Washington: What to Watch Now

In addition to the Venezuela situation, Congress has two big policy battles to deal with in January. One is the now-expired subsidies that help lower premiums for about 22 million Americans who purchase health insurance through the Affordable Care Act. Those subsidies expired at the end of 2025 after months of wrangling on Capitol Hill. Just prior to the holiday break, four House Republicans joined all 214 Democrats in signing on to a "discharge petition," a mechanism that allows a majority of House members to force a floor vote on a bill. A vote is expected January 8th on a three-year extension of the expired subsidies. The bill should pass the House but is unlikely to get the necessary 60-vote supermajority in the Senate. Negotiations on a compromise solution are ongoing, as plenty of Republicans realize they need to get on top of this health care policy debate lest it become a major liability in the midterm elections.

The other centers around government funding, as another shutdown deadline looms. The agreement reached in November to end the longest government shutdown in history only funds government operations through January 30th. Congress still needs to pass nine of the 12 appropriations bills to avoid a partial shutdown at the end of the month. But progress is being made. On January 5th, House leaders released the text of a three-bill package that would cover funding for the departments of Commerce, Energy, Interior and Justice, as well as the Environmental Protection Agency (EPA), water programs and science programs. House leaders have tentatively announced a January 8th vote on the package, which would then move to the Senate. While this is a notable development, the trickiest funding bills—those for Defense, Homeland Security and Labor/Health and Human Services—remain to be worked out. Unlike last fall, neither party seems keen on another government shutdown at the end of the month. A shutdown can't be ruled out, but there is cautious optimism on Capitol Hill that a deal can be reached.

It has been just over 60 days since the November 5th oral arguments in the challenge to the legality of the bulk of President Donald Trump's tariffs. The Supreme Court announced that it would issue its first decisions of 2026 on January 9th, fueling speculation that a decision on the tariff case may come then. Based on oral arguments, it is widely believed that the justices will rule against the administration, upending one of the president's signature policies and perhaps triggering a complicated refund process for more than $120 billion in tariffs paid to date. But the president has other emergency authorities he can use to impose tariffs, so tariffs aren't going away even if the Court rules against the administration.

Former Rep. Marjorie Taylor Greene (R-Ga.) left Congress this week, narrowing the Republicans' House majority to 219-213. A special election to fill the remainder of her term is likely to take place next month. If no candidate wins a majority of the votes, a run-off election would be held four weeks later. Congress was further rocked by the unexpected death of Rep. Doug LaMalfa (R-Cal.) on January 6th, narrowing the Republican margin to 218-213. A special election to fill his seat will be set at a later date but is likely to take place in the summer. There are two other special elections coming up: A race between two Democrats to fill the seat of the late Rep. Sylvester Turner (D-Texas) will take place on January 31st, while an election to replace former Rep. Mikie Sherrill (D-NJ), who resigned to become New Jersey's governor, is set for April 16th.

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