U.S. Congressional Update

The United States Congress is back in session after its traditional August recess, and the most important issue on the agenda is funding for the federal government. To date, none of the 12 appropriations bills that provide funding for federal agencies and programs for the coming year have been signed into law.

With the end of the current fiscal year looming on September 30 and only a handful of days in session before then, the Republican majority in Congress and the Trump Administration support passage of a “continuing resolution” (CR) that would provide funding at the current level for some period of time. Congressional appropriators appear to favor one that lasts until November 22.

In the House of Representatives, the Republicans maintain a slim majority and can pass a CR over the objections of Democrats. However, in the Senate, legislation must garner 60 votes to overcome a filibuster. In light of the current 53-47 Republican majority, Republicans need at least seven Democratic votes to pass a CR.

In March 2025 and facing a similar situation, Senate Minority Leader Chuck Schumer and a core group of other Senate Democrats voted for a CR that funded the government for the remainder of fiscal year 2025, making the calculation that allowing the government to shut down would actually facilitate the Trump Administration’s efforts to slash government programs and that depriving the Judicial branch of funding could undermine one of the only checks on the President’s power. While this position may have had some merit, it did not sit well with many Democratic voters, who wanted their elected officials to oppose the Administration’s policies more forcefully.

Today, the political dynamics are much different. Mr. Schumer and other Democrats have made it clear that they will not support another CR without significant Republican concessions on health care, including an extension of enhanced tax credits to help Americans pay for health insurance under the Affordable Care Act (a.k.a. Obamacare). If these credits are allowed to expire at the end of the year, an estimated four million people will lose their coverage.

While a handful of Republicans have expressed an openness to extending the tax credits, most appear to be opposed. Thus, we appear to be headed for a showdown. Will Republicans ultimately agree to include health care provisions in a CR to gain Democratic votes? And if not, will Democrats hold firm and refuse to vote for a CR, thus resulting in a government shutdown?

We will keep a close eye on these developments over the next couple of weeks.