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Federal Spending

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Federal budget, tariffs, and state fiscal pressure

In 2026 states face tighter budgets as revenues decline and spending needs rise, while watching whether the Supreme Court upholds Trump’s tariffs and whether Washington reaches a federal budget deal. Tax cuts are expected to be tightly targeted amid these constraints.

What should guide federal budget, tariff, and fiscal policy right now?

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Sources

Governing — https://www.governing.com/politics/the-biggest-issues-to-watch-in-2026
States are tightening their budgets as revenues decline and spending needs rise; any tax cuts are likely to be tightly targeted, and states will be watching to see whether the Supreme Court upholds Trump’s tariffs and whether the federal government reaches a budget deal.
Positions on this issue  ·  liberal → conservative
  1. Raise taxes on wealth and corporations to fund expanded federal and state programs
  2. Reject broad tariffs, negotiate a budget with more social spending and targeted revenue
  3. Seek a bipartisan budget deal balancing some restraint with essential investments
  4. Uphold aggressive tariffs and pair them with spending cuts and targeted tax cuts
  5. Slash federal spending deeply, extend wide tax cuts, and maximize tariff leverage

Federal spending and budget deficits

Federal budget pressures are a top concern for 2026, with states scrambling to manage declining revenues, rising spending needs, and uncertainty around federal transfers. Gallup consistently lists 'government' and spending concerns among the top national problems. Republicans are more likely than Democrats to cite taxes as a top priority (19% vs 10%), reflecting ongoing partisan tension over the size and cost of the federal government.

How should the federal government address spending and the budget deficit?

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How important is this to you?

Sources

Jared Brey, Jule Pattison-Gordon, Carl Smith — https://www.governing.com/politics/the-biggest-issues-to-watch-in-2026
States are tightening their budgets as revenues decline and spending needs rise; any tax cuts are likely to be tightly targeted, and states will be watching to see whether the federal government reaches a budget deal.
AP-NORC — https://apnorc.org/projects/2026-the-publics-priorities-and-expectations
Republicans are more likely than Democrats to mention crime (22% vs 5%) and taxes (19% vs 10%).
Positions on this issue  ·  liberal → conservative
  1. Increase federal spending on social programs and infrastructure; raise taxes on the wealthy to fund the deficit.
  2. Invest in growth-oriented programs while modestly raising revenues to stabilize the long-term deficit.
  3. Use a balanced approach of targeted spending cuts and selective revenue increases to reduce the deficit.
  4. Prioritize significant spending cuts across agencies before considering any tax changes.
  5. Drastically cut federal spending, eliminate entire agencies, and pursue deep tax cuts to shrink the government.