At Last, A Deal to End the Government Shutdown

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tactic of holding out was just not going to work. They were not going to get Republicans to fold on the demands they were making over Obamacare and these enhanced subsidies that they wanted extended, at least not as part of a reopening deal. The other thing that they realized and they'd been holding out hope for is there were a number of Democrats that thought that perhaps Donald Trump was going to walk in here at some point, go over the heads of Republican leaders, cry uncle, force some sort of deal, and that Democrats would get what they want. And Trump has made very clear that he's just not going to take part in this and that it was going to have to get sorted out in Congress. Then I think you look out and the consequences were really racking up, most notably, as you pointed out in the air traffic control system, but also key constituencies of Democrats, including recipients of SNAP funding. We had a Supreme Court ruling late last week that said that, you know, the administration did not necessarily have to pay out these benefits. So money has not been going out in all of the confusion of that. I think consequences even... For Democrats, John Thune's decision to keep them all in session over the weekend, very few things that senators hate more than missing the weekend home. And that looked like it might be their future life. One more thing I'm just going to throw in here, though, it's not going to get as much attention because people want to always talk about the hardball stuff that caused one side or another to bend a knee. But I want to give a shout out to some of the Republicans that have been... trying to work with Democrats to come up with some sort of solution in health care going forward. Bill Cassidy was putting some alternatives to these enhanced subsidies rather than giving them to insurers, maybe giving them to HCA's. We can debate whether or not any of these proposals are good or not. But it seemed to give some confidence to Democrats that there was an actual interest on Republican side, at least talking about what's happening in the health care. area. A number from swing states that are going to matter in next year's midterms, including Catherine Cortez Mastow and Jackie Rosen from Nevada. A couple of senators who were retiring, so they probably were like, free vote. Like, what are they going to do not reelect me again? Dick Durbin was one of those, Jeanne Shaheen. Tim Kaine was one who voted, but he represents about 150,000 federal workers that aren't getting paychecks right now in Virginia. So I think it was a combination of blunt reality and some individuals that were maybe either brave enough or in a good enough position that they could buck the rest of their coalition. Right. And so we have now a stopgap measure that goes through January 30th past the holidays. And the Senate is also going to attach a couple full year bills to this continuing resolution and fund some parts of the government through the rest of the year. Now, Bill, I wanted to ask a little bit about the politics here. that Kim's talking about and we'll get to the healthcare questions in a moment. But the air traffic control debacle, I think, has really had an effect on normal people who are going to the airport and wondering why they can't get anywhere. I think the Democratic...

Welcome back. I'm here with my colleagues, Kim and Bill. Kim, now we've got to go over to the House, assuming, let's assume that today the Senate does finish their job and pass a deal. This podcast is brought to you by ReliaQuest. Cybercriminals are constantly attacking. They want your data. They want your identity. They want your innovation. Reliacquest fortifies your business with agentic defense. AI that detects contains and eliminate cyber threats in minutes. It helps your security team move faster at the work that matters most to protect the business now and delivers insights to help them predict what's next. RelyQuest, agentic defense for the enterprise. Learn more at Rliquist.com. That's R-E-L-I-A-Q-U-E-S-T.com. Think all wealth managers are the same? Fisher Investments is clearly different. As a fiduciary, Fisher always does what's best for its clients. They don't sell commission-based investment products or make commissions on trades. Their fees are structured so they do better when clients do better. That might be why many of their clients come from other wealth managers. Visit fissureinvestments.com for more. Investing in securities involves the risk of loss. The Democrats that did vote to reopen the government are saying, well, you know, we got a couple things out of this. We got a promise of retroactive pay for federal workers. We got some prevention of further reductions as long as this continuing resolution is in place. I mean, that's sort of entertaining because the retroactive pay wouldn't have been a problem if they hadn't shut down the government in the first place. Right. So that is kind of a product of their own political strategy. But my question, I guess next is on the next steps of this. The House is going to come back. The House has been out for some time now of Washington. Do you expect this to be able to move through the House? The House is going to swear in a new member and their margin is quite tight. Any concerns about landing this plan and getting the government open this week? Yeah, just a little bit more on the deal, which we kind of didn't go through. It's also really amusing, as you say, like, oh, yay, Democrats are getting. a promise that all these workers who are always going to get paid are going to get paid anyway. And then also they got like a reset to where they were at the beginning of the shutdown in that the Trump administration very wisely kind of piled on these additional firings. And so now they've agreed to erase those firings that had happened since shutdown happened and put a very brief moratorium on any more. But not exactly the hugest deal. And then one other thing that was a part of this, we should note, is not just a continuing resolution, but three of these appropriations packages, although generally ones that most people agree on. And also, I guess if you're a Republican, I mean, the military construction veterans affairs and the agriculture bills, those are veterans and farmers who are very much GOP constituencies. So Republicans are more than happy to wipe that off the board. And if you end up in another shutdown scenario in January, also SNAP was funded. So it takes away some of the pain. that could come in a future shutdown. I think that's important to note what actually came out of this. In terms of the process now, believe it or not, this could actually get a lot dumber before it actually gets fixed.

Because while you've had this first procedural vote, there's going to need to be a couple of more in debate. And if the Senate were entirely in a mood to be quick about it, they could clear this off today. However, you have, for instance, Rand Paul saying he's really grumpy about a provision that's in the ag bill that has to do with the hemp industry and is suggesting that he might not yield back his time as part of a debate, which could stretch us out. You've got progressives who are very, very angry. at Chuck Schumer and at, you know, Bernie Sanders at all, they're very, very mad about this. They may not yield back time. They could string this out as well, too. Then the House comes back. I am thinking, you know, they get 36 hours to view this bill in a best case scenario. Maybe Wednesday or Thursday they have a vote again. It depends on what the Senate does. I think that this probably passes. There's going to be some grumbling about those three appropriations packages that were passed by the Senate. Some. conservative House members might view them as more spendy than they should be, although they're not wildly out of line, including with some things that the White House had requested. And in some ways, they should also feel happy because one of the debates that was coming up here, the appropriators only wanted SCR to go until right before Christmas so that they could then have maximum sort of power to just jam through a huge... final spending bill. And the fiscal conservatives wanted it to be longer. They won their way on that. So I think that they will probably have the votes. Also note, too, that while Hakeem Jeffries is saying, you know, we will not support this in the House, he's representing the progressives. There's going to be some moderate Democrats, like in the Senate, who feel compelled to vote for this as well, too. So I see this as going through barring some big revolt, which doesn't seem to be brewing at the moment. point to keep in mind in this scenario is that many of the Democrats who are engaging in performative outrage about reopening the government are surely glad their colleagues voted to reopen the government because now they get to look like they fight for the base while also not paying the price of having the government shut down. Bill, I want to turn now to the Affordable Care Act to Obamacare because that's been such a big part of the shutdown discussion. And It's really a no small miracle that Republicans did not give away anything on Obamacare because there was a lot of pressure from Democrats to continue these pandemic subsidies for Obamacare that no Republicans voted for that go to many folks earning hundreds of thousand dollars a year. encourage people to leave the workforce early. But Republicans have struggled so much on health care over the past 10 years that it is really notable that they didn't give in to any of those demands. Now, the Republicans will let.

Democrats vote on some unspecified extension of those subsidies that go to insurers before the end of the year. We don't know exactly what a form that will take, what kind of extension they'll end up voting on. But I think it's notable that the Democratic health care pitch didn't resonate to the extent that it has in past years. So I want to ask Bill, do you take this as any sign of optimism that perhaps the public is open to an argument from Republicans? They understand. that the Affordable Care Act hasn't made health care any more affordable. It hasn't made it any less dysfunctional or easier to find a doctor. And how would you be advising Republicans in this stretch? Because it's really the start of a new negotiation on Obamacare that could be dynamic. We don't know exactly where the president will come down on it. Democrats are hoping, like Kim said, that he, you know, changes his position. So my overarching question is be group therapists for a moment for Republicans. How would you advise? them to think about the health care issue for the rest of the year. Well, like you, I think they're off to a good start. If you'd asked me two months ago, would Republicans in a shutdown hold the line on Oban Care subsidies, I'm not sure I'd be confident that they would. It's the same old thing. Democrats promise all benefits and Republicans have to be the daddy party saying we can't afford this and so forth. Just think of Obamacare. It's a trail of broken promises and special treatment. So the idea of having the subsidies get through. in a shutdown deal rather than a full-fledged debate and so forth is just outrageous, but it tells you where we are on this. So I think it's a tremendous opportunity. What people have to get to, what the Republicans have to do is show Americans that the problems with health care and the problems with funding it are largely democratic created. And when they propose solutions, it's more of the same. that caused the problem in the first place. We haven't had this debate. almost since Obamacare was born. We just haven't had it. I think now it's the time to have it. I hope Republicans are prepared. They know how they're going to be portrayed and everything. But I think people are tired of the bureaucracy. You know, all Obamacare is going to fund itself and we're going to bend the price curve. I mean, virtually everything they promised has not come true. And then the solution is more the bad government interventions. the cost of thing in the first place. Yeah, I mean, we bent the cost curve. We just bent at the wrong direction is what I've started thinking to myself. And healthcare prices just continue to ratchet up outpacing other goods and services. So we'll take one more quick break. And we'll be back with more Potomac Watch. Don't forget, you can reach the latest episode of Potomac Watch anytime. Just ask your smart speaker, play the opinion, Potomac Watch podcast.

From the opinion pages of the Wall Street Journal, this is Potomac Watch. Welcome back. We're chatting about the deal to end the government shutdown. Kim, I've done a little bit of reporting on kind of how... Republicans are thinking about this. America has abundant oil and natural gas, but energy security takes more than energy in the ground. It requires smart policies that ensure supply, modernize infrastructure, and strengthen energy supply chains. Learn more at energy security framework.org pay for by the American Petroleum Institute. Discussion on the policy details before the end of the year. It is notable, there seems to be a consensus, even among more moderate Republicans, that the Republicans can't just whoop through these subsidies for one year or two years. with no reforms because they're too dysfunctional. They're going to people like I said who are affluent. They make it so that some people can pay nothing for Obamacare and that encourages a lot of fraud or you don't know you're enrolled. You move to another state. My sense is that there's just too many problems with the way the subsidies work and that Republicans are not up for just extending them outright. There's been some discussion. Over the weekend, about the instead of giving the subsidy to the insurer, try to give it to individuals, that is at least trying to get closer to some. consumer attention on where this money goes? Is that enough? How do you see the kind of policy discussion here shaping up? Because I do worry a little bit that Republicans could stick together on health care while the government was shut down. They were all in agreement not to deal with on the issue while they were being held hostage. But now it becomes a much more dynamic process. And there are real worries about these subsidies among some of the moderates. Yeah, that's the easy part. The easy part was all saying, we're not going to do anything while you've got the government shut down. Now they've got to decide what they are willing to do. And there are great big divides in the party, as you and I know. I mean, I think the bulk of the party is very reticent to extend these subsidies at all, but that there are moderates in the party and people from swing states and swing districts that are more willing to close their eyes and pretend that this isn't a huge cost and just get through the next political cycle that's over. the issue. I think this is a small silver lining of the shutdown is that it did require Republicans to focus on this issue, at least internally, because here's the reality. It isn't just the premiums are going up for those who had these enhanced subsidies. They're going up for many, many people across a board. And this is playing in to the cost of living issue that Americans are saying is a real, real problem for them. alongside inflation health care is also one of those costs, and it's becoming a bit prohibitive for some people. Now, this is exactly what landed Republicans with Obamacare in the first place, is that they weren't addressing health care. And Barack Obama came along and said, hey, I've got a plan. Let's do this. So they are now talking about this. And one thing I would keep an eye out for is there's the immediate question, as you said, about what to do with these particular enhanced and subsidies.

which were enhanced subsidies, which were enacted during COVID and now are expiring. And the options there range from simply not. continuing them, and that is one option, to making major changes to them, such as caps on income who can get them and who receives the subsidies, requirements that recipients pay at least some of the premium time limiting this out to a year or two. One of the things that worries me about this is that when you do a phase out, nothing ever really phases out in a year from now. They'll be extended again and again. And that's why there are Republicans that are saying, look, the price of of this needs to be much deeper. We need to be doing some real, real changes to the underlying Obamacare program, the things that are actually driving up the costs. I also was intrigued by this other idea that you were mentioning about giving people the money outright to use on the health care that they consider most appropriate to them. And so maybe you would use those to offset your premiums, but maybe you would use them, you know, as part of an HSA and moving. to a different type of health care program that gives you more control over how you're paying for your health care goods. I mean, this is a system we want to see happen in the end, which will inject some more transparency and consumer control. Now, I don't know if Republicans are brave enough to go there yet, but hey, we weren't having this discussion a month ago. And I think that that's a positive thing. I think this is the moment where it's a real heat needs to be brought on Republicans, though, to actually get a plan that they can all get behind. it makes a difference. Well, one positive sign, I think, is the president was tweeting out some charts about how these subsidies have made health insurance more expensive. And I think that is a significant quality improvement over his posting last week, pressuring Republicans to eliminate the filibuster to solve this problem. So I congratulate whoever helped him adjust his political targeting there. Got the chart. Yeah. But Bill, I mean, I want to ask you a little bit about. that briefly. Just, I mean, will President Trump, do you think, continue this filibuster pressure campaign? Is that something that he really believes in? Was that like a venting of frustration at the shutdown impasse? I don't think that is going anywhere among the current Republican conference, but you also, you never know. And I'm curious, just how did you read that pressure the president was putting on Republicans that way? I read it with alarm because I regard the filibuster. There's always a question short term versus long term. And I think it's been a great help to the American people that we block some really bad things. I think our system of government is built on in the sense that our system is not geared to get in the best or the perfect, but it is geared to preventing the worst. from government. And that's very important and so forth. So I would not want to see the filibuster go. I'm not sure how much popularity there is in that. You know, President Trump has history of getting off topics if he thinks not really winning and so forth. Like you, is much more gratified by his statement about subsidies.

causing high prices and so forth. So we'll see how it goes. Remember, also, as President Trump gets more and more in his term, by definition just his influence on the future. gets less. That's any president. And the reason is because senators and congressmen look ahead and they may have decades more to go and whoever the president is going to be out in like two years. So they tend to have different thinking on that as presidents have found to their frustration. So I would say I would like to see more of that criticism on subsidies and a little less than the filibos. So I think to blame that. The filibus is one of those things. I think you don't really miss until you get rid of it. And then you really have a chance of regret it. Because remember, the Democrats really have no constraint. If they can do something, they do it. They don't have the kind of debate we're having. If this is on the other side, they would just say get rid of it. And that puts us out of disadvantage and so forth. But I think we have to keep those tools. They're important. They're part of the tradition. That's not the real problem we have today. But what I would say further on, Obamacare, since we passed it, we have not really had an honest debate. over Obamacare, the costs, and the effect. And that's what I hope we're ginning up to now. Wise words from Brother McGern. Thank you, Kim. Thank you, Bill, for joining us today. We'll be back tomorrow with more Potomac Watch. Think all wealth managers are the same? Fisher Investments is clearly different. As a fiduciary, Fisher always does what's best for its clients. They don't sell commission-based investment products or make commissions on trades. Their fees are structured so they do better when clients do better. That might be why many of their clients come from other wealth managers. Visit fissureinvestments.com for more. Investing in securities involves the risk of loss.