Happy 2026!

IN THIS EDITION

2026 begins: Congress goes over the Obamacare cliff

GOP leans into OBBB messaging despite political headwinds

Your March primary cheat sheet

Vault: Can the House and Senate play nice on housing?

THE TOP

2026 begins: Congress goes over the Obamacare cliff

Happy Thursday morning and Happy New Year!

Welcome to 2026. It’s an election year, the five-year anniversary of Punchbowl News and the United States’ 250th birthday.

Punchbowl News has a slightly refreshed logo, as you can see at the top of the newsletter. You’ll also notice a bunch of tweaks across our brand to better align our look as PBN enters year six as a company. Five years in business. Wild. We’ll have more about that in the coming days.

The Senate returns to session Jan. 5, and the House is back Jan. 6. There are 305 days until the midterm elections. The government funding deadline is in 29 days.

President Donald Trump has spent the Christmas holiday at his home in Palm Beach, Fla. Trump has focused on international affairs, holding high-stakes meetings with Ukrainian President Volodymyr Zelensky and Israeli Prime Minister Benjamin Netanyahu. The United States is also involved in a quasi-military conflict in Venezuela, while deadly attacks on alleged “narco traffickers” continue.

Trump allies have played up allegations of fraud in Minnesota among members of the Somali community. This scandal has been unfolding for months — years — but only became a national story after right-wing journalists jumped on it recently. Now House GOP leaders are under pressure to act when Congress comes back into session.

One option being discussed among Republican aides is moving a bill to strip naturalized immigrants of their citizenship if found guilty of defrauding the federal government, a far lower bar than the current standard for “revocation of citizenship.” It’s not clear if this is possible or even legal.

Obamacare. For our audience, Jan. 1 means we’ve gone over the Obamacare cliff. Congress has officially allowed the enhanced ACA premium subsidies to expire. Millions of Americans will either lose their coverage or face dramatically higher premiums. Even conservative media outlets are hammering Trump and Hill Republicans over this one.

In the House, next week will bring a vote on a three-year clean extension of the ACA subsidies. That will almost certainly pass, barring some massive surprise, although it won’t get through the Senate. Speaker Mike Johnson has also said that he intends to spend much of the next few months working to fix a “broken health care system.”

In the Senate, bipartisan Obamacare talks continued throughout the holiday break. As we scooped, Sens. Bernie Moreno (R-Ohio), Jeanne Shaheen (D-N.H.) and Susan Collins (R-Maine) convened a bipartisan group of nine senators by phone on Tuesday. They plan to meet again in person next week.

Moreno and Collins have a proposal to extend the ACA subsidies for two years with income caps and anti-fraud reforms. Senate Majority Leader John Thune will have a big decision on whether to move ahead if the proposal picks up more GOP support.

There’d also need to be enough Senate Democrats willing to cut a deal. Senate Minority Leader Chuck Schumer has been downplaying the possibility of a bipartisan agreement. Schumer said Wednesday that Republicans “had multiple chances” to cut an Obamacare deal before the subsidies expired.

The White House believes that there’s an appetite in the Senate for a compromise, possibly an amended version of a House-passed Obamacare subsidies extension that includes program reforms.

Should that happen, it would reignite the question of whether Johnson will put a compromise on the floor. That will be a major debate in GOP leadership circles.

There are really three camps in the House Republican Conference at the moment. The first represents the majority point of view: that the GOP can’t ever win a health-care fight with Democrats, so they should do nothing about the expired subsidies.

Another group, best represented by Rep. Chip Roy (R-Texas), thinks it’s time for Republicans to aim for a major health care overhaul.

The third faction is made up of moderate Republicans, who think it’s a political and policy disaster that the GOP has allowed the subsidies to expire. Rep. Mike Lawler (R-N.Y.) told us on Fly Out Day that the three-year extension was “bullshit” and the Senate would eventually amend it.

Obamacare on the air. Over the Christmas recess, several senators were subject to ads in their states urging them to extend the subsidies, saying that the GOP majorities depend on it.

“If [Congress doesn’t extend the subsidies], premiums will double, families will lose coverage and Republicans will lose in 2026,” the ad says.

These spots are airing in local markets targeting GOP Sens. Dan Sullivan (Alaska), Roger Marshall (Kan.), John Hoeven (N.D.), Josh Hawley (Mo.), Katie Britt (Ala.) and Jon Husted (Ohio), in addition to Moreno and Collins.

Here’s the ad that ran in Alaska. It’s similar in other markets.

Government funding. The other huge issue facing Congress is government funding. The CR that ended the disastrous government shutdown expires on Jan. 30. House and Senate GOP appropriators reached a deal on an FY2026 spending topline before leaving town in December.

The “Four Corners” — the top House and Senate appropriators in both parties — are negotiating over the nine outstanding bills, and there’s general agreement on toplines, although not a formal deal. That means spending levels are far closer to what the Senate wants than House Republicans. House Republican leadership sources say the chamber could consider spending bills next week. We’ll see if they can get it together to do that.

We’ll note that Democratic leaders aren’t linking the spending bills to the Obamacare subsidies fight, as they did back in October. However, that doesn’t mean a shutdown is out of the question. There’s still a long way to go.

One big issue to watch is Trump’s decision to shut down the National Center for Atmospheric Research in Colorado. This, plus other moves, has set off a war with Colorado lawmakers.

— Jake Sherman, Andrew Desiderio and John Bresnahan

THE CAMPAIGN

GOP leans into OBBB messaging despite political headwinds

Republicans are planning to make their marquee tax bill the centerpiece of their 2026 election messaging. But given that GOP senators acknowledge the party hasn’t effectively communicated what’s in their signature package to voters, it may be a risky proposition.

The One Big Beautiful Bill — which Republicans are increasingly referring to as the Working Families Tax Cut — features a litany of border security, military spending, health care reform and tax policies. It’s a wide-ranging GOP wish list that leadership painstakingly pushed across the finish line in July.

But Republicans are concerned about the onslaught of Democratic attacks that slam the bill as a draconian Medicaid cut. While the GOP struggled to cobble together votes over the summer, Democratic groups have spent millions of dollars on negative TV ads defining the legislation, President Donald Trump’s signature accomplishment so far in his second term.

Multiple polls have shown the OBBB is underwater with voters. That’s bad news for every vulnerable Republican heading into November.

Senators sound off. Republicans still stand by the legislation, but they acknowledge it hasn’t been sold well.

Sen. Jim Justice (R-W.Va.) hailed the OBBB as an “unbelievable” piece of legislation equivalent to Trump “pitching nine consecutive perfect games.”

“If we have done that, how can we be concerned about the midterms? We ought to win by the biggest landslide in history,” Justice said. ”We are not going to do that, because the Democrats are really good at their messaging.”

What’s more, lawmakers say the scale of policies covered in the legislation can be difficult to explain to voters.

“When you start talking about no tax on tips, people are very excited about that. That’s where we focus,” Sen. Markwayne Mullin (R-Okla.) said. “There’s a lot of other wonderful stuff in it, but it’s very hard to explain,” Mullin added.

Republicans are clamoring for Trump to engage more in domestic politics as the fall approaches. Trump marked his return to the trail last month with a Pennsylvania rally that started with an affordability focus but later turned into a litany of grievances.

“I hope the president helps to sell it,” Sen. John Kennedy (R-La.) said about the reconciliation package.

Some Republicans want more legislative wins heading into the fall campaign.

Sen. Jon Husted (R-Ohio), who’s facing a competitive reelection campaign in 2026, said he wants to see regulatory reform passed to drive down the cost of housing.

“We did no taxes on tips, no taxes on overtime, no taxes on Social Security. That’s all really good,” Sen. Josh Hawley (R-Mo.) said. “Now we ought to do no tax on health care.”

“I would welcome a second reconciliation package,” Sen. Eric Schmitt (R-Mo.) said. We’ll note GOP leadership has poured cold water on the prospect of another reconciliation bill.

— Max Cohen

PRIMARY PROBLEMS

Your March primary cheat sheet

Election year has arrived. And that means that the primary season has begun.

From early March to mid-September — with breaks in April and July — voters will finalize the November matchups in key swing seats.

For open safe seats, the primary is tantamount to a general election and holds even higher stakes. A rash of House and Senate retirements has created an especially large number of open seats.

The first primaries are just two months away. Save and clip this cheat sheet for the March contests to watch.

March 3. Texas, North Carolina and Arkansas.

There is no shortage of interesting primaries in Texas. Let’s start with the Senate. Rep. Jasmine Crockett (D-Texas) is up against state Rep. James Talarico for the Democratic nomination. Some Democrats fear Crockett may struggle to win a general election, but she starts as the favorite in this race.

On the GOP side, it’s a three-way contest between Sen. John Cornyn, Texas Attorney General Ken Paxton and Rep. Wesley Hunt. Paxton is all but certain to make the May runoff. The question is whether Hunt boxes out Cornyn, the veteran incumbent senator.

In the House, Rep. Julie Johnson (D-Texas) is battling her predecessor, former Rep. Colin Allred (D-Texas), in a newly redistricted Dallas seat. Rep. Al Green (D-Texas) will also run against a sitting member — whoever wins the Jan. 31 special election to fill the late Rep. Sylvester Turner’s seat.

Former North Carolina Gov. Roy Cooper has an easy path through the Senate Democratic primary in the Tar Heel state. Republicans tried to clear the field for former RNC Chair Michael Whatley, but far-right activist Michele Morrow just jumped in.

March 10. Mississippi.

Longtime Democratic Rep. Bennie Thompson landed a primary challenge from Evan Turnage, an antitrust lawyer who worked for Senate Minority Leader Chuck Schumer and Sen. Elizabeth Warren (D-Mass.).

Turnage, 33, recently launched his bid, so it’s not yet clear whether he’ll be able to fundraise sufficiently. But this could be an early test case for the spate of generational change-driven primaries coming up. Thompson is 77.

March 17. Illinois.

The Land of Lincoln will host the next big Senate primary to replace retiring Democratic Sen. Dick Durbin. The contenders: Reps. Raja Krishnamoorthi and Robin Kelly and Illinois Lt. Gov. Juliana Stratton. Krishnamoorthi has led in fundraising and has been running TV ads. The big question here is whether Gov. JB Pritzker funds a super PAC to help Stratton.

Five of Illinois’ Democratic incumbents are retiring or running for Senate, leaving several safe blue seats open. Aside from Krishnamoorthi and Kelly, Reps. Danny Davis, Jan Schakowsky and Chuy Garcia are retiring.

Notable names to watch in these races: Former Rep. Melissa Bean is running to replace Krishnamoorthi. Former Rep. Jesse Jackson Jr. is vying for Kelly’s district. And social media influencer Kat Abughazaleh is running for Schakowsky’s seat.

— Ally Mutnick

… AND THERE’S MORE

Downtown Download. Netflix has hired Joseph Gibson and The Gibson Group to lobby on “antitrust issues in the technology industry.” Gibson was the chief GOP counsel for the House Judiciary Committee under then-Chairman Lamar Smith (R-Texas).

Google has hired Kountoupes Denham Carr & Reid to lobby on permitting reform.

Miller Strategies, run by top Republican lobbyist Jeff Miller, is now lobbying for ​Alex von Furstenberg on retirement issues; Carnival Cruises on cruise-related “visas, processing and staffing” and environmental issues; and for Kimberly-Clark to help them with their effort to acquire Kenvue, which owns Tylenol.

The cities of Doral and Miami have hired ​Carlos ​Trujillo, the former Trump administration ambassador to the Organization of American States, to lobby on federal procurement.

The Campaign. Rep. Thomas Massie (R-Ky.) is running a new ad saying that his late wife would want him to keep fighting in Congress.

– Jake Sherman

CLIPS