As Democrats closed in on control of both the House and the Senate overnight, President Donald Trump posted a picture of one of his red caps on Truth Social. It carried a single word: “Veto.”
That one word is the key to what Tuesday’s results mean for your money.
By Wednesday morning, Democrats had won 228 House seats and 54 Senate seats, with dozens of House races still being counted, Al Jazeera reported. They took Senate seats in states including Texas, Kansas and South Carolina.
That’s a majority, and a big one. But it’s still well short of two-thirds of each chamber, which is what it takes to override a veto.
Trump made his plan plain in a Fox News interview just after midnight. Democrats will “send over things that are insane,” he said, and “after a couple of months of vetoes, they’ll call,” according to The Independent.
Later in the same interview, he told Fox News what happens to their bills: “I send them back with a nice stamp veto,” ABC News reported.
And nothing changes overnight. The new Congress isn’t sworn in until Jan. 3. Until then, the current Republican-led Congress still has to keep the government open past Dec. 11, when funding runs out.
I’ve been a CPA since 1981, and I spent a decade on Wall Street. Here are five ways the new Congress hits your wallet — and the one thing that won’t budge no matter who holds the gavel.
1. Your tax bill: The $5,000 check is off the table
Trump’s promised $5,000 checks came with a condition. “If Republicans win the House of Representatives and the Senate,” he posted in October, every adult citizen would get the money.
Republicans didn’t. So much for that check.
The same goes for a second big Republican tax bill. Before the election, a Holland & Knight tax lawyer said that if Republicans held both chambers, they’d likely take another run at one next year, Thomson Reuters Checkpoint reported.
That door is closing. After Jan. 3, a party-line Republican tax bill can’t get through a Democratic House.
Don’t brace for big tax hikes, either. Under full Democratic control, the party would try to claw back breaks that went to high earners and multinational companies, Holland & Knight’s Joshua Odintz said. But he doubted those efforts would get far anytime soon. And Trump could veto them anyway.
What you can do now: The new breaks in the 2025 tax law are still on the books. According to the IRS, the deductions for tips, overtime, car loan interest and the extra $6,000 for people 65 and older all run from 2025 through 2028.
Keeping them alive after 2028 now takes a Democratic Congress and a Republican president agreeing on something. Don’t count on it. Claim every break you qualify for while you can.
2. Your health premiums: Democrats will push, Trump can block
If you buy your own coverage, you already feel this one. The enhanced premium tax credits that made Affordable Care Act plans cheaper expired at the end of 2025.
Enrollees who kept the same plan in 2026 saw their premium payments, after tax credits, jump 114%, or more than $1,000 a year, according to KFF. And 2027 benchmark silver premiums are up another 13% on average, KFF says.
Now that they’ve won, House Democrats have put restoring those credits and undoing the 2025 law’s Medicaid cuts near the top of their list, CBS News reports. But Trump has the final say with his veto pen.
The calendar works against you, too. Under the 2025 law, 43 states and Washington, D.C., must have Medicaid work requirements in place by Jan. 1, 2027, KFF says. That’s before the new Congress is even sworn in.
What you can do now: Don’t wait on Washington. On HealthCare.gov, Dec. 15 is the last day to pick a plan that starts Jan. 1, and open enrollment ends Jan. 15. Compare plans instead of letting yours renew on autopilot.
3. Prices and tariffs: The fight is coming, relief may not be
House Democrats also have measures ready to reverse Trump’s tariffs, the AP reported.
But today’s tariffs rest on powers Congress already handed the president. Since the Supreme Court struck down his emergency tariffs in February, the president has turned to other trade laws, especially Section 232 and Section 301, the Congressional Research Service says.
When a temporary global tariff expired July 24, he added new Section 301 duties.
For Congress to undo them, it takes a new law. That means a bill Trump signs, or two-thirds of both chambers voting to override him.
What you can do now: Plan as if today’s prices on imported goods are sticking around. If a car, appliance or remodel is on your list, get more than one quote. And if higher prices are squeezing you, here’s a place to build a budget that holds up.
A quick nudge — when it comes to money, the best day to get smart was 20 years ago. The second-best is today. Sign up for the free Money Talks Newsletter and start now. Takes 10 seconds, costs nothing, and could change your retirement.
4. Social Security: The one that won’t budge
Here’s a date that matters more than any election night: late 2032. That’s when Social Security’s retirement trust fund is projected to run dry, the program’s trustees say. After that, incoming money would cover 78% of scheduled benefits.
On a $2,000 monthly check, that’s a $440 cut. Over a year, $5,280 — gone. That means smaller checks, not no checks. Thinking the system just goes broke is one of the Social Security myths that can cost you.
Tuesday’s results don’t change that math. Congress has historically waited until the last minute on Social Security, which makes major reform right after the midterms unlikely.
But pay attention to who won. Senators elected this week serve until January 2033, Fidelity notes. Some of them could cast the votes that decide whether that cut ever happens.
What you can do now: Don’t claim early out of fear. If your full retirement age is 67, claiming at 62 shrinks your check to about 70% of the full amount. Here’s how I’d think about when to claim Social Security.
5. Your 401(k): Gridlock isn’t a reason to sell — or to chase
If “Democrats win” had you reaching for the sell button, look at what actually happened. The Dow was up 1,325 points, or 2.6%, by 11:15 a.m. Eastern on Wednesday.
Cheaper oil gave stocks a lift, the AP said. And investors tend to like a divided Washington, since it makes sweeping economic changes less likely.
One strategist put it in three words. “Earnings trump elections,” said Brian Jacobsen of Annex Wealth Management. I worked on Wall Street for 10 years, and I agree. One day’s rally is no more a reason to buy than a scary headline is a reason to sell.
History leans calm, too. Stocks may tend to do better in the 12 months after a midterm, Fidelity says. And a Congress that can’t get much past the president? Fidelity says that kind of gridlock may actually work in markets’ favor.
What you can do now: Rebalance on your own schedule, not the headlines. If you’d like a professional to look over your mix before you change anything, you can find a financial advisor here.
What to do before Jan. 3
- Pick your health plan: Dec. 15 for coverage that starts Jan. 1.
- Claim your tax breaks: Tips, overtime, car loan interest and the over-65 deduction run through 2028.
- Budget without the $5,000: The condition attached to it wasn’t met.
- Watch Dec. 11: A government funding deadline comes before any new law.
Trump has the veto. Democrats have the gavels. Your bills won’t wait for either one.
Add a Comment