The United States will experience two years of divided government, but a Democratic-controlled Congress could still influence economic policy.
President Donald Trump has said he could work with Democrats while reaffirming his position on vetoing legislation.
While much of the attention has been on the national level, the blue wave also swept through several states, including Texas, a key state for data centers.
Here’s how a Democratic Congress could affect the U.S. economy.
Data Centers
A chorus of Democratic lawmakers in both chambers has supported efforts to curb the artificial intelligence (AI) infrastructure buildout. But change could happen at the state level.
Texas Gov.-elect Gina Hinojosa proposed implementing a moratorium on new data centers in a state that accounts for as much as 30 percent of all planned U.S. data center capacity by 2030.
“Texas sits at the center of this theme,” Chris Osmond, chief investment officer at Fifth Third Wealth Advisors, said in a note emailed to The Epoch Times.
“Its business-friendly environment, available land, and power infrastructure have made it one of the most attractive markets for hyperscale data-center development.”
Ohio Gov.-elect Amy Acton has endorsed a conditional pause on new data center construction to shield residents from rising utility costs. She offered several requirements to continue developing the facilities, including covering all electricity and water costs, using exclusively union labor, and adhering to state environmental regulations.
Weeks until her first day in office, Georgia Gov.-elect Keisha Lance Bottoms has said she plans to sign an executive order to stop the construction of data centers. She will then determine other options.
But data centers and the broader AI expansion have been integral to both the financial markets and the wider economic landscape.
September’s nonresidential construction spending, for example, rose 0.6 percent, according to Census Bureau data released on Nov. 2. Much of that was driven by data centers.
“As has been the case for several months, data centers accounted for virtually all of that increase. Excluding data centers and the closely related power category, nonresidential spending actually fell in September,” Anirban Basu, chief economist at Associated Builders and Contractors, said in a statement.
Debt Ceiling
Lawmakers on both sides of the aisle will once again grapple with the debt ceiling.
Under the One Big Beautiful Bill Act, the federal government has a $41.1 trillion borrowing limit, and Washington is close to reaching it.
Economists estimate that the United States will officially reach that mark as early as February. The Treasury Department will then have between six and nine months to tap into the General Account and cover the government’s obligations.
Once these extraordinary measures are exhausted, the country will reach its X-date—when the government defaults on its bills until Congress lifts the debt ceiling.
Unlike previous debt limit episodes in recent years, the federal government faces higher interest rates.
In 2023, President Joe Biden and House Speaker Kevin McCarthy had a debt ceiling standoff with the benchmark 10-year Treasury bond yield below 4 percent. In 2021, political gridlock occurred when the 10-year Treasury yield was below 2 percent.
As of Nov. 9, the yield is close to 4.9 percent.
With the government already contending with higher borrowing costs, Bipartisan Policy Center economists recommend avoiding another debt ceiling showdown.
“Failing to address the debt limit in a timely manner can undermine investor confidence that the federal government will make good on all its obligations, and lenders may demand higher interest rates—which results in higher costs for households and businesses alike,” they wrote in a June 2026 report.
Affordability
House Minority Leader Hakeem Jeffries (D-N.Y.) revealed his party’s 100-day agenda for the new majority. A key facet of the campaign is affordability, which played a sizable role in last week’s election outcome.
In a letter to colleagues, Jeffries outlined the majority’s plans, including reversing Medicaid cuts, restoring Affordable Care Act subsidies, and advancing data-center-related energy permitting reform.
Jeffries, in an interview with “CBS Mornings” on Nov. 9, said Democrats will concentrate “relentlessly” on addressing affordability and fighting corruption.
“We’re committed to accountability and to holding the crooks accountable if you’ve been stealing from the American people, screwing over the American people, or shortchanging the American people,” Jeffries said.
Tariffs
Last year, the Senate voted to revoke a set of Trump administration tariffs on Canadian imports, but fell short of the supermajority threshold that would be needed to overturn a presidential veto.
With Democrats obtaining a majority, lawmakers could again advance legislation to undo some of the administration’s levies.
Even if Democratic officials were successful in removing or reducing some tariffs, the White House could respond by imposing new ones.
“A change in congressional control would not necessarily translate into an immediate shift in U.S. trade policy,” Victor Lopez, CEO of capital strategy firm Imperio Strategies, told The Epoch Times.
Tariffs have increasingly been used as a strategic tool to confront China and encourage domestic manufacturing, he added.
“Any effort to change course would have to contend with those interests, regardless of which party is in power,” he said.
The next step could be to seek a greater say in tariff powers, according to JPMorgan Chase strategists.
“The president still wields considerable power on tariff policy and even a Blue Congress will be limited in its ability to lower tariffs on its own,” they wrote in a Nov. 4 research note.
“Congress could seek to reclaim some tariff authority with a bipartisan bill—a long shot, but possible.”
Federal Reserve
A Democratic-controlled Senate could have implications for the Federal Reserve.
Philip Jefferson’s vice-chair term ends in September 2027, and Fed Gov. Jerome Powell’s term finishes in January 2028.
The president has yet to name their successors. The eventual nominees will need the support of the Senate Banking Committee and then a full floor vote.
Additionally, Trump has called for the removal of Fed board member Lisa Cook. If he succeeds in removing her from the board, the president would have to find a suitable replacement to satisfy Democratic senators.
“That should limit further changes to the board’s composition through 2028, reducing risk to Fed independence,” the JPMorgan strategists wrote.
Chase Smith contributed to this report.
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