Affordability, AI & Oversight: Congress’ Year Ahead

Congress heads into 2026 with frayed nerves and even thinner margins. Leaders in both parties are grappling with restless members, shrinking floor time, and a political environment that rewards confrontation more than compromise. Pressure to address rising consumer costs, escalating anxieties about AI, and oversight battles vying for relevance amid shocks from Epstein to Venezuela are set to dominate the election year. 

How will the specter of the midterms change the dynamics on the Hill? What do you need to know about the legislation and investigations on the table before November?  Precision’s Congressional veterans Mike Spahn, Henry Connelly, Tim Mulvey, and Matt Williams break down what to expect as Congress enters the New Year.

House & Senate factions scramble the legislative outlook

Lawmakers left 2025 with tensions running high and Congressional Leaders struggling to keep control of the floor. 2026 looks likely to challenge leadership even more – raising steep hurdles for major legislation like government funding or a second reconciliation bill:  

• House GOP Leaders’ fraying control limits 2026 legislative calendar – This year, the House plans to be in session for only 95 days before Election Day in November (compared to 130 days for the Senate). A lighter election year schedule is normal, but Speaker Mike Johnson is struggling to keep control of his razor thin majority. Discharge petitions – ordinarily a go-nowhere messaging tool of the minority – have become a live threat to move bipartisan bills through the House in defiance of GOP leadership. Less time in the Capitol means less time for floor drama and less time answering questions from the Capitol Hill press corps.

• House & Senate Dems divided over dealmaking versus drawing hard lines – Minority Leader Chuck Schumer heads into 2026 bracing for the January funding deadline to once again divide Democrats between bipartisan-minded appropriators and the “Hell No” wing of his caucus. House Democratic Leadership feels intensely vindicated and empowered by their unyielding approach to the shutdown and ACA subsidies fight. Expect Leader Hakeem Jeffries to maintain his hard line and reject concessions to Republican moderates that might dilute Dems’ advantage on healthcare or other affordability issues. 

• Senate Republicans test Trump’s boundaries but stick with the team – Prominent Senate GOPers have criticized the Trump Administration on topics ranging from Ukraine, to boat strikes, to the FCC, to tariffs, to vaccines. But unlike the House’s discharge petition signers, Senators haven’t carried that criticism into any major legislative showdown with the President. Most recently, GOP senators rallied around Trump’s Venezuela operation, although committee chairmen will expect answers from Administration officials as the aftermath unfolds. 
• Lawmakers’ retirements shake up the sources of influence – At least 10 Senators and 44 House Members have already announced they won’t be running for reelection. It’s not just household names like Marjorie Taylor Green and Nancy Pelosi leaving; a generation of influential senior lawmakers and committee leaders in both parties are headed toward the exits. As younger members vie to fill the policy and political vacuum left by these departures, the centers of gravity in both parties have begun to shift even before the midterms.

Healthcare Stalls Out in Center Stage

Healthcare has reemerged as a central fault line heading into the midterms, with Democrats eager to press an issue where they see clear political advantage and Republicans struggling to find common ground. The showdown around ACA subsidies has also frozen much of the usual lower-profile bipartisan dealmaking on other healthcare items often attached to government funding bills. The result is a standoff in which policy movement is limited, but political stakes are rising fast:

• Democratic Leadership sees no upside to a deal – Democrats are gleeful that they’ve shifted focus back to healthcare, one of the few issues where the party enjoys a significant political edge. House and Senate leadership see no upside in agreeing to a deal with Republicans that would let up the pressure. Expect Democrats to press their advantage with a more aggressive healthcare agenda around ACA subsidies, Medicaid cuts, and drug prices headed into the midterms. Healthcare issues where the parties are closer together, outside the ACA, are likely to be held until the lame duck session.

• Republicans stuck on concepts of a plan – President Trump’s hard opposition to extending enhanced ACA subsidies and divisions over expanding abortion restrictions have once again left Republicans in Congress struggling to unify around a plan to lower health costs. The GOP’s healthcare grab-bag package (including ACA eligibility restrictions, bigger HSAs, association health plans, and PBM measures) that passed out of the House in December is DOA in the Senate. 
• Moderates feeling the heat to deliver – After falling in line around major cuts to Medicaid in the Big Beautiful Bill, GOP moderates are feeling the heat over the ACA subsidies. The four House Republicans who signed Democrats’ discharge petition means a three year extension of ACA subsidies will come to the House floor – yet the Senate already voted down this plan in December. Senate moderates who banded together to re-open the government continue to meet, but the prospects for a breakthrough deal on key healthcare issues remain dim. 

Lawmakers fight for upper hand on “Affordability”

Rising consumer costs from groceries to energy are turning up the pressure on Congress. Unsurprisingly, the two parties have very different solutions to curb costs.

• Congress braces for SCOTUS ruling on Trump’s tariff authority – Over the last year, the Republican majority relinquished their power over trade as President Trump imposed sweeping tariffs, despite rising consumer costs. If the Supreme Court strikes down Trump’s tariffs in 2026, we may see major economic disruption as the administration may be forced to refund billions in duties already collected from U.S. importers. Congress will also be thrust back into the driver’s seat on trade, putting Republicans, particularly those in swing districts or from farm-state delegations, on the spot for explaining whether they support Trump’s tariffs and, if so, whether Congress should vote on them. 
• Republicans counting on a tax rebate jolt – With legislative options limited, Republicans will be counting on a political boost from larger than expected federal tax returns hitting bank accounts in the Spring. The extension of the Trump tax cuts – along with targeted new provisions – are key to Republican efforts to assuage continuing affordability concerns. The checks, coupled with a soaring Dow, will be a regular feature of campaign rhetoric – assuming both pay off as campaigns heat up.   
• Food costs take a political bite – Last year, President Trump lifted steep tariffs on coffee, bananas, and other foreign-made food items just 10 days after Republicans lost by large margins in the New Jersey and Virginia governors races. Democrats are planning to keep the Trump team on the back foot on rising grocery costs, as agricultural interests split over lowering tariffs on products like beef and the costs of foreign retaliation on US food exports.
• Energy cost blame game – Rising electricity and heating costs are driving voters’ affordability concerns heading into the midterms. Democrats will continue placing the blame on Republicans for rolling back clean energy tax cuts in the Big Beautiful Bill. Republicans will point to their work lowering fuel costs and reversing the Biden administration’s damaging “energy subtraction” policies. The tech industry is also taking heat as data centers have emerged as political targets for being a strain on resources.
• Permitting reform on ice – Cost of living woes and the nation’s insatiable demand for power have upped the urgency for bipartisan permitting reform. House Republicans passed permitting reform legislation at the end of last year, and the Democrats’ “abundance” movement has created new openness in cutting back regulation. But top Senate Democrats are freezing negotiations over the Administration’s recent move to halt offshore wind projects.

The Political “Cloud” of AI? 

Artificial intelligence is rapidly becoming a frontline political issue, with economic anxiety, state power, and federal inaction combining just as the midterms come into focus. As fears around job losses unite unlikely allies on the left and right, and Washington fails to set clear national rules, AI policy debates are intensifying across Congress, the states, and the campaign trail. The result is a hotter, more fragmented fight — one that puts the industry squarely in the political crosshairs: 

• AI EO ripple effects – Congress took two swings (and misses) at preempting states from enforcing AI laws in 2025. Last year alone, states introduced over 1,000 AI-related bills while Congress isn’t close to crafting a federal standard. The Administration’s Executive Order on AI didn’t win over Republican Governors like Ron DeSantis who are defending their own state’s AI laws. The administration’s latest move to jam states turns up the political temperature, making it harder for the industry to build bipartisan support for a federal solution that they have long desired.
• Job displacement fears unite political opposites — Artificial intelligence is disrupting the economy and transforming the way we work — and that’s creating concerns within both parties heading into the midterms. Factions of Democrats and Republicans alike fear that AI could wipe out millions of jobs. Look for outspoken voices with large megaphones on both sides — from MAGA populist Steve Bannon to Congresswoman Alexandria Ocasio-Cortez — to make the economic threat of AI a central economic issue in the year ahead.
• Data centers in progressive crosshairs – Senator Bernie Sanders is ratcheting up criticism around the data centers necessary to power AI, calling for a national moratorium on their construction. It won’t pass, but it will thrust data centers further into the political crosshairs when many left-of-center governors and lawmakers reap the benefits of new investments in their states and districts.
• Congress to play more bipartisan small ball – A comprehensive federal AI bill is likely off the table. That means lawmakers will look to replicate the successful passage of targeted standalone bipartisan legislation like last year’s Take it Down Act — a bill regulating nonconsensual deepfakes. Bipartisan bills that address election integrity and R&D are potential short-list candidates for consideration this year.

GOP committees investigate the Left, as Democrats plot 2027 oversight targets 

Intense pressure around the Epstein files has forced House chairs to push ahead with oversight efforts that both relieve pressure from the majority’s rank and file and draw attention to other matters. With the midterms coming over the horizon, the majorities in both houses will ramp up efforts around politically helpful investigations while Democrats will start laying out potential oversight priorities should the gavels change hands at the end of 2026.

• Venezuela & the Donroe Doctrine – While the administration’s allies in Congress are, for now, mostly rallying around recent action in Venezuela, Democrats are already calling for aggressive oversight into the matter. Given current confusion about the administration’s goals and future plans and talk about “boots on the ground,” this may well emerge as a focus of sustained bipartisan oversight as the year gets underway. American oil companies should prepare for their turn in the spotlight, as the President has pushed them to the forefront of whatever comes next for the country.
• Epstein, and anything other than Epstein – As the MAGA base and their voices in Congress continue to clamor for transparency around the Epstein Files, expect the Oversight Committee to continue its version of an investigation into the matter, potentially including contempt action against former President and Secretary of State Clinton. At the same time, Republicans will continue to search for fireworks in attacks on the left as a way to boost electoral prospects and distract from topics damaging to the GOP. House committees will likely target institutions and organizations perceived as left-of-center, hoping to recreate viral conflict and draw attention to culture war issues around crime and “wokeness.”
• Democrats promise investigations as a counterweight to Trump pressure – Bullish on 2026 prospects, House Democrats will soon start laying out an oversight agenda. With an administration unlikely to cooperate, look for a focus on the private entities that have made concessions to Trump.  Trump-backed media mergers, ballroom donors, investors in Trump’s crypto currency, and dealmaking law firms and universities could all face investigations as a pathway to conducting oversight on the administration.