United States: How will a Democratic sweep limit Trump’s fiscal agenda? - ING

President Trump’s domestic agenda is expected to face constraints during his final two years in office after the Democrats’ decisive US midterm election victory gave them control of both chambers of Congress, according to ING economists. Legislative gridlock is likely to hold up tax and spending proposals. Despite little prospect of further fiscal expansion, sizeable budget deficits and worsening debt dynamics are expected to continue, although the debt ceiling could provide a temporary restraint.

Will Congressional gridlock leave fiscal risks unresolved?

"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 created with the help of an Artificial Intelligence tool and reviewed by an editor. Learn more.)