• Healthcare subsidies affecting about 22 million Americans have emerged as main fault line in budget talks
• Divisions over spending cuts, national debt complicate negotiations

ISTANBUL

Just months after a record 43-day government shutdown disrupted federal services across the United States, Washington is once again approaching a fiscal deadline that could trigger another closure.

Lawmakers face a Jan. 30 deadline to renew funding for most federal agencies, setting the stage for high-stakes negotiations over government spending, the national debt and healthcare subsidies.

Without a new agreement, large parts of the federal government could shut down, furloughing workers and halting non-essential services.

The risk stems from a stopgap deal reached in November that ended the previous shutdown. While that agreement fully funded several sectors for the full fiscal year – including the Agriculture Department, Military Construction, Veterans Affairs and the Congress – it only extended short-term funding for most government operations, buying lawmakers time to negotiate a broader budget compromise.

That time is now running out.

Negotiations are expected to be contentious, driven by a push to cut the $2.2 trillion deficit and a fierce battle over the future of healthcare subsidies.

Healthcare emerges as main fault line

Healthcare costs have become the central sticking point in the funding talks, with both sides digging in over subsidies that help Americans afford health insurance.

At the heart of the dispute are enhanced subsidies that reduce monthly insurance premiums for people who get coverage through the Affordable Care Act marketplace. The subsidies expired at the end of 2025, and whether to revive them has become a central issue in talks ahead of the upcoming funding deadline.

Roughly 22 million people benefit from the enhanced support, accounting for about nine in ten marketplace enrollees.

According to analysis from the Kaiser Family Foundation, premiums would more than double for these enrollees without the credits. This represents an average increase of 114%, with annual costs jumping from an average of $888 in 2025 to $1,904 in 2026.

The Congressional Budget Office estimated that roughly four million more people would be uninsured over the next decade if the subsidies are not extended.

US President Donald Trump has expressed strong opposition to the current healthcare framework. Writing on his social media platform Truth Social: "Obamacare is a disaster! Premiums are skyrocketing for subpar healthcare!!! Democrats, do something!!!"

Democrats, meanwhile, say they will not agree to spending cuts unless healthcare protections are preserved.

"Our position is not complicated: cancel the cuts, lower the costs, save health care,” said House Minority Leader Hakeem Jeffries.

Other health-related programs are also facing funding cliffs at the end of January, including support for community health clinics, diabetes treatment initiatives and expanded access to telehealth services.

Deficit pressure complicates talks

The healthcare dispute is unfolding against a backdrop of growing concern over US public finances.

As of early December, the country’s gross national debt stood at about $38.4 trillion, up more than $2 trillion from a year earlier and representing an average increase of $6.12 billion per day.

The federal deficit for 2025 totaled $1.78 trillion, equivalent to 5.9% of the country’s economic output.

Hardline conservatives are using the looming deadline to push for deep spending cuts, arguing that rising debt levels are unsustainable.

But passing any spending bill remains difficult in a sharply divided Congress.

Although Republicans hold a majority in the Senate, most legislation still requires a three-fifth supermajority, which would require support from across the aisle, giving Democrats leverage to demand concessions – such as the extension of the healthcare subsidies.

Some lawmakers have floated changing Senate rules and eliminating the filibuster for spending bills, which would allow them to pass with a simple majority – a move strongly backed by Trump.

However, many institutionalists in the Senate have historically resisted it, fearing it would reduce bipartisan cooperation and eventually backfire when party control of the chamber flips.

What happens during a shutdown

A government shutdown occurs when Congress fails to authorize spending, legally preventing federal agencies from continuing normal operations.

The legal basis for modern shutdowns was established in the early 1980s, when it was determined that during a lapse in appropriations, no funds may be expended except those necessary for the orderly termination of an agency. The only major exceptions are for activities involving the safety of human life or the protection of property.

The Office of Management and Budget determines the exact details of which functions must stop.

During a shutdown, services deemed essential to public safety – including border security, air traffic control and the military – continue operating, but workers do not receive pay until funding is restored.

All other non-essential federal workers are furloughed, which means they are placed on unpaid leave.

Each agency determines which staff remain on duty, leading to uneven impacts across the government. During the most recent shutdown, the US Justice Department said that roughly 90% of its 115,100 employees would remain on the job, including all FBI employees. In contrast, the Labor Department planned to keep only about 3,400 of its 12,900 employees at work.

Economic, social costs

Government shutdowns have repeatedly disrupted the US economy and daily life.

The 43-day shutdown in late 2025 was the longest on record, but it followed a pattern of recurring funding gaps. Since the modern budget process was introduced in the 1970s, the US has experienced more than 20 shutdowns or funding lapses – 11 of them resulting in federal employees being furloughed.

Past closures have led to airport delays, suspended inspections, closed national parks and billions of dollars in lost economic activity.

During a 35-day shutdown in 2018-2019, during Trump’s first term, approximately 380,000 federal workers were furloughed, while another 420,000 were required to work without pay. That event caused billions of US dollars in lost economic growth and led to major disruptions at airports due to staff shortages.

In 2013, when President Barack Obama was in office, a 16-day shutdown triggered by disputes over the Affordable Care Act led to the Food and Drug Administration delaying almost 900 inspections and the National Park Service turning away millions of visitors from more than 400 national monuments and sites.

Last year’s shutdown cost the US economy an estimated $90 billion, Kevin Hassett, director of the National Economic Council, said in November.

As the clock ticks toward the end of the month, the global community is watching to see if US lawmakers can find a compromise. Without an agreement, the US risks another period of stalled government operations, renewed economic disruption and uncertainty at home and abroad.