Johnson Blocks House Vote on Extension of ACA Subsidies

Good evening! Republicans are sparring ahead of a planned vote on a healthcare package tomorrow, and we got the first government update on the labor market in quite a while. Here are your Tuesday takeaways.

Johnson Blocks House Vote on Extension of ACA Subsidies

With the House set to vote tomorrow on a Republican package of healthcare measures, Speaker Mike Johnson said Tuesday he won't allow a vote on an amendment to extend expiring Affordable Care Act subsidies, effectively ensuring that the tax credits will expire as scheduled at the end of this month.

The Republican package doesn't address the expiration of the ACA subsidies but instead combines several other policies favored by the GOP. Johnson told reporters that he and swing-district Republicans who wanted an amendment vote on the subsidies had failed to reach an agreement.

"Many of them did want to vote on this Obamacare COVID-era subsidy the Democrats created," Johnson said. "We looked for a way to try to allow for that pressure release valve, and it just was not to be."

Republican leaders reportedly refused to waive "pay-for" rules and insisted that the cost of extending the subsidies, estimated at about $35 billion a year, be offset by other healthcare savings.

The intraparty divide on the issue left GOP moderates fuming and warning that party leaders were making a costly political mistake.

"I think it's idiotic not to have an up-or-down vote on this issue," Republican Rep. Mike Lawler of New York told reporters, calling the decision "political malpractice" and "absolute bulls---."

"You know what's funny?" Lawler added. "Three-quarters of people on Obamacare are in states Donald Trump won. So maybe, just maybe, everybody should look at this and say, 'How do we actually fix the health care system?'"

Others in the GOP very much want to see the enhanced subsidies expire, and moderates who are disappointed that they won't get an amendment vote nevertheless indicated they'd back the underlying bill. Johnson said he expects Republicans of all stripes to support the package, which he argued would help a much larger group of Americans than Democratic proposals to extend the more generous subsidies.

The Congressional Budget Office estimates that the Gop bill would reduce the deficit by $35.6 billion over 10 years - and would decrease the number of people with health insurance by an average of 100,000 from 2027 through 2035. At the same time, average premiums on benchmark plans would be projected to fall 11%.

"If it becomes law, premiums will decrease, access will increase, and every American will have more options and flexibility to choose the coverage that works best for them," Johnson said of the Republican bill. "It's called the free market, and we're the ones that advance those ideas." Johnson added that the tax credits enacted by Democrats just subsidize a broken system and hide the true cost of the Affordable Care Act.

What's next: Even if it passes the House, the Republican plan isn't expected to get through the Senate and become law. It won't keep premium payments from soaring for millions of Americans next year. But it may allow House Republicans to say that they did something - or tried to - to address healthcare costs.

At the same time, Republicans reportedly continue to negotiate over a possible amendment vote and bipartisan efforts to extend the ACA subsidies continue in both the House and Senate. In the House, discharge petitions requiring 218 signatures could force votes on either of two bipartisan plans or a Democratic one calling for a straight three-year extension of the higher subsidies. In the Senate, a group of more than two dozen senators reportedly met Monday night to discuss a bipartisan fix centered on a plan from Republican Sens. Bernie Moreno of Ohio and Susan Collins of Maine. That proposal would extend the subsidies for two years but impose new income limits and other reforms.

At this point, any of those bipartisan efforts won't be able to produce results until next year. Some Democrats point out that lawmakers could have been working on this months ago, including over the weeks that the government was shut down and the House was out of session.

Unemployment Rate Hits a 4-Year High

U.S. employers added a better-than-expected 64,000 jobs in November, the Department of Labor announced Tuesday, but the gain followed a loss of 105,000 jobs in October. The net loss over the two-month period helped push the unemployment rate to a four-year high of 4.6%, up two-tenths of a percentage point from the previous reading in September.

The release of incomplete October data, which was included in the November report, was delayed by the 43-day government shutdown. Federal officials say they do not plan to provide a comprehensive report for the month, leaving a partial hole in the unemployment data for the first time in more than 70 years.

Based on the data we do have, the October job loss was driven by the Trump administration's aggressive campaign to reduce the size of the federal workforce, the effects of which finally hit the employment numbers at the end of the fiscal year. Federal employment shrank by 162,000 in October, a trend that continued at a more modest level in November, with 6,000 federal jobs lost. Federal employment is down by 271,000 from its peak in January.

Overall, the November report adds another piece of evidence backing the suspicion that job growth has been anemic since April, when President Trump unveiled his new tariffs on trading partners around the world. Three of the past six months have seen net job losses. Incorporating revisions that knocked 33,000 jobs off the August and September payroll numbers, average monthly job growth has averaged just 17,000 per month over the past eight months, with much of the growth occurring in just one sector, healthcare. Manufacturing continues to struggle, with employment in the sector shrinking over the past year.

As University of Michigan economist Justin Wolfers noted, the numbers could be even worse. Federal Reserve Chair Jerome Powell said last week that Fed officials believe federal data are currently overreporting jobs growth by about 60,000 per month, raising the possibility that the labor market has actually been shrinking in recent months.

White House celebrates: The White House said Tuesday that the November jobs report shows that Trump is "fixing the damage caused by Joe Biden," an effort that includes firing tens of thousands of federal workers.

The White House also claimed that only "native-born Americans" are getting jobs in the private sector - "NOT illegals." However, some economists have questioned the basis of such claims, including Jed Kolko of the Peterson Institute for International Economics, who has warned that the numbers the administration is relying on amount to "a multiple-count data felony" due to the limitations of the data involved.

The White House highlighted wage growth, too, saying real wages are on track to grow 4.2% in Trump's first year in office. Growth was weak in October, though, and appears to be decelerating, with average hourly earnings rising just 0.1% in October, the smallest increase since August 2023.

What it all means: The November jobs report suggests that the labor market is still a low-fire, low-hire environment, with most of the data remaining on trend. Layoffs aren't rising, but at the same time, hiring is weak.

The mixed picture may provide some reassurance for workers worried about the state of the economy, but it also highlights persistent softness that spells trouble for those who have lost their jobs or are looking for something new.

Many economists believe that the weakness is directly linked to the Trump administration's policies, especially the historic tariff hikes and the aggressive effort to reduce the number of foreign workers.

"All roads lead back to policy out of Washington, D.C.," said Joseph Brusuelas, chief economist at RSM, per The Wall Street Journal. "I'm not saying this is a harbinger of a recession, but we have some real challenges to the economy that we didn't have one year ago."

Thomas Feltmate, senior economist at TD Economics, said in a note that "labor demand has cooled more than supply in recent months, which is what's behind the steady upward drift in the unemployment rate."

That increasing unemployment rate could be a sign of things to come. Laura Ullrich, director of economic research for the Indeed Hiring Lab, said in a note that the latest report "paints a sobering picture of a job market that may officially be turning frigid after a prolonged cooling period."

However, as Ullrich and other analysts noted, it's too soon to draw any conclusions given the delayed and incomplete nature of the latest data. Economists are hoping the December report will provide a better picture of where the labor market is headed as we enter the new year.

Quote of the Day

"A+++."

− Vice President JD Vance, when asked Tuesday how he would grade the economy after President Trump a week ago graded his economy an "A+++++" in an interview with Politico.

Vance was in Allentown, Pennsylvania, to give a speech on the economy and defend the Trump administration's record as the president approaches the 11-month mark of his second term.

As affordability concerns have risen to the fore in political discussions ahead of the 2026 midterms, Vance repeatedly sought to blame the Biden administration - and the undocumented immigrants it allowed into the country - for the state of the economy. "If you look at every single affordability crisis that we talk about in the United States today, it's because we inherited a nightmare of an economy from Joe Biden," he said.

He argued that the Trump administration is working to improve economic conditions and has made some progress already but that the process would take time. "I promise you there is no person more impatient to solve the affordability crisis than Donald J. Trump, the President of the United States," he said.

In response to another question, Vance said he's not worried that the affordability issue will be a political liability next year. He said he believes that voters will understand the Republican story. "They know Rome wasn't built in a day," he said. "They know what Joe Biden broke is not going to get fixed in a week. We've got to stay with it."

Fiscal News Roundup

• House Republican Leaders Ditch Vote on ACA Funding, All but Ensuring Premiums Will Rise – NBC News
• House GOP Will Not Allow Amendment Vote to Extend Obamacare Subsidies – The Hill
• Key ACA Tax Credits Likely to Expire After House Speaker Blocks Vote – CNBC
• Republican Tensions Boil Over as Obamacare Deadline Approaches – The Hill
• 'Absolute Bulls--T': Endangered House Republican Blasts Leaders Over Impending Obamacare Lapse – Politico
• White House Weighs Risks of a Health Care Fight as ACA Subsidies Set to Expire – Politico
• Cost Leads Americans' Top-of-Mind Healthcare Concerns – Gallup
• House GOP Health Package Lowers Spending but Boosts Uninsured – Politico
• Trump Officials Privately Raise Doubts About Hassett for Fed Chair – Politico
• 16 States Sue Trump Administration Again Over Billions in Withheld Electric Vehicle Charging Funds – Associated Press
• Jobless Rate Rises, Adding to Trump's Economic Messaging Woes – Politico
• The Trump Administration Is Trying to Talk Voters Into Liking the Economy – Washington Post
• Six Polls That Show Donald Trump Is in Deep Economic Trouble – Newsweek
• Trump Has Signed More Executive Orders in 2025 Than in His Entire First Term – Washington Post
• Trump Chief of Staff Susie Wiles Says President 'Has an Alcoholic's Personality' and Much More in Candid Interviews – CNN

Views and Analysis

• The House GOP Plays It Safe on Health Care – James C. Capretta, AEI
• Why Both Republicans and Democrats Are Wrong About Health Care – Peter R. Orszag, New York Times
• The GOP's Better Healthcare Ideas – Wall Street Journal Editorial Board
• Johnson Is an Ironic Target for Republicans – David M. Drucker, Bloomberg
• What the End of Trump's First Year Looks Like – Amber Phillips, Washington Post
• The Fed Needs Clearer Jobs Data, ASAP – Jonthan Levin, Bloomberg
• Donald Trump May Be About to Pick the Least Important Fed Chair in Decades – Jason Furman, New York Times
• GOP Forcing Eight Million Student Loan Borrowers Into Repayment – Whitney Curry Wimbish, American Prospect
• Trump Is Raging at a Looming Supreme Court Loss on Tariffs. He's Got a Point – Ankush Khardori, Politico
• For Florida, a Lesson on Taxes – Washington Post Editorial Board