Dems Wield Obamacare Subsidies as Sword Over Shutdown Talks

Will Republicans in Congress hand Democrats a massive health care concession to avoid a government shutdown at the end of the month? That’s a question that has Capitol Hill abuzz.

As Congress faces an end-of-September deadline to fund the government and avert a shutdown, Senate Minority Leader Chuck Schumer, D-N.Y., is demanding that Republicans make concessions in terms of health care subsidies.

“The American people are hurting because of how [Republicans] have decimated health care. We need bipartisan negotiation to undo that damage,” Schumer told reporters after meeting with House Minority Leader Hakeem Jeffries, D-N.Y.

Schumer is in a position of both power and of vulnerability as he approaches funding negotiations, observers say.

While Democrats hold some leverage, since their votes are needed to end debate on funding, Schumer is also under extreme intraparty pressure to secure concessions from Republicans after facing backlash in March for voting for a continuing resolution or stopgap funding bill.

Jeffries similarly drew a hard line on demanding some yet-to-be-determined health care concession from Republicans.

“We will not support a partisan spending agreement that continues to rip away health care from the American people. Period. Full stop,” he said.

The battle lines are quickly being drawn around expiring COVID-era health care subsidies. 

At the end of 2025, enhanced premium tax credits for former President Barack Obama’s signature Affordable Care Act are set to expire.

Those enhanced credits were introduced during President Joe Biden’s administration under the American Rescue Plan Act to subsidize the cost of health care premiums as a response to the COVID-19 pandemic and then were further extended, but are set to expire at the end of 2025 by Biden’s Inflation Reduction Act.

Now, Republicans have to decide whether or not to extend the enhanced tax credits. But they have some reason for treading with caution around health care issues: In the 2018 midterms, Republicans lost control of the House after an attempt to repeal Obamacare.

Senate Majority Leader John Thune, R-S.D., told Punchbowl News in a recent interview that Congress will most likely need a short-term, stopgap funding bill to provide more leeway for negotiations, but that there will be no Obamacare subsidy deal in exchange for Democrats’ votes on a short-term continuing resolution.

“Not on a seven week [continuing resolution], no, no,” Thune said of a potential deal with Democrats on the issue, adding:

I think this is an issue that will get dealt with in some way—I mean, whether we do anything or don’t do anything.

We got a lot of people, and I’m kind of in the camp of [people who argue] those are [spending increases] for COVID, and we’ve got a serious problem that’s going to cost us over $300 billion to fix this if we stay at those enhanced levels, but we got people who are in different camps on that.

Thune explained, “If we don’t do something, it would go back to the pre-pandemic level … . They’d still be there. I mean, you still got Obamacare subsidies, premium tax credits for people to get insurance, but they wouldn’t be the enhanced level that you see now.”

Meanwhile, in the House, the notion of ceding ground to Democrats on the matter is met with disgust among many fiscal conservatives.

“Look, the bottom line is that if the Democrats wanted them to last forever, they should have put that in the bill,” House Freedom Caucus Chairman Rep. Andy Harris, R-Md., previously told The Daily Signal. “The Inflation Reduction Act extended COVID-era enhanced subsidies until the end of 2025. COVID is over. The Democrats’ law is going to expire, and I think it should expire. It’s too expensive to renew.”

He added:

All this does is return us to the pre-COVID level of subsidies. Well, that’s the level that was passed by the Democrats. They should be happy with that in the Obamacare bill. But it’s at a cost of over $40 billion a year.

If someone wants to propose how we pay for it, I might consider supporting it, but no one’s proposing how to pay for it.

Rep. Scott Perry, R-Pa., also a member of the Freedom Caucus, previously told The Daily Signal “Republicans should not support the continuation of that in any way.”

But it is likely that Democrats in the Senate, where the need for some level of bipartisanship is inevitable, will try to build up as much pressure as possible to force major concessions on health care.

Sen. Elissa Slotkin, D-Mich., has urged President Donald Trump to “walk back the rise in price to everyone on Obamacare.”

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