Senate on Edge: January Shutdown Looms as Enhanced ACA Subsidies Set to Expire

Alexander Bolton|The Hill

Dec 15•3 min read

Senators from both parties face the prospect of another government shutdown in late January after Republicans blocked a proposal to extend enhanced ACA subsidies set to expire in January. Progressives are urging Democrats to use the Jan. 30 funding deadline as leverage to force an extension, warning of large premium spikes and coverage losses. Analysts estimate 4.8 million could lose coverage in 2026 and more than 20 million could see higher costs, with marketplace premiums projected to rise about 26% if the credits lapse. A five-bill appropriations "minibus" that could fund roughly 85% of the government through September 2026 is stalled by conservative holdouts and unresolved House top-line decisions.

Senators from both parties are preparing for the possibility of another federal shutdown in late January after Republicans blocked a proposal to extend enhanced Affordable Care Act (ACA) subsidies that expire in January. The dispute — which helped trigger a 43-day shutdown in the fall — has reignited tensions in the Senate as progressives weigh using the Jan. 30 funding deadline as leverage to force an extension.

What’s at Stake

The enhanced subsidies helped lower premiums for people who buy insurance on the ACA marketplaces. Congressional analysts warn that failing to extend them could lead to an estimated 4.8 million Americans losing coverage in 2026 and more than 20 million facing substantially higher health-care costs. Insurers are projected to raise marketplace premiums by roughly 26% if the expanded tax credits lapse in January.

Political Maneuvering and Pressure

Liberal Democrats in the Senate reacted angrily after Republicans defeated a Democratic plan to extend the subsidies through 2028. Progressive senators are pushing to use the upcoming funding deadline as leverage — the same tactic employed in September and October — to force Republicans into concessions on health spending.

“The fight is not over,” Sen. Elizabeth Warren (D-Mass.) said after the vote. Sen. Bernie Sanders (I-Vt.) called the Republican defeat of the extension “an outrage,” warning the loss of tax credits “is going to result in a lot of pain for a lot of people.”

The Minibus And Leverage

A package of five appropriations bills — a so-called "minibus" — would fund roughly 85% of the federal government through September 2026 if passed and signed. Democrats warn that approving that package before the Jan. 30 deadline would strip them of leverage to demand a subsidy extension, since most government funding would already be in place.

Obstacles To Passage

Conservative Republican senators Sen. Mike Lee (R-Utah), Sen. Ron Johnson (R-Wis.) and Sen. Rick Scott (R-Fla.) have delayed the minibus, objecting to the number of earmarks, the inclusion of authorizing language they say belongs in separate bills, and the overall size of the package. House GOP leaders also have not finalized top-line spending numbers for 2026, leaving key funding levels unresolved for bills covering Labor, Health and Human Services, Defense and Commerce/Justice/State.

Flash Points That Could Trigger High-Stakes Fight

Senate Democrats suggested multiple potential catalysts could prompt high-stakes opposition to funding bills, including foreign policy moves or disputes over sensitive documents. One unnamed Democratic senator warned that if the minibus stalls, the likelihood of a shutdown increases significantly.

What’s Next: Lawmakers will watch whether the five-bill package clears the Senate and whether the House agrees on top-line spending. With the Jan. 30 funding deadline approaching, negotiations over ACA subsidies and appropriations will likely shape whether Congress repeats another shutdown showdown.