With just over three weeks to go until a government shutdown, leaders in both parties are still trying to figure out their own positions on FY2026 spending bills.
More importantly, they’re trying to figure out what President Donald Trump wants, and how far he’s willing to go to avoid a shutdown — or whether the White House is looking for a showdown with Democrats.
This is especially true for GOP congressional leaders. Top Republicans recall that Trump oversaw the longest government shutdown in U.S. history back in 2018-19, although that was only a partial stoppage. This time, it would be a full government shutdown. Trump can soften the worst of the fallout by ordering government workers to stay on the job even if they’re not getting paid, although even that has political costs.
Trump and OMB Director Russ Vought have waged a bitter fight all year with Hill Democrats over hundreds of billions of dollars in government spending. This includes a recent “pocket rescission” of nearly $5 billion in foreign aid, which even Senate Appropriations Committee Chair Susan Collins (R-Maine) called “unlawful.” The White House asked the Supreme Court for an emergency order on Monday seeking to overturn a federal judge’s injunction blocking the move.
Another huge issue is health-care cost increases, a growing political and economic problem for Trump and Republicans. Enhanced tax credits for Obamacare enrollees run out at the end of the year, threatening coverage for four million Americans.
So there are some key questions that need to be resolved: Is a bipartisan spending deal possible? What’s the length of any stopgap funding bill that will be needed to avoid an Oct. 1 shutdown? And is Congress going to extend the enhanced Obamacare tax credits?
The government-funding plan. There are basically two options for extending government funding: a short-term stopgap into November or December or a longer-term CR until January or February.
We could argue the strategy either way. It may be better for Speaker Mike Johnson to kick the deadline into 2026 in order to minimize the number of CR votes he has to whip. But we also understand the urgency that a November deadline creates.
The downside is that Congress will likely need another stopgap into December because it’s just not enough time to finish.
Senate Majority Leader John Thune said Monday any short-term funding bill should be “as clean as possible” or Republicans risk jeopardizing the chances of a longer-term deal.
But the problem here is that many Republicans seem to think Democrats will simply vote for a clean, short-term CR without getting anything. We think that’s way too optimistic.
“How do you say ‘clean CR,’ then Russ Vought gets to pick and choose?” Sen. Mark Warner (D-Va.) said.
At the same time, Senate Democrats aren’t yet getting specific about what it’ll take to win their votes. Trump also hasn’t even held a bipartisan meeting with Senate Minority Leader Chuck Schumer or House Minority Leader Hakeem Jeffries yet.
House and Senate appropriations leaders huddled Monday night to discuss their path forward. Collins said all four “are committed to trying to prevent a government shutdown and work on an agreement.”
The appropriators discussed conferencing three Senate-passed FY2026 spending bills — MilCon-VA, Agriculture and Legislative Branch — and passing a short-term CR. But the White House hasn’t signed off on this approach yet.
Sen. Patty Murray (Wash.), the top Democrat on the Senate Appropriations Committee, said the meeting was productive but called on Republican leadership to commit to a bipartisan CR.
“We had a productive conversation about conferencing the first three bills and a bipartisan, short-term CR to allow us time to pass full-year bills, which I believe is critical to protect Democratic priorities and programs that families count on every day,” Murray said. “I’ve been in regular touch with Leader Schumer, and now, we need Speaker Johnson and Leader Thune to commit to a bipartisan CR to avert a shutdown and move the ball forward.”
Obamacare subsidies. There’s growing pressure on GOP leaders to accept some sort of extension of the soon-to-expire Obamacare enhanced premium tax credits. Especially if that’s what unlocks Democratic votes for a stopgap funding measure. There’s also implications for 2026.
“The White House needs to be instructed by what it takes to get a CR out of the Senate,” Sen. Thom Tillis (R-N.C.) said. “I’m pretty much on record talking about how disruptive the [OBBB] Medicaid cuts were… The last thing we want to do, for the purposes of Democrats, is have another bad message on health care policy.”
But Thune on Monday seemed to dismiss the notion that Republicans would rubber-stamp an extension of the expanded eligibility requirements that Democrats enacted via the budget reconciliation process in 2021.
“[Democrats] dramatically increased the size of the population, dramatically increased the cost. And they put the expiration date in place,” Thune told us. “So like I said before, the Democrats have a responsibility to come forward with a solution.”
Johnson has acknowledged that Republicans are in a squeeze when it comes to the credits. Yet Johnson also warned that “there’s a lot of opposition to [extending the enhanced credits] as well.”
Since the House Republican leadership and the White House refuse to take a position on whether they are in favor of extending the enhanced tax credits, GOP opponents are beginning to step into the void.
House Budget Committee Chair Jodey Arrington (R-Texas) has been actively campaigning against any extension of the boosted Obamacare credits with GOP colleagues. Arrington told us he plans to start circulating information to educate House Republicans on why they shouldn’t extend the subsidies, calling them “fiscally reckless.”
Arrington also argued against any extension of the Covid-era credits privately, criticizing the subsidies to House GOP leaders, committee chairs and other key Republican members during Monday evening’s Elected Leadership Committee meeting.
House Freedom Caucus Chair Andy Harris (R-Md.) said “no” when we asked him if he wanted to see the enhanced credits extended.
“Covid is over,” Harris said. “Newsflash to America. Covid is over.”
