Democrats' Funding Proposal Could Add $1.4T and Expand Obamacare Subsidies

The U.S. government faces a potential shutdown as its funding is set to expire on October 1. Republicans have proposed a clean Continuing Resolution (CR) to extend funding for seven weeks, allowing time for the passage of the 12 annual appropriations bills for fiscal year 2026. In contrast, Democrats have offered a competing four-week CR loaded with healthcare policy riders, which would reverse recent reforms and permanently extend expanded Obamacare Premium Tax Credits from the COVID-19 era.

These health-related proposals within the Democratic CR carry significant budgetary implications. The Congressional Budget Office estimates that repealing recent Republican healthcare savings and extending Obamacare subsidies would add approximately $662 billion in costs over the next decade. Specifically, undoing the One Big Beautiful Bill Act's savings would cost $272 billion, reversing Affordable Care Act marketplace reforms would add $40 billion, and permanently extending the expanded Premium Tax Credits would increase the deficit by $350 billion.

Including all policy changes, the Committee for a Responsible Federal Budget projects the Democratic CR could cost the federal government about $1.4 trillion between 2026 and 2035. Critics argue such fiscal impacts exacerbate national budgetary challenges amidst ongoing struggles to meet basic appropriations deadlines. Proponents contend the measures address affordability and expand health insurance coverage, estimating millions more Americans would obtain ACA-subsidized plans by 2035.

Political leaders remain divided on the appropriate timing and scope of healthcare policy within government funding legislation. Republican lawmakers emphasize that healthcare reforms should be addressed separately from shutdown prevention efforts, warning against using the CR as a vehicle for broad policy changes that significantly impact the federal deficit. This standoff highlights ongoing tensions in balancing fiscal responsibility with healthcare access in federal budget negotiations.