Food, Fuel and Taxes: What Can Democrats Actually Do to Ease Cost-of-Living Pressures After Winning Congress?

Democrats won the midterm elections on a promise to ease pressure from food, fuel and taxes. The question now is how much they can actually deliver on living costs, because even with control of Congress, President Donald Trump still has the power to block their plans.

House Democratic leader Hakeem Jeffries said they ran on affordability, won on affordability, and now it is their job to govern on affordability.

Two business owners, half a country apart, want the same thing for different reasons. In Texas, Kim Hanks, who owns Tillies, a hotel, restaurant and spa business near Austin, says rising grocery and fuel costs are forcing her to raise wages for her 300 staff. She told the BBC World Service that affordability has been such a moving target for them.

In Indiana, Danny Reynolds, who runs Stephenson's of Elkhart, a clothing and bridalwear store, simply wants Washington to get its act together. He said his hope is that they can find some consistency and some working together.

The scale of the win was bigger than most forecasters expected, with at least seven Republican-held Senate seats changing hands. Behind the result was a striking mood: just 21 percent of Americans are satisfied with the direction of the country, even though the economy looks healthy on paper.

Voters were not looking at the statistics. They were looking at their grocery bills, electricity bills and the price at the petrol pump. In rural Texas, rising costs were even hurting Republicans in their own backyard. Sid Miller, the outgoing Republican agriculture commissioner, said ranchers feel betrayed, getting 300 to 500 dollars less for each head of cattle while also facing record fertiliser costs.

Under the banner 'Fighting for an Affordable America', Democrats say healthcare is their first priority. They want to bring back the extra financial help that made health insurance cheaper under the Affordable Care Act and reverse the cuts to Medicaid signed by President Trump in 2025.

Next come tariffs and energy. Democrats want to scrap the president's import taxes, which they say add thousands of dollars a year to the cost of groceries, fertiliser and building materials. They also want to end the war in Iran, which they link to petrol prices averaging 4.18 dollars a gallon, an increase of nearly 40 percent.

Housing is next. Some Democrats want to build four million new homes over the next decade. On tax, they want to make billionaires pay more and increase tax credits for families with children.

It is a long list, but how much of it they can deliver is in doubt. Investor Ken Fisher, founder of Fisher Investments, puts it bluntly: Congress cannot get anything past a presidential veto, and the president cannot get anything he wants. The result, he says, is likely to be two years of relative quiet on the legislative and regulatory front.

Getting around a presidential veto requires a two-thirds majority in both the House and Senate. On tariffs, Trump is unlikely to abandon a trade policy central to his agenda, so Democrats will need Republican support. Bernard Yaros, deputy chief US economist at Oxford Economics, expects the average tariff rate on imports to stay around 10 percent for the rest of Trump's term.

Tariffs are also bringing in more money for the government. Import taxes accounted for just over 1 percent of federal revenue in 2024; this year, they account for more than 5 percent. That growing contribution, Yaros argues, will make tariffs tough for a future administration to fully dismantle.

President Trump told CNBC he could work with Democrats on many more things than people understand. Yaros sees the possibility of a big political trade-off: Democrats agree to extend Republican tax cuts in return for restoring health insurance subsidies. But he does not expect a deal until late 2027, with the economic benefits arriving in 2028.

In the Senate, Ron Wyden, the Oregon Democrat set to chair the Finance Committee, says he will seek to reassert congressional authority over trade policy. Henrietta Treyz of consultants Veda Partners says Democrats will question companies that passed on the cost of tariffs to customers, and will pick and choose very carefully.

And some of the biggest changes may happen closer to home. State governors and regulators have a say in electricity prices, while local authorities decide where new homes can be built. Democrats have won governorships in Texas, Ohio and Georgia, where the rising cost of electricity for data centres is already a concern.

The hardest test may be something Democrats cannot fix with a new law. The price of petrol, diesel and fertiliser will depend heavily on what happens in the war with Iran. Oxford Economics warns that with the election over, further escalation appears more likely, because petrol prices will no longer be as much of a political concern for the president.

There is an immediate test, too. Government funding runs out after 11 December, and the chances of another shutdown look uncomfortably high. Democrats won the argument; now they have to show they can make life cheaper.