Now that 2026 is here, the midterm elections are beginning to loom on the horizon, making bipartisan deals more difficult to attain. Performative politics often rises to the fore when the electorate must be wooed.
This is all the more reason why Congress needs to make a priority of solving the budget impasse.
Jan. 30 is the date on which the current continuing resolution — the one that ended the longest government shutdown in U.S. history — is set to expire. A repeat of that ineffective and harmful strategy must be avoided, but as the new year dawns, time constraints seem almost insurmountable.
Congress is currently on a holiday break.
How close is a deal?
Senators spent most of the last month trying to work out sticking points, with no success. Congress has so far passed three of the 12 funding bills necessary to run the federal government. But lawmakers have yet to begin seriously debating the issues surrounding the remaining nine bills.
Of significance is the unsolved impasse concerning subsidies for the Affordable Care Act, which expired at midnight on New Year’s Eve.
Those subsidized premiums were put in place during the peak of the COVID-19 pandemic, in 2021. These were designed to be temporary increases to existing subsidies, a compassionate nod to harsh pandemic realities. They were designed from the start to expire at the end of 2025.
But their generous levels provide subsidies on a sliding scale for people earning up to 400% of the poverty line. That would apply, for instance, to a household of three with a total income of $103,280. Surely, lawmakers could at least agree to pare back some of these levels.
A temporary fix?
Some Republicans oppose the subsidies because they view them as a temporary fix when the real problem involves the need for structural reforms to the ACA.
Those concerns are on the right track. Actually, however, the problem runs much deeper. Neither Republicans nor Democrats have come to grips with out-of-control deficit spending overall. The national debt has surpassed $38 trillion, fueled by an annual spending deficit of just under $2 trillion, and it is growing quickly.
In 2025, interest alone on the debt was expected to surpass $1 trillion, which was more than the annual budget for the Department of Defense. That interest payment hamstrings the government’s ability to fund other programs or respond to emergencies, and it removes money from the economy that could be used on job-creating private sector investments and developments.
As Douglas Elmendorf, the former director of the Congressional Budget Office, told the Deseret News in November, trouble will come if the world ever begins to lose confidence in United States government bonds as safe harbors for money. That would lead the Federal Reserve to raise interest rates in order to quell those investor worries. But higher interest rates would make it harder for people to obtain mortgages and for businesses to expand.
A severe loss of confidence in the dollar could lead the government to inflate the dollar or raise taxes, or both, in an effort to cover expenses and pay down debts. This, too, would ripple through the economy, robbing people of wealth and hurting the government’s ability to fund defense and other vital programs.
Solving expensive health care costs
Extending ACA subsidies may allow many people to afford insurance, but it wouldn’t get the nation any closer to fiscal responsibility, and it would do nothing to tackle the high cost of health care, which is the root of the problem.
As the research group KFF reports, “The U.S. far exceeds other large and wealthy nations in per capita health spending, and health care represents a much larger share of the economy in the U.S. than in peer nations.”
A negotiated phase-out of ACA subsidies may be the short-term answer to this dilemma, but getting to the heart of health care’s cost issue would be far more compassionate in the long run.
Congress has a history of avoiding those tough issues, unfortunately. The nation’s deficit problem is fueled primarily by runaway costs for Social Security and Medicare. Reforming those programs would require some painful compromises and decisions.
In the meantime, however, Congress should avoid passing another continuing resolution, and it should commit to a January will with the hard work needed to avoid another costly shutdown.