Dems are digging in for a funding fight

IN THIS EDITION

On gov’t funding, Dems say they won’t be fooled again

Lawmakers push to repeal Syria sanctions

Mills interviewing staff for a Maine Senate bid

ICYMI: Welch on shutdown strategy, OBBB impact on rural health care

THE TOP

On gov’t funding, Dems say they won’t be fooled again

Happy Wednesday morning.

New: Senate Majority Leader John Thune will be our guest on Fly Out Day this week. What a time to talk to the top Senate Republican. Subscribe to our YouTube channel.

Shutdown fight. The federal government runs out of money in three weeks. And Senate Republican leaders are laying the groundwork for a re-run of the March funding fight: Jam Democrats with a stopgap measure they’ll certainly hate and hope they blink.

Except this time, Democrats insist they won’t fall for it.

Thune seemed to shut the door Tuesday to extending enhanced Obamacare premium tax credits as part of any funding measure to avert an Oct. 1 shutdown. This is a growing political problem for moderate Republicans, as more than four million Americans could lose coverage without the subsidies. Rank-and-file Democrats say an extension of Obamacare credits is their minimum demand for supporting any government-funding measure.

Instead, Thune wants Democrats to accept a “clean” continuing resolution to give appropriators more time to clinch a bipartisan full-year funding deal.

“But not on a short-term CR that’s going to be clean and hopefully quick so we can buy ourselves some time to do bigger appropriations,” Thune told reporters Tuesday night about addressing Obamacare credits in a funding bill. This was the most definitive Thune has been on the issue so far.

Yet Democratic senators across the ideological spectrum are making clear they’ll reject this, even though Senate Minority Leader Chuck Schumer hasn’t yet laid out specific demands.

When asked about his must-haves in any CR, Schumer told us “I’m not going to negotiate in public. The bottom line is they have to sit down and talk to us.”

At Tuesday’s closed-door lunch meeting, Schumer presented battleground polling showing Republicans would be blamed for a shutdown if they’re seen as not negotiating with Democrats.

Déjà vu? Six months ago, House Republicans passed a partisan CR with only GOP votes, forcing Schumer to ultimately break with House Minority Leader Hakeem Jeffries and vote for the six-month funding bill. But the reality is that only a small percentage of Senate Democrats’ votes are actually in play right now, potentially far fewer than the 10 who backed the March CR.

“I think we’re in a different place than March,” Sen. Elissa Slotkin (D-Mich.) told us. “I need Republicans to act like adults and negotiate in good faith. I need them to say that Trump’s lawlessness is going to somehow be curbed.”

Let’s be clear: Republicans will never get behind anything resembling what Slotkin outlined. She’s reflecting a desire among the party’s base to fight back harder against the Trump administration. Yet those demands echo the failed Democratic push in March to somehow secure language forcing the White House to spend money as Congress approved it, something Republicans were never going to accept.

With so much at stake over the next few weeks, Schumer and Jeffries are hoping to avoid a similar debacle and are taking steps to sync up on a strategy. The New Yorkers are scheduled to meet today alongside other Democratic leaders and committee rankers.

“The main thing that I think Chuck took from March is, let’s start this process earlier… The membership felt kind of like, ‘Wow, all of a sudden at the end, we have to choose between two really bad options,’” Sen. Tim Kaine (D-Va.) said.

Kaine cautioned that while Senate Democrats are in a better position this time, it “depends on some Republican willingness to include” Democratic priorities.

If Speaker Mike Johnson can get nearly every House Republican on board with a short-term CR — as he did in March — giving Democrats a win or two won’t be necessary in his chamber. Thune, however, can’t get a bill through the Senate with GOP votes alone.

One Democrat we spoke with seemed comfortable with allowing more time for appropriations talks to continue. Retiring Sen. Jeanne Shaheen (D-N.H.), a leading voice on Obamacare subsidies, said the funding process is “the one place” Senate Republicans have stood up to Trump.

Shaheen noted that in individual appropriations bills, GOP senators have agreed to restore much of the funding Trump has unilaterally cut. “That’s really important and we need to have that continue to play out,” Shaheen added.

So Schumer will be under a ton of pressure from all sides of his caucus, especially if there’s a shutdown and the price to get out of it could be higher. House Democrats are already angry at Schumer — as we scooped in Tuesday’s Midday edition — and it could get worse if he’s seen as caving now.

House view. Rep. Tom Suozzi (D-N.Y.), who’s co-leading a push for a bipartisan extension of the Obamacare credits, told us he’d view GOP movement on the issue as “an important opening bid” in funding talks, although he wouldn’t say if that alone is enough.

“You can’t not negotiate with the Democrats and say, ‘Oh we want you to vote for this,’” Suozzi added. “That’s just not going to happen. I mean, I can’t imagine the same thing happening as last time after Sen. Schumer got so much grief.”

Rep. Jimmy Panetta (D-Calif.) said Democrats should focus on rising health care costs and the Obamacare subsidies, but also energy prices, climbing debt, tariffs and labor supply issues from Trump’s mass-deportation campaign.

Jeffries urged Democrats in a full caucus meeting and at a later meeting with progressives not to negotiate against themselves, and that it is too early to declare the Obamacare subsidies as the goal.

— Andrew Desiderio, Laura Weiss, Max Cohen, John Bresnahan and Ally Mutnick

Join us next week on Thursday, Sept. 18, at 8:30 a.m. ET for a conversation with House Energy and Commerce Committee Chair Brett Guthrie (R-Ky.). We’ll discuss news of the day, small business and artificial intelligence. RSVP here!

WASHINGTON X THE WORLD

Lawmakers push to repeal Syria sanctions

Congress is on the cusp of repealing crippling economic sanctions on Syria, a rare alignment between Democrats and the Trump administration on foreign policy.

But lawmakers first need to settle this and other key hang-ups as part of the annual defense policy bill. While the Senate’s version of the National Defense Authorization Act includes a repeal of the Caesar Act — the 2019 law that imposed the sanctions — the House’s version does not.

Those U.S. sanctions are now seen as an impediment to regional peace and stability. The penalties have prevented U.S. security partners from making desperately-needed foreign investments to help rebuild Syria’s economy and infrastructure after a brutal civil war and the sudden fall of Bashar al-Assad’s regime last year.

“Iran has basically been pushed out of Syria, and that was their road to Lebanon to arm Hezbollah… And Russia’s influence is vastly diminished,” Sen. Jeanne Shaheen (D-N.H.), who traveled to Syria last month, said in an interview. “So it’s really a two-fer for us: Get rid of Iran and Russia if we help Syria get where it needs to go.”

President Donald Trump has embraced a repeal of the Caesar Act and met earlier this year with Syria’s new president, Ahmed al-Sharaa. There’s some skepticism about whether al-Sharaa, a former al Qaeda member who’s since renounced any terrorist ties, will follow through on his commitments for a stable Syria.

Shaheen, who met with al-Sharaa for two hours in Damascus, said he committed to help end Iran’s arms trafficking into Lebanon, for example, but acknowledged trust needs to be built.

“[Sharaa] says all the right things, he’s made a number of positive moves. But it’s a huge challenge,” Shaheen added, hailing the recent developments as an opportunity for stability “that hasn’t existed in decades.”

Banks and chips. Another NDAA issue both chambers will have to iron out with the White House is Sen. Jim Banks’ (R-Ind.) “America First” export-control proposal.

The GAIN AI Act, included in the Senate’s NDAA, would create a new process for chipmakers looking to export artificial intelligence chips to China and other “countries of concern.” To get an export license, the companies would have to ensure American customers get first dibs on those chips.

Banks’ proposal reflects a desire from Congress to take a more active role in the control of AI chips going abroad. But the industry says it’s too complex and could undermine U.S. AI leadership.

We scooped yesterday that White House AI Czar David Sacks called Banks. It’s not clear whether the Trump administration supports this. The House’s NDAA doesn’t have the language.

Scoop: Shaheen and Sen. Thom Tillis (R-N.C.) are out with a joint statement slamming the Trump administration for halting key security assistance for Eastern European nations as Vladimir Putin “escalates” his assault on Ukraine.

“The message this sends is dangerous: that the United States is pulling back just as the stakes in Ukraine and for NATO’s security are at their highest,” Shaheen and Tillis said, calling for swift passage of the long-stalled Russia sanctions package.

— Andrew Desiderio and Diego Areas Munhoz

BATTLE FOR THE SENATE

Mills interviewing staff for a Maine Senate bid

News: Maine Democratic Gov. Janet Mills is in the process of interviewing campaign managers for a potential Senate run, a sign that she’s moving closer to challenging Sen. Susan Collins (R-Maine), according to sources familiar with her plans.

Mills, a popular term-limited governor, has been flirting with a Senate run for months while other Maine Democrats have eagerly jumped in the race against Collins. Mills hasn’t made any final decisions about whether to run in 2026, but she’s growing more serious in her consideration, a person familiar with Mills’ thinking told us.

Should Mills launch a bid, she’d be the latest in a string of recruitment coups for Senate Minority Leader Chuck Schumer and the DSCC. These include former Sen. Sherrod Brown in Ohio and former Gov. Roy Cooper in North Carolina.

At an event earlier this week in central Maine, Mills openly praised Collins, telling reporters she appreciates “everything [Collins] is doing.”

But at the same time, Mills certainly sounded like a Senate candidate. “Every day I pick up the newspaper and I read the headlines and I watch the news, and there are a lot of very disturbing things going on in Washington,” she told reporters.

Mills has said she’s aiming to decide by November whether to challenge Collins. Mills’ moves now to ready her political operation and secure key staffers are an indication she is leaning toward a run.

Primary politics. Mills will be 78 years old on Election Day and a possibly awkward standard-bearer for a Democratic base eager for generational change. If Mills chooses to run, she’ll have to navigate a messy primary that includes brewery owner Dan Kleban and oyster farmer Graham Platner.

Mills starts with higher name recognition and solid approval ratings after two successful gubernatorial bids. People who know her say Mills isn’t eager to run for another office but felt obligated to consider it, especially after she sparred with President Donald Trump over transgender athletes at the White House earlier this year.

As we reported, Senate recruitment in Maine has been complicated by Collins’ stature. Few elected Democrats are eager to take her on, and the race to replace Mills in Blaine House has tied up much of Maine’s Democratic bench.

Collins is the only GOP senator up for reelection in a state that Kamala Harris won in 2024. But the long-serving Maine Republican is a formidable foe, dispatching Democrat Sara Gideon in 2020 despite an avalanche of Democratic money and being written off by pundits.

— Ally Mutnick and Andrew Desiderio

PUNCHBOWL NEWS EVENTS

ICYMI: Welch on shutdown strategy, OBBB impact on rural health care

Sen. Peter Welch (D-Vt.) joined Punchbowl News’ health summit Tuesday, where he said that renewing the enhanced Obamacare tax credits should be part of the negotiations to avert a government shutdown.

Welch said lawmakers of both parties will face lots of pressure to prevent an increase in health care costs, and they will need to act on the expiring subsidies soon.

The Vermont lawmaker also weighed in on Democrats’ government funding strategy as well as the impact of the One Big Beautiful Bill on rural health care.

You can watch the recording of the full event here.

— Samantha Handler

…AND THERE’S MORE

House GOP majority narrows. Democrat James Walkinshaw has won the special election to replace the late Rep. Gerry Connolly in northern Virginia. Walkinshaw’s victory will take the House to 219 Republicans to 213 Democrats, a two-vote margin.

Jordan wades into Tennessee. House Judiciary Committee Chair Jim Jordan (R-Ohio) has backed Matt Van Epps to succeed former Rep. Mark Green (R-Tenn.). Van Epps is a West Point graduate who also has Green’s endorsement. Here’s an ad from the American Liberty Foundation touting Jordan and Green’s endorsements.

Florida Senate news: Democrat Jennifer Jenkins, a former Brevard County school board member, is launching a Senate campaign in the Sunshine State. Jenkins gained prominence in Florida for winning a school board election against a prominent leader of the conservative Moms for Liberty organization.

In a launch video, Jenkins says Sen. Ashley Moody (R-Fla.) doesn’t understand the challenges working Floridians face. Moody is the overwhelming favorite in a state that’s trended to the right in recent cycles.

Jenkins is the most high-profile candidate in the Democratic primary following former congressional candidate Josh Weil’s withdrawal from the race.

— Max Cohen and Jake Sherman

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