Senators from both parties are preparing for another possible government shutdown early next year after Republicans blocked an effort to extend health insurance subsidies that are set to expire in January. Those subsidies were the central issue behind the 43-day shutdown that dominated much of the fall.
Liberal Democrats are furious that Republicans rejected a plan to extend the subsidies through 2028. Eight Senate Democrats, many of them centrists, voted last month to reopen the government hoping that Republicans would negotiate a compromise. Instead, talks broke down, setting the stage for steep increases in health insurance premiums next year.
With the next funding deadline approaching on Jan. 30, progressives are arguing that Democrats should again use the threat of a shutdown to force Republicans to support another extension of the subsidies. After the GOP blocked a three-year extension, Sen. Elizabeth Warren said the fight is far from over.
Sen. Bernie Sanders called the Republican vote “an outrage” and warned that letting the subsidies expire would cause major financial strain for millions of people. Nearly 4.8 million Americans are projected to lose coverage in 2026, and more than 20 million are expected to see significant cost increases. Insurers are also preparing to raise premiums by an average of 26 percent if the enhanced subsidies disappear.
Another Senate Democrat, speaking anonymously, said a shutdown is very possible if Republicans refuse to pass a package of regular spending bills by the end of next month. That package funds major federal departments including Defense, Labor, Health and Human Services, Commerce, Justice, and Interior. If it becomes law, roughly 85 percent of the government would be funded through September 2026, leaving Democrats with fewer opportunities to use shutdown leverage.
But if the legislation stalls, the chances of a shutdown rise sharply. The senator said Democrats may also withhold support for government funding depending on how the administration handles other major issues, such as Venezuela or the release of Epstein-related files.
Republican leaders are pushing to pass the five-bill package quickly to prevent Democrats from using the deadline as leverage. Sen. John Cornyn warned that Democrats could revive the strategy that produced the longest shutdown in U.S. history earlier this year.
Appropriations Committee Chair Susan Collins said she shares those concerns and worries that failing to move the package soon after the New Year could lead to another shutdown.
Progress on the bills has been slowed by objections from conservative senators Mike Lee, Ron Johnson, and Rick Scott, who oppose the number of earmarks, certain policy language, and the size of the package. Another challenge is that House Republicans have not yet settled on overall spending limits for 2026.
Despite this, some negotiation progress is being made. Lee said he is working through the disputed language added to the Interior bill without his approval and has received commitments for votes to remove some earmarks.