Government Reopening Proposal Would be the Costliest in History
Some lawmakers have called for increasing federal health care spending by $1.5 trillion to permanently extend the expiring enhanced Affordable Care Act (ACA) subsidies and repeal the health care savings from the One Big Beautiful Bill Act (OBBBA) as part of a deal to open the government. They’ve more recently focused mainly on the ACA subsidies, which would cost $350 billion through 2035 to extend in full. Supporters have not included any offsets for their proposal and would debt finance the entire package.
Including either the full $1.5 trillion package or the $350 billion to extend ACA subsidies would make the reopening bill by far the most expensive reopening ever enacted. To our knowledge, it would also be the most expensive reopening package ever considered.
Major Government Shutdowns in the Past 30 Years
| Fiscal Year Funding | Length | Primary Dispute(s) | Deficit Impact of Dispute(s) | Resolution |
|---|---|---|---|---|
| FY 1996 (first shutdown) |
5 days | Congress and the President disagreed over Medicare savings | -$270B | CR; commitment to a balanced budget in seven years |
| FY 1996 (second shutdown) |
21 days | Congress and the President disagreed over the plan to balance in seven years | -$400B | CRs; seven-year plan for balanced budget |
| FY 2014 | 16 days | Congress disagreed on ACA implementation and spending ‘sequester’ | -$34B to +$100B for delaying or repealing ACA | Clean CR; bipartisan budget conference to negotiate sequester replacement and deficit reduction |
| FY 2019 | 35 days | Disagreement over border wall funding | +$6B for border wall funding | Clean CR; bipartisan conference to negotiate DHS funding |
| Current (FY 2026) |
29 days and counting | House passed clean CR; Senate minority wants to attach health policy demands |
Up to +$1.5T for OBBBA health savings repeal and ACA extension +$350B for just ACA extension (+$60B for 2 years) |
Unresolved (negotiations ongoing) |
Notes: Deficit impact for disputes of the FY 1996 shutdowns were over seven years rather than a decade. Shutdowns only include those where operations were affected for more than one business day.
Prior to this year, the federal government had experienced four “true” government shutdowns – none of which were accompanied by demands for enactment of massive new borrowing:
- In November of 1995, the first 5-day shutdown for FY 1996 was due to disagreement over $270 billion of Medicare savings and began after President Bill Clinton vetoed a funding bill, but it was resolved with temporary funding and a commitment to balance the budget in seven years.
- In December of 1995, dispute between the President and Congress over how to achieve balance led to the second shutdown of FY 1996 and lasted 21 days; the government reopened after President Clinton submitted a plan to Congress that balanced the budget within seven years, which helped set the foundation for the passage of the Balanced Budget Act of 1997.
- In October of 2013, disputes over FY 2014 funding led to a shutdown that lasted 16 days. The Senate disagreed with the House’s funding proposals that included provisions to obstruct the implementation of the Patient Protection and Affordable Care Act (ACA), ranging from entirely barring funding of the ACA (increasing deficits by about $100 billion) to delaying parts of it (decreasing deficits by $34 billion). There were also disagreements on how to handle the new ‘sequester cuts’, which imposed an immediate 7.8 percent cut to non-exempt defense spending and 5.0 percent cut to non-exempt nondefense discretionary spending as a result of the failure of the Joint Select Committee on Deficit Reduction to reach agreement. In part because the shutdown coincided with an impending debt limit breach, lawmakers ultimately passed a clean continuing resolution (CR) without impediments to ACA funding alongside an agreement to establish a budget conference to begin bipartisan, bicameral budget negotiations. Those negotiations, led by House and Senate Budget Committee Chairs Patty Murray (D-WA) and Paul Ryan (R-WI), ultimately resulted in the passage of the Bipartisan Budget Act of 2013, which partially replaced two years of discretionary sequester cuts with user fees and mandatory savings, while modestly reducing long-term deficits.
- In December of 2018, there was a partial government shutdown of 35 days. The shutdown was the result of disagreement over $6 billion in funding for a wall bordering Mexico. Eventually, a funding bill was passed to reopen the government that did not include the border wall financing but instead established a bicameral, bipartisan conference committee to negotiate funding for the Department of Homeland Security (DHS). Negotiations ultimately led to $1.4 billion toward a physical border wall, along with significant additional border security funding.
Resolving the current shutdown has been complicated by the astronomically expensive and irresponsible health care asks, along with legitimate disagreements over the President’s spending authority. Focusing on issues of executive authority and asserting Congress’ power of the purse would have been far more appropriate and less fiscally reckless. Historically, government reopenings have generally been “clean” and have often come with commitments from the parties to work together to reduce deficits. Coupling a government reopening with $350 billion or $1.5 trillion of deficit increases is unheard of.
Congress should pass a clean CR to reopen the government without adding to an already unsustainable debt. Any extension of enhanced subsidies should be at minimum fully offset and preferably offset twice over in the context of a plan that reforms the subsidies and lowers overall health care costs. There are plenty of options available.
