WASHINGTON – Happy new year?
President Donald Trumpfaces daunting challenges in 2026 once the holiday celebrations are done, including a familiarimpasse over government spending,rising health care costs for millionsof Americans andmidterm electionsthat threaten Republican control of Congress.
The political disputes about spending−and the possibility of anotherfederal government shutdown−will play out while waiting for aSupreme Courtdecision that could overturn tariffs central to the president's economic agenda that are projected to generatemore than $3.3 trillionover the next decade.
More:Trump vs. the midterm blues: Can he get MAGA voters excited (and voting) in 2026?
Beyond the domestic issues, foreign affairs also remain volatile for the two-term Republican president.Trump is seeking a peace agreementin theRussian war with Ukrainethat's nearing its fourth anniversary. He is alsoworking to keep the ceasefire in Gaza, whereisolated skirmishes continue to eruptbetween Israel and Hamas.
More:Trump, Zelenskyy set for meeting at Mar-a-Lago over new Ukraine peace deal
And the Justice Department'sslow-motion release of documentsabout theinvestigations into convicted sex offender Jeffrey Epsteincould continue to drown out the political debate.
The narrowly divided Congress is a consistent challenge across all the contentious issues, even though Trump's Republican Party currently holds majorities in both the House and Senate. Lawmakersapproved only 61 laws in 2025, reflecting the polarization between the parties, like when only 34 laws were approved in 2023. Typically, lawmakers approve more than 300 bills in each two-year Congress.
Republicans have little room to maneuver with majorities of 53-47 in the Senate and 220-213 in the House. The House margin will narrow when Rep. Marjorie Taylor Greene, R-Georgia, leaves Jan. 5. Two seats previously held by Democrats will be filled withspecial elections in Texas on Jan. 31 and in New Jersey on April 16. And midterm elections, when the president's party traditionally loses seats, loom in November for the entire House and one-third of the Senate.
Here are six contentious topics Trump will have to navigate in the new year:
Congress returns to government funding impasse in January
The lack of consensus about the overall federal budget and the details of Trump's priorities, incuding significantly boosting funding for immigration enforcement,prevented approval of most of the dozen spending billsneeded to keep the U.S. government running each year.
The impasse that sparked thelongest shutdown in American historyat 43 days focused on health care funding. Atemporary spending billexpires Jan. 30, setting up another showdown over priorities.
More:The winners and losers of the government shutdown deal
Senate Democrats blocked approval of spending bills in the fall while arguing for an extension of subsidies for lower-income families to buy health insurance under the Affordable Care Act, which is also known as Obamacare. But Republicans refused, saying the program drove up insurance prices without improving care.
The expiration of food benefits for 42 million people under the Supplemental Nutrition Assistance Program during the shutdown provided more pressure the end the impasse.
More:Trump admin could withhold some SNAP funds from these blue states. Here's why.
But the temporary spending measure provided full-year funding for the Department of Agriculture – which restored SNAP funding – the Department of Veterans Affairs and the legislative branch.
With SNAP off the table, lawmakers go back to the drawing board for spending bills in January.
Health care costs rise as lawmakers debate remedies
Theexpiration of Obamacare subsidies on Dec. 31is projected to double average health insurance premiums for 24 million Americans who participate in the program.
Senators were unablein December to approve a Democratic proposal to extend Obamacare ora Republican proposalto deposit $1,000 to $1,500 annually into health savings accounts for eligible consumers.
TheHouse approved Republican legislationthat aimed to lower health care costs. But without extending Obamacare its chances of passing in the Senate are low.
More:Health insurance premiums to rise as Obamacare deal remains elusive
Four House Republicans joined all the Democrats in a parliamentary maneuver to force a January vote on legislation that would extend Obamacare subsidies for three years. But the Senate isn't expected to approve it.
GOP Reps. Rob Bresnahan, Brian Fitzpatrick and Ryan Mackenzie of Pennsylvania and Mike Lawler of New York had been pushing for a bipartisan overhaul of the program.
"We wanted an up or down vote," said Lawler, who faces a tough re-election contest in his district just north of New York City. "Unfortunately, leadership found every way not to let that happen."
Trump seeks peace in Ukraine and Gaza
Besides the domestic issues, Trump is juggling several foreign conflicts expected to carry into the new year.
Trump ordered themilitary to strike Islamic State targets in Nigeriaon Dec. 25, after warning the group had attacked Christians in the region.
More:US hits Islamic State in Nigeria after Trump warnings
He has left open the option of warwith Venezuela over alleged drug smuggling, a U.S. military blockade of oil tankers and attacks on 28 boats that killed more than 100 people.
And Trump continues to negotiate for peace between Russia and Ukraine, and tokeep the ceasefire in Gaza.
Ukraine's President VolodymyZelenskyy is expected to meet with Trump at Mar-a-Lago on Dec. 28. The visit comes after officials in the United States, Ukraine and Europe reached a consensus on Trump's peace proposal offering security guarantees for Kyiv and leaving territorial disputes to be resolved by the two countries.
"We have agreed on a meeting at the highest level – withPresident Trumpin the near future,"Zelenskyy said on social media Dec. 26. "A lot can be decided before the New Year."
More:Trump wins inaugural FIFA peace prize
Butattacks continue amid the talks. Russia's PresidentVladimir Putinsignaled a reluctance for compromisein a Dec. 19 news conference.
Putin's special envoy Kirill Dmitriev and foreign policy aide Yuri Ushakov participated in talks Dec. 26 with the U.S. administration.
In Gaza, the ceasefire agreementremains fragile between Israel and Hamas. Their October peace deal came after two years of intense Israeli bombardment and military operations in retaliation for a deadly attack by Hamas-led fighters on Israeli communities in October 2023.
More:Israel launches strikes in Gaza after accusing Hamas of violating ceasefire
But humanitarian agencies say there is still too little aid getting into Gaza, where nearly the entire population is homeless. Pope Leocondemned the conditions for Palestinians in Gazain his first Christmas sermon since becoming leader of the Catholic Church.
Israel's Prime MinisterBenjamin Netanyahuis expected to meet with Trump at Mar-a-Lago on Dec. 29.Netanyahu argued on social media Dec. 24that Hamas continues to violate the ceasefire, including by detonating an explosive device that wounded an Israeli defense officer, and must demilitarize and be removed from governance of the region.
Midterm elections could change − or reinforce − control of Congress
Trump won't be on the ballot in November, but his agenda will be.
Losing Republican control over the House, which some political experts say is possible, would make it even harder for the president to pass the kind of legislation he wants. And Democrats would gain subpoena power to resume investigations of the Trump administration that previously led to two impeachments during his first term.
Trump began in the summer to urge House members exploring campaigns for Senate or governor to stay put rather than risk primary fights.Threats of violence and dysfunctiondrove a half-dozen senators and46 House members to announcethey would retire or seek other jobs.
More:Threats, dysfunction and flying: Why quitting is all the rage in DC
Trump proposed in September thatRepublicans hold a midterm conventionin 2026 "to show the great things we have done."His urgency spiked after state and local elections Nov. 4 − whenDemocrats swept two gubernatorial contests, the New York City mayor's race and a California ballot initiative on redistricting − while exit polling showed voters punished Republicans over the rising cost of living. His approval rating has slipped to 39%, according to aReuters/Ipsos poll of 1,016 Americans conducted Dec. 12 to 15.
Trump has encouraged Republicans to campaign on the tax cuts approved in July on tips, overtime and Social Security benefits, along with the growing economy.
"This month alone President Trump has delivered yet another drug pricing deal, five new trade deals, record-breaking commercial and investment deals with Saudi Arabia, new stock market highs and a blockbuster jobs report," White House spokesperson Kush Desai said.
Party primarieswill begin to define the campaign in early March and will run through September.Texas,North Carolinaand Arkansas each have primaries on March 3, Mississippi's is on March 10 and Illinois has one March 17.
States including Republican-led Texas and Democrat-led California are redrawing congressional maps to gain more seats for their parties. But political experts sayso many maps are in fluxthat it's unclear which party might ultimately benefit.
More:What's next after Supreme Court approves pro-Trump Texas map for 2026?
A big advantage when one party controls both chambers of Congress is the option to approve one package of spending legislation with a simple majority. That parliamentary maneuver is called reconciliation. It's how Congress approved Trump's massive tax-cut and spending package last summer without any Democratic support.
Trump has urged Republicans to have a simple majority to approve legislation, whether through reconciliation or by abolishing the Senate filibuster. Republican leaders have resisted eliminating the filibuster because it preserves power for lawmakers in the minority and they are also concerned about the potential policy changes if and when a Democrat wins back the White House.
More:Is another government shutdown fight around the corner?
But Trump has said either approach would allow Republicans to approve spending bills and avoid a crisis with the Jan. 30 deadline.
"Republicans should knock out the filibuster and we should approve a lot of things," Trump told reporters Dec. 15.
Justice Department to take weeks longer to release Epstein files
The Justice Department'sslow-motion release of documentsabout the investigations of convicted sex offender Jeffrey Epstein could distract from the policy debates as Democrats highlight Trump's appearance in pictures, flight logs and emails.
Trump hasn't been credibly accused of wrongdoing. But the president faces questions about the files when he promoting his own priorities such as military shipbuilding or lowering the price of prescription drugs.
More:What's in the Epstein files? A reader's guide to the documents
Congress set a Dec. 19 deadline for the department to release all its files. But the department has released records in batches as officials said reviewing them to redact the names of people who accused Epstein of abuse is taking longer than expected.
The department announced Dec. 24 the FBI and prosecutors in the Southern District of New York founda million more documentsthat need to be reviewed, adding weeks to the process.
More:'Grossly fails.' Lawmakers behind Epstein files' release slam DOJ
The two House members who drafted the legislation forcing the release of documents − Rep. Thomas Massie, R-Kentucky, and Ro Khanna, D-California − threatened to seek a congressional finding of contempt for the partial release of documents. But the Justice Department is unlikely to prosecute a contempt recommendation against itself.
A bipartisan group of senatorsasked the Justice Department's acting inspector general, Don Berhtiaume, on Dec. 24 to audit the release of documents to determine whether it fulfilled the disclosure law.
Supreme Courtdecision on tariffs a 'LIFE OR DEATH' matter for country: Trump
The Supreme Courtcould rule at any time onTrump's tariffs.
The president has called the case as important as"LIFE OR DEATH for our country"and"one of the most important in the History of the Country."
Trump said it would be a disaster if the high court overturned the tariffs because they have raised$205 billion through October, pressured companies tobuild manufacturing plants in the United Statesand persuadedother countries to negotiate trade deals.
More:'Punch our customers in the face.' Farm concerns about Trump tariffs could fuel 2026 races
But lower courts ruled that Trump exceeded his authority under the1977 International Emergency Economic Powers Act, which had previously been used to impose sanctions, to create taxes on imports from countries worldwide.
The justicesheard oral arguments on Nov. 5.
Treasury Secretary Scott Bessent has said there are other statutes Trump could impose tariffs under. For example, Trump imposed tariffs on steel and aluminum under a different section of code.
But Trump has said the law he used is the most flexible.
Bessent andKevin Hassett, director of the National Economic Council, have said it would be difficult to refund tariffs already collected.
Contributing: Reuters
This article originally appeared on USA TODAY:Trump's 2026 outlook includes challenges like midterms, peace deals
