Democrats win Congress on affordability, but Trump retains veto power

Tariff revenue and Iran war complicate efforts to lower household bills

Democrats took control of Congress in the 2026 U.S. election, and the scale of the victory was bigger than most forecasters expected. At least seven Republican-held Senate seats changed hands as grocery, electricity and petrol bills shaped voter sentiment. House Democratic leader Hakeem Jeffries said, “We ran on affordability, we won on affordability, and now it’s our job to govern on affordability.” President Donald Trump still has the power to block the party’s plans, and overriding a presidential veto would require two-thirds majorities in both the House and Senate.

Kim Hanks, who owns Tillies, a hotel, restaurant and spa business near Austin, said rising grocery and fuel costs were forcing her to raise wages for 300 staff. “It’s been such a moving target for us on affordability,” she told the BBC World Service. In Indiana, Danny Reynolds, who runs Stephenson’s of Elkhart, a clothing and bridalwear store, said he wanted Washington to get its act together. “My hope is that we can just find some consistency, some working together,” he said.

Just 21% of Americans were satisfied with the direction of the country, according to the BBC’s report, even though the economy looked healthy on paper. Voters were looking at grocery, electricity and petrol bills rather than statistics, the report said. In rural Texas, outgoing Republican agriculture commissioner Sid Miller said ranchers were receiving $300 to $500 less for each head of cattle while facing record fertilizer costs. “They felt betrayed,” he said.

Under the banner “Fighting for an Affordable America,” Democrats put healthcare first. They want to restore the extra financial help that made health insurance cheaper under the Affordable Care Act and reverse the Medicaid cuts President Trump signed in 2025.

Tariffs and energy came next. Democrats want to scrap the president’s import taxes, which they say add thousands of dollars a year to the cost of groceries, fertilizer and building materials. They also want to end the war in Iran, which they link to petrol prices averaging $4.18 a gallon, an increase of nearly 40%.

Some Democrats want to build four million new homes over the next decade. The median sales price of houses sold was $393,300 as of Nov. 5, 2026, according to the raw value in FRED’s MSPUS series. On taxes, Democrats want billionaires to pay more and tax credits for families with children to increase.

Winning Congress did not remove the limits on what Democrats can enact. Trump is unlikely to abandon a trade policy central to his agenda, and Democrats would need Republican support to change it. Investor Ken Fisher, founder of Fisher Investments, said: “Congress can’t get anything past a presidential veto. President Trump can’t get anything he wants.” Fisher expects two years of relative quiet on the legislative and regulatory front.

Bernard Yaros, deputy chief US economist at Oxford Economics, expects the average tariff rate on imports to remain around 10% for the rest of Trump’s term. Tariffs’ contribution to federal revenue has also risen sharply: import taxes accounted for just over 1% of federal revenue in 2024 and more than 5% this year. Yaros argues that the growing contribution will make tariffs “tough for a future administration to fully dismantle.”

President Trump told CNBC he could work with Democrats on “many more things than people understand.” Yaros sees a possible political trade-off in which Democrats agree to extend Republican tax cuts in return for restoring health insurance subsidies. He does not expect a deal until late 2027, with the economic benefits arriving in 2028.

Henrietta Treyz of consultants Veda Partners said Democrats would question companies that passed tariff costs to customers. After the Supreme Court ruling in February, she said, the question would be: “Did you turn around, take that tariff rebate, and then lower prices for consumers?” Companies would also be asked, “What did you get in exchange?” Treyz said Democrats would “pick and choose very carefully.”

In the Senate, Ron Wyden, the Oregon Democrat set to chair the Finance Committee, has summed up his approach in five words: “affordability for us, accountability for them.” Wyden said he would use the committee to “reassert congressional authority” over trade policy. Insurers, drugmakers and banks should expect to be called to explain themselves.

Some of the largest changes may come closer to home. State governors and regulators have a say in electricity prices, while local authorities decide where new homes can be built. Democrats won governorships in Texas, Ohio and Georgia, where the rising cost of electricity for data centers is already a concern.

The hardest test may be one Democrats cannot fix with a new law. The price of petrol, diesel and fertilizer will depend heavily on what happens in the war with Iran, and forecasters disagree about what comes next. Oxford Economics warns that with the election over, further escalation “appears more likely” because petrol prices will no longer be as much of a political concern for the president. If prices come down, Democrats may struggle to claim the credit; if they go up, they may share the blame.

Congress also faces an immediate deadline. Government funding runs out after Dec. 11, and the BBC reported that the chances of another shutdown look uncomfortably high. The election gave Democrats control of the congressional agenda, but lower household costs will still depend on Republican support, presidential vetoes and the course of the Iran war.