(UBS)
Government Funding. Congress came back to Washington this week with significant unfinished business, particularly on government funding. Coming off the largest government shutdown in history late last year, it needs to pass the remaining nine of 12 government funding bills for fiscal year 2026 by January 30 in order to avert yet another shutdown. Congress passed the first three bills (Legislative Branch, Military Construction-Veterans Affairs, and Agriculture) in November as part of a compromise to end the shutdown. The House this week passed a package of three more spending bills (Energy-Water, Interior-Environment, and Commerce-Justice-Science). The Senate will vote on that package as soon as next week. Passage of these three bills provides some momentum for lawmakers to finish their work. However, the remaining six bills, which include Defense, Labor-Health-Education and Homeland Security, are the most contentious. They also are important since they make up nearly 70% of all federal discretionary spending. Congress has only three weeks to reconcile key differences and pass the remaining bills.
Congress may need to extend current funding for the remaining government agencies through another continuing resolution (that could be a short-term extension to buy some more time or an extension through the end of the fiscal year).
Health Care. While back at home, many lawmakers heard from constituents about expiring Affordable Care Act (ACA) subsidies. Last month, House Democrats received support from four Republicans to force a vote on renewing the (now expired) ACA subsidies for three years. The House passed that bill in a 230-196 vote, with 17 Republicans joining Democrats. However, the bill’s prospects are not good in the Senate, which voted down similar measures last month. With Republican leadership showing little interest in having another vote on a simple extension, a bipartisan group of senators has been working on finding an alternative. That could combine a short-term extension with income caps and a minimum premium requirement. There are major obstacles. One is timing given that open enrollment for ACA plans ends 15 January. Also complicating matters is Republicans’ desire to expand the Hyde amendment, which prohibits the use of federal dollars from being used for abortion. In a meeting with Republicans this week, President Trump urged Republicans to be flexible on the issue, though many Republicans disagree. Meanwhile, Democrats are staunchly opposed to any Hyde amendment expansion.
While bipartisan discussions continue, there seems like little chance of a breakthrough.
For much, much more, see the latest Special Edition of Washington Weekly , published 9 January, 2026.
