Reading the Midterm Landscape—and What It Means for Retail

The House is in recess this week, and the Senate is focused on confirming nominees and committee business. This makes for a good opportunity to take a step back and assess the political playing field as we inch closer to the November midterms. While the elections are still a long way away, the outlook is not positive for Republicans. 

Most of the high-profile primaries have finished, and the redistricting wars have settled. We are seeing a palpable sense of economic anxiety across most of the country — even among households where incomes and balance sheets are strong. Americans are uncertain about the future because of inflation, the Iran war, gas prices, and fears about technologies like artificial intelligence. 

Recently, I attended a political briefing where a Republican operative described the landscape as a “bad environment, improving terrain.” The point was that while the political climate remains challenging for Republicans, but redistricting has blunted the expected political wave: the President’s favorability has declined to a historic low, including among parts of his base and key cohorts such as Hispanics and young men; voters remain skeptical of the Administration’s economic agenda; and Republican retirements continue to add pressure. The dynamic echoes elements of 2006, when President George W. Bush faced economic weakness and prolonged conflict in the Middle East. If Democrats win the House and Senate, the implications for retailers could be significant given the likely majority agenda. It is also worth remembering that after the 2006 wave, Democrats followed up in 2008 with President Obama’s election and a governing agenda that produced Dodd-Frank, corporate tax increases, and the Affordable Care Act. 

With this two- and four-year outlook in mind, RILA is preparing responses to likely Democratic agenda items, such as tariff refunds, grocery prices, and executive compensation. Further, we should expect aggressive Democratic oversight of corporate behavior during the Trump presidency, including investigations into political giving to the White House as well as policy positions. A larger discussion about the role of the filibuster will likely take place if Democrats feel emboldened to end the practice of requiring sixty votes, knowing they may be even better positioned in 2028 to enact major legislation.  

Throughout the summer and fall, RILA’s team will continue developing advocacy strategies to help ensure retailers are not the primary targets of policymaker scrutiny and that any new legislation minimizes disruption to retail operations. These are the kinds of scenarios and policy conversations we will be discussing with key policymakers at the upcoming Government Affairs Committee meeting on June 25th in Washington, D.C., and we hope to see you there.

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