Obamacare subsidy deal looks dead in the Senate

IN THIS EDITION

The Senate is nowhere near an Obamacare deal

After ICE outcry, Dems turn on DHS funding bill

Vault: Banking punts major crypto markup

Toasting 5 years of Punchbowl News

THE TOP

The Senate is nowhere near an Obamacare deal

Happy Thursday morning.

The Senate will leave town this afternoon for 10 days with no deal to revive premium enhanced Obamacare subsidies, and no sign they’re moving toward any compromise on the key hang-ups.

Senators involved in bipartisan health care talks are struggling to reach agreement among themselves. Even if they can, the group would need to build consensus among senators on both sides of the aisle in order to pass a bill, somehow push the measure through the House and then convince President Donald Trump to sign it.

All of those steps are incredibly difficult. Meanwhile, the clock is close to running out. Open enrollment for marketplace plans ends today.

“We’re still in the red zone,” asserted Ohio Sen. Bernie Moreno, a GOP leader involved in the Obamacare talks.

Yet that’s exactly where Moreno said the negotiations were a week ago, and there’s been no breakthrough. In fact, it looks like things are going in the opposite direction.

Here’s why a deal is growing out of reach.

1) The Senate is nearly out of time.

Senators would restart open enrollment for Obamacare plans through March 1 as part of the already agreed-upon bipartisan framework. But every day that goes by shrinks that window. It may already be too late to change 2026 enrollment all that much. Initial Obamacare enrollment is way down.

Sen. Susan Collins (R-Maine) said Wednesday that negotiators will continue to meet during the Senate’s recess next week. Some of the participants will be abroad, however.

“Time’s not on our side,” Moreno acknowledged, lamenting that it’s been difficult to hold senators’ attention. “This can’t continue where we just drag it out because eventually you just run out of time.”

Senate Majority Leader John Thune has already said that any Obamacare deal would need to get done before the end of January. The recess next week, paired with the need to use the following week to pass the remaining FY2026 funding bills, makes it exceedingly difficult to meet that timeline.

2) The abortion funding dispute appears unsolvable.

Few issues paralyze dealmaking on Capitol Hill quite like the fight over abortion rights.

Anti-abortion groups are showing no sign of letting up in their pressure campaign to get new language restricting federal funding for abortion services added to any Obamacare subsidies deal. They’ve bashed potential compromises and forced many GOP lawmakers into a corner.

Plus, Trump’s comments last week urging Republicans to be “flexible” on Hyde have only backfired. Democrats have drawn a red line on the issue, and they have no incentive to give up ground.

3) Leadership doesn’t want any part of this.

The Obamacare negotiations are a toxic issue for the Senate leadership on both sides of the aisle.

Senate Minority Leader Chuck Schumer has continued to push Democrats’ three-year clean revival of the Obamacare credits as the only viable plan. Schumer has been under massive pressure to appease the Democratic base. A compromise with Republicans isn’t in Democrats’ political interest, and Schumer has been actively downplaying the chances of a deal.

“They ought to work with us to get costs lower. But they’re not doing that. They’re stuck,” Schumer told us. “Neither Thune nor Johnson says they want to extend the ACA credits by even a day.”

Thune has to manage GOP senators desperate for a deal — often in the name of their own political survival in November’s midterms — and those who despise any proposal that extends the Obamacare subsidies.

Thune has laid out the broad confines of the sort of compromise Republicans could potentially accept, but it would be tough for him to get more involved. For now, Thune has allowed the negotiations to proceed while warning that in order for any bipartisan compromise to be viable, it would need to win significant support from Republicans.

Meanwhile, Trump is largely uninvolved and distracted, consumed with foreign policy crises while pitching a string of populist economic ideas. Trump said he’s planning to release a health care framework this week, which could give some direction to the talks. But so far, Trump has largely lacked interest in options that involve extending the existing Obamacare subsidies.

Desperation runs deep. The one factor working in favor of rank-and-file lawmakers who want an Obamacare deal is sheer will.

House GOP moderates took drastic steps to force a floor vote on the issue. Seventeen House Republicans ultimately voted for a Democratic bill to restore the credits for three years — despite disliking the policy — in a sign of true desperation.

Even a staunch conservative, Sen. Ron Johnson (R-Wis.), told us he’s been talking with some Senate Democrats about a bill to restore enhanced subsidies for people making over 400% of the federal poverty level with anti-fraud reforms. That policy mix would be a tough sell for most Democrats. But it underscores just how widespread the hope is for some kind of breakthrough.

On war powers. The Senate voted 51-50 late Wednesday — with Vice President JD Vance breaking the tie — to kill the Venezuela war powers resolution, agreeing to a GOP argument that there are no active military operations in the country.

GOP Sens. Josh Hawley (Mo.) and Todd Young (Ind.) flipped after initially voting to advance the resolution last week, ensuring a major win for Secretary of State Marco Rubio and Senate GOP leaders. Young said Rubio agreed to a public Senate Foreign Relations Committee hearing “immediately after the recess.”

— Laura Weiss, Andrew Desiderio and Samantha Handler

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THE MINORITY

After ICE outcry, Dems turn on DHS funding bill

House Democrats are turning against the Homeland Security funding bill en masse in the aftermath of the killing of Renee Good and a wider backlash against ICE’s treatment of U.S. citizens and immigrants alike.

Many Democrats feel that voting for any FY2026 funding for DHS is a non-starter and are increasingly in favor of enacting a continuing resolution for the department.

“Right now, there’s no bipartisan path forward for the Department of Homeland Security,” House Minority Leader Hakeem Jeffries told reporters Wednesday. But Jeffries acknowledged that appropriators were still negotiating over the issue.

Appropriators are holding out hope for some deal that would be palatable to the broader Democratic caucus. The challenge, however, is crafting a bipartisan bill that provides no new funding for ICE and adds accountability measures — dealbreakers for many Republicans. It would also be difficult for Democratic members to explain to their base why they still ultimately voted to fund ICE.

“We will do our best to address the concerns that Democrats have,” said Rep. Henry Cuellar (Texas), the top House Democrat on the DHS funding bill. “Negotiations were going well before the shooting. We need to address the issue and are working on language on that.”

But even top appropriators are drawing red lines on giving ICE more funds, as Republicans have been pushing for.

“ICE has enough money,” top Senate Appropriations Committee Democrat Patty Murray (Wash.) said. “We’re not giving them any more.”

Murray was referring to the fact that Republicans’ One Big Beautiful Bill Act included tens of billions of dollars in new funding, money that is being used by President Donald Trump and his administration to fund a nationwide immigration crackdown.

This includes hiring thousands of new ICE agents and building new detention centers. At the same time, ICE is making it harder for lawmakers to inspect those facilities.

In the battlegrounds. House Democrats representing purple districts are divided over how to vote next week.

“There’s mixed feelings right now from the discussions that I’ve been in,” Rep. Gabe Vasquez (D-N.M.) said. “Some will and some won’t. I think we’re going to potentially see a split.”

Frontliners have been discussing whether to fund the package. While many are alarmed over ICE’s actions — including another shooting incident Wednesday night — some Democrats are wary of withholding money that is necessary for unrelated security issues.

“Obviously I’m not in favor of defunding critically important national security priorities,” said Democratic Rep. Eugene Vindman, who represents a swing seat in Virginia.

But Vindman also expressed concern over ICE’s actions and said that he’d need to see what was actually in the legislation.

“I have great concerns,” Rep. John Mannion (D-N.Y.) said of the DHS bill. “But I know that there’s talk about changes. If those changes are to decrease the ICE funding significantly than what was in that reconciliation bill, I support that.”

— Max Cohen, Samantha Handler and Ally Mutnick

PUNCHBOWL NEWS EVENTS

Toasting 5 years of Punchbowl News

On Wednesday night, we celebrated five years of Punchbowl News with cocktails and conversation on the rooftop of 101 Constitution overlooking the Capitol. During the event, Punchbowl News Founder & CEO Anna Palmer gave brief remarks toasting to our community and to the next five years and beyond. Attendees also watched a highlight reel of congratulations from members of Congress. Check out a few photos from the event here. Thank you to Intuit and UnitedHealth Group for making this celebration possible.

Raising a glass: Senate Minority Leader Chuck Schumer; Senate Majority Whip John Barrasso; Stacey Daniels, Annie Topp and Ryan Wrasse of Senate Majority Leader John Thune’s office; Kate Noyes of Barrasso’s office; Christie Stephenson, Jamie Fleet and Wayne Williams of House Minority Leader Hakeem Jeffries’ office; Mike Inacay and Vig Tharmarajah of Sen. Brian Schatz’s (D-Hawaii) office; Arden Koenecke of Sen. Mike Rounds’ (R-S.D.) office; and James Adams and Haraden Bottomley of Rep. Josh Gottheimer’s (D-N.J.) office.

Eric Fejer of Sen. John Curtis’ (R-Utah) office; Margaret Mulkerrin of Rep. Steny Hoyer’s (D-Md.) office; Jackson Krug of Rep. Morgan Griffith’s (R-Va.) office; Phoebe Keller of the Senate Commerce Committee; Suzanne Wrasse of the Senate Foreign Relations Committee; Amanda Critchfield of the Senate Finance Committee; Michael Kennedy, Daniel Eubanks and Paul Lindsay of Intuit; and Brian Walsh of UnitedHealth Group.

… AND THERE’S MORE

Fundraising news. Rep. Eugene Vindman (D-Va.) raised $1.7 million in Q4 of 2024 and ended the year with a whopping $4.2 million on hand. These are huge numbers for a House freshman.

Rep. Sharice Davids (D-Kan.) raised $729,000 in the fourth quarter and has $1.3 million on hand. Kansas Republicans are trying to draw Davids out of her seat in redistricting.

Illinois Senate. Illinois Future PAC, a super PAC backing Lt. Gov. Juliana Stratton, made a long-awaited TV ad buy on Wednesday. It spent roughly $460,000 in the Chicago media market for a buy beginning Friday and running for 10 days, per sources tracking the buy.

This is a big deal. Rep. Raja Krishnamoorthi (D-Ill.) has had the airwaves to himself for months. The primary is on March 17. Illinois politicos are watching closely to see if Gov. JB Pritzker will fund the super PAC for his LG.

Greenland. Sens. Jeanne Shaheen (D-N.H.) and Steve Daines (R-Mont.) are hosting the foreign ministers of Denmark and Greenland on Thursday afternoon. It’ll be the ministers’ first Capitol Hill meeting since Wednesday’s confab at the White House.

Job news. Zach Barnett, formerly a top aide to House Republican Conference Chair Lisa McClain, is now the executive director for public affairs and advocacy at the U.S. Chamber of Commerce. Barnett also worked for Sen. Roger Wicker (R-Miss.) and former Rep. Garret Graves (R-La.).

— Max Cohen, Andrew Desiderio and Ally Mutnick

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