How the GOP’s tax law teed up Democrats’ shutdown fight over Obamacare
By Michael Jones
When congressional Democrats unveiled their counterproposal last month to a Republican-backed short-term funding bill to keep the government open through mid-November, it included several provisions the GOP plan did not—chief among them, a permanent extension of the Affordable Care Act’s enhanced premium tax credits. Those subsidies are the main reason there’s still no end in sight to the standoff as the shutdown enters its first full week. Nearly every House and Senate Democrat has refused to back any deal that doesn’t also secure the ACA credits, while most Republicans are content to let them expire at the year’s end.
At the heart of the GOP’s opposition is the issue of cost. The nonpartisan Congressional Budget Office estimates that making the credits permanent would add $350 billion to the deficit over ten years while keeping 3.8 million Americans insured. Democrats counter that Republicans had no such concern when they made corporate and high-end tax cuts permanent in their $3.4 trillion reconciliation law—financed by more than a trillion dollars in safety-net cuts—while providing temporary tax relief for working families. Now, they argue, those same Republicans are demanding Americans accept that permanent, affordable healthcare is somehow too much to ask.
“Republicans spent all year focused on their One Big Ugly Bill so they can permanently extend massive tax breaks for the wealthy, the well-off and the well-connected, for their billionaire donors in order to subsidize the lifestyles of the rich and shameless. That’s what they’ve done all year,” House Minority Leader Hakeem Jeffries (D-N.Y.) told reporters on Friday. “And these tax breaks for the wealthy and the well-off were scheduled to expire on December 31, but they spent months obsessed with rewarding their billionaire donors with massive tax breaks, but now claim that the Affordable Care Act tax credits, which expire at the same time as those tax breaks for their wealthy friends? No, they can’t be bothered.”
The ACA’s enhanced premium tax credits were enacted under the 2021 American Rescue Plan, expanding access to affordable health coverage during the pandemic. The temporary expansion lowered the premium costs of millions of Americans buying coverage on the ACA marketplaces by increasing the financial assistance available and capping premiums at 8.5 percent of income. For the first time, Americans earning above 400 percent of the federal poverty level became eligible for subsidies, while lower-income enrollees saw their costs reduced to zero.
Initially set to expire at the end of 2022, the subsidies were extended through 2025 in the Inflation Reduction Act signed by President Joe Biden in August 2022. That extension preserved lower costs for roughly 15 million Americans, preventing widespread premium spikes and coverage losses that analysts warned could have forced millions off the exchanges. The credits remain a central pillar of the ACA’s coverage framework—and one of Democrats’ top healthcare priorities—because they shape the affordability of marketplace plans.
For some Democrats—especially progressive advocates of Medicare for All—the enhanced tax credits did not go far enough. They argue that even before the pandemic, too many Americans were left in a coverage gap that the Affordable Care Act couldn’t close. The official end of the global health emergency didn’t erase the structural inequities that necessitated federal intervention in the first place—it only strengthened the case for keeping those supports in place permanently.
But Republicans insist the first order of business is reopening the government and passing full-year appropriations bills before turning to the premium tax credits. Time is running out, though. Open enrollment begins in less than a month and insurers in several states have already started sending notices of higher premiums for 2026 coverage. The longer Congress waits, the greater the risk that millions of Americans will face sticker shock—or drop their coverage altogether—because Washington couldn’t agree on how to keep health insurance affordable.
For what it’s worth, Democrats note that Congress wouldn’t be facing this eleventh-hour scramble had Republicans supported an amendment to extend the ACA credits during one of the three marathon voting sessions held during deliberations over the GOP’s One Big Beautiful Bill Act. They argue that there was time to act, but that Republicans repeatedly chose not to. And even Republicans who oppose the Affordable Care Act’s subsidy structure acknowledge the political reality that the enhanced premium tax credits are deeply popular among the public. Allowing them to lapse amid an affordability crisis—when families are already struggling with higher grocery, rent, childcare, and utility costs—would amount to political malpractice.
The pressure is compounded by the economic fallout from President Trump’s trade war, which could soon force billions in taxpayer bailouts to struggling farmers. And because the credits benefit Americans in every state, including red districts, Republicans have a clear incentive to find a fix before the subsidies expire.
But as negotiations stall, Rep. Jasmine Crockett (D-Texas) told reporters last week that Democrats have little incentive to deal with Republicans who won’t even acknowledge the human cost of inaction.
“The idea that we won’t stand up for something as basic as healthcare. I mean, we’re talking about whether or not people live. I don’t see why we would [reopen the government without an extension]. Our constituents don’t want us to do harm to them, and unfortunately, that’s all they’ve gotten since this administration has come in,” Crockett said. “And so to further shrink the economy in this way by saying, ‘Hey, we know things are already unaffordable. Let’s go ahead and add another dagger into your chest by making your healthcare unaffordable to the extent that you literally lose your life.’ I just don’t know how you negotiate with somebody’s life. The question is: How much are your constituents’ lives worth?”
Michael Jones is an independent Capitol Hill correspondent and contributor for COURIER. He is the author of Once Upon a Hill, a newsletter about Congressional politics.
