Shut Down Threat Intensifies as Democrats Push for Obamacare Subsidy Extension

By Charlie McCarthy | Monday, 15 December 2025 10:21 AM EST
The possibility of a government shutdown next month has become more likely after bipartisan talks failed to secure an extension of Obamacare subsidies.

Senators in both parties are now openly bracing for another shutdown fight as Democrats signal they could again use the Jan. 30 funding deadline as leverage to force Republicans to extend enhanced Affordable Care Act marketplace tax credits that expire in January.

The same issue helped trigger the record 43-day shutdown that consumed much of the fall legislative calendar.

Progressives were livid after Republicans blocked a Democrat bill to extend the subsidies, with Sen. Elizabeth Warren (D-Mass.) declaring “the fight is not over,” and Sen. Bernie Sanders (I-Vt.) calling the vote “an outrage” while warning millions could feel the pain if premiums rise.

Democrats argue that the credits’ expiration will hike costs and push people off coverage.

Reports indicate the Senate rejected competing healthcare proposals this month, leaving the tax credits headed toward expiration and setting up a fresh budget clash early next year.

Republicans counter that Democrats are trying to weaponize government funding to lock in another multiyear expansion of Obamacare subsidies after voters were recently subjected to a government shutdown driven largely by the same demand.

GOP lawmakers have also pointed to Congress’s ongoing struggle to complete appropriations work needed to fund the government through the end of the fiscal year.

The shutdown threat returns if lawmakers do not clear remaining bills before the Jan. 30 deadline.

Senate Majority Leader John Thune (R-S.D.) has been pushing to pass a major “minibus” package of appropriations bills covering agencies such as War, Health and Human Services, Labor, Commerce, Justice, and Interior.

This would fund most of the federal government through September 2026 and sharply reduce Democrats’ leverage to demand an Obamacare extension in exchange for keeping agencies open.

However, Thune’s push has run into resistance within his own conference.

Thune acknowledged early in December that the Senate may not have time to finish another spending package before the Christmas break after individual senators objected to bundling bills for floor consideration, leaving much of the heavy lifting for January.

Congress has made only minimal progress on remaining funding measures and the Senate remains stuck on a proposed five-bill minibus. This is in part because a handful of Republicans are battling over earmarks and the scope of the package.

Republicans have also rolled out a healthcare counterproposal, touting “Lower Health Care Premiums for All Americans,” following Democrats’ subsidy-extension push.

The emerging picture is familiar: Democrats threaten shutdowns to expand or preserve Obamacare spending, while Republicans fight internally over whether Washington will finally return to “regular order” budgeting or keep governing through giant packages stuffed with earmarks.

With the Jan. 30 deadline approaching and the subsidy talks collapsing, the next round of shutdown brinkmanship appears to be getting queued up.