Think Divided Government Means Gridlock? Think Again.

Why the results of the midterms make congressional action more likely, not less.

On December 18, 2019, the Democratic-controlled House of Representatives voted to impeach President Donald Trump. The next day, the same House voted 385–41 to approve his signature trade agreement, the USMCA.

Political confrontation and bipartisan dealmaking are not mutually exclusive. That lesson, learned over decades of experience in divided government, is about to matter again.

When the new Congress convenes in January, Democrats will hold significant majorities in both houses, and President Trump will face divided government for the second time. The conventional script is already written: aggressive oversight, subpoenas, legislative gridlock, and a White House leaning harder on executive action.

Commentators will raise questions about how much power a lame duck president still wields and the impact a presidential primary season certain to kick off imminently will have on his agenda.

But history suggests that real congressional achievement is not only possible – it’s probable. 

The Surprising History of Divided Government

The closest parallel may be the final two years of George W. Bush’s presidency. Democrats had just won both chambers, investigations were underway, and the parties were bitterly divided over the Iraq War. Yet, they enacted major energy legislation in 2007, followed by economic stimulus, housing reform, and ultimately the extraordinary financial rescue legislation of 2008.

In 2015 and 2016, Barack Obama faced a unified Republican Congress for the first time. Despite fierce fights over health care, immigration, and executive power, the two parties rewrote K-12 education policy with the Every Student Succeeds Act, enacted a five-year transportation investment plan, and passed the 21st Century Cures Act, all before Obama left office – and during hotly contested presidential primaries raging among both Republicans and Democrats.

Trump’s own first term followed the same pattern. Even as House Democrats investigated and impeached him following the 2018 midterms, the parties negotiated USMCA and passed the First Step Act. When COVID-19 struck, they enacted trillions of dollars in emergency relief.

Skeptics will point to the most recent divided government, and they should. The 118th Congress, with a Republican House facing a Democratic president and Senate, was among the least productive in modern history. A speaker was ousted by floor vote for the first time in history, shutdown threats became routine, and major efforts on immigration, permitting, and more stalled.

Yet even that Congress, by most measures a worst case, produced a debt-limit agreement, a multi-year FAA reauthorization, and a major national security funding package. Each came together under the pressure of a deadline or a convergence of interests. In other words, even in the least favorable conditions, the patterns described below still operated.

How Divided Government Changes the Way Deals Get Made

Divided government is not inherently productive. Major initiatives failed in every period above, and confrontation often dominated the headlines.

But there’s a structural difference worth noting. Under unified government, the majority can often bypass the other party entirely, as both parties have done through the processes that produced the Affordable Care Act and the One Big Beautiful Bill Act. Divided government removes that option. Anything that becomes law must earn support from both sides, and that changes how the work gets done.

Rather than being driven primarily by leadership, deal making more often falls to smaller groups of members – working through committees and bipartisan “gangs,”  or deputized by leaders – who can step back from the daily headlines and chatter and instead focus on lasting legislation in key policy areas.

What Makes a Deal Possible?

Looking across these periods, three patterns emerge.

First, crisis creates urgency. The 2008 financial collapse and the 2020 pandemic fundamentally changed the political calculus. When the consequences of inaction become sufficiently severe, partisan differences can give way to a shared imperative to respond.

Second, political and policy interests sometimes converge. The parties don’t need to agree on everything – or even share the same motivation – to support the same legislation. Republicans seeking greater state control of education and Democrats seeking stronger accountability found common ground in 2015. Trump wanted to replace NAFTA; congressional Democrats wanted stronger labor protections. Both could claim meaningful progress through USMCA.

Third, deadlines create opportunities. Expiring authorizations, government funding deadlines, and other must-pass legislation can force negotiations that otherwise might never occur. These negotiations can also provide vehicles for broader policy compromises.

The common denominator isn’t necessarily ideological agreement. It’s a recognition that both sides have something meaningful to gain from acting.

Three Areas to Watch

With divided government arriving in 2027, three policy areas illustrate how these dynamics could create opportunities for major legislation.

Artificial intelligence. AI presents a different opportunity: a rapidly evolving policy challenge where the regulatory framework is still being defined.

Both parties have expressed interest in maintaining American leadership in AI, protecting children and consumers, and addressing national security risks. At the same time, businesses face growing uncertainty from a patchwork of state laws, while policymakers are debating how to balance innovation, accountability, and federal authority.

The disagreements are significant, particularly over federal preemption, liability, and the appropriate scope of regulation. But so is the potential for a deal.

Republicans could advance priorities around innovation, competitiveness, and regulatory consistency. Democrats could secure stronger consumer protections, transparency requirements, and safeguards against emerging harms. Both could point to progress on protecting children and strengthening American technological leadership.

Unlike the crisis-driven legislation of 2008 or 2020, AI legislation could emerge from the perceived costs of inaction – and neither party wanting to own a preventable catastrophe on their own.  

Health care. Few issues combine political salience, economic pressure, and opportunities for bipartisan agreement quite like health care. Rising costs affect families, employers, and governments alike. Democrats and Republicans may disagree fundamentally about the appropriate role of government, but both face pressure to address affordability and improve access to care.

The 21st Century Cures Act offers a useful precedent. It combined medical innovation, research funding, regulatory reform, and responses to pressing public health challenges into legislation with overwhelming bipartisan support.

A similar convergence could emerge around prescription drug costs, health care transparency, medical innovation, or other reforms intended to improve affordability. The path to agreement may not run through sweeping changes to the health care system or costly expansions of benefits, but through a substantial package of reforms that advances different priorities for each party.

Immigration. Immigration may seem an unlikely candidate for bipartisan dealmaking given the intensity of partisan disagreements. But it also presents a potential intersection of political and economic imperatives.

Republicans have emphasized border security and enforcement. Democrats have generally placed greater emphasis on legal pathways, humanitarian protections, and the status of immigrants already living in the United States. Meanwhile, employers across sectors have longstanding concerns about workforce availability and the functioning of the legal immigration system.

Those differences have repeatedly frustrated reform. But they also create the ingredients for a potential bargain: stronger border and enforcement provisions alongside changes to legal immigration, workforce programs, or other elements of the system. With an influx of Democrats who increasingly support strong border security measures and the President focused on an economy that needs a strong workforce, the early embers of a negotiation are already lit.

Such a deal would face substantial political obstacles. Yet immigration is precisely the kind of issue where neither party can easily deliver its full agenda alone, and where each could potentially secure meaningful policy gains through negotiation.

Preparing for Both Confrontation and Compromise

None of this means major bipartisan legislation is guaranteed. The political incentives for confrontation remain powerful, particularly as the 2028 presidential campaign gets underway.

But the historical record offers an important lesson for businesses, associations, and organizations seeking to shape public policy: preparing for divided government requires more than preparing for gridlock.

It means identifying where crises could force action, where different political priorities might produce common ground, and where legislative deadlines could create negotiating opportunities.

It also means recognizing that the most consequential deals may not begin with broad bipartisan agreement. They may begin with two parties pursuing different objectives and discovering that legislation offers each a path to achieving them.

The next Congress may be defined publicly by oversight, investigations, and partisan confrontation. But as we’ve seen time and time again, behind the headlines, opportunities for significant policy change could still emerge.

The organizations best positioned in 2027 will be the ones prepared for both.