Congress has returned to Capitol Hill for the second session of the 119th Congress with a compressed legislative calendar and heightened political pressure. With fewer than 120 legislative days available and midterm elections scheduled for November 3, 2026, House and Senate leadership are expected to focus narrowly on a limited set of policy priorities rather than broad legislative expansion
Several of these priorities carry direct implications for tax policy, health care access, and long-term fiscal stability—areas that continue to intersect with structured settlement policy and advocacy.
A Narrow Legislative Window Shapes Congressional Focus
The shortened calendar is already influencing how Congress approaches its work. Leadership in both chambers is expected to prioritize must-pass legislation and a small number of politically charged policy debates, leaving little room for expansive new initiatives
This environment places greater emphasis on implementation, oversight, and targeted adjustments to existing law rather than sweeping reform.
Major Tax Policy Issues Following the One Big Beautiful Bill Act
Tax policy remains a central focus in 2026, driven largely by the implementation of the One Big Beautiful Bill Act (OBBBA), signed into law on July 4, 2025. The legislation permanently extended most individual tax cuts from the 2017 Tax Cuts and Jobs Act and made significant changes to corporate, estate, and energy taxation
As Congress moves into the second session, attention is shifting from passage to execution, oversight, and the consequences of newly expired or temporary provisions.
Key tax-related issues under consideration include:
- Expired Tax Provisions
Several narrower tax provisions expired at the end of 2025, including the Work Opportunity Tax Credit, seven-year recovery for motorsports complexes, and special expensing rules for film and television production - Temporary Deductions for Tips and Overtime
The OBBBA introduced temporary deductions for tips (up to $25,000) and overtime pay (up to $12,500) for certain workers. These provisions are scheduled to expire at the end of 2028 and may resurface in future negotiations - State and Local Tax Deduction Cap
The SALT deduction cap was increased to $40,000 for tax years 2026 through 2029, a change that continues to generate debate across party lines - IRS Funding and Operations
Congress is grappling with the impact of recent IRS budget reductions, which cut staffing levels by roughly 25 percent and rescinded funds previously allocated for modernization efforts Corporate and Business Tax Changes
The OBBBA restored 100 percent bonus depreciation and eased interest deduction limitations by returning to an EBITDA-based standard
Health Care Policy Remains Unsettled
Health care is another area where unresolved issues are likely to dominate debate. Enhanced Affordable Care Act premium tax credits enacted during the COVID-era expired at the end of 2025, raising costs for some enrollees and reopening partisan divisions over whether and how to extend them
Recent developments include:
- A bipartisan group of House members, including nine Republicans, is supporting a procedural effort to force a vote on extending ACA subsidies despite opposition from House leadership.
- House passage of a motion to discharge legislation that would extend enhanced ACA tax credits for three years.
- Ongoing Senate negotiations, where any extension faces significant hurdles, though bipartisan compromise discussions continue
At the same time, states are implementing changes to Medicaid programs, including work requirements and eligibility adjustments for certain populations, adding further complexity to the health care landscape.
Long-Term Debt and Fiscal Stability Concerns Grow
With national debt exceeding $38 trillion, long-term fiscal sustainability is increasingly difficult to ignore. Some Members of Congress are advocating for bipartisan fiscal commissions to address structural deficits and rising interest payments, which now exceed defense spending
While consensus remains elusive, debt and interest costs are expected to remain part of the policy backdrop throughout the session.
Budget and Appropriations Pressure Builds
Finally, Congress faces the recurring challenge of keeping the federal government funded. Lawmakers must pass seven appropriations bills before the end of January or adopt another continuing resolution to avoid a government shutdown and extend funding through the end of the fiscal year
As in past years, these negotiations are likely to absorb significant legislative bandwidth and shape what other policy efforts can realistically advance.
Why This Matters
The second session of the 119th Congress is defined by constraint—limited time, political pressure, and competing priorities. For organizations and stakeholders focused on long-term financial security, tax stability, and health care access, close attention to implementation and preservation of existing policy remains critical.
As Congress works through this compressed agenda, the focus will not be on sweeping change, but on protecting, refining, and executing the policies already in place.
