TRILLIONS National Weekly – Dec. 16, 2025
ACA Enhanced Subsidies Headed for Expiration Dec. 31 after GOP Leadership Rejects Extensions; Partial Government Shutdown Looms Jan. 31; Tariffs & The Economy; Major National Developments
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(1) SENATE DEFEATED DUELING HEALTH BILLS LAST WEEK; HOUSE TO VOTE THIS WEDNESDAY, BUT EXPIRATION OF ENHANCED SUBSIDIES REMAINS LIKELY.
Background: During the government shutdown, Democrats’ primary goal was to include extension of expiring ACA enhanced subsidies in the spending law that ended the shutdown. However, President Trump and GOP leadership refused to include an extension, instead promising a December vote on a Democratic proposal to extend the enhanced subsidies. That vote occurred last Thursday, as well as a vote on a Republican alternative. Both measures fell 9 votes short of the required 60 votes.
What Are “Enhanced ACA Subsidies?” The ACA (Obamacare) provides federal tax credits to subsidize the purchase of private health insurance for individuals and families who earn too much to qualify for Medicaid. Enrollees select private health insurance plans offered through “marketplace exchanges.” The original ACA subsidies were available for people who have incomes up to 400% of the poverty line. In 2021, Congress enacted “enhanced” ACA subsidies to expand coverage during the pandemic—more than doubling the number of ACA enrollments to over 24 million. The enhancements were originally enacted for two years, but were later extended through December 31, 2025—after which time, ACA subsidies will drop to the original, more limited, levels—absent an extension.
Expiration of the enhanced subsidies will, on average, more than double out-of-pocket costs for enrollees—although the amount of increase varies significantly depending on income, age, family size, and state—and an estimated 4.8 million people will lose coverage in 2026 if enhanced premium subsidies expire. Read more HERE on the impact of expiring enhanced subsidies.
Last week, the Senate, in a 51-48 vote (short of the required 60 votes) failed to advance a Democratic bill to extend for 3 years the expiring ACA enhanced subsidies (S. 3385); and in another 51-48 vote failed to advance a Republican bill to shift ACA enhanced subsidy funds into Health Savings Accounts (HSA) (S. 3386). Read more from: AP | WSJ | WP | Politico.
This Week’s House Action: This Wednesday, the House is planning to vote on a GOP health bill, detailed below, that does not include an extension of expiring subsidies. A House GOP leadership agreement with Republican moderates to allow a vote on an amendment to extend enhanced subsidies has reportedly fallen apart (due to the leadership’s demand that its cost be fully offset).
However, it is possible that a discharge petition in the House could still force the chamber to vote on a subsidies extension.
The House GOP health bill has 5 parts:
“Association health plans“ allowing employers to band together to purchase coverage;
Transparency requirements for pharmacy benefit managers to help control costs (PBMs negotiate drug prices on behalf of insurers and large employees);
Restoration of payments to health insurers for cost-sharing reduction (which Trump canceled during his first term);
Legislation allowing employers to offer workers tax-advantaged funds to pay for individual health insurance, in lieu of offering traditional group plans; and
“Stop-loss” insurance aimed at expanding employers’ access to insurance policies protecting against catastrophic health costs from a few employees.
Axios reports that Larry Levitt, Executive VP for Health Policy at KFF summed up the bill as follows: “The House GOP health plan does not include any federal funding to help ACA enrollees pay for premiums or health care directly.“
Several slim possibilities remain for House action to extend enhanced ACA subsidies. There are two discharge petitions being circulated that would force House Floor votes on bipartisan proposals to extend the expiring subsidies, and House Democrats have a third discharge petition to force a vote on the Democratic extension proposal.
One bipartisan petition, filed by Reps. Brian Fitzpatrick, R-Pa. and Jared Golden, D-Me., would force a vote on a bill that includes a two-year subsidy extension and contains provisions designed to combat fraud in the ACA marketplace and to address concerns about PBMs boosting drug costs.
Another bipartisan petition from Reps. Jen Kiggans, R-Va. and Josh Gottheimer, D-N.J., would force a vote on a one-year ACA enhanced subsidy extension and would include new income caps limiting who qualifies for the enhanced credit.
The Democrats’ discharge petition would force a vote on a bill for a three-year extension of enhanced ACA subsidies (same as the Senate Democratic bill that failed to get 60 votes last week).
In order for any of the extension discharge petitions to succeed:
All House Democrats would have to join at least 4 moderate Republicans to get 218 signatures on a discharge petition. “We’re actively reviewing those two (bipartisan) discharge petitions and we’ll have more to say about it early next week,” House Democratic Leader Jeffries said last week; and
Senate Majority Leader Thune would have to be willing to keep the Senate in session for several additional days to reach a vote, or call the Senate back into session between Christmas and New Years, neither of which will happen unless an extension bill appears likely to get 60 votes; and
None of this will happen unless President Trump signals he would be willing to sign a bipartisan extension bill—which appears unlikely given the visceral hatred of “Obamacare” he has stoked in his political base for years.
For coverage of House action on healthcare, visit our ACA webpage.
(2) PARTIAL SHUTDOWN LOOMS JANUARY 31, 2026 AS NINE SPENDING BILLS REMAIN UNFINISHED, AND CONGRESS FAILED TO MOVE ANY BILLS THIS MONTH.
Background: Last month, the Senate passed 60-40, and the House passed 222-209, the Continuing Appropriations, Agriculture, Legislative Branch, Military Construction-Veterans Affairs, and Extensions Act, 2026. In addition to passing 3 of the 12 regular appropriation bills, (Ag, Leg., and MilCon-VA), the November spending law included temporary stopgap funding for agencies funded by the nine unfinished appropriation bills, lasting through January 30, 2026.
The nine unfinished appropriation bills are: Commerce-Justice-Science; Defense; Energy-Water; Financial Services-Gen. Govt. (FSGG); Homeland Security; Interior-Environment; Labor-HHS-Education; State-Foreign Operations; and Transportation-HUD. (Click on the bill names for the latest status of each bill.)
A partial government shutdown will occur on January 31, 2026, if any of the nine bills have not been completed by that date (and additional stopgap funding has not been provided for the unfinished bills).
Senate Appropriators had hoped to move a 5-bill package (Defense, L-HHS-Ed, C-J-S, Int-Env, and T-HUD) prior to Christmas, but that process fell apart when three Senate Republicans—Sens. Mike Lee (R-Utah), Ron Johnson (R-Wis.) and Rick Scott (R-Fla.)—objected to the number of earmarks in the bill and the inclusion of non-appropriations provisions.
Another key issue holding up the appropriations package: House and Senate Appropriators disagree on overall spending levels for FY 2026, with the White House Office of Management and Budget and House Republican appropriators pushing for major cuts below current spending levels—and Senate Republicans generally more inclined to negotiate bipartisan bills with Senate Democrats.
Outlook: partisan differences become a far greater impediment with the mid-term election year beginning next month. Another government shutdown—this time, for the agencies funded by the 9 unfinished 2026 bills—is a very real possibility, especially if there is no progress extending expiring enhanced ACA subsidies.
(3) TARIFFS AND THE ECONOMY
Recession Risk? Bloomberg reports “Moody’s puts the risk of a 2026 recession at about 42%. (Zandi says in a healthy economy that number is more like 15%.) Analysts Bloomberg surveyed are also tepidly optimistic, forecasting 2% gross domestic product growth and a 30% chance of recession.”
In a related story, consulting giant McKinsey is reportedly planning thousands of job cuts.
Federal Reserve: President Trump said last week he is focusing on Kevin Warsh or Kevin Hassett to lead the Federal Reserve; Jerome Powell’s term as Fed Chair ends in May. Also last week, the Fed lowered its key interest rate—the federal funds rate, which is the overnight rate at which banks lend reserves to one another—by a quarter-point.
Trump’s Approval on Handling the Economy and Immigration is Dropping: An AP-NORC poll finds that approval of President Trump’s handling of the economy and immigration are down about 10 points since March.
Politico reports the Administration is racing to finalize tariff payments in order to hamstring possible refunds if the Supreme Court throws out Trump’s global tariffs as exceeding the authority delegated by Congress.
President Trump’s Outlandish Investment Claims: We have become accustomed to President Trump making up numbers. Perhaps his most outlandish claim, yet, is that he has personally secured $18 trillion in new foreign investments in the U.S. PolitiFact brings those numbers down to earth.
Wall Street Journal wrote over the weekend that “everyone got Trump’s tariffs wrong,” with predictions either “buoyant or dire.”
TRILLIONS: Our take is that most mainstream economists accurately predicted the Trump tariff taxes on imports would raise prices and that is starting to happen. (Initially, companies tried to avoid losing market share by absorbing some of the costs of the tariff taxes, but that short-term strategy is waning and prices are starting to rise.) In addition, mainstream economists predicted tariffs would not lead to growth in manufacturing jobs because economic uncertainty hinders investment—and that has been the result, with manufacturing jobs declining.
Trump Repeats First Term Agriculture Bailout: In his first term, President Trump’s tariffs shut down foreign markets for U.S. agricultural goods and he had to rescue the agricultural sector with an expensive bailout. Here we go again: Wall Street Journal reports on the new $12 billion agriculture bailout.
(4) OTHER MAJOR DEVELOPMENTS ACROSS GOVERNMENT:
ANOTHER BUDGET RECONCILIATION BILL: The Hill reports that some Republicans are urging their leadership to engineer another fast-track, filibuster-proof budget reconciliation bill in 2026—this time to address healthcare affordability.
UKRAINE: Reuters reports that he EU last week agreed to indefinitely freeze Russian assets held in EU banks, which removes an obstacle to using the cash to help Ukraine defend itself against the ongoing Russian invasion. This is particularly important since Ukraine is no longer receiving direct support from the U.S.
VETERANS HEALTH CUTS: The Washington Post reports that the Department of Veterans Affairs plans to eliminate as many as 35,000 health care positions this month. “Employees warn that the contraction will add pressure to an already stretched system, contributing to longer wait times for care.”
WHY DOES TRUMP DISDAIN EUROPE: In the aftermath of President Trump’s new National Security Strategy deeply critical of Europe (and warning of “civilizational erasure”), Politico analyzes how Trump’s foreign policy is rooted in his MAGA ideology.
REPUBLICANS PUSH BACK AGAINST TRUMP: The Washington Post reports on Indiana Republicans rejecting President Trump’s gerrymandering ploy, and GOP House Members who voted to overturn Trump’s executive order ending union rights at federal agencies.
VACCINES AND PUBLIC HEALTH: Measles cases are now surging in the U.S. among non-vaccinated children, after the disease had been eliminated in the U.S. due to routine vaccinations; and the Trump Administration is now planning to place a black box warning on Covid vaccines to discourage their use—after Trump, in his first term, funded the massive effort to develop the vaccines.
SOCIAL SECURITY DISABILITY: The New York Times reports on changes to SSDI under consideration by the Administration.
IMMIGRATION AND VISA CHAOS: Over the last week, President Trump has been criticized for canceling citizenship ceremonies, demanding that tourists from Europe turn over their social media histories, allowing wealthy individuals to purchase their way into the U.S. under his new $1 million “gold card visa” program, and is being sued by states over his new $100,000 fee for H-1B applications.
TRUMP’S DEMAND FOR A CUT OF NVIDIA’S CHINA SALES: Politico asks if this is a tax and, if so, does it violate Congress’ constitutional authority over raising revenues?
NATIONAL GUARD DEPLOYMENTS: Last week, a Federal Judge ordered President Trump to end his deployment of the California National Guard in Los Angeles, against the wishes of the state.
TRUMP’S WHITE HOUSE DEMOLITION CHALLENGED: President Trump’s demolition of the East Wing has been challenged in court by the National Trust for Historic Preservation.
MORE CENTRALIZATION AND DISREGARD OF STATES’ RIGHTS: President Trump signed an executive order this week instructing federal agencies to withhold broadband infrastructure funding from states attempting to regulate Artificial Intelligence. Reuters reports that “the order might be opposed by some of the president’s staunches rural supporters,” who rely on the funding to expand broadband to rural communities.
(5) SUGGESTED READS:
Trump May Be Losing His Touch. At the end of his 11th month, he’s surrounded by mood shifts, challenges and ominous signs. – WSJ / Noonan
Europe’s center is barely holding – and Trump plans to blow it apart - Politico
Speaking engagements and press interviews can be scheduled by calling: (301) 509-5688. Email comments, suggestions, and questions to: info@capitolpublicpolicy.com.
About the author: served as Assistant Director at the White House Office of Management and Budget for three successive Budget Directors; General Counsel at the U.S. Senate Finance Committee, where he had principal responsibility for managing federal budget and debt limit legislation; Minority Chief Counsel at the U.S. Senate Rules & Administration Committee where he advised the ranking member on budget, appropriations, trade, and tax legislation; Staff Attorney at the U.S. Senate Budget Committee where he had responsibility for federal fiscal law issues including the Impoundment Control Act and drafted the first explanation of the congressional budget process; Director of Congressional Affairs at the Consumer Financial Protection Bureau and AmeriCorps; and staff director of a national bipartisan budget task force. Speaking engagements and press interviews can be scheduled by calling: (301) 509-5688. Email comments, suggestions, and questions to: info@capitolpublicpolicy.com.
He is author of the book, Trillions: A Primer on Federal Spending, Taxes, the U.S. Debt Ceiling, and Fiscal Law. Click here to purchase.
He is also Publisher of:
Appropriations.com which tracks the 12 appropriation bills and presidential impoundment developments each day;
andGovBudget.com which tracks major developments, by subject area, each day including: ACA – Obamacare – Expiration of Enhanced Subsidies | Law & Democracy | Cut Tracker | WH-OMB-DOGE | Economic News | Federal Taxes | Tariffs | Health and Human Services Programs | Debt, Deficits and Debt Limit | Discretionary Spending Programs | Mandatory Spending Programs | Immigration | Disabilities Programs | Defense | Climate/Energy | Budget Process.