The US mid-terms do not immediately deliver a newly constituted House and Senate.
- The successful newly elected candidates do not take their seats until January 2027.
- For the remainder of 2026, Republican controlled Senate and House remain in place.
- It remains to be seen what legislation might be enacted during that rump period,
- Those House and Senate Republicans who were re-elected will doubtless be considering how they will work with their Democrat colleagues once the new Congress has convened in January.
Although both Chambers will be Democrat controlled in the new Congress, that does not amount to a carte blanche for a raft of radical ideas being enacted into law.
- President Trump retains his power to veto any measure which is passed by both House and Senate.
- In a pre-election interview where President Trump acknowledged the possibility of an outcome from the midterms similar to what the electorate delivered, he quipped that he might become known as, “Mr Veto’.
- Similarly, the Democrats do not have the 60 seats in the Senate to overcome a presidential veto.
- Some element of bi-partisan cooperation seems likely if paralysis is to be avoided.
- A change in the balance of power in Congress causes knock-on a change in who chairs each of the House and Senate committees,
- On the finance/tax front the new chairs will be,
- Rep. Richard Neal (D-Mass.) – House Ways and Means Committee
- Sen. Ron Wyden (D-Ore.) – Senate Finance Committee
- How each of these gentlemen interact with the respective Republican ranking member of their Committee will be a key element in achieving bi-partisan cooperation.
- During the election campaign, areas of interest signalled by the Democrats were largely focused on domestic issues, including
- Promoting legislation that is focused on lowering costs for families.
- Reversing changes made by the Republicans to energy tax incentives and credits under the Affordable Care Act
The President has rule making powers via the use of executive orders that do not require Congressional approval.
- During the first two years of his second presidency, Donald Trump has made extensive use of executive orders.
- The only challenge to an executive order is that the order itself is ultra vires by being outside the scope of whatever enabling legislation is involved.
- Some of President Trump’s previous executive orders have been overturned in this way, notably over tariffs.
- However, such challenges take time to navigate their way through the US courts system.
- Until such a matter is finally resolved, uncertainty as to the future is likely to abound
- That’s bad for business confidence and a potential restraint on both inward investment to the USA and US investment overseas.
John Havard is a US/UK Private Client Consultant at the audit, tax and business advisory firm, Blick Rothenberg.
>> MORE NEWS & FEATURES
