For the first time since 2019, the federal government has shut down. This on the heels of the July 4 passage of H.R. 1, the “One Big Beautiful Bill Act”, which delivers disproportionate and devastating impacts to communities by cutting federal funding for key public benefit programs. H.R. 1 cuts $1 trillion from Medicaid to attempt to justify $4 trillion in tax cuts for the wealthiest Americans.
The shutdown is a result of a fight in Congress over a provision in H.R. 1 that would end the enhanced advance premium tax credits (ePTCs) for people enrolled in health coverage through the Affordable Care Act marketplace. H.R. 1 already jeopardizes 15 million Americans’ coverage by cutting funds for all federal healthcare programs. Without action from Congress, the enhanced tax credits through ACA will expire on Dec. 31, driving up the cost of coverage for millions of families.
Congressional representatives and senators have made two demands to ensure relief for Americans: extend the subsidies that made marketplace health insurance plans more affordable, and make sure congressional funding decisions hold firm to prevent the executive branch from repealing funding the president doesn’t agree with. Senators are now waging the fight, refusing to vote for these cuts in defense of communities across the nation.
How Can the Government Just “Shut Down”?
The federal government shuts down when appropriations bills are not approved by Congress. Appropriations bills finance the operations of federal agencies and programs like the National Institutes of Health, the Supplemental Nutrition Assistance Program, and even the National Park Service. Appropriations bills are designed to fund the government through each fiscal year, which ends on Sept. 30.
When appropriations bills are not approved by Congress, a temporary measure called a continuing resolution (CR) comes into play. A CR sustains the government’s funding at its current level until appropriations bills are approved. The government “shuts down” when funding has not been authorized by Congress in an appropriations bill or a CR.
Why Did the Government Shut Down?
Every Texan recognizes that the members of Congress who are defending affordable marketplace healthcare are drawing a firm, necessary line to prevent a devastating jump in coverage costs for marketplace enrollees. Those tax credits help make health care more affordable for 22 million Americans (nearly everyone enrolled in the marketplace.) Without the credits, a 45-year-old in Texas making $62,000 would see an annual increase of $1,360 (26%), while a 60-year-old couple making $82,000 would be hit with an eye-popping $17,953 increase (258%).
Federal budgets require compromise, but Texans can all agree that those compromises should not jeopardize the health of millions. Unless enough senators agree to preserve their constituents’ healthcare, a CR will only jeopardize millions.
Healthcare premiums for marketplace enrollees are already expected to rise by 18% in 2026 due to inflation and rising costs of care and prescription drugs. Those increases in combination with the end of ePTCs would be a cruel, one-two punch for low-income marketplace enrollees. It would more than double the cost of coverage for low-income enrollees, ultimately making healthcare so expensive that it’s out of reach for 4.2 million Americans. A disproportionate number of those impacted would be younger people (ages 19-34) and people of color.
Projected impacts among states vary widely, but Texas would be among the hardest-hit. Texas already has the highest uninsured rate in the nation (22% of Texans 19-64 did not have health insurance in 2024), while about 4 million Texans purchase healthcare on the ACA marketplace. Kaiser Family Foundation estimates that H.R. 1’s provisions, including the end of ePTCs, would cut 1.4 million Texans off health coverage and increase our uninsured rate by 4 percentage points. In other words, more than 1 in 4 Texans would be uninsured. Millions more Texans will have to make the hard decision whether to forego insurance, fall back to cheaper but higher-deductible plans, or cut back their spending in other ways.
Now, Texans must brace for deeper impacts caused by political theatrics, whether those impacts come through a prolonged shutdown or the elimination of ePTCs. Also at play is the line those same congressional members are drawing between fact and fiction. The fact is that the executive branch and congressional majority leaders are intentionally misleading Congress and the public about the use of ePTCs by undocumented immigrants. This misrepresentation spurs the fiction that undocumented immigrants take enough resources from Americans, and that the federal government cannot adequately administer public benefits to meet the needs of Americans. Undocumented immigrants do not have access to most healthcare programs in the U.S., including those at the center of this government shutdown.
Undocumented people pay taxes to fund the benefits provided by the health coverage programs citizens and lawful residents depend on for healthcare, but cannot access them. Millions of lawful immigrants residing in the U.S. pay taxes – $58.1B in 2023. The same fiction now stalling Congress from sustaining health coverage for millions was used to strip those lawful immigrants of their coverage in H.R. 1. For decades, experts in U.S. Customs and Immigration Services have authorized work permits and residence for lawful residents in the U.S.
What Happens In a Shutdown?
Most of the shutdown’s immediate effects will be felt by our state’s federal workforce, already under tough pressure from DOGE-led cuts and reductions in force earlier this year. Broadly counting, Texas was home to about 225,000 federal workers last year, with about 130,000 civilians employed in cabinet-level agencies. Typically in a shutdown, most federal government workers are furloughed or put on unpaid leave. This time, however, the Trump administration is threatening to permanently lay off some workers.
Workers deemed essential, including our state’s 114,000 active-duty military members, will be required to work without pay during the shutdown, but economic activity dependent on our state’s 15 military bases is likely to slow down. According to plans released by the Department of Homeland Security, most Customs and Border Protection and Immigrations and Customs Enforcement personnel will continue to work.
If the shutdown continues, some agencies and programs will begin to run short of existing funding, and more people will be impacted. Although the U.S. Department of Education is expected to furlough about 95% of its workforce, direct student aid and Title I and IDEA federal funding will continue for now. If the shutdown continues, school districts may see delays in reimbursements for the National School Lunch and School Breakfast programs.
On top of the tens of thousands of federal workers whose jobs USDA and HHS will furlough and will be without paychecks, the shutdown also jeopardizes the health and wellness of the 3.4 million Texans who use SNAP to buy food and the 4.1 million Texans who use Medicaid or CHIP to access healthcare. For now, the USDA plans to continue the school meal programs, SNAP, and WIC benefits.
Centers for Medicare and Medicaid Services (CMS) will continue processing payments for medications and treatment costs for people who use Medicaid, Medicare, and CHIP. However, doctors, hospitals, and other healthcare providers could face payment delays if the shutdown continues for weeks or months. Every Texan calls on our state legislators to investigate funding these crucial programs with state funds should the shutdown continue past the federal contingency plans.
According to the Texas Tribune, about $675 million in ongoing infrastructure, transportation, and other development projects for Texas communities will be paused until the government is reopened.
What’s Next: Healthcare Must Come First
The shutdown must end as soon as possible. Texas’ federal workforce and their families will suffer needlessly, and we will all feel the impacts as offices and parks close, payments are delayed, and bills pile up. Even worse, terminating ACA tax credits will strike 4 million low- and middle-income Texans with devastating impacts: kicking them off health insurance, upending them financially, or both. Without those tax credits supporting enrollees’ health insurance premium payments, Texans will drop their coverage and return to living in the conditions that 22% of Texans who are currently uninsured experience today. Texans’ health will suffer, and their debts will increase. Healthcare systems will experience even higher strain, and healthcare workers will lose their jobs while clinics and hospitals struggle to stay open or are forced to close. If ePTCs are not expanded, Congress will be responsible for endangering the lives of Texans.
Any agreement to reopen the government must not only retain tax credits for low-income individuals and families, but also ensure the president cannot leverage fiction and a political agenda to undo the deal. Healthcare must come first. Furthermore, Congress must step up and defend its own authority under the constitution–the power of the purse it has exclusively held for 249 years–and ensure any bipartisan funding deal is not ignored by a lawless administration.