THE US MIDTERMS: WHAT CHANGES, AND WHAT DOESN'T

The US Midterms: What Changes and What Doesn't

The most common misreading of Tuesday’s result is that America has swung left. It hasn’t. Here is a short note on what the midterms change, and what they don’t. The implications vary by sector; if you want to think through yours, I am happy to talk.

The short version: Democrats now control the purse, the subpoena and Senate confirmations. They cannot overrule the president. And the vote was against cost of living increases, corruption and the Iran war, not for the left.

The result

The midterms were a sweeping win for Democrats, including in long-held Republican territory. Kansas has elected its first Democratic senator in 94 years; Texas has sent James Talarico to the Senate over Ken Paxton. Democrats have won at least 54 Senate seats, with Alaska and Mississippi still counting, and CBS News projects they will hold between 254-260 in the House..

That is enough to absorb internal rebellions on the Democratic side. It is not enough to overrule the president (overriding a veto takes 67 senators and 290 representatives). Nor, in the Senate, does it get legislation past the filibuster’s 60 votes without Republican support. The new majority’s real power lies in the purse, the subpoena and Senate confirmation.

The policy implications for the next two years

Until the new Congress sits on 3 January, Republicans still hold both chambers, and they will push hard for what they care about: the president’s nominees, funding for the Iran war and defence, and whatever else they can attach. Some will land; much will not. Most legislation still needs 60 votes in the Senate, there are only around 20 legislative days before Christmas, and government funding runs out on 11 December. Confirmations need only a simple majority, so expect the most progress there. The funding bill is the vehicle for the rest, and Democrats already have a say in it.

The US system gives the president wide latitude over foreign and trade policy. Presidents in their final two years, constrained at home, have traditionally turned abroad. Trump, who cares deeply about his legacy, will be no different. Expect a push for deals, from Russia and Ukraine to the Middle East. For Europeans and other long-standing allies, this will be deeply uncomfortable.

Congress’s restraint here is money, not votes. The Senate has voted on Iran war powers 14 times; the one measure to pass both chambers was non-binding, and the White House ignored it (Carnegie Endowment). What works is conditions attached to must-pass funding and defence bills. On Iran, that lever is already being pulled.

At home, whether in energy, healthcare, AI or climate, little new law will pass outside must-pass bills. But stalled legislation is not stalled policy. Agencies keep writing rules, and a president blocked in Congress will double down on executive orders. For business, that cuts both ways. Change will keep coming, and it will be easier to reverse: the next president can revoke an executive order with a signature. Expect disruption but not durability.

The most significant consequence for many businesses is subpoena power. House Democrats have named their targets, including Trump family business dealings and corporate corruption. Organisations that donated to, contracted with or aligned closely with the administration should expect document requests and public hearings. General counsels should be preparing now.

Senate confirmation matters too. Senior officials always leave in an administration’s final two years. This time their replacements will need Democratic votes. Expect more vacancies, more acting officials and slower decisions in the agencies business deals with.

Finally, as I wrote earlier this year, the range of plausible scenarios is widening. One that deserves attention: Trump partnering with Democrats against his own party where interests align. Over the past year he's already given some hints of areas where this might take place (for example, banning large investors from buying single-family homes). Cost of living is the obvious common ground. Trump cares little about his own party. The outcomes could be quirky.

What this means for America for the next two years

Trump’s approval among midterm voters was 38% (CBS News exit poll); the Democratic Party itself was viewed favourably by only 28% of Americans this spring (CNN). This was a vote against the administration, its war, the cost of living and corruption, rather than a vote for Democrats.

Few Democrats will see it that way. Progressives will read the result as an endorsement of their agenda; centrists as vindication of theirs. A second fault line runs across both. Many will want to pursue those they believe abused power over the past two years; Chuck Schumer has promised to “launch investigations, take him to court, and entangle him in legislative razor wire.” More will want to hold people to account for corruption. A smaller group will prioritise governing.

Impeachment will tempt some. With 67 votes needed to convict, it cannot remove a president; it can only consume the time. That fight could get in the way of governing.

Many expect the investigations to trigger a rush of leaders in tech, law and finance distancing themselves from Trump. I expect far fewer than predicted. Most have already cast their lot and know it. Trump still has the power to reward and punish, and will use it. Those closest to him expect a pardon if needed. They are betting on America’s short memory, and in most cases they will be right.

This was not a swing to the left. America is as divided as it was on Monday. That matters for 2028.

What this means for 2028 and beyond

If this was not a pro-Democrat vote, the red states that turned blue this week cannot be banked for 2028. Democrats now share responsibility for the direction of the country, and Trump will make sure voters know it. The public expects them to govern, and it is not clear they will prioritise that, at least nationally. With Trump barred from running, whatever his wishes, there is no incumbent. Anyone confidently calling 2028 today is guessing.

Six years out is clearer. The Senate seats won this week in Texas, Kansas and elsewhere come up again in 2032. Unless Democrats have changed those states in the meantime, all things being equal, expect many to revert, and the Senate with them.

What this means for other populists globally

Very little directly. This was an anti-incumbent vote against a government seen as corrupt, failing to deliver, and fighting a war voters did not want and paid for at the pump. That is the lesson for governments of left and right alike.

The indirect effect is larger. From January 2029, populist governments may no longer have a supporter in the White House to stand alongside or shelter behind. They will increasingly have to stand on their own record.