- Schumer proposes a compromise: pass a short-term "clean" funding resolution now to reopen government, then address ACA tax credits separately.
- Republicans would extend enhanced ACA premium tax credits for one year, preventing steep premium hikes and shielding millions from a "premium cliff."
In a dramatic shift aimed at ending the protracted U.S. government shutdown, Senate Minority Leader Chuck Schumer unveiled a compromise Friday that could finally unlock federal funding and avert deeper economic fallout.
The proposal, delivered from the Senate floor amid mounting pressure from both parties, would see Democrats back a “clean” short-term spending resolution to restart shuttered agencies and paychecks for hundreds of thousands of federal workers.
In return, Republicans would commit to extending enhanced Affordable Care Act (ACA) premium tax credits for one year, shielding millions of Americans from steep health insurance hikes set to hit in January.
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“This is a path forward that respects both sides’ priorities,” Schumer, D-N.Y., declared during his afternoon address.
“Democrats have said we must address the health care crisis, but Republicans have repeatedly said they won’t negotiate to lower the health care costs until the government reopens. So let’s find a path to honor both positions.”
Why the Shutdown Persists
The olive branch marks a retreat from Democrats’ earlier insistence on bundling the ACA extension directly into the funding bill—a sticking point that’s doomed prior attempts to clear the Senate’s 60-vote filibuster threshold.
With Republicans controlling 53 seats and Democrats plus two independents holding 47, the impasse has fueled the shutdown since October 1, the longest in modern history.
Schumer’s plan decouples the issues: Pass the clean resolution now to flip the switch on government operations, then tackle the subsidies in a standalone measure.
It also envisions a bipartisan working group to hash out broader fixes for soaring health care premiums, a nod to GOP calls for structural reforms over what they deride as temporary Band-Aids.
The timing couldn’t be more urgent.
As furloughs stretch into a second month, non-essential services from national parks to regulatory reviews remain frozen, costing the economy an estimated $1.5 billion weekly in lost productivity, according to preliminary White House figures.
Furloughed workers, many without pay, are dipping into savings or relying on food banks, while contractors face layoffs.
Republican Resistance and Opportunity
Republicans, led by House Speaker Mike Johnson, have pushed their own clean funding measures, but they’ve repeatedly stalled in the upper chamber over Democratic resistance.
Schumer’s concession could sway moderate GOP senators wary of the shutdown’s toll, though hardliners aligned with President Donald Trump may demand more concessions, including border security riders.
“Therefore, we’d like to offer a simple proposal that would reopen the government and extend the ACA premium tax credits simultaneously … and then have the opportunity to start negotiating longer-term solutions to health care costs,” Schumer added, framing the deal as a pragmatic reset.
The ACA’s Critical Role
The enhanced tax credits, first supercharged by the 2021 American Rescue Plan and extended through 2025 under subsequent legislation, have been a lifeline for middle-class families.
They cap premiums at 8.5% of household income for plans bought on ACA exchanges, enrolling over 21 million people last year alone.
Without renewal, experts warn of a “premium cliff” where costs could surge 75% or more for many, potentially driving uninsured rates to pre-pandemic highs.
Schumer’s remarks came after a closed-door Democratic caucus, where frustration boiled over the strategy’s diminishing returns.
“We’ve held the line on health care, but at what cost?” one anonymous senator told reporters.
On the Republican side, Senate Majority Leader John Thune, R-S.D., signaled openness to talks, telling Fox News, “If this gets us back to work without opening the floodgates to unrelated spending, we’re listening.”
As markets jitter over fiscal uncertainty— with the Dow dipping 0.8% Friday on shutdown fears—Schumer’s gambit injects rare momentum.
Negotiations could convene as early as next week, though skeptics caution that Trump’s unpredictable influence, including his recent Truth Social posts blasting “radical left giveaways,” could upend progress.
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