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Estimated reading time of this week’s update: 15 minutes
(1) AFFORDABLE CARE ACT ENHANCED SUBSIDIES EXPIRED DECEMBER 31, 2025, SENDING ACA PREMIUMS FOR MANY SOARING AND LEAVING MANY WITHOUT COVERAGE; However, last month, 4 House Republicans Joined with Democrats to force a vote on extending enhanced subsidies. That vote will occur tomorrow (Thursday).
Background: During last fall’s government shutdown, Democrats’ primary goal was to extend expiring ACA enhanced subsidies. However, Republican leaders refused to include an extension in the stopgap spending bill that ended the shutdown—instead, promising a December Senate vote on a Democratic proposal to extend the enhanced subsidies for three years.
The 3-year extension fell short of the required 60 votes in the Senate, and shortly thereafter, the House GOP Leadership advanced an alternative health bill (HR 6703, summarized in our Dec. 21 TRILLIONS) that did not extend the subsidies. However, at the same time, a small group of moderate Republicans signed onto a House Democratic discharge petition which will force a vote tomorrow (Thursday) on the 3-year extension. Details follow.
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 but do not have access to affordable private health insurance. Enrollees select private health insurance plans offered through “marketplace exchanges” administered by their state, or by the federal government (for states that do not have their own 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 Americans.
The enhancements were originally enacted for two years, but were later extended through December 31, 2025—but have now expired.
Due to the expiration of enhanced subsidies on December 31, ACA subsidies have now reverted back to the original, more limited, levels. Expiration of the enhanced subsidies is projected to more than double marketplace premium payments in 2026 (on average)—although the amount of increases will vary significantly depending on income, age, family size, and state—and an estimated 2.2 million to 4.8 million people could lose coverage in 2026.
CNBC today reported that expiration of the enhanced subsidies—which are delivered as tax credits—could mean “astronomical tax bills” for many.
Moderates Force an Enhanced Subsidies Extension Vote Thursday: When House Republican Leadership last month barred moderate House Republicans from offering an amendment to extend the enhanced ACA subsidies, four House Republicans signed the Democrats’ discharge petition for a 3-year ACA extension—providing the 218 signatures required to force a House vote on the pending 3-year extension bill.
A preliminary vote today (Wednesday) advanced the bill 221-205, and the final vote will occur tomorrow (Thursday). Nine Republicans joined Democrats to advance the measure today.
While the Senate has already rejected the 3-year extension, House passage of the extension may put renewed pressure on moderate Senate Republicans to negotiate a bipartisan deal with Democrats for an extension.
Senate Majority Leader Thune said any such bipartisan package would have to include three elements: (1) minimum premium payments, (2) an expansion of Health Savings Accounts, and (3) address the “Hyde issue” — language that limits the use of federal funds for abortions. Senators have also reportedly been discussing an extension of the ACA enrollment period.
Today, Wednesday, the Wall Street Journal reported, Senate Republicans say a deal on an ACA extension is within reach that would continue enhanced subsidies for two years.
If an extension bill passes the Senate—and again passes the House if the Senate amends the bill—it is unclear whether President Trump would sign it. However, while he has been a vocal critic of Obamacare in the past, Trump yesterday urged “flexibility” on abortion restrictions—apparently reflecting his growing concern that the GOP could lose control of the House over spiraling health insurance premiums. Nevertheless, Politico reported that conservatives “balked” at Trump’s call to be flexible on abortion.
(2) PARTIAL SHUTDOWN LOOMS JANUARY 31, 2026, AS NINE SPENDING BILLS REMAIN UNFINISHED, but Appropriators made progress this week releasing a package of three bills on Monday, with the House to vote tomorrow (Thursday).
Background: In November, the Senate passed 60-40, and the House passed 222-209, a spending bill enacting 3 of the 12 regular appropriation bills, (Agriculture, Legislative Branch, and Military Construction-Veterans Affairs), and providing stopgap funding through January 30, 2026 for agencies funded by the 9 unfinished appropriation bills.
The 9 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.)
Some progress—3 more bills negotiated: On Monday of this week, House and Senate negotiators released final bipartisan versions of three bills, and the House will vote on all 3 bills tomorrow (Thursday):
Commerce, Justice, Science, and Related Agencies (Text | Sen.GOP Summ | Sen.Dem. Summ | Hse GOP Summ | Hse Dem Summ | Press Rel. (Sen.Dem) | Press Rel. (Hse. Dem) | Explanatory Statement | Earmarks)
Energy and Water Development (Text | Sen.GOP Summ | Sen.Dem.Summ | Hse GOP Summ | Hse Dem Summ | Press Rel. (Sen.Dem) | Press Rel. (Hse.Dem) | Explanatory Statement | Earmarks)
Interior, Environment, and Related Agencies (Text | Sen.GOP Summ | Sen.Dem. Summ | Hse GOP Summ | Hse Dem Summ | Press Rel. (Sen.Dem) | Press Rel. (Hse.Dem) | Explanatory Statement | Earmarks)
Some takeaways on the 3-bill minibus: GovExec reports that the bill rejects many Trump Administration proposals, from reorganizations to program eliminations; Politico reports the bill makes some cuts but rejects severe reductions sought by the White House to energy and environment programs; and Science reports the bill rejects major cuts to NSF, NASA, and energy science.
A partial government shutdown will occur on January 31, 2026, if any of the nine bills have not been enacted into law by that date and additional stopgap funding has not been provided for the unfinished bills.
Stay tuned to TrillionsWeekly.com for daily updates on appropriations bills and access to all bill text, report language, earmarks, and summaries.
(3) THE ECONOMY, TARIFFS, and AI
5 Major Issues: Axios published a useful outlook piece on Monday about 5 major economic issues they’re tracking in 2026:
1. How AI will impact the labor market;
2. How much the OBBBA tax cuts will boost the economy;
3. Whether the Supreme Court will strike down Trump’s power grab on tariffs;
4. Who Trump’s Fed pick will be and whether he will maintain the Fed’s independence;
5. How affordability concerns will impact the midterm elections.
Declining Manufacturing Activity: Bloomberg reports that US manufacturing activity shrank in December by the most since 2024, new orders contracted for a fourth month, and export bookings remained weak.
Rare Earths: The New York Times ran an in-depth analysis of China’s “six-decade campaign to dominate rare earths.” In 2026, we may see China’s dominance of rare earths used as a justification for Administration moves against Greenland—even though their “rare-earth deposits are low-grade, costly, and at least a decade from production.”
Where the Economy is Heading: The Washington Post published 10 charts showing where the economy is heading: “AI spending is up, gas prices are down and inflation is complicated.”
Wealth Gap: The Financial Times reported on the widening wealth gap in Trump’s K-shaped economy; and Politico reported on the “the extent to which wealthy Americans are driving growth.”
OpenAI: The Economist explains why OpenAI—in a perilous position—faces a make-or-break year in 2026.
Crypto Concerns: Politico reports that “bank CEOs from around the country are about to wade into the fight” over how digital assets are regulated. Specifically, “the American Bankers Association is now trying to harness the political capital of its members… to press lawmakers for bill language that would ban crypto exchanges from paying (an annual percentage) yield to stablecoin holders through rewards.”
Trump and Big Tech: The NY Times reports, “from AI to Chips, Big Tech is getting what it wants from Trump… (but) the mutually beneficial alliance is causing concern among some conservatives,” especially efforts to block state laws on A.I.
Tariffs and Prices: The NY Times explores: “Why Haven’t Trump’s Tariffs Had a Bigger Impact? Steep import taxes have raised prices and affected U.S. businesses, but not quite as much as expected. A new report offers some reasons”; Bloomberg explains why “Hedge Funds are the Winners in Trump’s Trade War,” and reports that “more than 1,000 companies are suing Trump over his tariffs.”
The Optimus Gamble: Wall Street Journal reports on Elon Musk betting Tesla’s future on building humanoid robots.
(4) MAJOR DEVELOPMENTS ACROSS GOVERNMENT
Venezuela: The most consequential development of the last week was President Trump’s abduction of the Venezuelan dictator Nicolás Maduro and his wife. The action shattered international law and norms on the sovereignty of foreign nations and raised serious legal issues on the use of force, head-of-state-immunity, and the scope of presidential power absent congressional authorization for the use of force.
Concerns about Trump’s rash actions deepened with threats against Cuba, Columbia and Greenland—the threats against Greenland placing the U.S. commitment to the NATO coalition in doubt. For more background:Scotusblog: Maduro’s arrest places these Supreme Court rulings in the spotlight.
National Law Review: Do U.S. courts have jurisdiction over Maduro’s criminal case?
Just Security: Maduro Capture Operation and the President’s Duty to Faithfully Execute U.N. Charter.
Le Monde: Concludes the strike and “international abduction” lack self‑defense or Security Council authorization and therefore breach Venezuelan sovereignty.
DW: International law scholars characterize the operation as an unlawful use of force under UN Charter Article 2(4) and describe the seizure as kidnapping absent Venezuelan consent.
European Journal of International Law: Trump’s Illegal Attack on Venezuela and Its Consequences.
Fortune: Explains the DOJ’s reliance on a 1989 Bill Barr opinion permitting “forcible abductions.”
HOUSE OVERRIDE VOTES ON THURSDAY: House will vote Thursday to override Trump vetoes of 2-GOP-backed bills. The first bill, the AVC Act, is a major drinking water project in Colorado. The second is a measure to spend $14 million to protect an area known as Osceola Camp within the Everglades National Park that is inhabited by members of the Miccosukee tribe of Native Americans. Why did Trump veto these broadly supported bipartisan bills? Retribution. He’s mad because Colorado has not released his ally Tina Peters from prison (after being convicted on state charges for illegally tampering with voting machines), and he’s mad at the Miccosukee tribe for opposing his immigrant detention center in the Everglades. House passage is expected, but Politico says it’s not clear if the overrides will clear the Senate.
Electricity Rates: Washington Post explains why data centers’ voracious needs for electricity are reshaping the political landscape; and the Wall Street Journal reports the Trump Administration wants to control how data centers connect to the power grid.
Federal Employee Cuts: Our new Federal Agency Cut Tracker follows the latest news on agency cuts. Axios reports there are 271,000 fewer federal employees at the start of 2026, than one year ago; and the Washington Post reports that DHS Secretary Kristi Noem has said she wants to reduce the Federal Emergency Management Agency’s staff by half.
Immigration: A judge’s ruling authorizes HHS to resume sharing Medicaid data with deportation officers; ICE plans a $100 million “wartime recruitment” push aiming to hire thousands of new officers, including at gun shows; the AP says faith leaders supporting targeted immigrants brace for a tough year ahead; and what America might look like with zero immigration.
Vaccines and Public Health: The Washington Post reports that “U.S. vaccination rates are plunging. Rocked by pandemic politics, the nation’s shield against infectious disease is shrinking”; and on Monday, the Trump Administration reduced the number of vaccines it recommends for every child.
Illegal Presidential Impoundments Continue: CNN reports that the Trump Administration is freezing billions in social services funding to five Democratic states—continuing a year-long blitz of illegally withholding congressionally appropriated funds.
Biggest Defense Spending Increase in History: President Trump on Wednesday said he would ask Congress for a $1.5 trillion defense budget in FY 2027, a massive increase of more than $500 billion per year.
Housing: President Trump said Wednesday he wants to block large institutional investors from buying houses, to address affordability.
Election Interference: The Washington Post reports that “thousands of mail-in ballots could be discounted under (a) new post office policy.”
(5) SUGGESTED READS
The Biggest Casualties of Trump’s Year of Cuts - Time
“Shutting down USAID is already estimated to have contributed to hundreds of thousands of deaths…”Trump’s Greenland fixation curdles into a crisis – WP / Ignatius
How RFK Jr. upended the public health system - WP
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: Charles S. Konigsberg 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.
Charles S. Konigsberg is also author of the book, Trillions: A Primer on Federal Spending, Taxes, the U.S. Debt Ceiling, and Fiscal Law. Click here to purchase.