Democrats’ expected majorities in both chambers of Congress after the Nov. 3 midterm election will likely lead to legislative gridlock and greater tension between Congress and the White House during the next two years, according to “U.S. Midterms: Policy Implications of the Blue Tsunami,” a commentary from Morningstar DBRS.
As of Nov. 4, the firm expected Democrats to win 255 to 260 of the 435 House seats and 54 to 56 of the 100 Senate seats. Even so, the firm said bipartisan support will still be needed to pass legislation, because Republicans can push back with the Senate filibuster and the presidential veto. Morningstar DBRS therefore considers large-scale changes to taxes and spending unlikely, and it does not expect major reversals in U.S. trade or foreign policy.
Morningstar DBRS flagged near-term fiscal risks. The current continuing resolution funding the federal government expires Dec. 11, and the outgoing Republican-led Congress will likely need to pass
