2026 Midterm Elections in Review: Policy Forecast for Lame Duck, the 120th Congress, and the States

The 2026 midterm elections ushered in a divided government pairing a Democratic Congress with the Trump White House. With Senate filibusters and presidential vetoes limiting the path for sweeping Democratic legislation on privacy, AI, and labor, congressional leaders will rely primarily on committee oversight and administrative inquiries over the next two years. Meanwhile, Democratic gains in governors’ races and state legislative chambers expanded Democratic trifectas and broke up single-party control in several historically conservative states.

With federal legislation stalled, newly empowered state capitols are taking the lead—advancing binding compliance mandates across privacy, AI, labor, and taxation.

Dive deeper into the 4As Post-Election Update and prepare for the changing policy landscape ahead. 

What’s Inside 

Built exclusively for 4As members, this post-election analysis explores how the 2026 midterms will shape five key areas in 2027: data privacy, artificial intelligence, tax, labor, and healthcare policy. 

From congressional gridlock on federal privacy legislation over preemption and enforcement—paired with expanding state data restrictions—to new congressional oversight and state-level rules governing artificial intelligence, our analysis connects post-election political dynamics directly to agency operations. We dive deep into why election outcomes create possible new threats to the federal advertising tax deduction and heightened FDA, FTC, and congressional oversight of direct-to-consumer healthcare and influencer marketing. 

Who Should Read This?

This briefing is designed for 4As member leaders across key agency disciplines who are planning for policy, legal, and operational shifts in 2027, including:

• C-Suite & Operations Leaders steering agency strategy, talent planning, and business resilience.
• Legal & Tax Compliance Teams  assessing shifting federal and state regulatory obligations.
• Client, Media & Creative Leads advising brands on emerging compliance considerations across campaigns and platforms.