Trump projected to win White House, control of Congress remains unresolved

In brief

What happened? 

November 5 election results indicate that former President Donald J. Trump has been elected to serve as the 47th President of the United States. At this writing, with 270 electoral college votes required, President-elect Trump is projected to have won at least 277 votes against 224 for the Democratic presidential candidate, Vice President Kamala Harris.

At the same time, Republicans are on track to have gained at least a 52 to 42 seat majority in the US Senate, with six races still to be decided. However, control of the House remains unclear due to many undecided races that will determine whether Democrats or Republicans will control the US House of Representatives in the next Congress. 

Why is it relevant? 

The 2024 election results will provide President-elect Trump an opportunity to pursue some of the tax and trade policies that he proposed during his campaign, but the outlook for enactment of his legislative proposals will remain uncertain until control of the House is settled.  

2025 will be a year for significant “must-pass” tax legislation, with key 2017 Tax Cuts and Jobs Act (TCJA) individual provisions set to expire at the end of 2025 and several significant business tax provisions set to change. Failure to act would result in across-the-board tax increases on virtually every individual taxpayer and automatic increases in some business taxes.   

Observation: A Democratic-controlled House generally would be expected to oppose many of President-elect Trump’s tax proposals, requiring bipartisan compromise in order to avert the across-the-board tax increases that are scheduled to occur with the looming 2025 expiration of the TCJA individual tax provisions. Republican control of both the House and Senate would allow for the use of “budget reconciliation” procedures to enact tax legislation in 2025 with only Republican votes, as was the case in 2017 when the TCJA was enacted. In both cases, the challenge of reaching an agreement on how to address expiring TCJA tax provisions could delay action on a tax bill until late 2025. 

The current Congress is scheduled to reconvene the week of November 11 to consider FY 2025 federal government funding and additional disaster relief funding for areas affected by Hurricanes Helene and Milton. A government-wide temporary funding bill is set to expire on December 20, 2024.    

• The current Congress could still act on disaster tax relief and the US-Taiwan provisions during the coming lame-duck session – if that gains traction, it could attract attention from proponents of the TCJA and child tax credit provisions. 

Action to consider 

Business leaders and individuals will need to evaluate the potential effect of the tax policies proposed by President-elect Trump on the US economy, business, and individuals, and how control of the House may affect the prospect for consideration of his campaign proposals.