The U.S. government shut down this week after a deeply divided Congress couldn’t reach an agreement on the federal budget. Both Democrats and Republicans blame each other for the shutdown. Democrats say they voted against the budget because they’re trying to prevent the deep cuts to Medicaid and other health care–related benefits. In the same breath, Republicans are trying to argue they are the party in favor of affordable health care (though the legislation included in this summer’s Big Beautiful Bill suggests otherwise). While the two parties battle it out, hundreds of thousands of federal workers are staying home without pay, and Trump is threatening widespread layoffs.
I was 15 when the U.S. government shut down for three weeks in the winter of 1995. As a teenager, I probably wouldn’t have cared very much, except that my mom was a pharmacist for the VA hospital. I was outraged that she had to continue to work without a paycheck. Financially, our family was fine—my dad earned enough to cover our bills during that roughly three-week period—but many families of federal workers were not as comfortable. Sure, federal workers are always paid for the furlough period after the shutdown ends, but there’s no denying how stressful it can be when you live paycheck to paycheck, and you’re not sure when the money you need to pay the bills will arrive.
It’s interesting to look back at the cause of the 1995 shutdown and realize that it’s pretty similar to what’s happening today. Back then, President Bill Clinton vetoed the federal spending bill in part because Republicans, led by then House Speaker Newt Gingrich, were trying to raise Medicare premiums. There was another 16-day shutdown in 2013 during the Obama administration that was over a fight about rolling out the Affordable Care Act (aka Obamacare). The cost of health care has been a polarizing issue in the U.S. for a long time.
This time, Democrats are fighting to save Biden-era subsidies that made health insurance purchased through the exchange more affordable—and in some cases, for the lowest earners, free. According to KFF, a nonpartisan health care think tank, enrollment in the ACA has more than doubled since these tax credits were rolled out in 2021 (from 11 to 24 million Americans), with the vast majority of enrollees able to take advantage of the subsidies. But if these subsidies are allowed to expire, an estimated 20 million Americans on the ACA will see their health care premiums increase—in some cases they’re double.
KFF provides a helpful example of just how much of an increase we’re talking about:
“[W]ith the enhanced tax credits in place, an individual making $28,000 will pay no more than around 1% ($325) of their annual income towards a benchmark plan. If the enhanced tax credits expire, this same individual would pay nearly 6% of their income ($1,562 annually) towards a benchmark plan in 2026. In other words, if the enhanced tax credits expire, this individual would experience an increase of $1,238 in their annual premium payments net of the tax credit.”
As with basically everything that has to do with the federal government and all the political in-fighting, it can be hard to understand how all of this impacts real people. But as I’ve been following this news, I’ve been thinking of some of the women who shared their stories in Home Economics. At least two entries published have featured women who benefit from the ACA subsidies and Medicaid: Divorced in Colorado and Expecting in Maine.
KFF has a calculator you can play with to see how much your health insurance might rise if the Republicans succeed in clawing back the subsidies. For our friend in Colorado, who worked as a freelancer and aimed to earn at least $4,500 a month to cover her bills, her premiums could increase by $125 a month.
Maybe that doesn’t seem like a lot. I would imagine that for many of our millionaire congressmen, it’s the cost of a nice lunch out. But when every dollar of your paycheck is accounted for, an extra $100 expense can be incredibly stressful. And it’s not just the cost of health care that’s going up. We’re all paying more for basically everything—from groceries to housing to utilities.
Divorced in Colorado is nearing retirement age, and when she shared her story last year, she had only $55,000 in retirement savings. The ACA subsidies provided her some breathing room to save more and be able to handle other rising expenses.
Who knows how this budget fight will shake out in the end? A recent poll by The New York Times and Siena University found that the majority of Americans (64%) feel our political system is too divided to solve our problems. It’s hard not to just feel bad about things right now and angry at the politicians who don’t seem to take the problems of everyday Americans seriously. I don’t think it’s too much for us to expect that, as citizens of one of the richest nations in the world, we should have access to affordable health care at the very least.
-Lindsey
The government shutdown in the news
- Looking for just the facts of the government shutdown? Here’s a straightforward overview. I’m not a regular listener of The Daily, but this week’s episode on the shutdown dives deeper into the issues I wrote about above.
- There are some resources available for furloughed federal workers. WTOP, a local news outlet in the D.C. area, has a roundup for workers in the DMV area.
- Last week’s Home Economics featured a former federal employee, who mentioned that when she worked for the U.S. government, she and her husband made sure their emergency fund had enough to cover their expenses in the event of a shutdown.
- Normally, the Bureau of Labor Statistics would have released jobs data today, but that isn’t happening thanks to the shutdown. It comes at an uneasy time in the job market: On Wednesday, payroll company ADP released a report saying U.S. private-sector businesses lost 32,000 jobs in September. The company also revised its August numbers. Instead of 54,000 payroll gains, ADP says the U.S. actually lost 3,000.
- Republicans are falsely saying Dems are holding out to give health care to unauthorized immigrants. That is not what’s happening. As The New York Times explains, unauthorized immigrants cannot buy health care plans on government exchanges or receive any subsidies, and they are not eligible for Medicaid, Medicare, or the Children’s Health Insurance Program.
- And have you seen all of the partisan messages splashed over government websites blaming Dems? The Trump administration also froze $26 billion in federal funds for Democratic-leaning states. It goes without saying we’ve never seen this level of partisanship before from an administration.
What we’re talking about
Honestly, not much! Alicia and I agreed this was a weird week. Is something in retrograde?
- As a certified TS lover, it’s really hard to find quality, critical Taylor Swift content. I don’t want the sycophantic “she can do no wrong” stuff; at the same time, I find most mainstream publications miss the mark. With her new album out today, I’ll be reading B.D. McClay’s Notebook on Substack. -Alicia
- I’m super grumpy about this New York magazine article on adult children moving back into their parents’ Brooklyn brownstones. I really don’t get why the media (and NYMag especially) is so worked up about multigenerational living! (My guess: It’s because like many of us, they wish their parents had a brownstone in Brooklyn they could inherit.) As I said on Instagram yesterday, we’re in a housing crisis! These people are making smart financial moves! -Lindsey
Our our radar
- Are we all playing Pips? I love Pips. Every day I race for the fastest time in a group chat with my in-laws. -Alicia
- Ken and I had a kid-free night last Saturday, and we watched My Old Ass, which I absolutely loved. I laughed. I cried. I felt so nostalgic for that age when you’re on the cusp of adulthood and everything seems possible. -Lindsey
Best money we spent this week
- I spent $45 to see a friend from high school in a play in Brooklyn, and I’ve never experienced a performance like that before: There were four actors total and maybe 40–50 audience members, lined up in two rows on either side of a small room, while the actors performed in the center. I definitely stayed out past my bedtime, but I loved watching my friend and have been reflecting on how far we’ve come from our 16-year-old selves. -Alicia
- My beloved Red Sox lost Game 3 of the AL Wild Card series last night, thus ending their season. I had so much fun watching them this year—Ken, Freddy, and I tuned into so many games. The major sports leagues make fans jump through all kinds of hoops to follow their team for an entire season, so even though we have an MLB TV subscription, we also had to sign up for Sling TV so we could watch the Wild Card games on ESPN. Still, I appreciate that Sling offers a $5 day-pass option, and I don’t regret spending $15 to see all three games. (Though I sure wish it had a different outcome!) -Lindsey
