NEWS on the Obamacare subsidy fight

IN THIS EDITION

Republicans’ Obamacare mess

RFK Jr. to face yet another hostile Senate panel

Despite W.H. pressure, Republicans defend blue slip practice

CLF chips into California redistricting fund

Tech: Intel move is irking Republicans

THE TOP

Republicans’ Obamacare mess

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Will Republicans and Trump save Obamacare? Official Washington is focused on two things right now — Jeffrey Epstein and a looming government shutdown at the end of the month.

But behind the scenes, vulnerable Republicans are worried about another issue: Obamacare subsidies that are set to expire at the end of the year.

The Obamacare cliff is a pressing political problem. The boosted tax credits help Americans pay for health insurance purchased through the Obamacare marketplace. Letting the premium subsidies lapse could lead to more than 4 million people losing health insurance, according to the CBO. Longtime Trump pollster John McLaughlin recently said the issue would be the party’s “greatest midterm threat.”

Inflation and rising costs of living are already a looming political liability for the GOP heading into 2026. Republicans are also under heavy fire for the Medicaid cuts in the One Big Beautiful Bill. So the Obamacare cliff could make those problems worse.

Let’s be clear: Republicans are in charge of Washington, so if premiums go up or huge chunks of Americans lose their health-care coverage entirely, the GOP will get the blame. They privately acknowledge that.

A bill to avert a government shutdown at the end of the month is a potential vehicle to address the matter. An extension of the tax credits is the one concession Senate Democrats think they could potentially get in exchange for their votes.

But here’s the rub: At this point, Republican party leaders seem less than eager about extending these subsidies. “Incredibly unpopular within the conference, expensive, bad policy, etc.,” one senior House GOP leadership aide said of an extension.

Ways and Means Committee Chair Jason Smith (R-Mo.) bashed the subsidies in July and ruled out an extension without significant changes.

Senate Majority Leader John Thune indicated Wednesday there’s some interest within his conference on extending the credits, but he put the onus on Democrats to “come to us with a suggestion, a solution, about how to address it.”

A bipartisan deal on the Obamacare subsidies could help ease Senate passage of a government-funding bill, given that Democratic votes will be needed. But there’d likely be a significant dropoff in GOP votes. And if Republicans will only accept a short-term or limited extension, that might not be a deal worth taking for Democrats.

The White House hasn’t quite figured out its posture on the issue yet. But administration officials seem pretty firm that this can’t be addressed in a short-term CR. If President Donald Trump wants the subsidies extended, they will consider it in December.

By then, it may be too late. Those impacted will have already been notified that their premiums are skyrocketing since open enrollment for 2026 coverage starts Nov. 1.

Let’s discuss some of the political dynamics at play here.

1) This is news: A group of vulnerable House Republicans and moderate Democrats is introducing a bill that would extend the subsidies for a year, pushing the deadline beyond the midterms. This could cost around $24 billion, based on the CBO’s estimate last year.

Rep. Jen Kiggans (R-Va.) is leading the bill along with GOP Reps. Brian Fitzpatrick (Pa.), Rob Bresnahan (Pa.), Carlos Gimenez (Fla.), David Valadao (Calif.), Young Kim (Calif.), Jeff Hurd (Colo.), Tom Kean (N.J.) and Juan Ciscomani (Ariz.). Democratic Reps. Tom Suozzi (N.Y.) and Jared Golden (Maine) have signed on, too.

Kiggans told us she supports an effort to “reasonably phase out” the boosted subsidies but Congress is “out of time” and needs a one-year patch to avert premium hikes. She spoke with Johnson about it on Wednesday during a Republican Governance Group lunch.

“Covid is over, we don’t need these same incentives that we’ve given people,” Kiggans told us. “But we can’t do it tomorrow. It can’t be just cold turkey.”

2) A group called American Advancement Inc. started running ads nationwide saying that extending the Obamacare subsidies is the way to “deliver on the promises that gave them the majority and protect Trump.” Here’s the ad in Maine targeting GOP Sen. Susan Collins.

Ads are also running targeting Thune in South Dakota and Johnson in Shreveport, La. Plus, they’re hitting GOP Sens. Shelley Moore Capito (W.Va.) and Jon Husted (Ohio), as well as North Carolina Republican Senate candidate Michael Whatley.

3) Democrats are going to spend the next few weeks trying to make this as politically painful as possible for Republicans.

Senate Democrats, led by Sen. Jeanne Shaheen (D-N.H.), have a new analysis from Georgetown University’s Center on Health Insurance Reforms. The report says insurers expect Obamacare enrollment to decline significantly if the subsidies expire. It also says the credits’ expiration and expectations that health costs will rise are driving premium hikes.

“Both sides recognize that we need to get something done, and I sincerely hope my Republican colleagues don’t stand in the way,” Shaheen told us.

— Laura Weiss, Andrew Desiderio and Jake Sherman

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THE SENATE

RFK Jr. to face yet another hostile Senate panel

HHS Secretary Robert F. Kennedy Jr. has broken a lot of the promises he made to Republican senators this year, plunging the department into turmoil. Now, he’s going to have to answer for it.

Kennedy made a series of commitments to Senate HELP Committee Chair Bill Cassidy (R-La.) earlier this year in order to win confirmation. Since then, Kennedy has been central to one controversy after another embroiling HHS, including the firing last week of new CDC Director Susan Monarez.

Cassidy and other Senate Finance Committee members now have their first chance to publicly grill Kennedy over these controversial moves at a hearing this morning.

In the wake of the tumult at the CDC, Cassidy called for increased oversight of the agency, though he hasn’t elaborated on what that would look like. Cassidy’s office declined to comment.

Back on his word. Cassidy had received assurances from Kennedy on vaccines, particularly that the incoming HHS head would work within existing vaccine approval systems, maintain the vaccine advisory panel without changes and regularly communicate with Congress about vaccine safety programs. Then, Kennedy fired all members of a key vaccine advisory committee in June.

Yet Cassidy won’t be Kennedy’s only critic at the hearing.

“The concerns that Cassidy has expressed, I share,” Sen. Thom Tillis (R-N.C.) said. “And that’s what will be covered in the hearing.”

Sen. Lisa Murkowski (R-Alaska) also backed Cassidy’s calls for increased oversight. Murkowski isn’t on Finance but sits on the Senate HELP Committee, which has jurisdiction over the CDC. Murkowski said Kennedy’s actions so far on vaccines have gone against commitments he made to her and others during the confirmation process.

“I was not pleased at all when Susan Monarez was asked to step down and the vacancies in leadership that we now have at CDC,” Murkowski said. “I’m encouraged that Chairman Cassidy wants to have some level of oversight within the committee on this. I think that that’s important.”

The softballs. Kennedy will have some friendly GOP faces on the Finance panel. Despite all Republicans voting for Monarez’s confirmation, many conservatives are now falling in line behind Kennedy over her ouster.

Sen. Roger Marshall (R-Kan.), who also sits on the Finance Committee, said there needs to be a shakeup at the CDC.

“The people that quit or were fired were not fulfilling the mission that President Trump intended,” Marshall said. “He selected Bobby Kennedy Jr. for this job because he’s a disrupter.”

Democrats’ bash fest. For Democrats, the hearing is a chance to tear into Kennedy over the turmoil at the CDC, rollback of vaccine safety measures and many other simmering controversies.

Sen. Ron Wyden (D-Ore.), the top Democrat on the Senate Finance Committee, and Sen. Angela Alsobrooks (D-Md.) also released a report this morning detailing the “unmitigated disaster” of Kennedy’s leadership so far.

— Samantha Handler, Max Cohen and Laura Weiss

SENATE GOP

Despite W.H. pressure, Republicans defend blue slip practice

Senate Republicans are usually in lockstep behind President Donald Trump’s priorities. But Republicans are standing by a key Senate tradition that gives the minority party veto power over some of the president’s key nominees.

Angered over Democratic obstruction of his picks, Trump is urging Senate Judiciary Committee Chair Chuck Grassley (R-Iowa) to do away with the “blue-slip” practice of allowing senators to nix nominees for district court judges, U.S. attorneys and U.S. marshals in their home states.

Republicans are loath to go along with Trump because the blue slip is one of the few ways the GOP can exert power when they’re in the minority. And like with the filibuster, Senate Republicans so far haven’t been afraid to stand up to Trump to preserve their institutional prerogatives.

“Senators know nominees from their own states better than anybody in Washington, D.C., can know them, including the White House counsel’s office,” Sen. John Kennedy (R-La.) told us.

Grassley has defended the practice by noting that Republicans used blue slips during former President Joe Biden’s administration to keep liberals off the bench. The Iowa Republican also noted that a nominee without blue slip approval isn’t likely to win Senate confirmation either. Senate Majority Leader John Thune is aligned with Grassley on this as well.

Habba drama. Alina Habba’s nomination as U.S. attorney for New Jersey ignited the latest blue-slip controversy. Both of New Jersey’s Democratic senators are opposed to Habba’s nomination, denying Trump’s former personal lawyer a path to Senate confirmation.

Trump has attempted to sidestep the confirmation process in a bid to keep Habba in place as acting attorney, despite opposition from federal judges in the Garden State.

Habba attacked Grassley’s protection of the blue slip last month. But Grassley’s Senate GOP colleagues — even those who are among the chamber’s most steadfast Trump allies — are sticking by him.

“I yield to my committee chairman there,” Sen. Eric Schmitt (R-Mo.) said. “I don’t think anything’s going to change there.”

Grassley’s stance is drawing plaudits from top Democrats, too.

“It seems like Grassley is under a lot of pressure from Trump, but he’s holding firm here,” said Sen. Dick Durbin (D-Ill.), the top Democrat on the Judiciary Committee. “The Senate has given away so much authority to the executive branch, and this is one area I hope we protect.”

The latest. Grassley on Wednesday made a unanimous-consent request to confirm a set of U.S. attorney nominees but it was blocked by Democrats. Grassley later bemoaned the “unprecedented obstruction on the floor” from the minority party.

— Max Cohen

THE CAMPAIGN

CLF chips into California redistricting fund

News: The Congressional Leadership Fund, a super PAC closely aligned with Speaker Mike Johnson, gave $5 million to Republicans’ anti-redistricting effort in California.

The group, dubbed Stop Sacramento’s Power Grab, is led by former Speaker Kevin McCarthy and former California GOP Chair Jessica Millan Patterson.

The race is on to define Democrats Gov. Gavin Newsom’s push to amend the California constitution and allow the legislature to redraw the congressional map in a way that could net Democrats five seats. Spending on the California ballot initiative could top $200 million.

Newsom’s high-stakes gambit is in response to Texas Republicans, who have already passed a new congressional map at President Donald Trump’s behest adding five new GOP-controlled seats.

But Texas didn’t need to change its state laws in order to do a mid-decade redistricting. California has an independent commission that’s in charge of drawing the state’s congressional maps. California Democrats are now banking on voters approving their plans to gerrymander in response. The election is on Nov. 4.

Democrats are ramping up their own redistricting messaging in California, too. Newsom has given money to the effort, and House Majority PAC, the super PAC aligned with House Democratic leadership, is also funding it.

– Ally Mutnick

Tech: Intel move is irking Republicans

Key Republicans don’t like that President Donald Trump is following the lead of progressive Sens. Bernie Sanders (I-Vt.) and Elizabeth Warren (D-Mass.) when it comes to his plan to use CHIPS Act grants to take a 10% equity stake in Intel.

As we’ve told you, the idea of giving taxpayers a stake in companies that receive federal funds to boost the domestic manufacturing of microchips was originally proposed by Sanders and Warren back in 2022.

“I don’t think the federal government should be taking equity stakes in private companies,” Sen. Ted Cruz (R-Texas) said. “That is a mistake and a slippery slope.”

Sen. Rand Paul (R-Ky.) also raised concerns over the move, “Once the government gets involved in the free market, there is no longer fierce competition that breeds excellence,” Paul said on X.

Other GOP senators don’t sound like fans either.

Sen. Mike Rounds (R-S.D.) told us he’s asked his team to look into the “legality” of the move, and Sen. Todd Young (R-Ind.), a CHIPS Act author, has also expressed skepticism about the federal government taking a stake in the beleaguered chipmaker.

It doesn’t appear these free-market-loving Republicans are prepared to do anything to thwart the president’s plans as of now. But it’s another episode of Trump making Republicans, particularly in the Senate, uncomfortable with his increasingly interventionist economic policies.

Supporters. Not every senator is against the move, though. Ohio GOP Sens. Bernie Moreno and Jon Husted, who represent a state where Intel is building chip fabrication plants, told reporters in Ohio they supported the effort.

And, of course, Sanders sent us a statement last month praising the move since it echoes his original proposal to have the government take a stake in companies that receive CHIPS money.

– Diego Areas Munhoz

MOMENTS

CLIPS