The Dust Has Settled on the Election. Here’s What a Divided Government Means for Your Company.
By: Nate Byer, Brad Dayspring, Shane Seaver and Molly Banta
Straight to the Point
- This is a new Trump era: no reelection to run for, a midterm walloping, and a Democratic Congress holding the gavels.
- Will Trump get more combative, look for deals with Democrats, or do both? Will virulent partisanship lead to a shutdown? Only time will tell.
- But whatever Trump does, both sides are coming for affordability. The issue of the moment means different things to different electeds, but one thing is clear: the common ground they’re likely to find is in holding businesses accountable.
What We See
In the first two years of this administration, many companies froze, unsure of how Trump would use his bully pulpit in term two, and were wary of sticking their necks out for fear of retribution. Some engaged, most stayed quiet, others found wins to share with the White House. And many companies began working through third parties and
501(c)(4)s to build influence. Now add a new player: a substantial Democratic majority with its own agenda and every incentive to hold the administration accountable.
The risk for business now runs two ways. A company can get caught in the middle, praised by the White House for a decision the new majority then investigates. Or worse, it can become the rare thing both sides agree is the problem. Nowhere is that risk higher than on affordability, where the White House and the new majority are both hunting for quick wins.
What It Means
Oversight comes first. Investigations won’t just be for the players in Trump’s inner circle. A new majority will be looking to make an example of executives who swung hard to deepen relationships and curry favor. Expect investigations, document requests, and hearings, with the sharpest focus on the companies seen as close to, or benefiting from, the administration’s agenda over the past two years. The pressure is already building.
Bills will be written for 2028. The House majority will likely move legislation on energy, health care, and cost of living designed to draw contrasts and lay the framework for the 2028 cycle. But past divided governments, from the 2018–2019 shutdown onward, suggest gridlock is the most likely case.
The states will move faster than Congress. The states are often incubators of federal action and legislation. Newly flipped legislatures and governors’ offices will have a more practical impact on how companies operate than anything passed federally.
What To Do
Don’t go back into the shell. Waiting might have made sense in 2024, but it won’t work now. You have two sets of stakeholders, an administration and a Congress with different priorities, and each is ready to define you if you don’t. Map your exposure with each and set a clear objective. Look past your usual allies, because some issues, data centers among them, are already drawing coalitions that cross party lines. Then engage: communicate, invest, and show up before someone else frames the story.
Prepare for congressional oversight. Assume any request could reach back the start of the current administration. Take stock of the commitments, investments, federal funding, and public statements your company made during the last two years, especially those tied to administration priorities, since that is where scrutiny will focus. Run executives through mock hearings with legal counsel before an invitation arrives. Write down the story of what you did and why, and make transparency the default, because a slow or partial response becomes its own headline.
Meet the new members early. A large freshman class is arriving, and every new member needs quick wins and a reason to be seen at home. Give them one. Your employees are their constituents, so offer what a new office can’t easily build on its own: a town hall with your workforce, a plant tour or site visit, a roundtable with local suppliers and community leaders. Lead with the district, not the ask. Talk about jobs, local investment, and what your people are hearing about costs. Reach out before calendars fill and committee assignments settle. A company that helps a new member connect with voters becomes a partner in that member’s first win. One that waits risks becoming the target of it.
Audit every touchpoint for affordability. Campaigns framed affordability as a question of fairness: who is giving you the short end of the stick? Expect scrutiny to travel up the chain from a smaller package to the parent brand to the CEO. If you have been telling a story about holding prices down, keep telling it with specifics and make sure it is breaking through. Assume committee staff will read anything you tell investors and remember that earnings call remarks and executive pay set against worker raises make ready-made hearing moments. In energy, manufacturing, data centers, and consumer goods, executives should spend the next six months being less polished and more grounded.
Watch the transition. The weeks between now and January 3, when the new Congress is sworn in, will reveal a lot about the next two years. Watch who wins leadership elections in each chamber, what the new majority brings to the floor first, and whether early post-election talk of working together survives the first real negotiation. In 2018, it didn’t. Within weeks, the government shut down for over a month. In the states, watch what newly flipped legislatures do with their majorities, since those moves will reach your operations sooner. Use what you learn to build relationships during the lame-duck period and prepare to mobilize in January.
A new Congress resets relationships, and this one resets them at both ends of Pennsylvania Avenue. That’s an opening for companies willing to engage early. If you’re working through what it means for your 2027 plans, let’s talk.
