Republicans will control the Senate in the incoming 119th Congress (2025-2026). The GOP’s undisputed win of 53 of the Senate’s 100 seats means Democrats have lost control of the upper chamber in the 119th Congress.

Senate control by Republicans gives President-Elect Trump considerable leverage over many issues, including some important to NAIFA members and their clients. For example, the upcoming 2025 tax bill will have a definite “Republican flavor.” A GOP-controlled Senate will influence the following tax issues:

• 199A deduction: Current law’s Section 199A 20 percent deduction for qualifying noncorporate business income expires at the end of 2025. President-Elect Trump and Senate Republicans are likely to push hard for extending the deduction.

• Corporate tax rate: President-Elect Trump wants to cut the corporate tax rate to 15 percent. Democrats want to raise it to 25 percent or 28 percent. Senate Republicans, while not guaranteed to go along with a 15 percent corporate tax rate, are more likely to resist raising the corporate tax rate.

• Individual and capital gains tax rates: Current law individual income and capital gains tax rates are set to expire—and revert back to the much higher rates in effect in 2016—in 2025. Republicans want to extend the current law rates for everyone, while Democrats want to raise them for those earning more than $400,000/year. Republican control of the Senate, along with Trump in the White House, makes full extension of individual income and capital gains tax rates more likely, despite the projected cost ($4.5 trillion or more) of doing so.

• Deficit/debt reduction: With the annual federal deficit approaching $1.9 trillion and the national debt exceeding $35 trillion, there will be considerable debate about the nation’s finances. Republicans in control in the Senate are likely to focus more on spending reductions than on tax increases to address this looming economic problem. Further, they are more likely to support President-Elect Trump’s call for higher tariffs on a wide range of imported goods—something that will trigger more revenue (albeit possibly at the cost of higher prices on consumer goods subject to the new tariffs). The deficit/debt reduction issue will be significant in 2025 and 2026.

Senate Republicans are also likely to look favorably on certain Trump campaign promises, including his call for tax-free tip income, a deduction for interest paid on car loans, and possibly making at least some overtime pay tax-free. Also potentially in play will be the Trump call for help for family caregivers, which could trigger better rules for (and more interest in) long-term care insurance.

NAIFA members lost one key advocate in the Senate. Sen. Jon Tester (D-MT) lost his reelection bid to Republican challenger Tim Sheehy. Another key Senator, Finance Committee member Bob Casey (D-PA), also lost his reelection bid.

Prospects: The narrow 53-47 GOP Senate majority will matter when evaluating prospects for any given piece of legislation. 

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 Michael Hedge – Senior Director – Government Relations, at mhedge@naifa.org.