THE SHUTDOWN FIGHT IS A CRITICAL MOMENT IN THE EXPANSION OF THE GOVERNMENT. It’s not hard to understand why many Americans are bored by the government shutdown battle now underway in Washington, D.C. They’ve seen it many times before, and they know it never amounts to much in the end. So why pay rapt attention and get all agitated about it?
But the current shutdown is interesting in one particular way — for what it says about the continued, apparently inexorable expansion of government, and how it happens.
The Democratic Party’s biggest policy achievement of this century is the 2010 passage of Obamacare, the Affordable Care Act. Establishing a national healthcare system had been a Democratic goal for generations. With Obamacare, the party got closer than ever before, as it briefly had 60 votes in the Senate.
But Democrats did not have the political support to establish the huge, single-payer system they wanted, so they settled for the Affordable Care Act — establishing marketplaces, offering government subsidies, establishing rules regarding pre-existing conditions, expanding Medicaid, and more. It was the best they could do with the votes that they had. Acknowledging that, some Democrats at the time referred to Obamacare as a “starter home,” an affordable beginning house to which an owner adds rooms and amenities as the years go by.
Of course, to do that, the Democratic Party would need to control the White House, House, and Senate. After 2010, the next time that happened for Democrats was in 2021, in the first year of President Joe Biden’s term. So it was no surprise that a top Democratic priority was expanding Obamacare.
On top of that, there was a crisis, the COVID-19 pandemic, that Democrats could use to push for “emergency” expansion. The first such expansion was with the American Rescue Plan Act, the $1.9 trillion COVID-19 relief bill signed into law by Biden on March 11, 2021. (It had passed on nearly party-line bases in both House and Senate.) This is from the Kaiser Family Foundation, a pro-Obamacare think tank:
The vast majority of Affordable Care Act marketplace enrollees receive a tax credit that lowers enrollees’ monthly payment for health insurance. Established as part of the ACA, premium tax credits were originally available for enrollees making between 100% and 400% of poverty. More recently, the American Rescue Plan Act introduced enhanced premium tax credits that increased the amount of these tax credits and also expanded eligibility to households with an annual income over 400% of the federal poverty limit ($103,280 for a family of three signing up for coverage in 2025), capping their out-of-pocket premiums for a benchmark plan at 8.5% of income.
So, virtually the first thing Democrats did when they controlled Washington was to expand Obamacare. But the expansion was temporary, set to expire at the end of 2022 — after all, it was purportedly a response to the COVID-19 emergency. But temporary measures have a tendency to turn into permanent programs in Washington, D.C. So when the American Rescue Plan Act expansion was set to expire in 2022, Democrats passed, as part of the so-called Inflation Reduction Act, a measure extending the higher premium tax credits for three more years, until the end of 2025.
And here we are. With the COVID-19 emergency long over, the Obamacare premium tax credits are set to expire on December 31. And now, Democrats, who never wanted the credits to expire at any time, are insisting they must be extended again. Otherwise, Congress would be taking healthcare away from the American people!
And that is what the government shutdown fight is about. Republicans want to pass a simple bill to keep the government open, but Democrats insist it must also extend “emergency” Obamacare premium tax credits.
Republicans predicted this back in 2010. They knew that a government program like Obamacare, once established in law, would never expire and never become anything other than more expensive. And when COVID-19 hit, Republicans feared that emergency spending, instead of being temporary spending for an emergency, would become the new baseline for federal spending going forward.
That is what happened. Total federal spending in fiscal 2019, the last before COVID, was $4.45 trillion. In fiscal 2024, it was $6.75 trillion. That is an increase of 52% in just five years. It is a situation that is not, as they say, sustainable. And that is what the current shutdown showdown is about.
