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Estimated reading time of this week’s update: 15 minutes
(1) APPROPRIATIONS and DEFENSE POLICY: Status of the Nine Unfinished Bills as Congress aims to avoid a January 31, 2026, partial shutdown; and the Defense Policy Bill.
Background: Last month, the Senate passed 60-40, and the House passed 222-209, the Continuing Appropriations, Agriculture, Legislative Branch, Military Construction and Veterans Affairs, and Extensions Act, 2026. The spending law was signed November 12, 2025, ending the 43-day government shutdown.
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.
A partial government shutdown will occur on January 31, 2026, if any of the 9 bills have not been completed by that date (and additional stopgap funding has not been provided).
Last week, Senate Appropriations Republicans released bill and report language for two of the unfinished bills, but did so without bipartisan agreement:
Senate Appropriations Republicans released the Energy-Water Development bill: Text | Rpt | Dem Stmt
Senate Appropriations Republicans released the Financial Services, General Govt (FSGG) bill: Text | Rpt | Dem Stmt
Will Congress complete another package of several bills by Christmas? Probably not. Despite ongoing negotiations, Majority Leader John Thune (R-SD) said early this week the Senate might not have time this month to pass another package of spending bills. The Senate is in session for only two more weeks, after this week; the House and Senate then break for the Christmas-New Years Recess.
What’s holding up negotiations? Principally, topline numbers: House and Senate Appropriators disagree on overall spending levels for FY 2026, with the White House and House Republicans pushing for major cuts below current spending levels. However, House Appropriations Chairman Tom Cole (R-OK) said it may be possible to negotiate some bills without an agreement on the topline number.
Defense Policy Bill: On a separate, but related track, is the National Defense Authorization Act (NDAA) for FY 2026. House and Senate leaders are aiming to complete the 2026 NDAA before Christmas, with a House-Senate compromise bill due to be released shortly.
Background: While the annual Defense Appropriations Bill provides line-item funding for defense programs, the annual Defense Authorization Bill or “NDAA” establishes policies and program levels for DoD programs.
The House passed its version of the NDAA in September authorizing about $890 billion, while the Senate passed its version in October authorizing about $32 billion more than the House version.
(2) THE SENATE WILL VOTE NEXT WEEK ON A DEMOCRATIC PLAN TO EXTEND “ENHANCED” AFFORDABLE CARE ACT FEDERAL SUBSIDIES, WHICH EXPIRE THE END OF THIS MONTH.
However, Democrats haven’t yet settled on a plan, and Republicans remain deeply split on whether to extend, replace, or do nothing on the enhanced subsidies.
In the meantime, millions of ACA enrollees are already experiencing huge spikes in premium costs as they sign up for 2026 coverage, and millions more are expected to drop coverage and become uninsured.
Background: During the government shutdown, Democrats pressed to include extension of expiring ACA enhanced subsidies in the spending law that reopened the government. President Trump and GOP leadership refused to include an extension of the enhanced subsidies in the spending law; Senate Republican Leader Thune instead offered a promise to allow a Senate vote by mid-December on a Democratic proposal to extend the enhanced subsidies (60 votes being required for passage).
Here’s the latest:
What Are “Enhanced ACA Subsidies?” The Affordable Care Act provides federal tax credits to subsidize the purchase of private health insurance for individuals and families (above the Medicaid eligibility ceiling). Enrollees select health plans offered through “marketplace exchanges.” The original ACA subsidies were available for people who have incomes up to 400% of the poverty line. During COVID, 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 2025 and will expire December 31, 2025, without congressional action.
The enhancements reduced net premiums to zero for some people with low incomes and made subsidies available to people with higher incomes for the first time—permitting anyone to qualify if standard health plans in their area would cost more than 8.5% of their income.
Expiration of the enhanced subsidies will, on average, more than double out-of-pocket costs for enrollees—although the amount of increase varies wildly based on income, age, family size, and geography, according to the nonprofit KFF.
According to KFF, Affordable Care Act premiums will rise on average by 26 percent next year, and the loss of enhanced subsidies would mean consumers have to devote more of their income to health care costs. As a result, out-of-pocket contributions could more than double, on average, due to the loss of enhanced subsidies.
Senate Democratic Leader Schumer told CNN on Monday that Democrats are still discussing what to include in a bill to extend the enhanced ACA subsidies.
At a Wednesday hearing of the Senate’s HELP (Health) Committee, Senators of both parties said the expiring subsidies need to be addressed, but offered no solutions on how to bridge differences between the two parties.
Chair of the Committee, Sen. Bill Cassidy (R-LA), has previously proposed shifting subsidy funds into Health Savings Accounts, which is opposed by Democrats as not a reasonable substitute for insurance coverage.
Sen. Lisa Murkowski (R-AK) commented, “We are going to need to have a short-term extension, but I think we can put reasonable [income] caps on.”
To see various recent proposals to address the expiring enhanced subsidies, link to last week’s TRILLIONS.
While Murkowski’s approach might work in the Senate, the House is more difficult, with many House Republicans ideologically opposed to extending any part of what they still call “Obamacare.” Last week, when the Trump White House suggested it might be willing to approve a temporary extension, it ran into significant GOP pushback.
Politico reports, “As the stalemate continues, conservative research and advocacy groups are barnstorming Capitol Hill to convince Republicans to stand their ground, arguing that Democrats have exaggerated the impact of letting the subsidies run out.”
However, Vern Buchanan (R-FL), Chair of the Ways & Means Health Subcommittee, told Politico, “We’ve got to put something together, otherwise we’re all going to face blowback.”
Further complicating the situation is the unresolved issue of abortion restrictions within Obamacare. According to Politico, for many Republicans, an expansion of abortion restrictions is a must-have in any tentative deal on the expiring enhanced subsidies. Specifically, they want to prohibit any insurance plan receiving a federal subsidy from covering abortion services.
So where is the White House on the enhanced subsidies? Trump’s pollster, who had earlier told him to extend the enhanced subsidies, is now telling him to change the subject and focus on drug prices.
(3) WH BUDGET DIRECTOR FIRST IN 50 YEARS TO FLOUT BUDGET COMMITTEE OVERSIGHT; and What is Vought Planning to Do with $100 million in taxpayer funds?
House Budget Committee Ranking Democrat Brandan Boyle, In a December 1st letter to the White House Office of Management and Budget, rebuked OMB Director Russell Vought for flouting Congress’s constitutional authority over spending and failing to appear before the Budget Committee (which has congressional oversight over OMB). The letter, co-signed by 15 House Members, said, in part:
We remain alarmed that you persist in implementing an extreme agenda that jeopardizes the economic security of the American people and shows open disregard for Congress’s constitutional power of the purse…
The OMB Director traditionally appears within a week of the release of the President’s Budget… (N)ot only has the Committee yet to hear from OMB, you have also found time for multiple closed door meetings with House Republicans. Under Democratic Chairs, the public was never shut out from these important exchanges. What is the Administration trying to hide?
Rather than dodge this Committee, we ask that you come forward in the light of day and give the American people answers about the impact of your policies — including higher costs and a worsening unemployment rate…
At your behest, OMB has disregarded Congress’ power of the purse, including the Impoundment Control Act of 1974 (ICA). The Government Accountability Office (GAO) has already found eight instances of the Administration disregarding Congressional spending decisions and violating the ICA. This includes impounding lifesaving National Institutes of Health research grants… GAO also found that the Administration illegally withheld funds for Head Start, infrastructure, and public-school improvements, further straining the economy and undermining programs families count on…
In addition, a legal requirement in our jurisdiction…requires OMB to publicly post information on all apportionment decisions. OMB illegally hid this information and violated the law. Today, it only partially posts this required information, even after a court order… Likewise, the Administration has spent money without Congressional appropriations…
If you fail to appear before this Committee before the end of the year, this will be the only Administration in the last 50 years to not send the OMB Director (to testify).”
If Vought ever does testify, TRILLIONS urges the Ranking Member to ask the Director what he intends to do with the $100 million in direct appropriations which congressional Republicans tucked away for OMB in President Trump’s July megabill (in section 90103).
(4) TARIFFS AND THE ECONOMY:
PAYROLLS FALL: Bloomberg reported on Wednesday that payrolls at U.S. companies fell by the most since 2023. ADP data showed a 32,000 decline in payrolls, driven by small businesses.
MANUFACTURING LOSSES: The Wall Street Journal reported on Monday that U.S. manufacturing contracted for the ninth straight month, blaming tariffs which have increased costs for producers.
COOLING RETAIL SALES AND WEAKENING CONSUMER CONFIDENCE: The Wall Street Journal reported last week that shutdown-delayed data showed cooling retail sales in September and weakening consumer confidence in November. “Taken together, the new and older data suggest the U.S. economy is heading into the all-important holiday season buffeted by a slowing labor market, continued inflationary pressures and signs consumers were easing their pace of spending and searching for bargains.”
COMPANIES ANTICIPATING TRUMP DEFEAT ON TARIFFS: Anticipating that the Supreme Court will find that President Trump exceeded his authority when he imposed global “reciprocal” tariffs, the New York Times reports that “a growing roster of companies in recent weeks has hired lawyers, filed lawsuits or submitted official claims to the U.S. government…in an early bid to secure a quick payout.”
TRUMP STILL PROMISING PHONY “DISTRIBUTIONS” FROM TARIFF REVENUES: As explained in detail in a previous issue of TRILLIONS, the U.S. is running nearly $2 trillion annual deficits. An increase in tariff revenues of $200 billion per year does not give us any “extra cash” to send out to taxpayers as “dividends”; it simply reduces, by a small fraction, our continuing and unsustainable annual deficits.
So why does Trump keep promising this? It’s simple: he is establishing a ruse for sending out checks to American voters prior to the 2026 midterm elections. The catch: those checks will be financed by more Treasury borrowing, which our Treasury Secretary will never admit. After all, Scott Bessent still won’t admit what every economist knows – that tariffs increase prices for American consumers and producers.
If you need more proof, Mr. Secretary, take a look at this week’s lawsuit filed by retail giant Costco, becoming the biggest company yet to demand a refund of Trump tariffs; and the Wall Street Journal’s editorial proclaiming “Costco’s lawsuit confirms who pays for tariffs.”
(5) OTHER MAJOR DEVELOPMENTS ACROSS GOVERNMENT:
CMS ANNOUNCES NEW SAVINGS FOR SENIORS ON 15 MAJOR DRUGS: The Centers for Medicare and Medicaid Services announced new price reductions on 15 major drugs of cancer and chronic disease. The price cuts result from negotiation authority established by the Biden Administration in the Inflation Reduction Act of 2022. Link here to see the list of discounts and how Medicare enrollees can access the discounted prices.
CLIMATE ROLLBACK: President Trump announced on Wednesday that he will weaken Biden-era automobile mileage standards that were designed to increase electric-vehicle sales and reduce carbon emissions. This comes at a time when China is capturing the global electric vehicle market.
JUDGE BLOCKS MEDICAID CUTS FOR PLANNED PARENTHOOD: A federal judge on Tuesday blocked the Trump Administration from enforcing in 22 states a provision of the July megabill (OBBBA) that cut off Medicaid funding from Planned Parenthood and local affiliates that perform abortions. The judge put her ruling on hold for seven days to allow the Administration to appeal.
RURAL HEALTH: CNN reports how life changed in a rural town that lost its health clinic after enactment of Trump’s megabill (OBBBA).
IMMIGRATION: The Washington Post reports that DHS agents swept Chicago to get “the worst” criminals; but many have no record. “Aggressive tactics have been deployed to round up more than 4,000 people, only a small portion of whom have major criminal records.” In a related story, Trump’s embrace of “remigration” echoes far-right parties in Germany and Austria. And Bloomberg reports that Trump’s immigration curbs threaten Social Security and Medicare.
SNAP FUNDS THREATENED: The AP reports that the Trump Administration will withhold funds for administering SNAP food aid in most Democratic-controlled states starting next week unless those states provide information on the immigration status of aid recipients.
U.S. CUTTING SCIENCE INVESTMENTS: The New York Times explains how a quiet policy change means the government is funding fewer grants in science and medicine.
CONFIDENCE IN DEMOCRACY AND INSTITUTIONS DECLINING: Gallup, in its Democracy for All Project found that: half of Americans say democracy is performing poorly; fewer than one in three think core institutions are working; and economic insecurity magnifies dissatisfaction.
SCOTUS TO HEAR ARGUMENTS ON POWER TO REMOVE HEADS OF INDEPENDENT AGENCIES: Next week, the Supreme Court will hear arguments in Trump v. Slaughter, in the battle over of the president’s power to remove the heads of independent federal agencies created by Congress. The case could potentially overturn a key 1935 decision—Humphrey’s Executor—where the Court recognized Congress’s ability to restrict the power of removal to one or more enumerated causes.
TRUMP CONTINUES TO CIRCUMVENT THE SENATE ON APPOINTMENT OF PROSECUTORS: The Washington Post reports that President Trump is continuing to go around the U.S. Senate in the appointment of federal prosecutors. In a related story, the New York Times reported on a U.S. Appeals Court decision that Trump appointee Alina Habba is an “unlawful U.S. Attorney.”
DONALD J. TRUMP INSTITUTE OF PEACE? You may remember from earlier this year that Trump’s DOGE office attempted to dismantle and effectively close the U.S. Institute of Peace. Trump has now renamed the organization the “Donald J. Trump Institute of Peace.” Read the AP story on the renaming.
WHITE HOUSE PERSONNEL PROBLEMS: Politico reports that President Trump has nearly doubled Joe Biden’s mark for nominees withdrawn from the Senate during the first year of his term.
ETHICS: Over the last week, President Trump pardoned the ex-Honduran President Juan Orlando Hernández who flooded America with Cocaine and was sentenced to 45 years, former Rep. Henry Cuellar who was indicted on bribery charges, and David Gentile, who was convicted for a $1.6 billion scheme that defrauded thousands of investors. In addition, the New York Times reported Sunday that David Sacks, the Trump Administration’s A.I. and Crypto Czar “has helped formulate policies that aid… many of his own tech investments.”
CHINA’S USE OF A.I.: The Washington Post reported this week that China is using A.I. to extend censorship and surveillance of ethnic minorities. This is an important read for those concerned about the erosion of due process and ethnic profiling in our own country over the last 11 months.
(6) SOLUTIONS – NEW FEATURE
This new feature of the TRILLIONS National Weekly will highlight nonpartisan solutions worthy of consideration.
How to end political prosecutions: a “prosecutor jury.” – WP op-ed
America desperately needs new health care ideas. Here are five. – WP op-ed
(7) SUGGESTED READS:
A sickening moral slum of an administration. – George Will
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.