The Government Shutdown Finally Ends

Late Wednesday evening, the House of Representatives passed legislation to reopen the government after a historically long shutdown. The vote was 222-209 with six Democrats voting for the bill continuation resolution. The government is now open until January 30, 2026, while longstanding issues on funding and health care tax credits remain unresolved.  

We shared a full update on the agreement and how we got here earlier this week. In addition to the short-term extension of federal funding, the agreement includes three full-year appropriations bills (Agriculture, Military Construction/Veterans Affairs, and Legislative Branch) and an extension of food stamps and the Farm Bill through September 30, 2026. In order to secure Democratic votes, Senate GOP leaders promised a vote on extending expiring Affordable Care Act (ACA) enhanced premium tax credits by the end of the year.

What’s Next for Congress? 

With the shutdown over, Congress will quickly turn to a growing list of outstanding priorities. The most pressing issues before the end of the year are extending ACA tax credits and reauthorizing the National Defense Authorization Act (NDAA). 

ACA Tax Credits 

The agreement to reopen the government guarantees a Senate vote on an extension of the ACA tax credits, which expire on December 31, 2025. Read our full deep dive from last month on the credits here. 

Our analysis is that there is a legitimate, bipartisan effort to reach a deal on extending the tax credits, including key Republican members. The big questions remaining are: 

The agreement to reopen the government guarantees a Senate vote on an extension of the ACA tax credits, which expire on December 31, 2025. the tax credits, including key Republican members. The big questions remaining are:  

1. How long will the extension last? Republicans oppose a permanent extension, but a year-long extension was a nonstarter for Democrats earlier this year. The latest is that Democrats are pushing for a three-year extension.  
   
2. Do lawmakers eliminate the $0 plan? This has been another priority for conservatives. 
   
3. Will they cap the income levels? And if so, what can we expect to be the final number? 
   
4. Will there be any pay-fors to offset the cost? While not as frequently insisted upon in recent years, Republicans are expected to be more open to an extension if the costs are offset by other cuts. What those would be is at this point unclear. 

We expect that a bill will be introduced and passed in the Senate in the second week of December, per Senate Majority Leader John Thune (R-SD). It will likely be the last major piece of legislation passed by the Senate this year. 

The question then remains if the House will be compelled to take up a vote on the issue. Speaker Mike Johnson (R-LA) is a vocal opponent of the credits, and the House is expected to only vote on the issue if one of two scenarios plays out: 

• Discharge Petition. A handful of House Republicans could side with Democrats who are initiating a discharge petition process, which requires the signatures of 218 Members. House Democrats are already strategizing for this possibility.  

• President Trump Gets Involved. The President has significant sway with House Republicans, and he could indicate his support and direct Speaker Johnson to hold a vote. However, we expect that the President will only do so if he receives assurances from insurance companies that prices will be lower than they were under former President Joe Biden. 

NDAA 

The NDAA is another must-pass bill before the end of the year. The NDAA authorizes programs and activities for the Department of Defense (DOD) for the next year, although it does not appropriate any funds itself. The House and Senate have each passed their own version of the bill. The next step is for House and Senate negotiators to agree to a single bill that will then need to pass both chambers again, before heading to the President’s desk. 

While there are policy differences in the bills, the Senate also authorizes nearly $925 billion in Fiscal Year (FY) 2026, while the House bill only authorizes $892 billion – nearly $32 billion less than the Senate. 

FY 2026 Appropriations 

After votes this week, nine of the 12 regular appropriations bills remain. Congress hopes to pass those bills before the current CR expires on January 30, 2026. Failing that, another short spending extension will be necessary to avoid a shutdown. Members of Congress want to avoid a full-year CR which is how the government was funded in 2025 because it does not allow elected officials to re-set priorities.  

The table below includes an updated look at our FY 2026 appropriation bill tracker. Three bills have already been signed into law – Agriculture, Legislative Branch, Military Construction & Veterans Affairs. That leaves nine bills that must still pass the House and Senate then be signed by President Trump. The spending levels in the available Senate appropriation bills that have been passed out of committee is $48 billion higher than the funding levels contained in the House bills. These spending discrepancies have to be reconciled.  

Sneak Preview of 2026 Policy Issues

It is never too early to be thinking about the issues that will animate 2026. Here is a look at some of the must-pass legislation facing Congress next year in addition to other issues that could be priorities for President Trump and his team.  

FY 2026 Concurrent Budget Resolution

Building on the success of One Big Beautiful Bill Act (OBBB), many Republicans want to do budget reconciliation again. It will be an uphill climb to unify conservatives and moderates but is the last chance to pass goals with Dem votes.  

Reconciliation 2.0 

Republicans want to duplicate the budget reconciliation process to pass additional mandatory spending reforms on a partisan basis. The process will be difficult because Senate GOP moderates oppose many cuts and there is no galvanizing policy like tax cuts to bring every side together. But reconciliation may be the only vehicle for President Trump’s election year priorities or a new GOP health package.  

Farm Bill Consideration or Extension 

Legislation reopening the government extends current Farm Bill policy – over $1 trillion in aid to farmers and the Supplemental Nutrition Assistance Program (SNAP) – through September 30, 2026. Congress will try once again for a long-term bill next year. 

Russian Sanctions 

There is strong bipartisan support (over 80 bipartisan cosponsors) for a Russia sanctions bill introduced by Senator Lindsey Graham (R-SC). The bill was held from a vote pending President Trump’s separate negotiations with Russia. With little action from Russia, the sanction bills and huge secondary sanction on Russian oil could pass next year.  

Cybersecurity Information Sharing Act (CISA) Reauthorization 

The current CISA authorization will expire on January 30, 2026. This law provides for a legal framework within which private sector companies can communicate cybersecurity threats to partners in the private sector and the government. 

Federal Permitting Reform for Energy Production Projects 

Federal efforts to streamline government permitting and speed up energy infrastructure project approvals have already moved with bipartisan support but failed to pass both chambers. There should be a political incentive to move in 2026. 

Tariff Rebates 

President Trump has repeatedly suggested using billions in new federal receipts from tariffs to provide refunds directly to citizens. He could push for this through reconciliation, standalone legislation, or even look for existing federal authority.  

OBBB Corrections 

When a comprehensive bill like OBBB is passed, there are unintended consequences. Many in Congress already want to re-adjudicate issues like gambling deductions, litigation financing taxes, and phase outs from the Inflation Reduction Act (IRA). A tax bill could be brought up next year to make changes.  

Surface Transportation Authorization Expires 

Known on the Hill as the “Highway Bill,” this recurring legislation authorizes federal funding for ground transportation programs. Generally taken up every five years, the 2026 version will have an estimated price tag of $396 billion according to CBO.  

New Medicaid Provider Tax Limits Take Effect 

An important savings policy in OBBB was a limitation on state provider taxes that helped states hike Medicaid spending. These limits go into effect on June 30, 2026, and must not be altered or abandoned by Congress.  

IRA Credits for Homes & Alternative Fuel Refueling Property Expire 

Targeted tax incentives for green energy were rapidly expanded by the IRA. Many of those credits are set to expire for items placed in service after June 30, 2026. As we get closer to that date there may be attempts to save popular credits.  

Export-Import Bank Authorization Expires 

This government agency provides taxpayer-guaranteed loans overseas to subsidize purchases of products from private U.S. companies. The Ex-Im Bank is supported by President Trump but has lapsed during reauthorizations after conservative opposition. The current authorization expires at the end of 2026. 

Medicare Physician Payment Increase Expires 

Doctors who treat Medicare patients were given a pay increase in OBBB that expires at the end of 2026. Stopping this schedule cut could become a political issue.  

Lame Duck Appropriations Spending and Debt Limit Legislation 

Congress traditionally punts spending decisions until after midterm elections. With the U.S. $41.1 trillion federal debt limit likely in early 2027 (depending on deficits next year), it is likely that Congress will end 2026 on the edge of another “fiscal cliff.” 

What to Watch Next Week 



• On Monday, the Office of the U.S. Trade Representative hosts a public meeting on the required review of United States-Mexico-Canada Agreement (USMCA).

• A vote on the controversial House bill that has divided the Republican caucus on requiring the public release of certain records related to disgraced financier Jeffrey Epstein. After reaching the required number of signatures on a discharge petition, Speaker Mike Johnson (R-LA) said he would bring the bill to the floor next week.

As always, if you have questions about these or any other policy topics and would like to schedule a meeting or call with Marc and Andy, please email us.