8 Policy Trends Every Government Affairs Team Should Watch in 2026

The One Big Beautiful Bill Act is now law, the Supreme Court rewrote trade policy, and states are racing to fill federal regulatory gaps. Here are the eight policy trends that will define your work through the midterms and into 2027.

1. Healthcare Affordability Jumps to the Top of Voter Concerns

Healthcare costs now outrank the economy as voters’ number one worry. A March 2026 Gallup poll found 61% of Americans rate healthcare affordability as a major concern — 10 points ahead of economic issues.

The numbers tell the story. Enhanced ACA premium tax credits expired on December 31, 2025. KFF estimates that marketplace enrollees will pay an average of $1,016 more per year, with premiums increasing roughly 114%. CBO projects that 11.8 million people will lose coverage due to combined Medicaid and ACA changes.

The One Big Beautiful Bill Act’s Medicaid provisions phase in throughout the year: the enhanced 90% federal match for expansion populations ended January 1, states must implement six-month redeterminations by December 31, and work requirements (80 hours/month) take effect January 1, 2027.

Who’s driving the conversation: HHS Secretary Robert F. Kennedy Jr. is framing his tenure around the “Make America Healthy Again” agenda. Senate HELP Committee Chair Bill Cassidy (R-LA) and House Energy & Commerce Chairman Brett Guthrie (R-KY) are the key committee leaders. Bipartisan interest exists — Rep. Jennifer Kiggans (R-VA) has 13 Republican and 10 Democratic cosponsors on H.R. 2824, which would extend premium tax credits.

The bottom line: Healthcare will dominate the midterms. Reproductive rights ballot measures are advancing in Virginia, Nevada, Missouri, and Idaho. If your organization touches healthcare policy, expect sustained intensity through November.

2. The Supreme Court Just Rewrote Trade Policy

The February 20 ruling in Learning Resources, Inc. v. Trump struck down all IEEPA-based tariffs in a 6-3 decision. Chief Justice Roberts wrote that in IEEPA’s “half century of existence, no President has invoked the statute to impose any tariffs, let alone tariffs of this magnitude and scope.”

The ruling invalidated approximately $166 billion in collected duties from over 333,000 importers. The administration pivoted within hours, imposing a 15% surcharge under Section 122 of the Trade Act of 1974. That authority expires after 150 days — on July 24, 2026 — forcing Congress to vote on extension just months before the midterms.

The Yale Budget Lab calculates that the U.S. average effective tariff rate stands at 11.0%, the highest since 1943. The Tax Foundation estimates tariffs add roughly $1,300-$1,500 in costs per household.

Who’s driving the conversation: Six House Republicans joined Democrats in voting to overturn Canadian tariffs. Sen. Susan Collins (R-ME) publicly opposed tariffs on Canadian imports. Pew Research found 63% of Americans have little or no confidence in the president’s handling of tariffs.

The bottom line: The July 24 expiration creates a high-stakes vote right before primary season. Importers should be filing refund claims now. Section 232 tariffs on steel, aluminum, automobiles, semiconductors, and pharmaceuticals remain in place and are expanding.

3. AI Regulation Becomes the Defining Federal-State Battle

The federal government and states are on a collision course over artificial intelligence. The administration’s March 2026 National Policy Framework for AI urged Congress to adopt federal preemption of state AI laws. Congress has repeatedly declined.

Sen. Ted Cruz (R-TX) offered a 10-year moratorium on state AI law enforcement in the OBBBA — the Senate rejected it nearly unanimously. Sen. Marsha Blackburn (R-TN) released a 291-page discussion draft of the TRUMP AMERICA AI Act. Rep. Don Beyer (D-VA) introduced the GUARDRAILS Act to block federal preemption entirely.

States aren’t waiting. Colorado’s AI Act — the nation’s most expansive — takes effect June 30, 2026, requiring algorithmic discrimination impact assessments. California’s SB 53 mandates transparency reporting for frontier AI models. Texas and New York have their own laws in force. Forty-six states have enacted laws targeting AI-generated deepfakes.

Who’s driving the conversation: Former White House AI Czar David Sacks characterized the situation as “50 different states regulating this in 50 different ways.” His Innovation Council Action announced it would spend $100 million+ to oppose state AI regulation. Anthropic-backed Public First Action is spending roughly $50 million supporting pro-regulation candidates. House Energy & Commerce Chairman Brett Guthrie (R-KY) positioned his committee as “the tip of the spear” on AI in the House.

The bottom line: If your organization develops, deploys, or is affected by AI systems, you’re facing a patchwork of compliance requirements with no federal floor in sight. Track Colorado’s June 30 deadline closely — it will set the template for enforcement.

4. The One Big Beautiful Bill Act Creates Year-Long Implementation Pressure

The reconciliation law, signed on July 4, 2025, is now the organizing force behind most federal policy action. Its provisions phase in on a staggered timeline, creating pressure points throughout 2026.

On taxes: the law makes permanent the 2017 TCJA individual rates, the doubled standard deduction, and increases the Section 199A pass-through deduction to 23%. New temporary provisions — no tax on tips (up to $25,000/year), no tax on overtime (up to $12,500), and an auto loan interest deduction for U.S.-assembled vehicles — run through 2028. The SALT cap rises to $40,000. The child tax credit increases to $2,200. The estate tax exemption jumps to $15 million per person.

States must now decide whether to conform to or decouple from federal provisions. Colorado held a special session and decoupled from the overtime deduction, facing a $1.5 billion shortfall for FY2026-27. North Carolina has not adopted the tips, overtime, or auto loan deductions.

Who’s driving the conversation: House Budget Committee Chairman Jodey Arrington (R-TX) announced Republicans will pursue “Reconciliation 2.0” targeting healthcare costs, trade enforcement, and fraud prevention. He called it “the most powerful and potent legislative tool in the toolbox.”

The bottom line: CBO estimates the law adds $3.4 trillion to deficits over a decade. The implementation timeline means new compliance requirements, state conformity decisions, and regulatory guidance will roll out continuously through 2027.

5. Energy Policy Splits Along Federal-State Lines

EPA Administrator Lee Zeldin finalized the repeal of the 2009 Greenhouse Gas Endangerment Finding on February 12, 2026 — eliminating the legal foundation for federal greenhouse gas regulation. Zeldin called it “the single largest deregulatory action in U.S. history.” Environmental groups and states led by California Governor Gavin Newsom immediately filed suit.

The OBBBA accelerated the rollback of IRA clean energy incentives: wind and solar facilities that begin construction after July 4, 2026, lose eligibility for generation credits if placed in service after 2027. The bill repealed EV tax credits for vehicles acquired after September 30, 2025. CRS estimates these changes reduce federal clean energy expenditures by $48.8 billion through 2033.

States are filling the vacuum. California reauthorized its cap-and-invest program through 2045. Illinois signed the Clean and Reliable Grid Affordability Act, mandating 3 GW of energy storage. Multiple states are developing nuclear energy plans, driven in part by surging electricity demand from data centers.

Who’s driving the conversation: Over 160 environmental, health, and labor organizations called for Zeldin’s removal. Governor Newsom responded to DOJ’s lawsuit against California’s vehicle emissions standards: “We won’t stand by as Trump Republicans make America smoggy again.” A bipartisan group of governors urged Congress to streamline transmission permitting.

The bottom line: National EV sales share hit 9.1% in 2025 and is projected to reach 11.8% in 2026, despite the credit repeal, driven by state policies and declining battery costs. The federal-state split will persist regardless of midterm outcomes.

6. Labor Policy Fragments Between Washington and State Capitals

The Department of Labor enters 2026 under strain. Secretary Lori Chavez-DeRemer faces an inspector general investigation; her chief of staff and deputy were fired in March. The department has absorbed a roughly 35% budget reduction and eliminated the Office of Federal Contract Compliance Programs entirely.

The reconstituted NLRB — with Trump appointees Chair James D. Murphy, Member Scott Mayer, and General Counsel Crystal S. Carey — is expected to narrow or overturn Biden-era precedents on card-check recognition and employer handbook rules. A direct federal-state conflict has emerged: the NLRB is suing California over a new state law authorizing state adjudication of unfair labor practice cases.

Senate HELP Committee Chair Bill Cassidy (R-LA) introduced six labor reform bills requiring secret-ballot union elections and binding NLRB precedent. The U.S. Chamber called the package “a bold and necessary step in updating federal labor laws.”

Who’s driving the conversation: At least 19 states raised minimum wages on January 1, 2026, with six reaching or exceeding $15/hour for the first time. Minnesota launched its paid family and medical leave program (up to 20 weeks combined). Pennsylvania’s House passed both a $15 minimum wage bill and a paid leave bill. Rep. Jennifer O’Mara (D) said: “If Washington, D.C. isn’t going to get it done, then frankly, colleagues, it is our responsibility to deliver.”

The bottom line: Illinois updated its Human Rights Act to prohibit AI-driven workplace discrimination effective January 1, 2026 — one of several states regulating AI in employment ahead of any federal standard. Multistate employers face increasingly divergent compliance requirements.

7. Affordable Housing Gets Historic Investment Alongside Proposed Cuts

The OBBBA delivered the most significant affordable housing investment in decades through LIHTC expansion: a permanent 12% increase in annual 9% credit allocations and a reduction of the bond financing threshold from 50% to 25% for 4% credits. Novogradac estimates these changes could finance 1.22 million additional affordable rental homes over 2026-2035.

Simultaneously, the administration’s FY2026 budget proposed a 51% cut to HUD, eliminating Section 8, public housing, CDBG, and HOME programs in favor of a new block grant with a two-year assistance cap. Congress has not enacted these cuts.

Who’s driving the conversation: Emily Cadik, CEO of the Affordable Housing Tax Credit Coalition, called the LIHTC provisions “historic and… the biggest step forward in addressing our affordable housing crisis in decades.” The NLIHC’s 2026 “Gap” report documents a national shortage of 7.2 million affordable rental homes for extremely low-income households. NAHB Chief Economist Robert Dietz urged policymakers to “remove barriers that are hindering builders from building more homes.”

The bottom line: Indiana’s HB 1001 would make single-family homes, duplexes, and ADUs permitted uses without public hearings — a significant signal of zoning reform. Housing affordability is increasingly a midterm issue, particularly in suburban swing districts.

8. Children’s Online Safety Gains Rare Bipartisan Momentum

One of the few policy areas generating genuine bipartisan energy is children’s online safety. The Kids Off Social Media Act (S. 278), co-sponsored by Senate Commerce Chairman Ted Cruz (R-TX) and Sen. Brian Schatz (D-HI), would ban social media accounts for children under 13 and algorithmic recommendations for users under 17.

Cruz said, “Every parent I know is concerned about the online threats to kids. As Chairman of the Commerce Committee, I am confident we can swiftly move this legislation.”

The Kids Online Safety Act (KOSA) remains alive but faces a critical dispute: the Senate version preserves state enforcement authority, while the House version strips the “duty of care” provision and preempts state laws. Forty state attorneys general — led by New York AG Letitia James — urged Congress to pass the Senate version, warning the House approach “would undermine existing state laws.”

Who’s driving the conversation: Alabama became the fourth state to enact its own children’s online safety law in February 2026, joining Utah, Louisiana, and Texas. Platform companies face a growing patchwork of age verification requirements.

This is one of the few areas where federal legislation could actually pass in 2026. Tech companies should prepare for new compliance obligations regardless of whether action comes from Congress or continues at the state level.

Looking Ahead: What Connects These Trends

Three forces tie these policy battles together as you plan for the rest of 2026 and into 2027.

Affordability is the defining issue. Healthcare costs, tariff-driven price increases, housing shortages, and energy prices all feed into the same voter anxiety. Every policy debate — from Medicaid work requirements to clean energy credits — is being filtered through the affordability lens heading into November.

Federal-state conflict has reached historic intensity. Democratic state attorneys general have filed 71 lawsuits against the Trump administration in its first year, on pace to exceed the record 138 during Trump’s first term. The Local Solutions Support Center is tracking nearly 850 state preemption bills in 2026, a one-third increase over last year. Courts have become the primary arena for resolving policy disputes.

Implementation timelines create natural pressure points. Colorado’s AI Act (June 30), the Section 122 tariff expiration (July 24), Medicaid redetermination deadlines (December 31), and work requirements (January 1, 2027) all create concrete moments when policy becomes operational reality.

For government affairs teams, the practical takeaway is clear: no policy area can be tracked in isolation. Tax conformity affects state budgets. Medicaid changes affect the healthcare workforce. Tariff policy affects energy costs. The organizations that succeed in this environment will be the ones that connect the dots across issue areas — and track the implementation timeline, state conformity decisions, and judicial outcomes that determine what actually happens on the ground.

Tracking legislation, regulatory actions, and stakeholder positions across federal and state levels has never been more critical. Tools like Quorum Federal and Quorum State can help you monitor these interconnected policy developments in real time — so you can anticipate what’s coming rather than react after the fact.

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