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The whole conversation around the 2010 Affordable Care Act (ACA, aka ObamaCare) is about health care for the middle class, people with discretionary income. The operative question is about how much income politicians can keep in the discretionary category for their constituents.
Nonetheless, income levels for health insurance subsidies are referred to as a percentage the poverty level in order to retain the political sympathy of helping the poor. The U.S. Department of Health and Human Services calculates and publishes an official Federal Poverty Level (FPL) which is the minimum dollar amount of income considered necessary for basic necessities. Personal income above that is referred to as discretionary or disposable. Income-based Federal programs tend to discuss personal income as a percent of FPL. For context, if an individual earns 12 times FPL, they are in the top 10 percent of earners. For a family of four, only eight times FPL puts their income level among the top 10 percent.
When ACA was originally passed in 2010, it was set up to redistribute income from higher earners to lower earners. One of the more prominent income thresholds it used to separate higher earners from lower earners was 400 percent of poverty (FPL), meaning four times the poverty level. To put this in context today, about 40 percent of all individual earners and about 70 percent of all families of four would be included in those earning 400 percent FPL or less. Under ACA, originally, the Federal government subsidized all premium costs after a lower-earning taxpayer, at 133 percent FPL, paid 2.07 percent of income toward their premium, and subsidies scaled up to cover all premium costs after 9.83 percent of income from a taxpayer at 400 percent FPL, still considered to be one of the lower earners.
In 2021, in response to COVID, Congress passed the American Rescue Plan (P.L. 117-2) which “enhanced” ACA’s subsidies for two years by lowering the percentage of income required to be paid for health insurance in order to get Federal subsidies. The income percent expected to be paid toward health insurance premiums went down to zero for those earning up to 150 percent FPL, and down to 8.5 percent for anyone earning four times the poverty level or higher. The only limit on the subsidies for those at four times the poverty level or higher is the premium subsidy cannot exceed the amount of the premium itself after the 8.5 percent of income. A year later, the Inflation Reduction Act (P.L. 117-169) extended this enhancement to the end of 2025.
The results of this expansion over the last three years have been increased generated costs of people already in the program and a doubling of the number of people in the program taking tax credits for health insurance premium cost that the government pays directly to wealthy third-party insurers. The income-based ceiling on taxpayer premium payments and the lack of a ceiling on the remaining premium cost have combined to accelerate government spending. The Congressional Budget Office (CBO) estimates that continuing these policies after 2025 for 10 years would cost $350 billion.
Any time a politician tries to tinker with the relationship between supply and demand, unnatural things happen. When people are insulated from, and no longer feel, the true cost of what they are receiving, demand goes up. For example, price fixing causes an increase in demand without reward for the supply, and therefore shortages result. ACA has a price-fixing effect (the income-based ceiling on taxpayer premium payments) which increases demand and has no limit on payment of remaining premium costs to wealthy third-party insurers. The second-party health care providers don’t proportionately benefit so there’s supply improvement is limited. The results are both shortages and inflation. Guaranteed payment for increased demand directly fuels inflation, and emergency room wait times are a prime example of shortage.
The only way to maintain a policy based on politics more than economics is through politics. With natural structural incentives to hold down overall costs of health care largely removed, the resulting per person costs soar. The subsidies don’t address the underlying problem of high costs. Rather, they just give the feeling of addressing the costs for people insured. This explains why the Democrats have dug in as hard as they have on continuing these subsidies and maintaining the disconnect between what people receive vs. what they pay. Yet, the additional funding they demand would facilitate the very policies that are causing the problems they claim the additional funding would fix.
The longer this economically unsound policy continues the harder it becomes to fix later. You reap what you sow, and the longer we sow and continue flawed policy, the harder and more painful it becomes to fix later. We’re already seeing that now, and a government shutdown is just the beginning of the kind of pain comparisons still ahead for policymakers.
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Tim McGhee
CHPP Legislative Analyst, Pray for Congress
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Daily Digests: M 9/29 • T 9/30 • W 10/1 • Th 10/2 • F 10/3
Senate — Votes — Legislation: New: 68 (D, R), Action: 14, Voted: 4, Passed: 10
M 9/29/2025 — Prayer, Digest, Record All–SLR, PDF • Summary
T 9/30/2025 — Prayer, Digest, Record All–SLR, PDF • Summary
W 10/1/2025 — Prayer, Digest, Record All–SLR, PDF • Summary
Th 10/2/2025 — Prayer, Digest, Record All–SLR, PDF • Summary
F 10/3/2025 — Prayer, Digest, Record All–SLR, PDF • Summary
- Bill to reopen government fails again in Senate after bipartisan talks fall short (H.R. 5371) “A person familiar with the negotiations between Republican and Democratic members of the Senate Appropriations Committee said that Republican senators thought they were ‘very close’ Thursday evening to a bipartisan agreement that would allow eight or nine Democrats to vote for the House-passed continuing resolution to reopen government. A GOP senator familiar with the talks, however, said the momentum toward a deal died suddenly on Friday as Senate Democratic Leader Chuck Schumer (N.Y.) stepped in to urge Democratic colleagues to hold out against the House-passed stopgap funding measure until Republicans agree to significant concessions on extending the health premium tax credits.” • Federal shutdown to continue through at least Monday after Senate fails to fund government: Friday's vote failed in a 54-44 split, with Democratic Sens. Catherine Cortez Masto of Nevada and John Fetterman of Pennsylvania voting with most Republicans, along with Independent Sen. Angus King.
House — Votes — Legislation: New: 94 (R, D)
T 9/30/2025 — Prayer, Digest, Record All PDF, Extensions All PDF • Activity, Votes
The prayer was offered by Guest Chaplain Charles Trullols, Catholic Information Center, Washington, DC.
F 10/3/2025 — Prayer, Digest, Record All PDF, Extensions All PDF • Activity, Votes
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3:32:52 p.m. - DISTRICT WORK PERIOD - Pursuant to clause 13 of Rule I, the Chair announced the Speaker's designation of the period from Tuesday, October 7, 2025, through Monday, October 13, 2025, as a "district work period".
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Federal Spending — Committees: House, Senate — FY 2026 bills, table
Action the House has taken on government funding: Republicans have acted responsibly by advancing a clean, nonpartisan 24-page continuing resolution (H.R. 5371) that keeps funding at current levels through November 21 with no partisan policy riders. It averts a government shutdown and ensures essential services and benefits continue uninterrupted for the American people. • Johnson pushes back on Jeffries: ‘There is nothing partisan about this continuing resolution’, Johnson: Shutdown 'ultimately could be a benefit' if Trump administration eliminates programs
White House orders departments, federal agencies to execute plans for orderly government shutdown • Wall Street braces for economic data blackout • How a shutdown could impact global markets • Maine Democrat blames 'far-left' for government shutdown
5 takeaways as a government shutdown begins • Five questions hanging over the shutdown How long will the shutdown last? Will either side cave on health premiums? How far does Trump go with federal layoffs? What government services will be most affected? Who is likely to face the most blame?
Federal government pays non-essential employees $400 million per day • When will shutdown end? Lawmakers have no clue expect shutdown to drag on for at least a week If things are going to change next week, it could depend on whether Trump and Republicans or Democrats are feeling the most political pain. Sen. Mike Rounds (R-S.D.) has floated to Democratic colleagues a proposal to extend the expiring premium subsidies for one year — an idea that Sen. Lisa Murkowski (R-Alaska) included in her framework to keep the government open, which she unveiled on Sept. 20. Senators are also discussing a short-term continuing resolution, something spanning a week or 10 days, to reopen the government while the negotiations on health care provisions continue. • Rank-and-file senators in both parties seek breakthrough on shutdown Johnson: ACA subsidies are “expiring because they themselves, the Democrats, put that into law.” Johnson said he’s talked to one of his Democratic colleagues on the phone recently and dismissed the idea that House Republicans would be willing to rewrite the seven-week continuing resolution they passed last month. • Trump broaches health care talks: Trump administration officials for the first time opened the door to possible bipartisan negotiations over an extension of soon-to-expire health insurance subsidies … Senate Democrats are privately discussing multiple options for how to get out of a shutdown and keep pressure on Republicans to come to the table on the insurance subsidies • Bipartisan talks to end shutdown percolate in Senate: On ACA subsidies: Sen. Mike Rounds, R-S.D., said he suggested extending the current tax-credit structure, which has no income caps and reduces the required financial contribution from beneficiaries, for a year. After 2026, the credits would phase down to their original, pre-pandemic parameters before Democrats’ 2021 expansion. The cap on eligibility would return to 400 percent of the federal poverty level, and personal minimum contributions would increase.
Shutdown to extend into next week as Trump readies budget knife: A White House memo (4 pp.) tallied up $193 billion in 10-year spending on “healthcare for illegal immigrants and non-citizens.” Democrats have always known repealing major pieces of the GOP budget package is a nonstarter. Schumer has already narrowed Democrats’ health care demands to an extension of the enhanced exchange tax credits that are paid directly to health insurers. • DOT freezes funds for projects in New York: Duffy said DOT is focusing on the projects because they are “arguably the largest infrastructure initiatives in the Western Hemisphere.” Funding disbursements from DOT will be withheld until an administrative review of the occurrence of “unconstitutional practices” is complete, he said. “Without a budget, the Department has been forced to furlough the civil rights staff responsible for conducting this review.” The threat to withhold the funding over DEI principles raises the prospect that New York could face a stoppage in federal aid that runs longer than a government shutdown. • Administration freezes Chicago funds • Trump Cancels $45M Green Energy Grant That Chuck Schumer Secured for His Donors • Trump, Russ Vought eye more funding cuts • Fetterman: Shutdown 'the ideal outcome for Project 2025' • Unions file lawsuit seeking to halt Trump shutdown layoff plans
Schumer says he will not support 7- or 10-day stopgap to avoid shutdown • Shutdown continues amid talk of side deals to get stopgap unstuck • Five Senate Democrats the GOP is trying to flip on government funding: Sen. Gary Peters (D-Mich.), Sen. Jeanne Shaheen (D-N.H.), Sen. Maggie Hassan (D-N.H.), Sen. Jon Ossoff (D-Ga.), Senate Minority Whip Dick Durbin (Ill.) • Distrust hinders path to deal
A timeline of lapses in government funding: 2025 is the 21st shutdown in the past 50 years.
Executive — Committees: House, Senate
Cassidy lambasts FDA's abortion pill approval as 'betrayal' The Food and Drug Administration (FDA) approved of a new generic form of the abortion pill mifepristone. • Hawley says he's 'lost confidence' in FDA leadership after it approved new 'chemical abortion drug': “FDA had promised to do a top-to-bottom safety review of the chemical abortion drug, but instead they’ve just greenlighted new versions of it for distribution,” Hawley said. “I have lost confidence in the leadership at FDA.”
FBI had three informants reporting Biden corruption in Ukraine, but no record of real investigation: More whistleblowers than previously known came forward alleging Biden family corruption in Ukraine. Senate Judiciary Chairman Chuck Grassley wants to get to the bottom of why the FBI failed to fully investigate the allegations.
Commerce Policy — Committees: Senate, House
Lawmakers eye surface transportation bill for permitting changes: “So much of our projects are primarily private dollars. But if they touch a piece of federal infrastructure, then it’s game over,” Ian Jefferies, president and CEO of Association of American Railroads, said in an interview. “We have to go through these processes, and we end up in 10-year reviews for trying to replace a 100-year-old tunnel.”
Science/Technology Policy — Committee: House, Senate
Cruz ‘sandbox’ plan for AI draws support, detractors The bill would allow companies to apply to waive federal regulations relevant to their AI systems for up to 10 years, with the White House — through the Office of Science and Technology Policy — designated to oversee the program.
Congress — Committees: House, Senate
Democrats’ Dirty CR
Abe Hamadeh reveals he was on a Biden administration TSA watch list: The DHS' Quiet Skies program was originally intended to identify and track individuals who may pose threats to aviation and relied on behavioral analysis and data collection that was often gathered without passengers’ knowledge.
Retiring: Schweikert
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Committee Activity — Meetings: 11 • Reports: 8 • Legislative action this week:
All committee legislative action • Senate (Subcommittees) • House (Subcommittees)
Floor Outlook
House of Representatives — Rules Committee: Legislation
Johnson cancels House votes next week • House extends recess until next week amid shutdown: The House district work period is from Tuesday, Oct. 7 through the following Monday, Oct. 13. • House Republicans Agree
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3 p.m., Monday, October 6, 2025
Program for Monday: Senate will resume consideration of S. 2296, National Defense Authorization Act.
At 5:30 p.m., Senate will vote on the motion to invoke cloture on the motion to proceed to consideration of S. 2882, Continuing Appropriations and Extensions and Other Matters Act.
Following disposition of S. 2882, Senate will vote on the motion to invoke cloture on the motion to proceed to consideration of H.R. 5371, Continuing Appropriations and Extensions Act.
Following disposition of H.R. 5371, Senate will vote on the motion to invoke cloture on the en bloc consideration of certain nominations as provided for in S.Res. 412 (119th Congress).
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The House meets in Pro Forma sessions during district work periods.
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