Democrats are vowing to block a short-term government funding bill to keep the government open unless Republicans agree to extend billions of dollars in federal health insurance subsidies.
“Republicans have to come to meet with us in a true bipartisan negotiation to satisfy the American people’s needs on healthcare, or they won’t get our votes, plain and simple,” Senate Minority Leader Chuck Schumer, D-N.Y., said, The Wall Street Journal reported Saturday.
The showdown centers on enhanced Affordable Care Act tax credits, first enacted in 2021 as part of a COVID-19 relief law, to make Obamacare plans significantly cheaper for lower- and middle-income households.
The credits are set to expire at the end of this year, which could cause about 22 million enrollees receiving subsidies to see their insurance premiums spike by more than 75%, according to health policy research group KFF.
Republican leaders are pushing for a two-month stopgap bill with no major additions and say that extending the subsidies should be debated later as part of broader fiscal talks. Senate Majority Leader John Thune, R-S.D., said he is open to discussions about the subsidies but not as a condition to avoid a shutdown.
Some Republicans are speaking out against ending the subsidies, however. Sen. Josh Hawley, R-Mo., warned of “massive increases” in premiums if Congress fails to act, while Sen. Thom Tillis, R-N.C., who is retiring, called health care costs one of the decisive issues in elections.
Further, House Speaker Mike Johnson, R-La., said that he and many other Republicans oppose the subsidies but added that he understands “the political realities and the realities of people on the ground.”
Republicans are defending their narrow majorities in the House and Senate in the upcoming 2026 midterms, and President Donald Trump’s pollsters have cautioned against allowing the subsidies to expire.
A July memo from Trump pollster Tony Fabrizio showed strong voter support in swing districts for continuing the payments, and another longtime Trump adviser, John McLaughlin, warned that letting them lapse could amount to “an unexpected tax hike” on Trump voters.
The Congressional Budget Office estimates that making the subsidies permanent would add $335 billion to the federal deficit over the next decade.
Extending the subsidies is Democrats’ strongest bargaining chip, said Sen. Tim Kaine, D-Va. “It’s not the only issue that we’re focused on, but it’s probably the unifier,” Kaine said. “It feels like we’re pushing on a door … that may be open.”
There have also been calls for Democrats to use the shutdown standoff to restore GOP cuts to Medicaid, but potential Republican defections are giving Democrats leverage by focusing on the ACA subsidies.
Trump, meanwhile, has tried to tamp down speculation of any bipartisan deal, saying that if Republicans gave Democrats “every dream, they would not vote for it.”
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