Campaign Promises vs. Your Paycheck: What To Watch After the Election
Political candidates promise to make life more affordable come every election: Cut taxes, lower the price of groceries, reduce energy costs and put more money in workers’ pockets. This year, voters were listening closely.
In fact, 89% called the cost of living a major or crucial factor in their vote, according to CBS News exit polls. Then, on Nov. 3, Democrats won control of both the House and Senate, signaling that they're the party the majority of the public expects to address the affordability issue.
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With that in mind, here’s what that could mean for your paycheck when the new Congress takes control in January, and what likely won’t change.
Prices Won’t Drop Immediately Because Congress Flipped
According to the Bureau of Labor Statistics, consumer prices rose 3.7% over the last 12 months up to September. For a household spending $75,000 a year, that’s roughly $2,775 more for similar goods and services. If your salary rose less than 3.7%, your paycheck buys less than it did a year ago.
Consumers are also feeling the pinch at the pump. Regular gasoline averaged about $4.27 a gallon in late October, or about $1.13 more a year ago, per the U.S. Energy Information Administration.
New laws also take time to see the impact on your finances. A bill must pass both chambers and be signed by President Donald Trump, whose term runs through Jan. 20, 2029. Otherwise, Congress needs a two-thirds vote in each chamber to override a veto.
Democrats Plan To Start With Tariffs and Healthcare
Democratic Leader Hakeem Jeffries said the party plans to unveil its agenda in the first 100 hours of the new Congress. They plan to restore Affordable Care Act tax credits that expired in 2025, repeal Trump tariffs and reverse Medicaid cuts.
Tariffs are another thing voters say it did hurt their local economy, as stated by the CNBC Voter Poll. The good news is that senate Democrats already introduced the End Trump’s Tariff Tax Act, which would end certain import duties and offer refunds for some duties importers have already paid.
There’s prescription drugs, as well. The Lowering Drug Costs for American Families Act would expand Medicare negotiation on prices and extend some pricing protections to people with private insurance. Medicare’s first 10 negotiated Part D drug prices took effect Jan. 1, 2026.
The Fed Still Sets Interest Rates
Congress doesn’t set the cost of borrowing. The Federal Reserve voted 10-2 on Oct. 28 to hold its benchmark rate at 3.75% to 4%. The Senate's role is indirect since senators confirm the president's nominees to the Fed's board of governors.
Rates also dictate how far your savings stretch. For example, a $24,000 balance earning 4% will generate $960 in a year. If you’re in the 22% federal tax bracket, you’d owe $211.20 on that interest, remaining with $748.80 after taxes. To keep up with the current 3.7% inflation, that balance would need to grow by $888, which falls about $139 short.
Editor’s note on political coverage: MoneyLion is nonpartisan and strives to cover all aspects of the economy objectively and present balanced reports on politically focused finance stories.
This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal or tax advice.
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