Republican leaders are charting a course to address affordability issues as they gear up for the 2026 midterm elections. Following significant tax cuts earlier this year, the party is unveiling a broader agenda aimed at demonstrating tangible economic relief to voters. Affordability has emerged as a crucial political issue, and while Republicans maintain control of Washington, their messaging struggles to resonate with the wider public.
According to a December NPR/PBS News/Marist poll, a notable 57% of Americans expect economic conditions to worsen, despite 74% of Republicans expressing optimism about the outlook for the coming year. GOP leaders argue that recent tax cuts, combined with anticipated changes in healthcare, housing, and interest rates, will soon deliver substantial benefits.
A central element of the Republican strategy is the Working Families Tax Cuts Act, colloquially referred to as the “One Big Beautiful Bill.” Signed into law earlier this year, this legislation extends lower tax rates and higher standard deductions that were first introduced during the Trump administration’s 2017 tax cuts, which were set to expire at the end of the year. It also introduces new tax write-offs for specific groups, including tip earners, Social Security recipients, and overtime workers.
Treasury Secretary Scott Bessent emphasized that the effects of these tax changes have yet to manifest in American households, asserting, “Working Americans didn’t change their withholding, so they’re going to be getting very large refunds in the first quarter.” He estimates that households could see refunds ranging from $1,000 to $2,000.
Despite this optimism, the Republican administration faces declining approval ratings regarding its economic management. In response, party leaders are proactively addressing affordability concerns, particularly in healthcare. Democrats have actively framed GOP efforts to reduce waste and fraud in programs such as Medicaid as “cuts.” They argue that the new work requirements included in the One Big Beautiful Bill could lead to millions losing coverage, alongside warnings about rising healthcare costs due to the expiration of enhanced Obamacare subsidies.
House Democrats have initiated a discharge petition to force a vote on a three-year extension of these subsidies, which is scheduled for January, although it faces challenges in the Senate. Republicans counter that these subsidies, enacted without GOP support, mask deeper issues in the healthcare system. They cite data indicating that premiums on Obamacare exchanges have increased at approximately double the rate of employer-based plans, highlighting the need for broader reforms.
In December, Senate Republicans proposed a bill backed by former President Donald Trump, which would allocate around $1,000 to $1,500 into Health Savings Accounts linked to Bronze or Catastrophic plans on the ACA exchanges. This approach aims to direct federal funds to consumers rather than insurance companies. However, Democrats swiftly blocked this initiative.
As the focus on healthcare intensifies, House Republicans have also advanced legislation addressing cost-sharing reduction payments and imposing transparency requirements on pharmacy benefit managers. GOP leaders assert that healthcare policy will be a primary focus in the early stages of the midterm election year. “Whoever messages and wins on the affordability issue is going to be in a winning position for the midterms,” stated Hayden Dublois, data and analytics director at the Foundation for Government Accountability.
In addition to healthcare, housing affordability remains a significant concern. National Economic Council Director Kevin Hassett announced that the administration is preparing a comprehensive housing proposal aimed at alleviating burdens on homebuyers. Details of this plan are expected to emerge early in the new year. Hassett mentioned, “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.”
Nevertheless, not all proposals from the White House have garnered support. The concept of a 50-year mortgage, which surfaced in November, was criticized even by traditional Republican allies as impractical. Some lawmakers are advocating for another reconciliation bill in 2026 to address affordability, with Senator John Kennedy of Louisiana being a vocal supporter of utilizing the reconciliation process to bypass potential Democratic filibusters.
While House Speaker Mike Johnson has shown openness to this idea, Rep. Jason Smith, chair of the House Ways and Means Committee, expressed skepticism about the feasibility of a second reconciliation bill. In December, Trump indicated that Republicans “don’t need” another substantial bill, suggesting confidence in the impact of the previously passed tax cut and spending legislation.
Republicans also see potential in influencing affordability through interest rates. Jerome Powell, the current Federal Reserve Chair, is set to see his term end in May, creating an opportunity for Trump to appoint a new leader aligned with his calls for lower rates. The president has consistently criticized the Fed for maintaining high rates, which he argues hinder economic growth.
As Republicans prepare for the 2026 midterm elections, their focus on affordability will be critical. The party aims to reshape its messaging and policy proposals to resonate with voters concerned about the economy, healthcare, and housing affordability.
