Congress Faces Deadlock on Short-Term Continuing Resolution, With Marketplace Subsidies a Stumbling Block

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With a shutdown looming if government funding is not extended beyond the end of the federal fiscal year on September 30, the House approved a seven-week stopgap funding bill (), just as it left Washington for recess on September 19. The measure by a vote of 217–212, with two Republicans, Reps. Thomas Massie (R-KY) and Victoria Spartz (R-IN), voting against the measure and one Democrat, Rep. Jared Golden (D-ME), joining Republicans to pass the bill. When sent to the Senate, however, the Republicans’ continuing resolution (CR) failed to garner 60 votes in a procedural motion, as did the Democratic alternative (). The Republican CR failed 48–44, with Sen. John Fetterman (D-PA) voting yes and Sens. Rand Paul (R-KY) and Lisa Murkowski (R-AK) voting no. The Democratic measure fell 47–45. Now, both chambers are in recess amid the stalemate on government funding beyond September 30.

After being persuaded by Republican Leadership that Democrats’ demands were overly partisan and insincere, President Trump cancelled a scheduled meeting this week with Democratic Leaders, Sen. Chuck Schumer (D-NY) and Rep.  Hakeem Jeffries (D-NY), to discuss federal funding. The House is intentionally not expected to reconvene in until after October 1, leaving the Senate with less than 48 hours to break the impasse and avert a government shutdown when the chamber returns on September 29.

House Republicans’ stopgap, dubbed a “clean” CR, funds the federal government through November 21. The House-passed bill includes minimal additional policies beyond funding, with three notable additions:

• An extension of Cybersecurity Information Sharing Act (CISA) authorities for the duration of the CR. This extension is particularly relevant for health care entities and hospital systems, which rely on CISA to proactively scan for cyberthreats and share information without incurring legal liability;
• An adjustment to the apportionment formula for the Special Supplemental Program for Women, Infants, and Children; and
• Enhanced security measures for congressional members and the executive and judicial branches, reflecting ongoing concerns about threats to public officials.

The House CR also contains the of health care extenders from the March 2025 CR that expire on October 1, including:

• Public health extenders, such as funding for community health centers, Teaching Health Center Graduate Medical Education, and the Special Diabetes Program;
• Medicare extenders, such as the Medicare-dependent hospital program, add-on payments for ground ambulance services, telehealth flexibilities, Acute Hospital Care at Home waiver authorities, and the work geographic index floor; and
• A delay to the Medicaid Disproportionate Share Hospital (DSH) reductions.

All extenders continue through the duration of the CR.

In response to the House Republicans’ CR package, Democrats released their own stopgap legislation that extends government funding through October 31, including health extenders, but also repeals the Medicaid cuts from Republicans’ reconciliation bill () and provides a permanent extension of the Affordable Care Act’s enhanced premium tax credits (PTCs), set to expire come December 31. Democrats have made health care a central issue in CR negotiations, indicating they may support a short-term CR if Republicans commit to negotiating on the enhanced PTCs, but Senate Majority Leader John Thune (R-SD) and House Speaker Mike Johnson (R-LA) have remained firm that congressional Republicans will only support a clean CR.

Republican leadership has signaled they may consider addressing enhanced PTCs later in the year, and pressure is mounting for them to do so. On September 18, the Congressional Budget Office (CBO) released an finding that permanently extending the enhanced PTCs by September 30 would insure an additional 3.6 million people in 2030 and 3.8 million in 2035. While the permanent extension would add almost $350 billion to the federal deficit through 2035, CBO did estimate that gross premiums for benchmark plans would be 7.6 percent lower on average every year between 2026 to 2035 due to a healthier risk pool.

Further complicating the political outlook on the enhanced PTCs, Alaska Republican Senator Murkowski introduced legislation () to extend the Marketplace subsidies for two years—through 2027. This is in addition to bipartisan legislation in the House () that extends the enhanced PTCs for one year—through 2026. The Centers for Medicare & Medicaid Services (CMS) Administrator, Dr. Mehmet Oz, met with Republican members last week to discuss a plan for the Marketplaces should Congress extend the enhanced PTC after premium rates are finalized. Dr. Oz noted that ideas under consideration include opening a special enrollment period, requiring premium rebates, and other potential measures.

Additional policies incorporated into House Republicans’ CR include funding for Medicare hospice surveys, the Tennessee Medicaid disproportionate share hospital (DSH) allotment, and the implementation of the No Suprises Act. The CR also reauthorizes the Over-the-Counter Monograph Drug User Fee Program for five years (through FY 2030). The extenders included in the CR are offset by cuts to the Medicaid Improvement Fund.

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