It’s seemingly impossible to cut through the noise on Capitol Hill – let alone within the taxwriting committees – to see what Congress may realistically tackle in 2026. After a year dominated by tax reform, prolonged appropriations negotiations, and the looming midterm elections, the legislative outlook remains crowded and uncertain.
Still, several areas of bipartisanship are beginning to emerge. With narrow House margins and a closely divided Senate making partisan legislation increasingly difficult, lawmakers must prioritize ideas capable of drawing support from both parties, including affordability initiatives, targeted health-care reforms, and pragmatic tax-administration measures. Together, these priorities point to an agenda shaped less by sweeping partisan ambition and more by incremental, practical problem-solving.
Tax Administration and IRS Modernization
Tax administration and IRS modernization remain one of the clearest areas of bipartisan overlap, with lawmakers focused on updating outdated statutes, streamlining regulatory processes, improving agency efficiency, and modernizing reporting systems to better serve taxpayers.
Unlike debates over tax rates, tax administration is widely viewed as a core government function rather than a partisan tax policy fight, making it one of the most likely areas for incremental legislative progress in 2026. In practice, even modest reforms could have real impacts on day-to-day operations, shaping how individuals, businesses, and nonprofits file, report, and document compliance, while also creating opportunities to advocate for technical fixes that reduce administrative burdens and improve filing processes without reopening broader tax policy debates.
Targeted Tax Updates and Extenders
Congress has a long history of bipartisan cooperation on targeted tax updates and extenders, which include technical clarifications, compliance and enforcement measures, and policy extensions. These measures remain among the most realistic legislative vehicles in a divided Congress.
Some areas of potential alignment are expected to include extending expired tax provisions, updating the tax treatment of digital assets, and laying the groundwork for retirement-related tax policies that could begin taking shape for passage in the next Congress. Such efforts could create targeted but meaningful impacts across specific industries, while also serving as a practical vehicle for moving less controversial priorities forward.
Health Care Policy and Affordability
Health care affordability is shaping up to be one of the most consequential bipartisan issue areas across the board in 2026. With the expiration of the Affordable Care Act subsidies at the end of 2025, pressure is mounting on both sides to pursue some form of compromise on health care reform. Beyond the subsidy debate, lawmakers are increasingly aligned around broader cost concerns, including rising premiums, insurer practices, and pharmacy benefit manager pricing.
President Trump reinforced this during his State of the Union address, signaling that health care reform remains one of the top priorities for the administration. Collectively, these dynamics suggest that negotiations around health-care costs are likely to remain a central focus, positioning affordability as one of the few areas where meaningful legislative progress remains possible.
What to Watch Next
In order to see meaningful wins this Congress, the GOP cannot solely rely on its governing “trifecta” to advance partisan priorities, especially with such slim margins. Taken together, these opportunities point to a tax agenda focused less on messaging and more on getting things done before the midterm elections.