If they squint, lawmakers can see the outlines of a bipartisan deal that could avoid a government shutdown later this year. But bringing an agreement into focus — and enacting it into law — will be no small task.
The general parameters floated by multiple factions in the House and Senate is to couple, by the end of the year, an extension of federal health insurance subsidies that are set to expire on Jan. 1 with government funding through September 2026.
But no one is willing to lock in that agreement yet, and getting there could take several more months of negotiations. There also are plenty of stumbling blocks that could keep it out of reach: GOP hard-liners oppose extending the subsidies. Democrats, meanwhile, aren’t yet aligned on what it would take to give President Donald Trump even a few more weeks of funding.
It’s all but guaranteed that Congress won’t be able to reach a broader deal this month, meaning even in the best-case scenario lawmakers will soon need to vote on a stopgap that would buy time to strike a larger deal. Looming over it all is Trump, who already wants to fund the government into next year — past the health insurance cliff. GOP leaders believe they will need him to unequivocally endorse any agreement to get it through Congress.
Rep. Steve Womack (R-Ark.), a top appropriator, noted Tuesday that any such deal would end up in a “push me, pull you” situation.
“It will probably kill Republican votes in order to add Democrats,” Womack said about the idea of extending health care subsidies as part of a package to keep federal agencies funded.
But it could be the only possible solution to the parties’ dueling dilemmas. Republicans are under pressure to cut a deal on the subsidies as they grow increasingly concerned about the political climate heading into next year’s midterm elections.
Their signature “big, beautiful” bill is underwater with the public, due in large part to changes it made to Medicaid, prompting an attempted rebrand around the new law’s benefits for “working families.” Nearly 20 million Americans rely on the soon-to-expire subsidies.
“I think it’s bad policy, bad politics to let them lapse,” said Sen. Thom Tillis (R-N.C.), a critic of the GOP’s Medicaid cuts, of the health insurance credits.
Democratic leaders, meanwhile, are under mounting pressure from their members — to say nothing of their voters — to put up a big fight against Trump and congressional Republicans.
“There’s no good faith, and we have not been at the table effectively, and the damage that’s being done to American families is so great that we’ve got to be in a fighting mode,” said Rep. Chuy García (D-Ill.).
Winning an extension of the insurance subsidies — tax credits that were created under President Barack Obama as part of the 2010 Affordable Care Act and greatly expanded by President Joe Biden under the 2021 American Rescue Plan — could give the party something to rally around.
There are signs that key elements of each party are moving toward a possible accord. A group of House Republicans that includes some of the conference’s most vulnerable incumbents, for instance, has already come out with a proposal to extend the tax credits. Top GOP leaders have not ruled out a deal, though they have suggested a straight extension of the subsidies would be a nonstarter.
At the same time, Democratic leaders have started suggesting health care will be the main battleground for the fall funding fight, and key voices on the party’s aggressive left flank have generally endorsed the strategy — with some caveats.
Each side has malcontents who could scuttle any deal, however. For Republicans, it’s conservative hard-liners who are in no mood to back costly extensions of a Democratic health care program. At the very least, they are warning that the tax credits would need to be subject to new income caps or fraud prevention measures.
Rep. Andy Harris (R-Md.), the House Freedom Caucus chair, laid out a litany of problems with the subsidies Monday during a closed-door meeting of House GOP leaders and senior Republicans. But those in the room left believing Harris had left some wiggle room for a deal — even as other hard-liners declared themselves a hard no on any extension.
Asked about the potential for a broader deal that included a fraud crackdown, Harris said he would have to see the particulars. “If it’s by itself — no,” he said. “No, just cut it off.”
By Tuesday morning, House Democratic leaders were hearing an earful from members who are spoiling for a showdown with the GOP, returning to Washington after six weeks of hearing from constituents back home telling them to show Republicans more backbone. Trump’s decision late last month to unilaterally cancel roughly $5 billion in previously approved spending only deepened Democrats’ anger.
Lawmakers lined up at microphones during their weekly caucus meeting to share frustrations with Trump’s decision to thumb his nose at Congress’ funding powers. Some also vented about Democratic leadership’s focus on health care amid the funding battle, according to three people granted anonymity to describe the private discussion.
“If we could have negative numbers, that would be the percent of trust that most of us have in the Republican caucus right now,” said Rep. Mark Pocan (D-Wis.).
Leaders in both parties don’t have much time to figure out their next move. Republicans aren’t in agreement among themselves, much less with Democrats, on what an extension of the health care tax credits would look like. And that issue is intertwined with the pressing decision on how long to punt government funding past the fast approaching Sept. 30 shutdown deadline.
The conservatives want a patch that goes until at least January, if not for the full 2026 fiscal year; the White House aligned itself with that timeline Tuesday, pitching a Jan. 31 end date. That would decouple the health care fight from government funding — preventing Democrats, and some of their own GOP colleagues, from using an earlier deadline as a leverage point.
“What I don’t want is a CR that goes through right before Christmas,” Sen. Rick Scott (R-Fla.) said in a brief interview. “We get an omnibus … it’s blown out with thousands of earmarks, and it’s a waste of money.”
Democratic leaders, meanwhile, are proceeding carefully after the last funding fight back in March ended in an embarrassing and frustrating Senate surrender. Minority Leader Chuck Schumer, flanked Tuesday by members of his leadership team and top Democratic appropriator Patty Murray, put the onus on Republicans to at least meet with them about how to fund the government past the end of the month.
Senate appropriators are discussing a short-term spending patch until Nov. 21 linked to three full-year funding bills for Agriculture, Veterans Affairs and the operations of Capitol Hill. Murray (D-Wash.) warned Tuesday she would “not vote for a funding bill that I had zero say in drafting.”
Democrats are also navigating internal divisions over whether to make the expiring health tax credits a red line now, in exchange for their votes on a short-term patch this month, or closer to the end of the year.
Sen. Tim Kaine (D-Va.) said it was his sense that there could be a “straightforward” stopgap for now, saving the insurance issue for a “comprehensive” deal later. But Sen. Chris Murphy (D-Conn.) and Rep. Alexandria Ocasio-Cortez (D-N.Y.) said now was the time to stand firm.
“I think we need to have a high price, and so that price could be saving the ACA,” Ocasio-Cortez said.
But it’s Trump who might be the biggest wild card. He has not personally weighed in on the funding fight or a possible extension of the Democratic health care law he once tried, and failed, to repeal. Senate Majority Leader John Thune said Tuesday that he hadn’t yet spoken to the president about the subsidies, but he added that other GOP senators are in conversation with the administration about the end-of-year deadline.
Many GOP lawmakers are openly warning that Trump risks political disaster if action is not taken to at least partially continue the tax credits — and they are urging their more conservative colleagues to entertain a deal, sooner or later.
“What they have to learn is what everybody else has to learn in life — that you don’t get your way 100 percent of the time,” said Rep. Jeff Van Drew (R-N.J.).
Benjamin Guggenheim, Meredith Lee Hill and Jennifer Scholtes contributed to this report.
