Ahead of the Curve: Close out 2025 and be ready for 2026

An overview of the items that Congress and the Trump Administration are likely to consider.

As we enter the holiday season, what must Congress do to close out the calendar year, and what can we expect to happen in January, with a January 30 funding deadline looming over lawmakers?

End of Year Considerations

Affordable Care Act Subsidies

Expanded Affordable Care Act (ACA) premium subsidies are set to expire at the end of the year. Democrats made their extension the key part of their government shutdown negotiations, while Republicans have mostly opposed an extension of the COVID-era enhanced tax credits without reforms. As part of the resolution to the government shutdown, Senate Majority Leader John Thune (R-SD) promised his Democratic counterparts a vote on a proposal to extend the subsidies by the second week of December. While the vote has a low chance of success, Democrats are weighing both policy and political considerations to decide what legislative proposal would be most effective.

Support for extending the tax credits has been varied amongst Republicans, with a small number of moderates in the Senate and House – concerned about skyrocketing premiums for a number of their constituents – supporting clean extensions, and the vast majority of GOP Members either wanting significant reforms or rejecting any extension of the enhanced advanced premium tax credits. Rumors that House Republicans will propose a short-term extension continue to circulate, but no concrete details have emerged.

Senate Health, Education, Labor and Pensions (HELP) Committee Chair Bill Cassidy (R-LA) unveiled an alternative plan, which would directly fund health savings accounts (HSAs) as opposed to extending credits for ACA insurance. The plan received vocal support from the White House but was criticized by Democrats in Congress.

Complicating the issue further is the divide on whether Hyde protections – prohibitions on taxpayer dollars funding abortion services – should be included in any proposal. Many Republicans insist that an extension of the premium subsidies will need to include Hyde language.

The White House has held discussions with Members of Congress to explore potential ways forward on a deal, coming close to releasing a proposal last week. However, a path forward remains elusive. Discussions will have to accelerate significantly to address the expiration of these premium subsidies before the end of the year, and Congress may pick up conversations around health care when they return in 2026.

National Defense Authorization Act

The National Defense Authorization Act (NDAA) is in its final stretch. House and Senate Armed Services Committee staff are wrapping up and completing final quality control checks on the legislation, which will then come to the floor. The House will go first in the process, with text expected to be released on December 5 and considered on the House floor during the week of December 8. Most policy issues have been negotiated, but conferees continue to address varying spending levels between the House and Senate-passed versions of the bill. The core bill text of the NDAA will include compromises reflecting the FORGED Act and SPEED Act, strengthening Secretary Pete Hegseth’s announced defense acquisition reforms.

Other items are likely to be included in this historically must-pass bill. It is essential to note that provisions outside the jurisdiction of the armed services committees will require approval from both the chair and the ranking member of the external committee responsible for the policy, as well as four-way approval from congressional leadership. For example, authorization language for the U.S. Coast Guard is expected to be included in the NDAA. Additionally, House Majority Leader Steve Scalise (R-LA) has expressed interest in using the NDAA as a vehicle to pass a moratorium on the enforcement of state artificial intelligence (AI) laws, following earlier attempts that fell apart in July. While receiving support from Republican leadership and President Donald Trump, there is bipartisan opposition among Members of Congress, state legislators, and governors, and this provision is not likely to be included in the defense bill.

Finally, State Department authorization, the Intelligence Authorization Act, and the GAIN AI Act are up for consideration to be included in the NDAA package. Due to ongoing debates by the committees of jurisdiction, GAIN AI’s export restrictions on advanced AI chips are likely to be excluded from the defense package while Members continue to refine the proposal.

Discretionary Funding and Appropriations

The November continuing resolution (CR) was also the vehicle to enact three fiscal year (FY) 2026 appropriations bills – Agriculture-Food and Drug Administration, Legislative Branch, and Military Construction-Department of Veterans Affairs – but left the remaining nine appropriations bills unaddressed. Senate leaders have discussed assembling a broad “minibus” package of Defense, Commerce-Justice-Science, Labor-Health and Human Services-Education, Interior-Environment, and Transportation-Housing and Urban Development for floor consideration so those bills could move to conference with the already House-passed companions. In the House, Appropriations Committee Chair Tom Cole (R-OK) stated there is consensus amongst Republican appropriators to instead negotiate a smaller FY 2026 funding package of three bills – likely Commerce-Justice-Science, Transportation-Housing and Urban Development, and Interior-Environment – in the coming weeks, and punt Labor-Health and Human Services-Education and Defense to the new year. But the lack of a bipartisan top-line spending agreement remains a hurdle to advancing any package of full-year bills before the next funding deadline at the end of January.

January 2026 Preview

January 30 Funding Deadline and Appropriations

Congress will need to pass the nine remaining appropriations bills or pass another stopgap measure to avoid portions of the federal government closing again at the end of January. Several authorities were extended through January 30 in the CR – including the National Flood Insurance Program, the Essential Air Service Program, short-term extensions for cyber and homeland security, and funding for tribal health facility staffing and operations, among others. Congress will need to address these items promptly in the new year before they expire on January 30. If Congress reaches a consensus on a second minibus package, lawmakers may attempt to extend these provisions for the full fiscal year. Absent from discussions about finishing out the FY 2026 process are the Energy and Water, Financial Services, Homeland Security, and State Foreign Operations bills, as some Members suggest these four have issues that cannot be resolved.

A second full-year CR is almost unheard of, especially when one party controls the White House and both the House and the Senate, and an entire Congress has punted its Constitutional responsibilities of appropriating funds from the Department of the Treasury. Further, another full year CR would mean President Joe Biden’s final appropriations acts will have set the spending terms and conditions for half of President Trump’s term. Looking ahead to the upcoming election cycle, if the House or the Senate flip, and FY 2027 begins with a CR through a lame duck session of Congress, Republicans will have lost the opportunity to put their stamp on 1/3 of the appropriations measures.

Health Care

The November CR included several health care program extensions through January 30, including waivers for expanded Medicare coverage for telehealth and hospital-at-home services; funding for community health centers, graduate medical education for teaching health centers; Medicare supplemental payments for low-volume hospitals; and delaying the scheduled three-year, $24 billion cut to Medicaid disproportionate share hospital payments. Each of these provisions will need to be addressed again at the end of January, either through a full-year appropriations bill or another short-term stopgap solution.

Additionally, there is potential for movement on another health care package. If discussions progress, expect many of the pieces in the failed December 2024 CR to serve as the potential core of a health care deal, including provisions related to community health center funding and pharmacy benefit manager (PBM) transparency.

Permitting Reform

Permitting reform remains at the forefront of bipartisan energy policy discussions on both sides of the Capitol. Policymakers across the spectrum recognize that the current permitting process threatens U.S. energy reliability, affordability, and competitiveness, and Members of Congress continue to propose legislation that provides greater regulatory certainty and streamlines project approvals. Recent proposals, including the Cheap Energy Act, the SPEED and Reliability Act, and the Problem Solvers Caucus framework, all center on accelerating project timelines, clarifying federal authority, and strengthening coordination among agencies. Yet nearly all of these proposals remain in limbo. In mid-November, the House Natural Resources (HNR) Committee advanced on a bipartisan 25-18 vote the SPEED Act, sponsored by Chairman Bruce Westerman (R-AR) and HNR Committee Member Rep. Jared Golden (D-ME). Included in the legislation was an amendment added during markup by voice vote that would provide permitting certainty by blocking the executive branch from revoking energy permits after they have been approved. Westerman has made clear that passing the SPEED Act out of the House before the end of the year is a key priority, and he hopes the bill’s passage will put pressure on the Senate to take up the issue. The House this week announced tentative plans for a “permitting week” next week, with the SPEED Act and a number of other permitting bills scheduled for floor consideration. In the Senate, the Environment and Public Works (EPW) and Energy and Natural Resources (ENR) Committees continue to engage in bipartisan negotiations around permitting reform, with both committees engaged in productive discussions based in large part on the Energy Permitting Reform Act, which passed out of ENR last year before the end of the Congress.

Tariffs and Trade

All eyes are on the Supreme Court as justices consider when and how to issue its ruling in Learning Resources, Inc. V. Trump. The case tests whether President Trump’s use of the 1977 International Emergency Economic Powers Act (IEEPA) to impose sweeping tariffs is lawful and whether the statute unconstitutionally delegates Congress’s legislative authority to the executive branch. The Court’s decision could have a sweeping effect on President Trump’s trade policy.

With formal review of the United States-Mexico-Canada Agreement (USMCA) set to begin next year, the United States Trade Representative (USTR) will host a public hearing on the agreement in December. The Trump Administration may also work to finalize additional trade agreements, with India among the countries currently engaged in negotiations.

Cryptocurrency

Over the summer, the House passed the CLARITY Act, the lower chamber’s version of the crypto market structure bill, by a 294-134 vote. In the Senate, the Agriculture and Banking committees each have jurisdiction over cryptocurrency, with the Agriculture Committee overseeing commodity regulations, and securities law falling under the jurisdiction of the Banking Committee. Senate Agriculture released a discussion draft of its legislation earlier this month, following the Senate Banking Committee’s release of draft text in July. Senate committee leadership has expressed hopes to mark up the package in both committees this month and bring the package to the Senate floor in early 2026. While that timeline could slip until next year, once the Senate passes its legislation, it will be sent back to the House for consideration.

Cybersecurity Information Sharing Act

The November CR temporarily extended provisions of the Cybersecurity Information Sharing Act (CISA) of 2015 through January 30, but ongoing debates may produce a longer-term reauthorization. The White House signaled its support for a clean, 10-year reauthorization, based on public comments from National Cyber Director Sean Cairncross. On Capitol Hill, Senators Gary Peters (D-MI) and Mike Rounds (R-SD) are continuing to pick up bipartisan cosponsors for their 10-year extension bill. In contrast, Senate Homeland Security and Governmental Affairs Committee Chair Rand Paul (R-KY) is insisting that any extension of the information sharing framework include reforms to the Cybersecurity and Infrastructure Security Agency. In the House, Homeland Security Committee Chair Andrew Garbarino (R-NY) advanced his Widespread Information Management for the Welfare of Infrastructure and Government Act out of committee in September. The bill would update definitions and extend core information-sharing liability safe harbors for 10 years. If committee leaders cannot reach a deal in January, a second short-term reauthorization of CISA is likely to ride along with government funding legislation, setting the next expiration at the end of FY 2026.

Farm Bill

The prospects for comprehensive reauthorization legislation have grown increasingly uncertain as we approach the seven-year mark since the last full farm bill was enacted in 2018. With major commodity support and conservation provisions already addressed in this summer’s One Big Beautiful Bill Act (OBBBA) and the November CR extending the authorization to September 30th of an election year, the political dynamics for passing substantial farm bill legislation have become even more challenging. Deep cuts made to the Supplemental Nutrition Assistance Program (SNAP) program in the OBBBA have only deepened the divide between Democrats and Republicans on a typically bipartisan reauthorization process. However, there is agreement across Congress and in the Trump Administration that, after seven years, the farm bill is in dire need of a comprehensive reauthorization, one that considers supply chain disruptions, increased input costs, international market access, and other economic factors that have plagued the food and agriculture industry in recent years. Lastly, both House and Senate Agriculture Committee leadership know there are several bipartisan policy proposals ripe for consideration in an updated farm bill. These proposals could present a real legislative opportunity if the political will exists.