The funding compromise is a win for Republicans. One can tell because progressives are downright apoplectic.
The government shutdown finally seems to be coming to an end, as eight Democratic senators joined nearly all Republicans to push a short-term funding bill just barely over the Senate’s 60-vote threshold to overcome the filibuster. That legislation, known as a continuing resolution (CR), is part of a broader deal that Republicans made to peel off five Democrats from their party’s leadership (three Senate Democrats had previously voted to reopen the government). With a few concessions, Republicans persuaded them to drop the demand that an extension of enlarged Obamacare subsidies be included in the funding bill.
Although Obamacare subsidies were left out of the Senate’s CR, Majority Leader John Thune (R., S.D.) promised to allow a vote on extending them next month. Democrats first enacted these enlarged subsidies for individually purchased health insurance plans in 2021, as part of their party-line American Rescue Plan law. They were initially designed as a temporary, Covid-era measure, scheduled to expire after 2022, but Democrats later extended the subsidies through 2025 as part of their falsely titled Inflation Reduction Act. These enhanced subsidies blew out spending on the program by removing income limits on eligibility and covering 100 percent of premiums for low-income enrollees.
Democrats’ core demand throughout the shutdown was for this Republican-controlled Senate to extend the marketplace subsidies once more, which the nonpartisan Congressional Budget Office estimated would add $350 billion to deficits over the next decade. Republican leadership rightly refused to put an extension of the swollen subsidies into their funding bill. To cave on this policy would have been to pour taxpayer money indefinitely into a broken health insurance market in desperate need of reform.
If Thune holds up his side of the shutdown deal, Democrats will get to put an Obamacare subsidy extension bill of their choice on the Senate floor in December. Even with some Republicans in support, that bill is unlikely to clear the chamber’s 60-vote cloture threshold — and if it somehow passes the Senate, it’s likely dead on arrival when it lands on House Speaker Mike Johnson’s desk.
The main purpose of this demand, it seems, is to force Republican senators to publicly vote against extending the subsidies, enabling Democrats to squarely blame them in next year’s midterms for millions of voters’ premiums going up. In reality, enrollees’ actual premiums will have largely remained the same. It will simply be the policyholders themselves, not taxpayers, who are paying more of the bill.
Below are some additional policy implications of the shutdown deal that Democrats secured:
- As demanded by Tim Kaine (D., Va.), who represents around 150,000 federal workers in his state, all federal employees who were laid off during the shutdown must be rehired and given back pay. Executive branch agencies will need to report to Congress to ensure their compliance with this requirement. Additionally, the funding bill prohibits any additional reductions in force — which is federal-government-speak for layoffs — through January 30, 2026, when the CR expires.
- In brighter news, the short-term funding bill’s passage will allow for consideration later this week of three appropriations bills that would fund certain departments and agencies for all of fiscal year 2026. The advancement of these bills, which are the product of monthslong bipartisan negotiations, is meant as a peace offering to Democratic appropriators after they were infuriated by Republicans’ rescissions package earlier this year. The three appropriations bills that are expected to move out of the Senate (out of twelve total bills) would respectively fund the Department of Agriculture and the FDA, the Department of Veterans Affairs and military construction projects, and the legislative branch’s operations. Hopefully, the remaining nine bills will be voted on shortly thereafter. These individual appropriations bills are supposed to be how the federal government gets funded — not the endless series of year-end omnibus packages and continuing resolutions that we have sadly become accustomed to.
The libertarian-adjacent Senator Rand Paul (R., Ky.) plans to vote against the bill and drag out its passage based on a couple of policy provisions. He opposes language long advocated by his Kentucky counterpart, Mitch McConnell, that would prohibit certain hemp products that were inadvertently legalized by the 2018 farm bill. Kentucky is home to the country’s second-largest hemp-production industry, which Paul argues the funding bill would obliterate. Paul also faults the CR for waiving PAYGO, a set of self-imposed “pay as you go” rules for Congress to offset the budgetary cost of tax cuts and mandatory spending increases. Unfortunately, waiving PAYGO requirements is a common bipartisan practice on Capitol Hill, as Paul himself recognizes.
Overall, however, the funding compromise is a win for Republicans who were eager to reopen the government with minimal policy concessions. One can tell because progressives are downright apoplectic over the deal that their colleagues cut. To be sure, Republicans could still cave disgracefully on extending Obamacare subsidies before the year ends. But, at least for now, conservatives don’t have too much policy to be upset over.