was a major focus for the GOP in the 2016 elections, likewise the botched withdrawal from Afghanistan. There’s a big risk here for Trump that the situation in Venezuela devolves and becomes a liability, but you’ll recall pundits said the same thing about taking out Iran’s nuclear facilities. Only time will tell.
Trump’s War Chest vs Lame Duck Status: The first domino to fall on the road to a future GOP without President Trump was the State of Indiana’s refusal to follow through on Trump’s demand for a mid-decade redistricting. The subtext of the GOP opposition in quotes to the media can be summarized as the recognition that someday soon Trump won’t be on the ballot, but they will. The golden rule in politics is that politicians first and foremost do what’s best for themselves…we know, you’re shocked to read that sentence. For GOP lawmakers the past decade, that has meant aligning oneself with President Trump. Trump himself has ruthlessly exploited this to his own advantage, and the list of GOP casualties is long and illustrious (see Taylor Greene, Marjorie) and somewhat less illustrious (one of your hosts). After the mid-terms, Trump will be a lame duck. His power to enforce his will on Congressional Republicans will begin to evaporate at a rapid pace. Effectively overnight he will go from the undisputed leader of the Republican party to the man every ambitious Republican wants to replace.
Even before that happens, Presidential contenders will begin putting together their networks. Unless GOPers with national ambitions are just going to cede the contest to the Vice President (they won’t, but he’s in pole position), cracks are going to start to emerge.
Trump, through his various committees and the RNC, has somewhere between $300-600 million at his disposal (depending on how you count) today, and that number will only grow. Don’t forget the richest man in the world and the President finally kissed and made up and has plans of his own. Expect Trump to liberally deploy the threat of primary funds or withholding campaign cash to keep members in line, even in places (or perhaps especially in places) where doing so would be a massive own goal for the GOP.
Don’t fear Democrats, the party won’t be short on money, and this kind of inside politicking by Trump (doing what’s best for him vs electing a swing seat Republican) is probably better for the Democratic party. Money doesn’t automatically mean you win elections, just ask Michael Bloomberg, but Democrats don’t really have a national party leader who can force its membership to tow the party line at the moment. The disadvantages of which are well known but for Dems in marginal districts also comes with the distinct advantage of allowing you to build your own brand.
Kids Online Safety/Data Protection: The Senate of course is firmly in agreement and on the record with the Kids Online Safety Act (KOSA), a bill House Republican leadership views as unconstitutional and a non-starter for the House. Energy and Commerce Chairman Brett Guthrie (KY) will pick up where the committee left off in January on a package of bills aimed at the safety and security of children’s access to content online. At present, there is scant Democrat support for the Republican offerings, which imperils the chances of deal with the Senate. Guthrie of course can’t worry about that until he gets a bill out of his committee, let alone the House. Some of this is negotiating but there are very real challenges between the more business friendly GOP and the anti-tech Republicans who have come to D.C. in recent years. In reality, the most likely outcome is a small package centering on age verification, app stores, and smartphones. Many states have already acted in this arena giving lawmakers a reason to hurry lest they get left behind. Broad based privacy regulation is going to continue to get dragged down by issues over free speech and private right-of-action. There are no easy fixes there which make them unlikely election year wins. The time it takes to reach a deal on these things means a comprehensive data privacy bill is likely a casualty of the calendar.
Schumer’s Grip on the Democratic Caucus: Senate Minority Leader Schumer had a rough year with the base of the party and activists demanding he be more confrontational to President Trump, with demands for a new leader percolating in media and left-wing circles. The long rumored AOC primary challenge has yet to materialize, but even if it doesn’t, you’re seeing Democratic Senate candidates publicly oppose his continued leadership. To be fair to Leader Schumer, it doesn’t cost anything for a challenger to say that (or for a House Member for that matter), it’s a free cheap shot that can be smoothed over if they manage to get elected and there’s a long history of calling for the ouster of a party leader on the campaign trail only to back them when their uh….perspective changes. BUT…we’d be lying if we didn’t expect this to impact how he manages the Senate Democrats in the run up to the midterms. Leaders don’t like this kind of thing but it’s tolerable…up to a point…if it helps win elections. A more concerning development is if the calls start coming from inside the house (er…Senate).
Surface Reauthorization: Probably the only spot of bipartisan comity on major legislation that Congress will likely see this year. The current authorization expires September 30th. In the House the path is more straight forward, and Chairman Graves and Ranking Member Larsen have a strong working relationship. They’ve already signaled that the most contentious issues (solvency of the trust fund and integrating electric vehicles into that system) will likely not be addressed. Senate Jurisdiction is more spread out, but EPW Chair Shelley More Capito (WV) is well liked on both sides of the aisle and is not known as a partisan. The big wild card…to the extent we can spice up a paragraph on transportation policy…will be whether a rail title is included. Traditionally it’s not, and with the pending merger of two class one railroads, opening the bill to rail policy could be risky.
The Also Rans and Wild Cards: Issues you’ll read a lot about but ultimately won’t get to prime time, and a few that could blow up the whole calendar.
- Crypto Regulation: The primary reason this goes nowhere is almost nobody understands how Crypto currency works. The second reason is the people who say they understand how crypto works, don’t understand how crypto works.
- Permitting Reform: Permitting reform is starting to feel like that estranged Uncle that shows up once a year at Christmas and says this is the year he turns his life around…before asking you for money.
- The Tariffs and The Farmer: Farmers don’t like Trump’s tariffs, even if they tolerate them. Prices for American ag products are already precarious enough that the U.S. government heavily subsidizes American farmers. Retaliatory tariffs on American ag products and foreign market limits have put a strain on a key part of Trump’s base. One of the reasons this hasn’t exploded into open conflict is Trump has been using proceeds from his expansive use of tariffs to offset the cost of foreign retaliation on American agriculture. If the Supreme Court limits Trump’s ability to impose certain tariffs and thus collect revenue he can pass on to American farmers, than this could escalate significantly.
- Putting the Artificial in the Artificial Intelligence Debate: Congress is by nature, reactionary. Industries emerge, problems arise, Congress…um…”solves” them. It was already true before the arrival of AI that technology moved at a pace that was difficult for Congress. By the time Congress agrees on a bill, it’ll already be outdated. Trump’s Executive Order limiting state action on AI…which is really nothing more than “don’t do anything unless you want us to sue you and spend years in court (even though the Admin would probably lose), will give just enough cover for this issue to wither, at least this year, on the vine.
- D is For Departure: Compared to Trump 1.0, Trump 2.0’s cabinet has seen remarkable stability. We simply haven’t seen the public fighting, backbiting, and sniping at his cabinet officials like we saw in the first term. Trump’s primary team is largely united and singing from the same song sheet so any departure would likely be voluntary or timed so that a nomination fight for the replacement would occur after the midterms.
Reminder: Elevate Government Affairs offers monitoring and full coverage of hearings and markups for our clients. Be sure to ask us if you need something covered!
This is a product of Elevate Government Affairs LLC. To learn more about our firm, visit elevatega.com.
