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The 43-day federal government shutdown that began Oct. 1 finally ended on Nov. 12, with the passage of a continuing resolution that maintained funding for most of the government at levels agreed to at the end of 2024.
The resolution is a stopgap measure, expiring on Jan. 30, setting up another potential shutdown.
The resolution did not include the extension of Affordable Care Act (ACA) health insurance premium tax credits at the center of the shutdown fight. Those credits were temporarily expanded by the American Rescue Plan and Inflation Reduction Act to increase eligibility for the insurance premium subsidy to individuals and couples making income at 400% of the federal poverty level or more.
Senators who provided the necessary votes to pass the legislation — seven Democrats and one independent who caucuses with the Democrats — say they secured a commitment from Senate Republican leadership, which controls floor time in the Senate due to their majority in the chamber, to vote on an extension of that credit expansion in December, before the new coverage year begins in January. However, that effort is expected to fail unless several Republican senators change their positions, and the House Republican leadership has not agreed to hold a vote.
Grant Thornton insight:
While congressional Democrats did not win the major policy concession they argued for, they did succeed in bringing the issue of healthcare affordability to the political forefront and in pushing Republicans to discuss the issue. As the government shutdown wound down last week, the president began pushing his party to draft a bill that would distribute funds directly to Americans instead of to insurance companies, renewing his criticism of the ACA (also known as Obamacare) as “a disaster.”
Expect the credits, and healthcare more broadly, to be another campaign issue during the midterm congressional cycle that essentially began in earnest after high-profile state and local elections in New Jersey, New York City and Virginia on Nov. 4. While those Democrats who voted to end the shutdown are currently facing criticism from voters who wanted them to hold out for a more substantive policy win, the party is betting that swing voters and its own political base will credit them next November with fighting for ACA premium tax credits — and that the same base will not punish them for backing off the fight.
Along with the promise on the Senate floor of a vote on extending the ACA premium tax credit expansion, the deal to reopen the government reverses reductions in force that put several thousand federal employees in limbo, including approximately 1,300 at the IRS. The Trump administration attempted to lay off workers as part of its efforts to bring Democrats to the table during the shutdown, though the maneuver was subject to an ongoing legal challenge that now may be moot. The bill also guarantees back pay for furloughed federal employees, though a 2019 law already mandated that outcome.
The shutdown disrupted IRS operations, with about half the current agency workforce furloughed, primarily impacting taxpayer services, audits, appeals, correspondence, and administrative work, according to the tax collector. U.S Tax Court also temporarily suspended operations beginning on Oct. 20. Courts and the IRS, along with other agencies and federally related services, such as air traffic control, should return to normal operations this week.
Along with the resolution reopening the government, Congress passed and President Donald Trump signed into law three appropriations bills that set fiscal year 2026 federal funding levels in multiple areas, including for the Department of Veterans Affairs and parts of the Department of Defense. That legislation includes language meant to prohibit Trump administration efforts to reprogram funds for other purposes — the first Trump administration previously redirected some military construction funds towards the border wall with Mexico — and reduce the VA’s workforce.
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