Senate Republicans reject Democrat deal to reopen government

Top Senate Democrat Chuck Schumer on Friday offered a new plan to Republican lawmakers that would allow the U.S. government to reopen from a shutdown that began Oct. 1.

But Republicans quickly dismissed Schumer’s proposal, which hinges on protecting enhanced Affordable Care Act subsidies for at least one year. In exchange, Democrats would drop their demand that a longer-term extension of ACA tax credits be included in a stopgap government funding bill.

“I find Senator Schumer’s demands ridiculous and equivalent to political hostage taking to continue bad policy,” Sen. Lindsey Graham, a South Carolina Republican, said in a post on X.

“We should not be made to continue flooding health insurance companies with taxpayer dollars under Obamacare as the price to open up the government,” Graham said.

“My no vote will be an unequivocal rejection of Senator Schumer’s very bad idea.”

Schumer’s proposal calls for Democrats to agree to pass the GOP’s so-called clean resolution, which would provide short-term funding for government operations.

In exchange, the New York lawmaker said, Republicans would agree to a separate one-year extension of ACA credits, and to create a bipartisan committee to continue negotiations to address health-care affordability.

The offer comes as millions of Americans who buy Obamacare health insurance plans are being confronted with much higher premiums for 2026 coverage because the prices of those plans do not include the discount they would get from enhanced ACA tax credits.

Those boosted subsidies, which are used by more than 20 million Americans, are due to expire at the end of December if Congress does not extend them.

Senate Democrats, since before the shutdown began, had until Friday insisted that any funding resolution extend the ACA subsidies.

That stance prevented a Republican-backed House funding bill that does not extend the credits from getting the 60 votes that it needs to pass the Senate.

Republicans say that the question of retaining the credits must be settled only after a “clean” funding bill is passed.

The GOP holds 53 seats in the Senate. There are 45 Democratic senators, and two independents who caucus with them.

“Democrats have said we must address the health care crisis, but Republicans have repeatedly said they won’t negotiate to lower the health care costs until the government reopens,” Schumer said on the Senate floor on Friday afternoon.

“So let’s find a path to honor both positions,” the minority leader said.

“Therefore, we’d like to offer a simple proposal that would reopen the government and extend the ACA premium tax credits simultaneously … and then have the opportunity to start negotiating longer-term solutions to health care costs,” Schumer said.

“This proposal reopens the government and ensures working families who are shopping right now for their health care get certainty and financial relief while open enrollment has begun,” he said.

Schumer said insurers can “update their rates after we pass a simple extension of the tax credits.”

Senate Majority Leader John Thune, R-S.D., called Schumer’s proposal a “non-starter.”

“They know that their last proposal was unserious and unrealistic … so I guess you could characterize that as progress,” Thune told reporters.

“But I just don’t think that it gets anywhere close to what we need to do here.”

A person familiar with the Republican position told CNBC, “Democrats offered this privately weeks ago and [were] rejected.”

“Today’s stunt is an admission by Democrats that it’s time to end the shutdown they started.”

A White House official told CNBC, “Democrats are making clear they’re holding the American people hostage for other spending. This is a huge climbdown from their initial position and shows they’re under massive internal pressure.”

The official said that House Minority Leader Hakeem Jeffries, D-N.Y., “indicated that he would never accept something like this, so it’s a sharp break from House Democrats.”

“Ultimately, Democrats should reopen the government today, and the administration will meet with them on the tax credit and work with them on it,” the official said.

Jeffries, in a statement, said, “The initiative put forth by Leader Schumer is a very reasonable, good faith proposal that reopens the government and addresses an important part of the Republican healthcare crisis.”

“House Democrats will convene as a Caucus shortly, where we will have an opportunity to further discuss how to end the Republican shutdown,” Jeffries said.

He added that House Speaker Mike Johnson, R-La., “and House Republicans need to get back to work and return from their outrageous six-week long taxpayer-funded vacation. Enough.”

Numerous polls have shown that more Americans blame Trump and Republicans than Democrats for the shutdown.

Three days before Schumer made his new proposal, Democratic candidates swept key election races in New York City, New Jersey, and Virginia.

President Donald Trump admitted on Wednesday that the electoral drubbing was bad for Republicans.

Trump said that the shutdown was seen as “a big factor, negative for the Republicans.”