Thanks to President Donald Trump’s latest strategic move, Democrats truly are damned if they do shut down the government and damned if they don’t.
Perhaps it takes an “Art of the Deal” businessman to cut the Gordian Knot of government shutdown politics once and for all.
First, a little background: The Constitution gives Congress the power of the purse, the ability to make spending decisions for the federal government. Unfortunately, Congress has been effectively divided down the middle for decades now, and while Democrats want to tax and spend, Republicans often at least say they want to cut the size and scope of government. That’s a recipe for repeated deadlock.
While Republicans have majorities in the Senate and House of Representatives, it takes 60 votes to pass key funding bills in the Senate, which means Republicans need at least seven Democrats to fund the government.
This go-around, Democrats are fighting to extend a higher threshold for health care subsidies originally passed as part of legislation to combat the COVID-19 pandemic.
The Affordable Care Act, better known as Obamacare, created subsidies to offset the costs of health care premiums. Obamacare limited those subsidies by income, offering premium subsidies to people whose incomes fall between 100% and 400% of the federal poverty level and cost-sharing subsidies to those with incomes between 100% and 250% of the poverty level.
In 2021, however, President Joe Biden’s American Rescue Plan Act temporarily lifted the 400% income ceiling for premium subsidies and reduced required premium payments for some enrollees, while entirely eliminating them for enrollees with incomes below 150% of the poverty level. These extra subsidies were set to expire after two years, but the 2022 Inflation Reduction Act extended them to 2025.
Even were these extra subsidies to expire, taxpayers would still foot the bill for 80% to 90% of the premiums for low-income Obamacare enrollees, but Democrats warn that allowing these extra subsidies to expire will leave millions unable to afford coverage.
Of course, not a single Republican voted for the original COVID-19-era subsidies, and Democrats cannot reasonably expect Republicans to champion a costly policy originally meant to address the pandemic, now that the pandemic is over.
Democrats are relying on the old canard of blaming Republicans for a shutdown, to paint Republicans as heartless and uncaring.
That’s where President Trump’s brilliance comes in.
The Republican legislation to fund the government is already a compromise. The House of Representatives passed a bill that would extend government funding at Biden-era levels, leaving many Republicans dissatisfied.
Yet most conservatives and fiscal hawks loved the impacts of the Department of Government Efficiency (or DOGE), which went through each federal agency identifying waste, fraud, and abuse. While Tesla CEO Elon Musk and former presidential candidate Vivek Ramaswamy promised to cut trillions in government funding and only ended up trimming billions, the effort exposed wasteful spending and made a dent in the operations of Big Government as usual.
So, this week, the White House Office of Management and Budget released a memo, telling federal agencies that if the government is going to shut down, they might as well make the most of it.
When the spending runs out, many government agencies run to a halt, and employees often forego their paychecks. Shutdowns can end up costing more than business as usual, however, because employees receive their paychecks with backpay after the government reopens.
While a shutdown will interrupt some key government services, the White House has a great degree of latitude to determine which services are “essential” and which are not. The U.S. military won’t go dark just because Congress can’t sign a check, for instance.
Those of us who remember previous government shutdown battles can vividly recall when President Barack Obama made a big show of closing down national parks during the 2013 government shutdown.
So, when the Office of Management and Budget directs agencies to “consider Reduction in Force (RIF) notices for all employees in programs, projects, or activities” that are “not consistent with the president’s priorities” in the shutdown, it stands to reason that this shutdown will bring about DOGE 2.0.
Democrats who have been marching with the American Federation of Government Employees (the largest union representing federal workers) and other unions, and declaring their solidarity with D.C. bureaucrats against DOGE might want to think twice about dying on the hill of COVID-19 Obamacare subsidies.
They’re already getting more concessions than they deserve when Republicans agree to fund the government at Biden-era levels. It speaks volumes that they’re willing to risk DOGE 2.0 just because they can’t trim “emergency” subsidies passed in the name of fighting the pandemic.
Thanks to Trump’s brilliant move, Republicans win if Democrats come back to the table and agree to cut the Obamacare subsidies, and they also win if obstreperous Democrats force a shutdown and bring about DOGE 2.0.
I’d prefer Congress find a way to keep the government open, but if Democrats die on this hill, I’d love to see the government get leaner and even more efficiently geared toward doing what is truly necessary—and trimming more of the bloat we conservatives have been identifying for years.
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