“As the Trump administration attempts to tackle the affordability crisis, they are expecting policy changes undertaken this past year to ultimately lead to lower costs. But the benefits of policy changes during the early years of a presidency often do not materialize in time for voters to reward the incumbent.” — Howard Schweitzer, CEO, Cozen O’Connor Public Strategies
The Cozen Lens
- Democrats’ electoral success last month has put increased attention on the affordability issue facing voters and raised questions about what President Trump and Republicans will do, but so far, the indications are that the main emphasis will be on adjusting the message rather than policy.
- Lawmakers are racing to make up for lost time in negotiations over full-year government spending bills as the January 30th deadline to fund the federal government through the end of FY26 rapidly approaches.
- Congress is expected to pass the National Defense Authorization Act by year-end and the legislation presents an opportunity for other bills to hitch a ride and become law as amendments.
Affordability is in the Eye of the Beholder
Washington’s Newest Buzzword. Following Democrats’ resounding victory in last month’s elections, affordability has been forced into the spotlight, with significant questions about what President Trump will do to address it.
- A large part of Democrats’ success on Election Day this year has been credited to their attention to rising costs and to their proposals to address them. Now, the success of this message has forced Republicans to scramble to craft policy proposals that show voters they, too, care about these issues. However, as the incumbent party, history suggests that Republicans may face a difficult task if little changes.
- As the president, Trump and the White House bear a particular responsibility for crafting this response. There has been significant discussion in Washington, D.C., about what options he and Republicans may have, including another reconciliation bill. Still, so far, there have been relatively few meaningful steps, with the most consequential being a tariff cut on several agricultural products. However, indications from the Trump administration suggest this is a limited action, not the start of a larger tariff-cutting cycle.
The Pen is Mightier Than the Sword. For Trump, while he acknowledges the affordability issue is real, he is most likely to address it through messaging rather than policy changes in the months ahead — in part because he believes the full benefits of his administration’s policies have yet to be felt by voters.
- The recent tariff adjustment is indicative of the strategy the White House is likely to adopt, with the main pivot being messaging and policy changes that occur only on the fringes, rather than wholesale reversals. The result will be an increased emphasis on policies that the Trump administration sees as delivering lower costs to voters, but not shifting away from some of its less popular positions, including its tariffs.
- One reason Trump is confident in this plan is his belief, shared by other senior White House officials, that voters will feel better off next year as the full effects of the tax cuts passed earlier this year take hold. In addition, the Trump administration has argued that it inherited “a mess” from the Biden administration, which can only be improved with more time.
- This stance from Trump is not uncommon in American history, with several past presidents believing that the messaging, not a signature policy, was the problem. A recent example includes the Biden administration’s efforts to frame the Inflation Reduction Act to voters amid rising inflation. While these policies may end up being beneficial for the U.S. in the long run, the caution for Trump is that they do not always gain traction in time for voters to reward the incumbent.
Trump and the Markets. One aspect of Trump’s handling of this affordability issue that is relatively unique is his perception of the stock market as a scorecard for his policies, and his eagerness to take credit for its recent rise.
- Since his first term, it has been clear that Trump valued the major stock market indices, eager to celebrate their new highs during his time in office. Trump sees these as key indicators of his performance as president, and his business background has led him to place greater value on them than on other metrics.
- The overall market’s success over the last few months and its significance to Trump is noteworthy in the affordability discussion, as it is likely another reason that the president does not feel a need to pivot away from his policies. While other economic indicators suggest cause for concern, such as recent job losses, Trump’s emphasis on the stock market as a metric of the economy’s health leads him to downplay other statistics.
FY26 Spending in Play But Another Shutdown Isn’t
A Return to Regular Order. Having passed three full-year FY26 funding bills as part of the deal to end the government shutdown, lawmakers in both parties see an opportunity to advance another set of spending bills as soon as this month.
- Alongside a continuing resolution that extended government funding at current levels through January 30th, 2026, lawmakers passed a trio of FY26 appropriations bills – the Military Construction-VA, Agriculture-FDA, and Legislative Branch funding bills – in early November. Those bills marked a key breakthrough for a Congress that hadn’t advanced a single appropriations bill to the president’s desk since it officially kicked off in January 2024, instead relying exclusively on continuing resolutions (CR) to fund the government for FY25 and the beginning of FY26. For many members, and in particular Democrats, the funding breakthrough is an opportunity to wrest control over government spending back from the White House.
- Before heading out on the Thanksgiving recess, senior appropriators in both chambers expressed optimism that Congress could take up a second tranche of appropriations bills early this month, building on the momentum of last month’s spending deal. Senate Majority Leader John Thune (R-SD) has expressed interest in moving a major package of bills that could include the Defense, Labor-HHS-Education, Commerce-Justice-Science, Interior-Environment, and Transportation-HUD FY26 appropriations bills, while House Appropriations Committee Chair Tom Cole (R-OK) is eyeing a narrower package that would drop the Defense and Labor-HHS-Education titles.
- Despite the optimism among leadership and appropriators, advancing additional spending bills before the January 30th deadline will be tough sledding. While each of the bills that Thune and Cole have singled out for the next package passed out of their respective committees in both chambers earlier this year, a number of them are facing pushback from individual lawmakers, such as resistance from Senator Chris Van Hollen (D-MD) over the lack of funding to restore a planned FBI headquarters in Maryland in the Commerce-Justice-Science bill. An agreement on the overall spending levels of each title between the two chambers also remains elusive at this point, as House fiscal hawks advocate for spending cuts while Senate appropriators push for flat or even increased funding.
Shutdown Appetite Diminishes. While Democrats haven’t yet shut the door on the idea of forcing a second government shutdown at the end of January, the appetite for another drawn-out spending battle is low.
- For Senate Democrats, one of the biggest impediments to forcing a second government shutdown is the lack of a key issue upon which to stake the political fight. The party largely succeeded in winning the public blame game for this fall’s shutdown, in part due to a united message on healthcare costs, but come January 30th, the issue of the Affordable Care Act’s (ACA) expiring enhanced premium subsidies will be over one way or another. The subsidies are set to expire after December 31st and open enrollment for the ACA marketplace will end on January 15th.
- While Democrats could center a second shutdown fight on a separate issue, such as the power of the purse, it would be harder to get the more esoteric message to break through with voters. With the midterms less than a year away, both the base and congressional Democrats may prefer to train their focus on the looming electoral fight and ensuing opportunity to undercut the GOP’s legislative agenda.
- Instead of a shutdown, the real risk for lawmakers come January 30th is that each of the government agencies not yet covered by an enacted full-year appropriations bill will instead, once again, be funded by a full-year continuing resolution. Cole told reporters that he’d support a full-year continuing resolution to cover any bills not yet passed at the end of next month to avoid a funding fight pushing deep into an election year. The risk could be particularly high for the most controversial bills, including the Financial Services, Homeland Security, and State-Foreign Ops FY26 appropriations bills, none of which Senate negotiators have been able to reach an agreement on.
The One Bill Congress Will Still Definitely Pass
NDAA Timeline. The National Defense Authorization Act (NDAA) is on track to pass by the end of the calendar year.
- Congress has passed the NDAA every year for over 60 years and is not likely to break the pattern in 2025. House Armed Services Committee Chair Mike Rogers (R-AL) told Politico in an interview before Thanksgiving that the House and Senate Armed Services Committees had wrapped up work on the bill, leaving final decisions to be ironed out by congressional leadership. He also said that he expected the bill to be released this week and voted on the week of December 8th.
- Because the NDAA is considered must-pass, it provides an opportunity for lawmakers to attach other legislation, which may or may not be closely related to defense, as amendments for a better shot at passing into law. For this reason, the NDAA has been compared to a Christmas tree with legislative “ornaments” that can be piled on.
Key Amendments. Lawmakers will have to determine what amendments will make the cut for the final bicameral NDAA.
- The Senate included the GAIN AI Act, which would require chip companies to prioritize U.S. buyers over “countries of concern,” in its NDAA, while the House did not. The Trump administration is lobbying against the bill, which is likely to doom its chances in the GOP-controlled Congress. In a social media post, President Trump called for Congress to pass a single federal standard on AI as part of the NDAA or as a standalone measure. This is unlikely to attain sufficient bipartisan support to make it into the NDAA, though, particularly because Republicans are not unified on the issue of federal preemption of state AI rules.
- The Senate also included the BIOSECURE Act, which would block funding to Chinese biotech companies deemed to be a national security risk, in its NDAA. The House passed a different version of the bill last year but hasn’t taken it up this year. The changes made to the Senate version could give it a better chance of success this year, though passage is not a guarantee.
- The Senate’s bipartisan ROAD to Housing Act also made it into the upper chamber’s NDAA but faces obstacles to becoming law as part of the final package. House Financial Services Committee Chair French Hill (R-AR) has prevented the bill from advancing. If a compromise can’t be reached in the few weeks that remain in the year, the bill may not make it into the final bicameral NDAA.
