Update 916 — Senate Rejects PTC Extension;
GOP Debates, Dithers on ACA Premium Cliff
This week, the Senate failed to pass an extension of enhancements to ACA premium tax credits that will expire at the end of this month, causing health insurance premiums to skyrocket for more than 20 million marketplace enrollees. Republicans seem aware that inaction could imperil their control of the House in next year’s midterms, but most still oppose the enhancements. Action is expected in the House next week, but with just one in-session week remaining before the holiday recess and two weeks remaining before the enhancements expire, there is little reason for optimism.
Other developments this week include oral arguments in a pair of Supreme Court cases: one on executive power over the federal government and the other on campaign finance. President Trump announced a $12 billion bailout for farmers hurt by his tariffs and allowed Nvidia to sell its H200 chip to China. On Capitol Hill, the ROAD to Housing Act has been scuttled, and the crypto market structure bill is coming up against a tight deadline.
Good weekends all…
Best,
Dana
Headline
Senate Rejects Extension of ACA Subsidy Enhancements
In recent months, Congress has focused much attention on addressing enhancements to Affordable Care Act (ACA) premium tax credits (PTCs) that will expire at the end of this month. If the enhancements lapse as scheduled, premiums will double on average for more than 20 million Americans who rely on PTCs to afford health care coverage through the ACA marketplaces (more information on PTCs and the expiring enhancements can be found in our recent update).
In exchange for providing some votes to end the government shutdown last month, Democrats received a handshake deal for a Senate vote on a PTC of their choosing. Democrats coalesced around a clean, three-year extension of the enhanced credits, and the Senate moved forward with consideration this week.
Yesterday, the Senate failed to get the 60 votes necessary to advance the Democratic PTC extension bill – the Lower Health Care Costs Act – in a 51-48 vote. Just four Republican Senators joined all Democrats in supporting the extension:
- Susan Collins (R-ME)
- Josh Hawley (R-MO)
- Lisa Murkowski (R-AK)
- Dan Sullivan (R-AK)
Pressured by the premium increases once enhancements expire and growing concerns about congressional Republicans’ and Trump’s inaction on addressing the rising cost of living, Senate Republicans offered their own proposal on the floor yesterday. The bill, sponsored by HELP Committee Chair Bill Cassidy (R-LA) and Finance Committee Chair Mike Crapo (R-ID), centered on investing in Health Savings Accounts (HSAs) for some ACA marketplace enrollees instead of extending enhanced PTCs. HSAs are tax-advantaged savings accounts that can be used for limited medical expenses like deductibles, copayments, and coinsurance – but not premiums.
The Republican HSA proposal failed to advance in a 51-48 vote yesterday, with all Republicans aside from Senator Rand Paul (R-KY) voting in favor and all Democrats opposing. Even if the bill were to pass, it would do very little to address health care affordability. The bill does nothing to prevent the doubling of premiums for more than 20 million ACA enrollees, and only those under 700 percent of the federal poverty level who are enrolled in bronze or “catastrophic” plans with extremely high out-of-pocket costs would be eligible for the $1,000 to $1,500 in HSA funds per year, which would likely not be sufficient to offset the less comprehensive coverage.
With the failure of these two bills, attention now turns to the House, where GOP leadership is getting ready to release a health care package today that is expected to include HSA legislation but do nothing to extend the expiring PTC enhancements. Leadership may offer vulnerable House Republicans a vote on an amendment that would extend PTCs, but this could endanger GOP support for the bill, and a formal decision has yet to be made. House Democrats have also gotten 214 signatures on a discharge petition for a clean, three-year extension matching the proposal by Senate Democrats, but it would require a few moderate Republicans to join to force a vote.
A clean extension of the enhanced ACA PTCs before the end of next week is the only option Congress has to avoid making health care more unaffordable and pushing millions off of their coverage. If Republicans refuse to act, they will have to answer for the resulting health care affordability crisis in the midterm elections next November.
Supreme Court Cases
Supreme Court Takes up NRSC Campaign Finance Case
America has seen a decline in trust of government and democracy over the past 20 years, in part due to multiple Roberts Court decisions, most notably Citizens United, which ended limits on corporate independent campaign expenditures.
In 2022, the National Republican Senatorial Committee (NRSC) and the National Republican Congressional Committee (NRCC), with then-Senator Vance and then Representative Chabot, sued the Federal Election Commission (FEC) over the constitutionality of restrictions on coordinated campaign advertisements under the Federal Election Campaign Act of 1971 (FECA). The Democratic National Committee has backed Mac Elias in defense of the FEC after the Justice Department declined to defend the FEC. The U.S. Court of Appeals for the Sixth Circuit affirmed the FECA limits in September 2024.
NRSC v FEC Oral Arguments
On Tuesday the Supreme Court heard oral arguments on the constitutionality of coordinated party expenditure limits under the First Amendment. According to Campaign Legal Center, federal law considers money that a donor spends at the direction or suggestion of a federal candidate (coordinated donation) to be equivalent to a contribution to the candidate.
It remains unclear which way the court will swing; however, Justices Clarence Thomas, Samuel Alito, and Brett Kavanaugh seem ready to strike down the spending caps as a violation of the First Amendment, and the three liberal justices stand starkly against decreasing regulation.
Kavanaugh expressed concerns about the limitations of political party power compared to super PACs. This imbalance could be easily remedied by overturning Citizens United. Sotomayor warned that lifting these restrictions would throw the door to corruption wide open, allowing donors to funnel bribes to candidates through party committees, avoiding direct contribution limits.
Justices Gorsuch and Barrett did not provide much insight into their perspective on the issue. Chief Justice Roberts pressed the lawyer for the NRSC on the distinction, or lack thereof, between spending by parties/candidates and contributions to their campaigns. He disputed that coordinated expenditures are not direct contributions to candidates.
Relevant Cases
Prior to NRSC v FEC, the Roberts Court has favored campaign finance deregulation. The chart below outlines the most relevant cases.
Source: Center for American Progress
Impact on 2026 and beyond
Since Citizens United, dark money groups have spent at least $4.3 billion on federal elections. By dismantling limits on political parties, the Supreme Court will authorize a surge in soft money spending via campaign ads for candidates. A victory for the NRSC will likely incentivize Republicans to return with more deregulation cases. We plan to do a deeper analysis of the impacts of this decision when it is released, likely next July.
Supreme Court Examines President’s Ability to Fire Independent Officers
The Supreme Court heard oral arguments in Trump v. Slaughter – the case concerning the legality of President Trump’s attempt to remove Rebecca Slaughter as a member of the Federal Trade Commission (FTC) – on Monday. The court’s ruling could undermine the independence of the FTC and every other independent federal agency by allowing the president to unilaterally fire independent government officials in a significant expansion of executive power.
The Court’s conservative majority appeared ready to rule in favor of President Trump, overturning the longstanding precedent set in Humphrey’s Executor v. United States (1935), which prevents the president from unilaterally firing the executive officials of independent agencies.
Overturning Humphrey’s Executor would have dire ramifications for the balance of power of the federal government. Allowing the president to fire agency heads at will effectively eliminates those agencies’ independence. Without its bipartisan commission, the ability of the FTC to operate without politically-motivated interference, along with that of other powerful regulatory agencies such as the Federal Communications Commission, the Federal Election Commission, and the Securities and Exchange Commission, ceases to exist.
Such a move could also implicate the Fed’s independence, even if SCOTUS attempts to insulate it in its decision, because there are no strong, rational legal arguments that the Fed should be immune from executive interference when government entities with similar charters and governing structures receive no such treatment.
Eliminating Humphrey’s Executor also severely restricts Congress’s own authority, as it will have few avenues left to design government agencies with the degree of independence and discretion expected in modern bureaucracies without leaving them vulnerable to getting steamrolled by the president.
The U.S. District Court of the District of Columbia ruled that Slaughter had been illegally fired and ordered the Trump administration to reinstate Slaughter. The Trump administration appealed the ruling. The Supreme Court is taking up the case and hearing arguments before a ruling by the U.S. Court of Appeals for the District of Columbia Circuit, with agreement from both parties.
Other Developments
President Announces Agriculture Bailout
At a White House press conference on Monday, the President convened top cabinet officials and members of the agriculture industry to announce a $12 billion bailout for farmers. Farmers have been squeezed this year as China, the top soybean market, zeroed out purchases in retaliation to Trump’s tariff regime. This bailout from the President is a fraction of the assistance needed to solve the problem he created. Major crop growers alone are estimated to lose between $33-$44 billion this year.
Row crops – corn, soybeans, wheat, rice, and cotton – will receive $11 billion of the assistance in the form of a one-off payment, while the remaining $1 billion is set aside for future allocation for specialty crops such as fruits and vegetables. Funding for the one-time payments will come from the USDA Farmer Bridge Program. Contrary to Trump’s claims during the press conference that the money is tariff revenue, the Bridge payments are taxpayer-funded.
According to the American Farm Bureau Association, “Persistent cost pressures from labor, regulatory compliance, fertilizer, and energy have eroded margins, while weak commodity prices and uneven global competition have strained farm finances.” Farmers continue to call for more than temporary relief from the harm of tariffs and instead seek stable and predictable export markets.
Congress will not have to vote on the aid package, but farmers continue to lobby lawmakers to allocate more funding than the $1 billion set aside for growers of fruits, vegetables and other non-row crops.
Nvidia Chips Approved for China
On Monday, President Trump posted to Truth Social to announce that he will be lifting restrictions on chip-maker Nvidia to sell the H200 chip in China. In return, the United States will capture 25 percent of Nvidia’s future sales of the chip. The H200 chip is Nvidia’s second-best chip and is six times as powerful as the H20 chip approved for sale to China this summer. In that deal, the President secured a 15 percent cut of sales.
The administration has to be creative to avoid this setup from operating like an illegal export tax. To avoid that issue, the H200 chip will be shipped to the US from Taiwan, where it is manufactured, to undergo a security review before being shipped to China. The US will likely collect the 25 percent cut via import tariffs when the chip enters the US.
The administration has yet to clarify details on the security review and the vetting process for purchasers of the chip, but China skeptics and tech hawks are concerned. Many worry that giving the country access to Nvidia’s second-strongest chip may assist in China’s hopes to reach complete parity in computing capabilities. Nvidia CEO Jensen Huang invested millions of dollars in lobbying for this cause and will continue to push for the next generation of chips to be sold in China.
Crypto Market Structure Bill Advances SBC
After weeks of stalemate, negotiations over a crypto market structure bill-in-formation finally yielded some movement in the Senate Banking Committee. Last week, Chair Tim Scott sent Democrats a new compromise offer on the GOP’s draft, reportedly including provisions on ethics rules for lawmakers’ crypto trading, though the new language does not fill in all of the blanks and unanswered questions left in the discussion draft
On Wednesday, Politico obtained details of Democrats’ counteroffer. Their three-page proposal seeks:
- clearer token classification to prevent assets from functioning like stocks, without proper oversight;
- stronger anti–money laundering safeguards; and
- limits and disclosure requirements for crypto trading by lawmakers and their families.
Democratic negotiators include generally crypto-friendly senators—Kirsten Gillibrand, Mark Warner, Ruben Gallego, and Angela Alsobrooks—while crypto-skeptics like Senator Elizabeth Warren are not expected to support any deal. Republicans Tim Scott and Cynthia Lummis are leading talks on their side.
GOP leaders aim to pass a market structure bill before 2026, but progress has been halting. The House passed its CLARITY Act in July, yet Senate Republicans chose not to take it up, opting instead to draft their own bill—a process that consumed months and led to further gridlock as Democrats pressed for changes.
Scott now faces a tight deadline: he must introduce and mark up a bill by the end of next week before Congress adjourns. Democrats doubt a deal can come together that quickly; Warner noted, “We have wide swaths where we don’t have an agreement — even any language.” Advocates on both sides of the crypto debate are pressuring lawmakers, and any final agreement will also need White House approval. With time running out, the fate of the crypto legislation remains uncertain.
ROAD to Housing Act Stripped from NDAA
Despite bipartisan support, the package of affordable housing bills known as the ROAD to Housing Act was stripped from the National Defense Authorization Act (NDAA) before its final passage. The bill had overwhelming support in the Senate, passing out of the Senate Banking Committee with a unanimous vote and receiving broad support as part of the Senate’s version of the NDAA.
In the end, however, the bill could not overcome resistance from the House GOP, especially House Financial Services Committee Chair French Hill (R-AR). Representative Hill has said that he wants the House to consider its own standalone bill on housing affordability, further stating that “next year, we look forward to working with our Senate colleagues to send a bill to the president’s desk that reflects the views of both chambers and leads to more affordable choices for America’s homeowners and renters.”
None of this clarifies the House GOP’s policy concerns with the ROAD to Housing Act, and they have kept their cards very close to their chests on the matter. Whether these policy concerns were the main reason the ROAD to Housing Act died in the House, or whether it was thanks to resentment from the House GOP over the Senate trying to take full command of housing policy, as well as other pressing issues, is anyone’s guess. What is clear is that it will be difficult to pass major housing legislation next year, as the window is closing on the GOP’s opportunity to advance its agenda before the midterm elections.
Hearings
HFSC Discusses AI in Financial Services
On Wednesday, the House Financial Services Committee held a hearing on the use of AI in the financial sector. The GOP members of the committee, led by Chair French Hill (R-AR), used the hearing to highlight the GOP message on AI. The witnesses the GOP majority invited to testify were all representatives from Big Tech and others pushing the adoption of AI, and largely repeated the GOP’s call for less regulation and greater innovation for the emerging technology.
The biggest pushback against this narrative came from Joshua Branch, a Big Tech Accountability Advocate with Public Citizen. Branch called attention to the risks posed by AI, including the risk of enabling fraud and perpetuating bias, as well as to the ways that Big Tech is trying to skirt the few guardrails that currently exist. For example, he denounced Big Tech for advocating for a moratorium on state-level AI regulation, despite the fact that Big Tech initially supported many of those same laws. The HFSC’s Democratic members also offered some criticism, though they were not united, with some members taking a softer stance towards AI and Big Tech.
Notably, this hearing came a day before Trump signed an executive order allowing state attorneys general to shut down state laws on AI, the latest attempt to implement a moratorium on state AI regulations.
Look Ahead
Tuesday, December 16
- November jobs report
- Senate Committee on Banking, Housing, and Urban Affairs Subcommittee on Financial Institutions and Consumer Protection hearing: Ensuring Fair Access to Banking: Policy Levers and Legislative Solutions
Thursday, December 18
- November Consumer Price Index report