If Congress changes hands, should you change your investment strategy?
America owes more than $40 trillion, the economy is still growing, and control of Congress is up for grabs. Here’s how I’m thinking about the election - and what you can do with your own money.
If you’ve been following the election, you’ve probably heard plenty about who’s going to win. I want to spend a little more time on what happens afterward.
What changes for the family trying to buy a house? For someone building a retirement account? For the business owner deciding whether to hire another employee or hold on to cash?
Because once the campaign ads stop, those decisions are still there. So are the bills.
I think we need to start with something that has been growing under both parties: the national debt.
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State of Capital: We’ve been running up this tab for a long time
When Bill Clinton handed the presidency to George W. Bush in January 2001, America had about $5.7 trillion in gross federal debt. By the time Bush handed the presidency to Barack Obama in 2009, that number was about $10.6 trillion—an increase of roughly $4.9 trillion.[^1]
During Obama’s eight years, the debt grew another $9.3 trillion, reaching nearly $20 trillion when Trump took office in 2017. During Trump’s first term, it rose approximately $7.8 trillion, bringing the total to about $27.8 trillion when Biden became president.[^1]
Under Biden, it increased another $8.45 trillion, reaching about $36.2 trillion. And since the beginning of Trump’s second term, it has risen roughly $4.3 trillion more. As of October 28, the total stood at approximately $40.6 trillion.[^1]
Think about that. From less than $6 trillion to more than $40 trillion in roughly a quarter of a century.
Now, those numbers need context. Presidents don’t make these decisions alone. Congress passes spending and tax legislation. Administrations inherit obligations, and we have lived through wars, a financial crisis, and a pandemic. The increase in debt during a presidency is not the same thing as the cost of everything that president personally approved.[^2]
But whether you vote Republican, Democrat, or neither, I think we should be able to agree that this deserves attention.
My concern is what happens when the next crisis arrives. If we’re already borrowing heavily while the economy is growing, how much room are we leaving ourselves to respond?
That connects directly to our everyday finances. Government borrowing can put upward pressure on interest rates by competing for money that businesses and other borrowers also need. Higher rates can make it harder to finance a home, expand a business, or refinance existing debt.[^3]
Spending can also contribute to inflation when it pushes demand ahead of what the economy can supply. Federal Reserve research found that this happened with pandemic fiscal support. But the debt balance alone doesn’t explain inflation; supply disruptions, monetary policy, and other forces matter too.[^4]
So when I talk about the debt, I’m thinking about borrowing costs, purchasing power, and the choices our families may face down the road.
What could actually change after the election?
On November 3, voters will decide all 435 House seats and 35 Senate seats. Republicans currently control both chambers and the White House.[^5]
Democrats are favored to take back the House. The Senate has become much more competitive as well. In its October 27 outlook, Morgan Stanley described it as a toss-up with a slight Democratic edge. Democrats need a net gain of four Senate seats to take control.[^6]
Some of the races worth watching are Republican-held seats in Texas, Maine, Ohio, Iowa, Kansas, and Alaska. Cook Political Report included all six among its seven toss-ups in its October 20 ratings. Those ratings are a snapshot, and different forecasters draw the lines differently.[^7]
If Democrats win either chamber, we would have divided government. That would make it harder for Trump to pass the next round of legislation without negotiating with the other party.
It would not give Democrats a free hand to reverse everything. Trump would still be president, and he would still have veto power. Overriding that veto requires two-thirds of each chamber.[^8]
But Congress has real influence. It controls funding, conducts oversight, and can block legislation. The Senate also decides whether to confirm presidential nominees who need its approval. So a shift in control could affect the administration’s ability to move its agenda forward, even without sweeping new laws.[^8]
I would expect more investigations, more scrutiny, and tougher negotiations. Parts of the deregulatory agenda could face more resistance. At the same time, the administration could continue using executive authority within the law.
This is where the phrase “Wall Street likes gridlock” comes in. If neither side can easily pass major legislation, businesses may have more confidence that the tax and legislative framework won’t suddenly change.[^9]
There’s a logic to that. But I wouldn’t confuse gridlock with calm. Funding standoffs, debt-limit negotiations, and executive decisions can still create uncertainty. And history doesn’t establish that a particular political arrangement automatically produces better investment returns.[^9][^10]
For investors, the question is how changes in Washington affect company earnings, borrowing costs, and the price we’re willing to pay for an investment.
Meanwhile, the economy is still moving
The latest GDP report is a good reminder that the election isn’t the whole economic story.
On October 29, the Bureau of Economic Analysis reported that the economy grew at a 3.4% annualized rate in the third quarter, up from 2.2% in the second quarter. That is inflation-adjusted growth, and the first estimate remains subject to revision.[^11]
I know that can be frustrating to hear when everything in your own life feels more expensive. But a growing economy and a financially stretched household can exist at the same time.
There are also reasons businesses have continued investing. The administration has made deregulation a priority, and last year’s One Big Beautiful Bill Act preserved the 2017 individual income-tax rate structure and restored or expanded important business deductions.[^12][^13]
One distinction matters here: the 21% corporate tax rate from 2017 was already permanent. The 2025 law did not need to extend that rate. It did make other changes that affect business investment and household planning.[^13]
Then there’s the AI buildout. We’re seeing investment that has consequences for equipment, infrastructure, and the companies supplying it. In its October 29 results, Amazon said increased property and equipment spending primarily reflected investment in AI—and that the spending helped push its trailing-year free cash flow below zero.[^14]
That is both an opportunity and a reminder to be selective. Companies eventually have to earn an adequate return on what they spend. Being excited about AI is different from deciding that every AI-related investment is worth its current price.
Tax incentives and technology investment can support activity. Higher tariffs and financing costs can work in the other direction. CBO’s 2026 outlook describes some of those competing forces.[^3]
That’s why I’m watching the election alongside the economic data. Whoever wins, businesses still have to sell products, manage costs, and generate earnings.
The Conversation: What I would do with that information
I would start by looking at my own finances before making a big election-driven investment decision.
How much cash do you have available if your income slows down or an unexpected bill arrives? Three to six months of essential expenses is a common emergency-fund goal, although the right amount depends on your situation. If you’re starting with less, work toward a manageable first milestone. The point is to avoid having to sell investments at a bad time just to pay the bills.[^15]
Then look at when you need your money. A down payment you’ll need soon should not carry the same investment risk as retirement money you won’t touch for twenty years. Your mix of stocks, bonds, and cash should reflect those differences.[^16]
I’d also take a second look at what “diversified” means in your account. You can own several funds and still have the same handful of companies driving the outcome. Open the holdings. See what you actually own. If one area has grown into a much bigger share of your portfolio than you intended, consider whether it’s time to rebalance, taking taxes and costs into account.[^16]
And before year-end, have a conversation about your contributions, debt, and tax situation. Work with the law that exists today. You can adjust if policy changes, but you don’t need to put your financial life on hold while Washington argues.
I think that’s where people can get some control back. You may not know who will win every Senate race, but you can know your monthly expenses, what your investments cost, and how much you can consistently put toward your future.
The election matters. So does the plan you’re following after it.
If you want help connecting these headlines to your own financial situation, reach out. That’s the conversation I want us to keep having through Invested in Us.
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For general education, not individualized investment or tax advice. Investing involves risk, including loss of principal.