US troops may miss first paychecks on Oct 15 as shutdown drags on

WASHINGTON - The financial impacts of the government shutdown are set to escalate this week, even as Senate Republicans and Democrats show no signs of breaking the stalemate over health care policies at the heart of the fight.

Without a deal, military troops are

set on Oct 15 to miss their first paychecks

since the shutdown started. Meanwhile, Americans who use Obamacare are starting to feel the consequences of expiring subsidies at the center of Democrats’ demands, as insurance companies begin to send notices of rising premiums. 

The Trump administration said the government would pay the military this week using tariff and tax revenues. But without action by Congress, it’s unclear how the administration can do so.

Representative Jim Himes, a Democrat from Connecticut, on CBS’s Face the Nation on Oct 12 highlighted the impact the shutdown will have on troops.

“None of them are wealthy. None of them are going to get paid on Oct 15,” Mr Himes said. “To pay the military during a shutdown would require legislation. The speaker of the House has taken that off the table.”

Speaker Mike Johnson has refused to bring the House back to Washington, which prevents any votes from being scheduled to ensure military members are paid for the duration of the shutdown. He is insisting the stopgap spending bill passed by his chamber is the only path forward.

“Democrats in the Senate, all but three, have voted not to pay the troops. So, the ball is in the Senate’s court – the House has done its job,” Mr Johnson said on Fox News on Oct 12. Senate Democrats have also indicated a lack of interest in a standalone measure to ensure military pay.

Separately, Republicans are under increased pressure to negotiate with Democrats on extending expiring tax credits that lower health-care premiums for more than 22 million people enrolled on Obamacare exchanges. Insurance companies are sending out notices to customers this month, reflecting large increases to premiums for next year. 

With open enrollment starting Nov 1, Democrats insist a deal to reopen the government must include an extension of the subsidies. Republican leaders have said they will negotiate with Democrats on the issue after the government reopens.

But notices of rising premiums have caused the smallest of cracks in GOP unity on the issue. Representative Marjorie Taylor Greene, a conservative Georgia Republican, broke from the ranks, criticising her party for lacking a plan to keep premiums from rising, saying her own offspring would be affected by tax credits’ sunset.

Democrats see Ms Greene’s defection as a hopeful sign that more Republicans may be open to striking a deal to extend the subsidies as their constituents are hit with higher premiums.

“As every day goes on there are more Republicans that are breaking with JD Vance and President Trump on health care”, Democratic Senator Chris Murphy of Connecticut said on CBS on Oct 12. “Hopefully at some point there will be enough Republicans to join us and try to protect people’s pocketbooks.”

But so far, informal bipartisan talks about extending the subsidies have yet to produce an off-ramp to the shutdown. Democrats have been skeptical that any deal they strike with Senate Republicans will stick in the House without Donald Trump’s blessing.

Democrats have urged the president to negotiate with them. Mr Trump so far has ignored their requests.

“The president has indicated he wants to do something about this,” Democratic Senator Mark Kelly of Arizona said on NBC’s Meet the Press on Oct 12. “All this is going to take is to put everybody in a room for an extended period of time and coming up with some reasonable conclusion.”

House Republicans have done little to convince Democrats they would honor a deal to extend the subsidies if the Senate can reach one, by stepping up attacks on President Barack Obama’s 2010 health care overhaul. Representative Steve Scalise of Louisiana, the number twp Republican in the House, called Obamacare a “sinkhole” and a “failed project” on Oct 10, adding that 90 per cent of his conference felt the same about the program that is broadly popular with Americans.

Mr Scalise and others also criticised the expiring subsidies as a giveaway to health insurance companies. Making those subsidies, first enacted during the Covid-19 pandemic, permanent would cost US$350 billion over 10 years, according to the nonpartisan Congressional Budget Office.

Mr Trump’s decision to fire more than 4,000 federal workers on Oct 10 further eroded the prospect of reaching a deal to end the shutdown quickly. Vice-President JD Vance said on Fox News’s Morning Futures that more dismissals are coming.

“The longer this goes on, the deeper the cuts will be,” Mr Vance said. BLOOMBERG