After passing major tax cuts earlier this year, Republicans are laying out a broader affordability agenda they hope will start paying off for voters in 2026.
Affordability has emerged as one of the most potent political issues heading into the 2026 midterms, but Republicans find themselves underwater on economic messaging despite unified control of Washington. GOP leaders argue that recently enacted tax cuts — paired with forthcoming changes to healthcare, housing, and interest rates — will soon deliver tangible relief.
While 74% of Republicans say they are optimistic about the economic outlook for next year, the overall public remains less confident, with 57% expecting economic conditions to worsen, according to a December NPR/PBS News/Marist poll.
Much of the party’s optimism is tied to the Working Families Tax Cuts Act, also known as the “One Big Beautiful Bill,” which was signed into law earlier this year. The legislation extends lower tax rates and higher standard deductions, first enacted under the 2017 Trump tax cuts, which were set to expire at the end of the year, and introduces new write-offs for some tip earners, Social Security recipients and overtime workers.
Administration officials argue that the impact has yet to show up in American wallets, but that it soon will.
“The bill was passed in July. Working Americans didn’t change their withholding, so they’re going to be getting very large refunds in the first quarter,” Treasury Secretary Scott Bessent told NBC10, estimating households could receive between $1,000 and $2,000.
The law also allows businesses to immediately write off capital expenditures, a provision Republicans say is designed to spur hiring and wage growth.
“We are poised for an economic boom the likes of which the world has never seen,” President Donald Trump said during his Dec. 18 prime-time address to the nation.
Still, with approval ratings for the administration’s handling of the economy plummeting, Republicans have moved to take a more proactive approach on affordability issues.
Nowhere is that more evident than in healthcare, where Democrats, with the legacy media’s near total buy-in, have aggressively framed GOP efforts to curb waste and fraud in programs such as Medicaid as “cuts.”
Democrats have railed against the One Big Beautiful Bill’s new work requirements for able-bodied enrollees and its crackdown on provider taxes — a financing mechanism critics say states use to extract additional federal dollars — warning that millions could lose coverage.
They have also criticized Republicans for refusing to extend enhanced Obamacare subsidies set to expire at the end of the year, arguing that healthcare costs will skyrocket as a result.
House Democrats secured enough signatures on a discharge petition to force a vote on a three-year clean extension of the subsidies after several moderate Republicans signed on. That vote is expected in January, though the proposal faces steep odds in the Senate, where Republicans have already blocked a three-year extension.
Republicans counter that the subsidies, enacted during the Biden administration without a single GOP vote, mask deeper structural problems in the healthcare system. They cite data showing premiums on the Obamacare exchanges have risen at roughly twice the rate of employer-based plans, as evidence that broader reforms are needed.
Even so, 54% of adults say they are concerned that they will be unable to afford needed healthcare services in the next year, and Republicans are moving to advance alternative proposals.
In December, Senate Republicans put forth a Trump-backed bill that would deposit roughly $1,000 to $1,500 into Health Savings Accounts paired with Bronze or Catastrophic plans on the ACA exchanges. GOP lawmakers argue that federal dollars should flow directly to consumers rather than to insurance companies through subsidies, though Democrats quickly blocked the measure.
House Republicans, meanwhile, advanced legislation addressing cost-sharing reduction payments and imposing transparency requirements on pharmacy benefit managers as one of its final actions before the holiday recess. House GOP leaders say healthcare policy will be a major focus in the first half of the midterm election year.
“Whoever messages and wins on the affordability issue is going to be in a winning position for the midterms,” Hayden Dublois, data and analytics director at the Foundation for Government Accountability, told the Daily Caller News Foundation. “Republicans need to hone in on the problems — they’re not problems caused by Republican policies. They are the policies that Republicans are trying to meaningfully clean up while Democrats are trying to engage in quick fixes that blow the deficit up and put a Band-Aid on a bullet wound.”
Housing affordability has also emerged as a top concern for voters, and the White House says action is coming. National Economic Council Director Kevin Hassett said Sunday that the administration is preparing a sweeping housing proposal aimed at easing the burden on homebuyers, with details expected early in the new year.
“We are going to have a plan, a big plan, to announce sometime soon in the new year that’s going to be very good news for the American people who feel like it’s not affordable to buy a home anymore,” Hasset told Fox News. “We have a big list of housing ideas that have been vetted very carefully by the Cabinet secretaries to present to the president in a week or two and we will see which ones he picks.”
However, not all proposals from the White House have been well-received. The idea of a 50-year mortgage floated by the administration in November was slammed even by Trump’s usual allies as unworkable.
Some lawmakers on the Hill are also pushing for another reconciliation bill in 2026 to address affordability issues. Sen. John Kennedy of Louisiana has been among the most vocal proponents of using the reconciliation process, which would allow Republicans to bypass a Democratic filibuster.
“Yes, we passed the ‘one big, beautiful bill,’ that was July 1, five months ago, now, almost six months ago,” Kennedy said. “We need to act.”
While House Speaker Mike Johnson has expressed openness to the idea, Rep. Jason Smith, who chairs the House Ways and Means Committee, said he does not “see a path of a second reconciliation ever passing.” The president himself also said in December that Republicans “don’t need” another big reconciliation bill “because we got everything” in the major tax cut and spending legislation passed earlier this year.
The administration sees interest rates as another lever it could pull to influence affordability in 2026.
Federal Reserve Chair Jerome Powell’s term ends in May, giving Trump the opportunity to appoint a new central bank leader aligned with his long-standing calls for lower rates.
The president has repeatedly criticized the Fed for keeping rates too high and slowing economic growth, and is expected to announce his pick early next year. Hassett and Fed Governor Kevin Warsh are considered among the leading contenders.
“Once the president has an opportunity to make a better selection for the chair of the Federal Reserve, we’ll start to see a greater affordability in the form of lower interest rates,” Dublois said. “We’re still one foot in the Biden economy, and fully stepping into the Trump economy is going to unleash prosperity next year.”
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