United States: Trump’s fiscal agenda faces limits from Democratic sweep - ING

Two years of constraints on President Trump’s domestic agenda lie ahead, ING economists expect. Their assessment follows the Democrats’ decisive US midterm election victory, which secured control of both chambers of Congress. Tax and spending proposals are likely to face legislative gridlock during the President’s final two years in office. Further fiscal expansion looks unlikely, but large budget deficits and worsening debt dynamics are expected to continue. The debt ceiling could provide a temporary brake.

Congressional gridlock: fiscal risks persist

"With most votes counted, it's clear the Democrats have secured a decisive victory in the US midterms, claiming majorities in both the Senate and House of Representatives."

"The obvious outcome from the result on Tuesday is that a Democrat-controlled Congress will stifle President Trump’s domestic agenda in his final two years in power."

"The consequence is that spending and tax proposals, as with most domestic legislation, will likely be gridlocked."

"While we won’t see any further fiscal expansion, large fiscal deficits and deteriorating debt dynamics will continue."

"The fiscal situation will certainly remain a concern, although hitting the debt ceiling could act as a temporary brake."

(This article was produced with the assistance of an Artificial Intelligence tool and reviewed by an editor. Learn more.)