In 2025-2026, Republicans will control the White House (Trump/President), the Senate (53 to 47), and the House (220 to 215). But despite winning the trifecta, GOP lawmakers will confront significant challenges next year. They include a spiraling deficit that will make enactment of GOP priorities difficult, and deep divisions between ultra-conservative and more centrist Republicans.

Early GOP priorities of interest and/or concern to NAIFA include:

• A mammoth tax bill that would extend current law tax rules that expire at the end of 2025. Issues of concern to NAIFA include extension of the Section 199A deduction for qualifying noncorporate business income, and ABLE Act enhancements. Also in play are individual and capital gains tax rates, the size of the standard deduction, and estate and gift tax rules.
• New tax benefits promised by President-Elect Trump on the campaign trail. These include tax-free Social Security benefits, tip income and overtime pay. Also among the Trump promises are a tax credit for expenses associated with caring for seniors (this would likely benefit long-term care insurance), and a deduction for interest paid on car loans.
• Relief from burdensome Biden Administration regulations—in play will be the Biden Administration fiduciary, worker classification, overtime pay, and noncompete agreement rules.

Also high on the early GOP priority list are issues that do not directly impact NAIFA, but that could influence the timing (not to mention the outcome) of issues that are in NAIFA’s wheelhouse. These include border security/immigration reform, energy issues, and defense spending issues.

All of these priorities are sensitive to competing demands on lawmakers. Perhaps the biggest of these challenges is the impact of an almost $2 trillion federal deficit. Any proposal that would result in lost federal revenue, either through taxes not collected due to the proposal or through direct spending, will lose at least some support due to cost concerns. And lawmakers will be picking among competing proposals which will set up tough choices for lawmakers who might otherwise support any given proposal.

Adding to the difficulty will be the tiny majority House Republicans will have, especially at the beginning of the 119^th Congress. Then, three Republicans are expected to resign (or, in the case of former Rep. Matt Gaetz (R-FL), decline to take his seat). That brings the number of House GOP seats down to 217 to the Democrats’ 215. That means that until the special elections are held to fill those seats and assuming full attendance, House Republicans will need to be unanimous on all partisan votes during the crucial first 100 days of the incoming Trump Administration. The special elections will not happen until at least April. And even if, as expected, Republicans are elected to fill those three seats, House Republicans will need all but three of their members to vote aye on a measure that it is unanimously opposed by Democrats.

Over the last two years there has been little Republican unity, especially in the House, although the influence of President Trump will help win over at least some wavering GOP House members on issues that are a priority for the Administration. Recall that only a handful of House Republicans succeeded in roiling the House over the election of its Speaker back in 2023. And more than once revolts among just a few Members prevented House passage of GOP initiatives.

Prospects: The very tight margin of control in the House (and a decent but not filibuster-proof majority in the Senate) means general widespread support may not be enough to win approval of any given issue. Competition from other widely supported proposals in an atmosphere of severely limited resources and next to no flexibility in terms of vote counts will make most issues a battleground.

NAIFA Staff Contacts: Diane Boyle – Senior Vice President – Government Relations, at dboyle@naifa.org; or Jayne Fitzgerald – Director – Government Relations, at jfitzgerald@naifa.org; or Mike Hedge – Senior Director – Government Relations, at mhedge@naifa.org.