Obamacare subsidies extension to get vote after 4 Republicans buck leadership

by · CNBC

Key Points

  • House Speaker Mike Johnson failed to head off a rebellion in his party over extending key Obamacare tax credits that will expire at the end of December.
  • Four moderate House Republicans joined a Democratic effort to force a vote on the expiring Affordable Care Act subsidies.
  • The procedural move to save the boosted ACA credits is identical to the strategy used to compel the release of documents related to Jeffrey Epstein.

Four moderate House Republicans rebelled against House Speaker Mike Johnson on Wednesday, joining Democrats to force a vote on extending key Obamacare subsidies that are set to expire at the end of the year.

If approved by the House and Senate, the measure will extend enhanced tax credits for customers of Affordable Care Act health insurance plans for three years.

If those subsidies expire as scheduled, the prices of Obamacare premiums that millions of Americans personally pay will skyrocket.

The stunning defections by the quartet of Republicans came a day after Johnson, R-La., said that GOP leaders would not allow a vote under normal procedures on keeping the enhanced ACA tax credits alive into 2026.

Johnson, earlier Wednesday morning, urged GOP caucus members not to join Democrats in the procedural end-run around him.

Lacking sufficient Republican support to extend the credits, House Minority Leader Hakeem Jeffries, D-N.Y., in November created a so-called discharge petition, which would force a vote on an extension once it obtained signatures from 218 House members.

Democrats only have 214 members, so they needed four Republicans for that measure to work.

Johnson was asked about the discharge petition on CNBC's "Squawk Box," about two hours after it obtained the required signatures.

He said that "doing an end-run around the majority party, the speaker or the regular process is not the best way to make law."

Four moderate Republicans signed the petition: Brian Fitzpatrick, Rob Bresnahan and Ryan Mackenzie, all of Pennsylvania, and Mike Lawler of New York signed the petition.

"When leadership blocks action entirely, Congress has a responsibility to act," Lawler said in a statement.

"My priority is ensuring Hudson Valley families aren't caught in the gridlock."

A vote to extend the ACA subsidies could help House Republicans who face tough reelection bids in 2026. The GOP holds a razor-thin majority in the chamber.

Lawler on Tuesday said that not holding a vote on the subsidies would be "political malpractice."

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If the measure clears the House, it would still need to be approved by the Senate, which, like the lower chamber, is controlled by Republicans.

Last week, the Senate rejected a similar measure that would have extended the subsidies for three years.

"Under this proposal, people making $500k+ per year would continue to be eligible for what were supposed to be temporary COVID-era subsidies," Senate Majority Leader John Thune's spokesperson Ryan Wrasse wrote in a social media post on Wednesday.

Sen. Josh Hawley, R-Mo., is one of only a handful of GOP senators who joined Democrats in voting to preserve the credits.

Hawley warned that Congress needs to act on the subsidies.

"I mean, the prices are way too high. I'm a father of three. I know small children. I know so many parents in Missouri who are scared to death they're not going to be able to take their kids to the doctor. I mean, that's a very valid concern," Hawley said.

A bipartisan group in the Senate has formed and is working to craft compromise legislation to both extend the subsidies and reform Obamacare. 

Senators in the group on Wednesday said their talks are picking up steam, with some noting that the action in the House has given that effort support.

"We have some momentum to enact a bipartisan bill that includes reforms," said Sen. Susan Collins, R-Maine, one of the leaders of the group, and the chair of the Senate Appropriations Committee. 

"We're now working on drafting a specific bill to incorporate those conversations that will include reforms as well as the two-year extension," she said. 

Sen. Bernie Moreno, R-Ohio, who is leading the group with Collins, said the talks are in "field goal range."

But Moreno ruled out approving the so-called clean three-year extension of the subsidies that the House will vote on. 

Precise details on the plan, however, are not clear. 

Moreno said the group is eyeing an extension to open enrollment to "take that pressure point off."

Sen. Bill Cassidy, the Louisiana Republican who chairs the Health, Education, Labor and Pensions Committee, is pushing for his own plan, which would give people money directly to offset their health insurance costs.

"Well, the President has said that he won't sign something unless we give money to the enrollee, the patient, as opposed to the insurance company," Cassidy said. "I am presuming that something like I'm proposing will be in the final mix."

Sen. Jeanne Shaheen, D-N.H., said that while the "bipartisan, bicameral talks have been constructive," the group still needs critical assurances that what it produces will get a vote and the president's signature. 

"We need to make sure the speaker will bring up a bill if the Senate passes something out, and we need to make sure that leadership in the Senate will bring up legislation if we reach an agreement," Shaheen said. "What the president is going to do is a question." 

Johnson and GOP House leadership are pushing a separate health-care bill that would not extend the enhanced subsidies. The House will vote on that bill, which would provide cost-sharing aid for consumers, on Wednesday.

Johnson told "Squawk Box" that GOP caucus members could tackle health insurance costs in early 2026.

"We're looking at another reconciliation package, for example, in the first quarter of next year, which will have a number of other revisions and reforms to the system, and all of it is geared, again, for reducing premiums, increasing access to care and quality of care," the speaker said.

— CNBC's Emily Wilkins contributed to this report.