2026 Midterm Election: What Parties Are Proposing to Bring Down Inflation

Inflation has remained above the Federal Reserve’s 2% goal heading into the November 3 midterms. Consumer prices went up 3.7% over the 12 months through September, while core prices increased 2.6%.¹ The election could determine which affordability bills advance in Congress, but it will not change prices on its own. Democrats and Republicans are proposing different bills to manage household costs, taxes, trade, energy and regulation. Congress can influence inflation through fiscal and economic policy, while the Federal Reserve sets interest rate policy. Here is a breakdown of what each party is promising, how current legislation compares and the potential impact on your finances.

A financial advisor can help adjust your investment allocation to account for persistent inflation.

What Democrats Are Proposing

Senate Democratic Leader Chuck Schumer began 2026 by making affordability a central theme. He identified healthcare, housing, groceries, childcare, energy expenses and tariffs as pressures on household budgets. ²

House Democratic Leader Hakeem Jeffries also made affordability a priority by introducing the “Fighting for an Affordable America” initiative ahead of the midterm elections. The effort included working groups that focused on housing, gas and utilities, groceries and goods, caregiving and healthcare. ³

Democratic lawmakers have pursued those priorities through four bills and one policy roadmap targeting tariffs, prescription drug prices and grocery costs. The four bills are proposed legislation, while the Senate Finance roadmap is a request for information that could help shape future policy.

Each bill would generally need to pass both chambers of Congress and receive presidential approval, or overcome a veto, to become law. The table below summarizes all five measures:

The two tariff bills address different ways the president can impose taxes on imported goods. On February 20, 2026, the Supreme Court ruled that a federal emergency law did not give President Trump the authority to impose certain tariffs. ⁹ The administration then used a different law, Section 122 of the Trade Act of 1974, to add a temporary 10% tax on many imports. ¹⁰

In March 2026, Senators Tim Kaine and Raphael Warnock introduced the Reclaim Trade Powers Act to repeal Section 122, which the administration had used to impose the surcharge. The temporary 10% import tax expired in July, but the bill would prevent future tariffs based on the same authority. It would not eliminate other duties imposed under Section 301.

The End Trump’s Tariff Tax Act would go further by removing certain tariffs imposed under several laws. It would also require the government to refund some duties already paid by importers.

Proposed changes to prescription drug pricing could affect both Medicare beneficiaries and people with private insurance. Medicare currently negotiates prices for a limited number of medications, while the Lowering Drug Costs for American Families Act would expand the negotiation program and extend certain prescription pricing protections to commercial coverage.

Senate Finance Committee Democrats are examining broader measures to reduce medication expenses, including expanded negotiations and lower out-of-pocket costs for patients. Their roadmap seeks public feedback on potential reforms but is not legislation. The responses could help inform future legislative drafting.

The Stop Price Gouging in Grocery Stores Act would prohibit retail food stores from charging grossly excessive prices or using certain personal information to set different prices for individual consumers. The Federal Trade Commission would issue rules and enforce the restrictions, while sellers could defend increases tied to costs outside their control.

What Republicans Are Proposing

Republican leaders have emphasized lower taxes, increased domestic energy production and reduced federal regulation as ways to address affordability. Senate Majority Leader John Thune pointed to tax cuts as a way to help households cope with higher prices by reducing how much they owe in federal income taxes.

In September, Thune cited the 2025 One Big Beautiful Bill Act (OBBBA) as an example, which made lower individual income tax rates and a larger standard deduction permanent, expanded the child tax credit and introduced deductions for qualifying tips and overtime pay.

These provisions can leave eligible households with more after-tax income to cover rising expenses, although they do not directly reduce the prices that consumers pay or lower the inflation rate.

Alongside tax and regulatory measures, Republicans have also backed policies intended to expand domestic energy production and reduce electricity and housing costs. Increased energy supply could help limit some price pressures, although the effects depend on market conditions and how quickly new projects develop.

These efforts use different mechanisms, from tax relief and executive action to voluntary commitments and legislation. The table below shows what each measure does, whether it is already in effect and how it could affect household costs:

Expanding domestic energy production could help slow increases in fuel and electricity prices by increasing supply. However, new projects take time, and prices depend on demand and other market conditions.

The data-center measures aim to prevent costs associated with serving large electricity users from being shifted to other customers. Housing legislation seeks to increase the number of available homes, which could ease pressure on rents and home prices over time. Neither approach guarantees lower costs.

Together with tax relief, these policies could help households manage rising expenses, but their effects on the overall inflation rate remain uncertain.

How Current Legislation Compares With Party Proposals

Republicans and Democrats proposed different ways to address inflation, but not all of their plans have become law. Some measures, including the 2025 tax cuts, Medicare’s negotiated drug prices and the bipartisan housing law, are already in effect. Others would require further action by Congress. The table compares existing policies, each party’s proposals and measures supported by both:

The proposals would affect inflation and household expenses differently. Lower prescription drug prices could help affected patients without significantly changing overall inflation. More housing supply could slow increases in rents and home prices, but construction takes time. Tax cuts leave eligible households with more money without directly lowering prices.

The Affordable Prescriptions for Patients Act, from Senators John Cornyn and Richard Blumenthal, targets patent practices that can delay competition from lower-cost biosimilar drugs. The bill has not yet passed Congress.

What Needs to Happen Before Proposals Could Affect Inflation

Interest rates, which the Federal Reserve uses to influence inflation and economic activity, fall outside Congress’s direct control. The agency sets them independently, using monetary policy to pursue stable prices and maximum employment. The Fed aims for 2% inflation over the longer run, measured by the annual change in the personal consumption expenditures price index.

On October 28, the Fed kept its benchmark interest rate target range at 3.75% to 4%. Two of its 12 voting members wanted to raise rates by 0.25 percentage points. The agency said inflation remains elevated and that more economic data will help it decide the appropriate policy stance to return inflation to its 2% goal. ²⁰

The midterm elections could change which party controls congressional committees and votes, but election results alone would not turn proposals into law. A bill generally must pass both chambers in the same form before going to the president. Congress can override a presidential veto with a two-thirds vote in each chamber. ²¹

Most Senate legislation can require 60 votes to invoke cloture and end debate. Budget reconciliation is not subject to the ordinary 60-vote cloture requirement, but its use is restricted by rules governing budget-related provisions. ²²

President Trump’s current term runs through January 20, 2029. A Democratic Congress would generally need his signature to enact legislation or enough votes to override a veto. Republican control could make it easier to advance White House priorities, but Senate voting rules and disagreements among lawmakers could still prevent passage.

Bottom Line

The midterms could influence which economic priorities Congress focuses on next, including tariffs, prescription drug costs, taxes, housing and energy. But election results alone would not immediately change inflation or household expenses. Any new policies still need to move through the legislative or regulatory process, and their effects take time to reach consumers. Inflation will also continue to depend on broader economic conditions, including spending, supply, wages and Federal Reserve policy.

Financial Planning Tips

• A financial advisor can help you factor persistent inflation into your budget, savings and investment allocation. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
• To see how rising prices could affect your purchasing power over time, try SmartAsset’s inflation calculator.

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