Update 918 — Congress Adjourns for 2025
Punting on ACA Subsidies, Crypto, Budget
Congress officially adjourned to start a two-week holiday recess yesterday without extending the enhancements to the ACA premium tax credits that expire at the end of this year. While House Democrats were able to discharge a bill for a clean, three-year extension, and will vote on this measure next month, prospects remain bleak. Republican inaction will cause ACA marketplace premiums to double, or more, on average beginning in January, and force millions to drop their coverage entirely.
New data released this week shows that the labor market continued to weaken in October and November, with 41,000 jobs lost over the two months and inflation ticking down to 2.7 percent last month, though the inflation data was distorted due to the government shutdown. Congress did pass the annual defense authorization bill this week after a bipartisan vote in the Senate, but failed to pass any of the nine remaining appropriations bills, funding for which expires on January 30.
Happy holidays, and see you in 2026!
Best,
Dana
Headline
Congress Fails to Extend Premium Relief in Time
In Congress’s last week in session before the holidays, the battle over expiring enhancements to the Affordable Care Act (ACA) premium tax credits (PTCs) again took center stage. Democrats have spent the past few months pushing to extend the enhanced credits, which help more than 20 million ACA enrollees afford their monthly health insurance premiums. If the enhancements are allowed to expire as scheduled on December 31, ACA marketplace premiums will more than double on average, causing around 4 million people to lose their health care coverage altogether.
Action was focused in the House this week, following the Senate’s failure last week to pass a pair of competing health care proposals – one of which was offered by Democrats and would have provided for a straightforward extension of the enhanced PTCs for three years.
After months of refusing to negotiate ahead of the premium cliff at the end of this year, House leadership released a health care proposal last Friday, consisting largely of minor health provisions that have previously passed the House. Notably, the bill, which passed the House on Thursday night in a 219-211 vote, did not address the expiring PTC enhancements at all. CBO estimates that the legislation would kick 100,000 additional people off their health insurance coverage. Its contents have already been rejected by the Senate, and the bill is unlikely to advance.
Not all Republicans were satisfied with Speaker Mike Johnson’s (R-LA) lackluster approach to addressing the health care affordability crisis and impending ACA premium cliff. A group of moderate GOP House members, largely led by Representative Brian Fitzpatrick (R-PA), lobbied leadership hard for a vote on an amendment to the GOP health care bill that would extend the expiring enhancements for a short period with some reforms. These members face tough midterm reelection contests and strongly believe that an extension is necessary to protect the House’s razor-thin GOP majority in a political environment that’s proving to be increasingly difficult for Republicans defending the narrowest of majorities in the House.
After the Rules Committee rejected these amendments Tuesday night, four Republicans split with their caucus to sign on to House Minority Leader Hakeem Jeffries’ (D-NY) discharge petition for an extension of the expiring ACA subsidy enhancements without limiting reforms. This allowed the discharge petition to reach the requisite 218 votes, setting the stage for a vote on the underlying extension when Congress returns from recess the week of January 6.
While this move was another notable rebuke of Speaker Johnson and gives House Democrats a chance to pass a clean extension of the expiring enhancements and prevent premiums from doubling for more than 20 million Americans, there are doubts about the path forward:
- Discharge petitions guarantee a vote on the underlying legislation, but not the results of that vote. The four Republican signatories could change their minds before an early January vote under heavy pressure from leadership and the administration. But discharge petitions also close once they reach 218 votes, meaning there could be – and likely are – additional moderate Republicans that support the Democrats’ extension in lieu of other options.
- The Senate already rejected the same proposal for a clean, three-year extension last week. Four Republican Senators – Susan Collins (R-ME), Lisa Murkowski (R-AK), Dan Sullivan (R-AK), and Josh Hawley (R-MO) – did split with their base to support the measure. But it doesn’t look like there is much support for the extension beyond those four, and, even if there is, it would likely fall short of the nine votes needed to get the bill across the finish line.
- President Trump remains a wildcard, capable of rounding up support for an extension or vetoing one if it reaches his desk.
With the House now joining the Senate in failing to address the expiring enhancements, and Congress out on recess for the winter holidays, the credits are expected to expire as scheduled on December 31. 20/20 Vision calls on Congress to pass a clean extension of the ACA PTC enhancements upon its return from recess next month. While Republicans have already done a considerable amount of harm by delaying and avoiding action, a retroactive fix could still provide some relief to Americans who are struggling in the face of a growing affordability crisis.
Other Developments
Jobs Data, Inflation Readings for Recent Months
The labor market has weakened over the past several months, and inflation ticked down, but remained above the Federal Reserve’s two percent target last month, according to new data released by the Bureau of Labor Statistics this week. The data includes several quirks, as the Bureau of Labor Statistics suspended data collection during the 43-day lapse in funding to the federal government from October 1 to November 12.
41,000 Jobs Lost in Oct. and Nov.; Unemployment Up to 4.6% in Nov.
The United States labor market continued to weaken in October and November under the weight of the Trump administration’s sweeping tariffs and cuts to the federal workforce, according to the November jobs report released by the Bureau of Labor Statistics on Tuesday.
Total nonfarm payroll employment rose by 64,000 jobs in November and fell by 105,000 jobs in October. Job gains in the two months prior were revised down significantly, with job gains in September being revised down by 11,000 jobs, from a gain of 119,000 to a gain of 108,000 jobs, and job gains in August being revised down by 22,000 jobs, from a loss of 4,000 to a loss of 26,000 jobs. With these revisions, the U.S. economy has gained an average of about 23,250 jobs over each of the prior four months, a significant moderation compared to the first four months of this year, in which an average of 122,750 jobs were added each month.
The unemployment rate ticked up to 4.6 percent in November, reaching its highest level since September 2021. The unemployment rate remains low, but has gradually risen this year from 4.0 percent in January to 4.4 percent in September, the most recent month for which data is available. The Bureau of Labor Statistics did not collect data on unemployment in October amid the government funding lapse.
Tuesday’s jobs report includes partial data from October and more complete data from November.
Last month, the largest job gains came in health care, which added 46,000 jobs, in line with the average monthly gain of 39,000 over the prior twelve months. Employment in construction rose by 28,000 jobs, and employment in social assistance continued to trend up, rising by 18,000 jobs, in November.
Jobs were lost in several other industries in November. Employment in transportation and warehousing declined by 18,000 jobs over the month.
Federal government employment declined by 162,000 jobs in October, as some federal employees who accepted deferred resignation offers came off federal payrolls, and declined by 6,000 jobs in November. Federal government employment has fallen by 271,000 since January, amid the Trump administration’s cuts to the federal workforce.
Inflation Rises Unexpectedly, Ticks Down to 2.7% in November
Inflation, as measured by the Consumer Price Index (CPI), ticked down to 2.7 percent in November, according to the November CPI report released by the Bureau of Labor Statistics yesterday morning. This is down from 3.0 percent in September, the last month for which data is available, and notably below the 3.1 percent annualized increase in inflation estimated by economists polled by Dow Jones.
According to the report, prices rose by 0.2 percent on a monthly basis in November. Core CPI prices – which exclude food and energy prices – also rose by 0.2 percent on a monthly basis and by 2.6 percent in November, down from 3.0 percent in September.
Food prices rose by 2.6 percent on an annualized basis, and energy prices rose by 4.2 percent in November. Shelter costs, which represent about a third of the weighting in the index, rose by 3.0 percent on an annualized basis, significantly cooler than in early 2025.
Looking Ahead
The new data shows that the labor market continues to weaken notably, and while the latest data shows inflation ticking down last month, it does not offer sufficient evidence of a sustained downward trend. The December CPI report, to be released on January 13, will provide clarity as to whether the trend of rising inflation over the past year persists into 2026.
This data will be key for the Fed’s interest rate-setting committee, which has faced the challenge of determining monetary policy with its dual mandate of stable prices and maximum employment in tension over much of this year. The Federal Open Market Committee will also consider the December jobs report, to be released on January 9, when it considers whether to cut rates further or hold rates steady at its next meeting on January 27 and 28.
NDAA Sent to President’s Desk
On Wednesday, the Senate passed the National Defense Authorization Act (NDAA), which will now be sent to the President’s desk for his signature. The largely bipartisan vote, 77-20, authorized $901 billion for defense spending, about $8 billion more than the President’s request. The NDAA is an annual authorization that establishes federal defense programs ahead of the appropriations process and has passed consistently for 64 years. The House passed its version of the bill, 312-112, earlier this month.
The bill authorizes a 3.8 percent wage increase for service members and $800 million for Ukraine over the next two years. However, excluded from NDAA were the following highly anticipated amendments of relevance:
- The ROAD to Housing Act faced opposition from Republican leadership in the House Financial Services Committee, but transformed into a similar standalone bill this week: The Housing for the 21st Century Act.
- A ban on central bank digital currencies was sought by conservatives, but had no hope of gaining support from Senate Democrats.
Funding Bills Stall in Senate; Jan. 30 Shutdown Cliff
More than two months into the 2026 fiscal year (FY26) that began on October 1, and one month after the end of the longest government shutdown in history, Congress has yet to pass the bulk of FY26 appropriations bills that fund federal discretionary spending.
Limited progress was made last month as a part of the deal that ended the 43-day shutdown, as Congress passed and the President signed a “minibus” package of three appropriations bills:
- Agriculture
- Military Construction and Veterans Affairs
- Legislative Branch
Congress was forced to turn to a continuing resolution (CR) to provide temporary funding for the remaining nine bills, which make up around 90 percent of federal discretionary funding. This CR expires on January 30 – just four legislative weeks from now.
Since the end of the shutdown last month, Senate Majority Leader Thune and congressional appropriators have been attempting to move another package of funding bills consisting of:
- Defense
- Labor, Health and Human Services (Labor-HHS).
- Transportation, Housing, and Urban Development (T-HUD)
- Commerce, Justice, and Science (CJS)
- Interior and the Environment
The Senate spent much of the last few weeks attempting to clear procedural holds that have blocked the consideration of these measures in a minibus package. After a brief period of progress and optimism earlier this week, the Senate ultimately failed to clear all of the necessary holds, with Colorado Senators Michael Bennet (D-CO) and John Hickenlooper (D-CO) objecting because of the administration’s recent move to dismantle the National Center for Atmospheric Research (NCAR) in Boulder, Colorado. The Senate adjourned for the holidays on Thursday without passing the package of funding bills, but having made progress on some of the key holdups.
Now, all eyes turn towards the January 30 expiration of the CR that is currently funding the bulk of discretionary spending. At this point, neither party seems to have a desire to force another shutdown. But the Senate will need to overcome considerable obstacles upon its return to pass a minibus package, and even then, the House is extremely unlikely to pass it wholesale. With just four legislative weeks remaining before the current CR expires, and an additional four bills that Congress must address beyond the Senate’s minibus, completing the FY26 appropriations process may be a tall, if not insurmountable, task.
Crypto Market Structure Bill Pushed to 2026
Senate Banking Chair Tim Scott (R-SC) signaled that he would not push for a markup for the still-in-development crypto market structure bill this week. By doing so, he has punted on crypto market structure until next year — likely a disappointment for the crypto lobby, which has pushed hard for a market structure bill to provide regulatory clarity. But with the slow progress in negotiations between Senate Democrats and Republicans, it is likely not a surprise. By contrast, Senate Democrats get their wish for more time to negotiate a deal.
Negotiations will continue to play out for the remainder of the year and will pick up again in January after the holiday recess. These negotiations are between Senate Republicans and crypto-friendly Senate Democrats, who want to pass crypto legislation but do not want to be seen as backing down on many of the party’s red lines. From what we know of the Senate Democrats’ policy demands, they include the following:
- A clear separation between digital commodities and securities, one that will, for example, prevent digital assets from being used as a regulatory workaround for trading traditional stocks with less oversight.
- Stronger protections against money laundering and crypto-related fraud.
- Ethical rules for limiting the extent to which elected officials and their families can profit from digital assets.
That last policy demand is an especially thorny one, as President Trump and his family have profited immensely from selling digital assets during his second term, and whatever compromise that Senate Democrats and Republicans reach on the market structure bill will still need his signature.
While expectations are that Congress will still pass a crypto market structure bill before the midterms, the fact that it failed to pass the crypto industry’s most sought-after legislative priority despite the industry’s heavy spending during the 2024 campaign season and lobbying efforts throughout 2025 is still notable. Even with a record number of pro-crypto politicians from both parties in Congress this year, there were still enough partisan policy differences to slow legislative progress to a crawl through the second half of the year.
Markup
HFSC Advances 20 Bills in Final Markup of 2025
The House Committee on Financial Services convened for a markup on Tuesday and Wednesday, in which the members advanced 20 bills focused on banking and housing out of committee. Several of the bills requiring federal regulators and agencies to conduct additional studies were passed unanimously or with strong bipartisan support.
These include:
- H.R. 6536, the Rural Depositories Revitalization Study Act – The bill, led by Representative Ralph Norman (R-SC), would require federal banking regulators to conduct a joint study and issue a report to identify how they can improve the growth, capital, adequacy, and profitability of depository institutions that primarily serve rural areas.
- H.R. 6555, the Enhancing Bank Resolution Participation Act – The bill, led by Representative Bill Huizenga (R-MI), would require federal banking regulators to conduct a joint study on the use and benefits of granting shelf charters and a modified bidder qualification process in the bidding process for failing bank assets.
Several bills were advanced on party lines, notably including H.R. 6554, the Community Bank Representation Act, led by Representative Monica De La Cruz (R-TX). The bill seeks to formalize a community bank representative’s role on the Federal Reserve Board, effectively splitting supervision and regulatory duties currently undertaken by the Fed’s Vice Chair for Supervision. The establishment of such a position would create confusion on the Fed’s board, particularly as the Community Bank Representative would, unlike the Fed’s Vice Chair for Supervision, not require Senate confirmation. 20/20 Vision opposes the bill and encourages all Democrats to vote no, should the bill move to the floor in the coming year.
Members also approved a resolution reauthorizing the Committee’s Task Force on Monetary Policy, Treasury Market Resilience, and Economic Prosperity through July 22, 2026.