Shutdown Update: $1.5 Trillion in Demands

The government is on day 15 of the shutdown, and Democrats in the U.S. Senate are holding out for $1.5 trillion in healthcare spending. 

After refusing to pass the clean continuing resolution (CR) that passed the U.S. House on September 19, Senate Democrats offered a counterproposal. Neither the clean CR passed by the House nor the CR proposed by the Senate Democrats has passed the Senate. Refusal to budge by Democrats has caused the government shutdown to continue for two weeks, while government employees are furloughed or laid off. 

The items in the holdup are to permanently extend the expanded premium tax credit for purchasing health insurance and provide additional funding for Medicaid for illegal immigrants.

The Affordable Care Act Subsidies, specifically the enhanced premium tax credit, are set to expire at the end of 2025 thanks to the sunsetting of the American Rescue Plan Act, but the Democrats want to extend it. The original expansion of this tax credit occurred in 2021 and was set to expire in 2025. The extension would continue to subsidize healthcare premiums for those with incomes higher than 400% of the Federal Poverty Level. If allowed to expire, the premium tax credit will still be available for those with incomes lower than 400% of the federal poverty level.

Democrats want to permanently extend the enhanced premium tax credit, but it’s costly to taxpayers. The Centers for Medicare & Medicaid Services gives the enhanced subsidy credit for the growth in HealthCare.gov insurance plans. Enrollment increased from 9.2 million enrollees in 2020 to 21.8 million in 2025, with 93% of them being subsidized by this tax credit. The Congressional Budget Office estimated that the enhanced tax credit and expanded eligibility would increase federal outlays by $22 million for fiscal years 2021 through 2030. Further, the Joint Committee on Taxation attributes a net revenue loss of $129.2 billion in fiscal year 2025 to the enhanced premium tax credit. 

Not only would giving in to these requests continue increased government spending, but it would repeal all of the health savings included in the recently passed tax cuts (the One Big, Beauitful Bill Act). The Committee for a Responsible Budget estimates that this proposed continuing resolution would add $1.5 trillion to the federal debt. America already has a large debt of $37 trillion and growing. Total medicaid spending in fiscal year 2024 reached $918 billion, and with extended subsidies, the cost will continue to grow.

Bottom Line:

Instead of forcing these policies into a continuing resolution after Congress has already voted to repeal them, Democrats need to recognize there is a proper way to negotiate policy priorities. Furloughing employees and causing veterans to suffer from a lack of services is not the right way.