
Despite the vote for changes in the economy, divided Congress and presidential veto power limit structural reforms
American voters voted for economic changes in the midterm elections, but analysts point out that the divided Congress and presidential veto power are likely to limit reforms in areas such as tariffs, healthcare, artificial intelligence and fiscal policy.
AI-generated summary
Recent midterm elections in the US reflected popular dissatisfaction with the cost of living and the economy.
The American electorate voted resoundingly for changes in the recently concluded midterm elections.
Polls invariably showed that economic issues were at the top of voters' concerns.
In other words, the population voted not just for changes, but specifically for transformations in the economy.
But voters may be disappointed.
A change in the partisan composition of Congress will have little impact on a public policy-making process driven by presidential decrees, in which Republican parliamentarians submit to the president's wishes and Democrats do not present relevant solutions to the country's most urgent economic problems.
The population's main concern is the cost of living, starting with the impact on prices caused by Donald Trump's tariffs and the war in the Middle East.
Congress could try to regain the tariff-setting authority it transferred to the executive branch nine decades ago.
But Trump would veto any project along those lines.
Likewise, Congress could pass a war powers resolution demanding an end to hostilities in the Middle East.
Over time, this would reduce gasoline and diesel prices.
Once again, however, a president zealous for his prerogatives would veto the proposal, and the matter would be closed.
Health is another urgent issue.
Insurers proposed a median 15% increase in prices for plans offered through the Obamacare health insurance marketplace, the popular name for the Affordable Care Act.
The temporary subsidies intended for middle-income people who contracted these plans have expired.
Healthy individuals are stopping taking out insurance, which further increases the premiums charged to those who remain.
Eliminating the fine applied to those who chose not to have health insurance — a measure created precisely to solve the problem of policyholders leaving — was one of the main initiatives of Trump's first term.
Good luck to anyone who tries to reinstate her before the end of her second term.
Another source of tension was concerns about data centers used for artificial intelligence.
Congress could pass a law that would require rigorous analysis and consultation with communities before these facilities are built.
It could also force them to pay for expanding the capacity of electricity and water supply systems.
But Trump, with the power of veto at his disposal, considers the United States' position in the AI race more important than the concerns of communities.
In direct terms, it is in the hands of the artificial intelligence and semiconductor industries.
Changes in policies for the sector are more likely to come from state authorities.
The other issue that influenced the outcome of the midterm elections was immigration policy.
Arbitrary detentions and deportations are of particular concern, for obvious reasons, to Latin American and Asian American communities.
Congress can say what it wants, but immigration policy is conducted by executive branch bodies headed by people appointed by Trump.
When public opinion turned against more aggressive repression, ICE simply switched to less visible tactics.
And there is still the big economic problem that no one wants to face: fiscal policy.
Financial markets are concerned about public debt exceeding 100% of GDP (Gross Domestic Product) and budget deficits exceeding 6%.
Families feel the effects in the form of higher interest rates on real estate financing.
The consequences will be even more painful when out-of-control deficits cause financial instability, as will happen if nothing is done.
The political class remains particularly unwilling to face the fiscal problem.
The traditional solution advocated by Republicans — balancing the budget by eliminating waste and fraud — has already proven to be an illusion.
We can thank the short-lived Doge, or Department of Government Efficiency as it was called, for this.
But Democrats are just as bad as Republicans when it comes to fiscal policy.
They are not willing to present relevant proposals to increase tax collection, that is, measures capable of significantly increasing tax revenue.
A wealth tax has appeal, but the expected defeat of California's proposed tax on billionaires in a vote on Tuesday is unlikely to encourage them.
It is possible to argue that the California proposal failed because of fears that billionaires would leave the state to move to other parts of the United States — an issue that would not affect a federal measure.
But implementing a wealth tax is complicated, and the additional revenue from taxing billionaires would not significantly reduce the budget deficit.
The fact is that the United States has a low tax burden compared to other developed economies.
The deficit problem could be addressed through a comprehensive tax reform, which would eliminate loopholes in legislation and increase tax rates progressively.
But this presupposes the election of a Democrat to the Presidency, and one with a long-term vision.
It also requires a Democratic-led Congress that goes beyond stock phrases and overcomes fears that comprehensive tax reform is a politically untouchable issue.
AI outlook — possibilities, not facts
Trump will veto Congressional projects on tariffs and the Middle East.
Likely · Within months

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