Outlook on the 2025/2026 Elections: Key Issues
The 2025 off-year gubernatorial elections in New Jersey and Virginia and 2026 midterm elections represent significant opportunities for the electorate to weigh in on the direction that President Donald Trump and the Republican-controlled Congress have taken the country. Since Inauguration Day, the Republican trifecta has changed American policy significantly, and whether or not voters agree with these shifts will be seen at the ballot box. While Congress tackles regular business, including legislative vehicles like the annual National Defense Authorization Act (NDAA) and other matters related to government funding, some of the most pressing issues voters may consider in these upcoming election cycles include:
Reconciliation: President Trump’s “One Big Beautiful Bill” includes nearly $4 trillion in tax cuts, work requirements for Medicaid, elimination of taxes on tips and overtime, more burden for the Supplemental Nutrition Assistance Program (SNAP) on states, and an end to clean energy subsidies. Signed into law on July 4, the reconciliation package is big, far reaching, and controversial, even for the Republican conference, leading both Sen. Thom Tillis (R-NC) and Rep. Don Bacon (R-NE) to announce retirements. Meanwhile, House Speaker Mike Johnson (RLA) has announced plans for another reconciliation bill this fall for fiscal year 2026 (FY26), with the suggestion that Congressional Republicans could also potentially squeeze in another for FY27. It is yet to be seen how these bills may be implemented and what the ramifications might be, but these major changes will likely be a huge point of contention for the upcoming elections. Democrats have been hitting the airwaves trying to connect with voters to warn of the negative impacts of this package on their daily lives, though several big provisions will not take effect until after the midterms.
Economy: The economy, at present, is steady, with unemployment and inflation low, but the first quarter of 2025 saw the first contraction of the U.S. gross domestic product (GDP) since 2022. While the stock market and interest rates remain steady, both could react to volatile changes President Trump may pursue in economic policies, including ongoing pressures on the Federal Reserve to lower interest rates. Further, the president’s “Liberation Day” tariffs were met with mixed reactions by members of both parties, alongside a temporary stock market crash. Most countries have since negotiated down tariff rates, many tariffs still remain in effect, however, including a 30 percent tariff on all Chinese goods and a 50 percent tariff on steel and aluminum products. While President Trump’s supporters believe the administration’s tariff strategy will drive domestic production and consumption, most economists believe it will also 2 increase prices, spurring fears of high inflation once more. Those most affected may take their frustration to the ballot box.
Immigration: President Trump and Republicans made combating illegal immigration a major issue in the 2024 election and are likely to continue to do so following the administration’s increased Immigration and Customs Enforcement (ICE) deportations. While most Republicans support President Trump’s policies, lower court rulings and unrest in some parts of the country, including in Los Angeles and massive “No Kings Day” protests nationwide, show a clear division and an energized opposition. Most Americans support the vision for strong borders that President Trump campaigned on. However, polls suggest the majority of the country also supports programs like Deferred Action for Childhood Arrivals (DACA), which President Trump has vowed to eliminate. It is uncertain how voters will thread this needle when they cast their ballots.
Foreign Affairs: Issues of foreign affairs and national security are becoming increasingly important to Americans, with conflicts in Iran, Gaza, and Ukraine being top of mind for some voters. There is always the possibility for new conflicts between now and next November, especially as tensions escalate between China and Taiwan. The president has touted foreign policy victories, including brokering a ceasefire between Israel and Iran and demanding that NATO countries increase defense spending. Current conflicts have driven a wedge between hardline war hawks who want to bolster the administration’s support for Israel and strike Iran and the growing contingent of voters who say they refuse to vote for a candidate if they do not denounce Israel’s actions in Gaza. This trend of active polarized voters is not new. In 2024, the conflict in Gaza led to massive shifts against the Democratic Party in areas like Dearborn, Michigan, which is home to a large Palestinian community. Similarly, the last election cycle saw, massive shifts towards the Republican Party in areas like Westchester, New York, with significant numbers of Jewish and Israeli voters.
Culture Wars: Many Republicans, including the president, won in 2024 on the backs of culture war issues by blaming economic problems on progressive social ideals. This includes concepts like LGBTQ+ equality and rights to gender affirming care, particularly for minors; Diversity, Equity, and Inclusion (DEI) practices; and other things deemed culturally insensitive or inappropriate by the new mainstream. Republican candidates had moderate success in 2021 and 2022 running primarily on these issues, dominating school board meetings with a bottom-up approach to politics. Whether Republicans can reignite the culture war momentum to win over voters is yet to be seen. Democrats were able to make inroads in 2022 and 2024 despite unfavorable national environments after the 2021 Dobbs v. Jackson decision repealing abortion rights mobilized the base. New statewide ballot initiatives related to reproductive rights have 3 helped increase Democratic turnout but have not carried Democratic candidates across the finish line in every state.
DOGE: The Department of Government Efficiency (DOGE) was created by President Trump and Elon Musk to modernize agencies, maximize productivity, and cut wasteful spending. Since its inception, DOGE has laid off more than 275,000 federal workers and instigated countless legal battles over the executive branch’s authority to effectively eliminate government departments. Data breaches, alleged slower response times for those seeking assistance with federal benefits such as Social Security, and potentially billions of dollars in lost Internal Revenue Service (IRS) revenue have also been attributed to DOGE activity. While Musk is no longer in government, many DOGE actors remain in place, and the desire to reduce the size of government is spreading. Congressional Republicans are working to advance a recissions package to halt spending on programs previously funded by Congress. The administration’s proposed rescissions package must pass Congress by the statutory deadline of July 18. While the House has advanced the rescissions package, the Senate has yet to vote and several Republican Senators, including Senate Appropriations Committee Chair Susan Collins (R-ME), have expressed interest in potential amendments that could prove divisive for Republicans.
FY26 Appropriations: The new fiscal year starts October 1, teeing up a September 30 deadline for Congress to fund the government. With the House Appropriations Committee markup schedule already delayed by reconciliation and an uncertain timeline in the Senate Appropriations Committee, it is highly unlikely all 12 appropriations bills will be wrapped up before the fiscal year begins. While there are rumors that Congressional Republicans could support a year-long continuing resolution (CR), Democrats will be faced with a politically tough vote. Ultimately, Democrats may have to choose between demonstrating their anger over Congressional Republicans ceding Congress’ power of the purse by shutting the government or giving Republicans a win to avoid the Trump Administration leveraging a shutdown to further curtail federal programs. While the average voter may not understand the budget and appropriations process, the outcomes of upcoming elections could be indicative of who voters might blame if there is a government shutdown.
While voters outside of Washington will likely remain focused on these bigger picture issues, lawmakers in Washington are expected to pursue an even broader agenda. Different constituencies have been lobbying for their priorities, and action is possible this year on issues like cryptocurrency, pharmacy benefit managers (PBMs), critical minerals, and permitting reform, among others. Even if these issues see traction in Washington, they may be less likely to be mobilizing factors for the nationwide electorate. 4 Individual voters have unique motivations when they go to the polls. As evidenced by the first few months of the second Trump Administration, priorities and policies are subject to change in an instant and, as a result, specific issues rise and fall in importance in the eyes of the electorate. Predicting what will influence voters in the fall of 2025 and 2026 is difficult, but these are the most likely issues that could affect voter behavior.