Congress Limping in the New Year
ACA Subsidies Set to Expire
With only four legislative days left in the year to address the expiring Affordable Care Act subsidies, many moderate Republicans, racing to find a solution, are growing increasingly frustrated with the more conservative members of their caucus as well as Republican leadership, which, despite numerous promises, has struggled to pull together a comprehensive healthcare package. As of press time, House Republican leadership is still trying to finalize its plan, which would include a smattering of smaller health policy ideas considered by conservatives for years (like expanded health savings accounts, association health plans, and stop-loss coverage for self-insured small businesses) but would not extend the ACA’s enhanced tax credits at the center of the months-long debate. At the same time, Republican Leadership is reportedly planning to offer its more moderate members in swing districts the opportunity to vote for an amendment based on legislation by Rep. Brian Fitzpatrick (R-PA) that would extend the enhanced tax credits for two years, but will be laden with poison-pill provisions that would make it very difficult for most Democrats to support.
In this instance, moderate Republicans hold significant leverage over Speaker Johnson, who, facing severe opposition from the party’s right flank, will need their votes to get the bill over the finish line. According to recent reporting, Johnson has already promised moderate members a vote on their amendment, plus assurances against language further restricting federal funding for abortion. However, this might prove to be a serious sticking point for members across the Republican caucus, who are already under pressure from pro-life groups.
If Johnson can’t pass any bill of his own design, between the three creditable discharge petitions hanging over his head, Johnson is at risk of losing control of the negotiations altogether. The discharge petitions, introduced by Reps. Josh Gottheimer (D-NJ), Brian Fitzpatrick (R-PA), and Minority Leader Hakeem Jeffries (D-NY) would extend the current ACA subsidies by one, two, or three years, respectively, and include varying levels of income caps, minimum premium costs, and other anti-fraud protections. As of now, Democratic leadership is weighing whether to endorse Gottheimer’s or Fitzpatrick’s petition and, in turn, force a vote on the House floor or stick with their original three-year extension plan and let Republicans come to the table to negotiate or live with the end of the subsidies.
Senate Republicans, similarly divided over the matter, were split on Thursday between Senate Democrats’ proposal for a clean, three-year extension of the current subsidies and an alternative bill put forth by Senate Health, Education, and Labor Committee Chair Bill Cassidy (R-LA) and Senate Finance Chair Mike Crapo (R-ID), which would provide money for expanded health savings accounts, but a fraction of what Americans would lose from the ending of the premium subsidies. Both proposals failed by identical 51-48 votes, with the Senate Democrats’ version gaining support from Sens. Collins, Hawley, Murkowski, and Sullivan. The Senate is unlikely to reach a breakthrough before the holiday recess; any action in the House next week will likely wait to be resolved by the Senate in the New Year, when Senate Leader John Thune (R-SD) and, ultimately, President Trump, have to decide how to proceed.
Lawfare at OMB over anti-RIF provision
One of the major concessions Senate Democrats received in their deal to end this fall’s government shutdown was language requiring the Trump Administration to reinstate federal employees laid off through reductions-in-force (RIFs) carried out since October 1st, as well as barring the Administration from carrying out any further RIFs through January 30, 2026.
Yet, just days after reopening the government, the OMB General Counsel Mark R. Paoletta issued a memo to the State Department instructing the Department to defy the terms of the continuing resolution and continue its reduction-in-force, laying off another 250 employees.
While this action has already been challenged and blocked in the U.S. District Court for the Northern District of California, Paoletta’s move underscores the Administration’s willingness to flout the law and the challenge of reaching a bipartisan deal on any issue, whether it be appropriations or permitting reform.
