Senate Advances Deal to Reopen Government After Centrist Democrats Strike Major Compromise
Eight senators cross partly lines
Eight Democrats cross party lines to back a deal seeking to reopen the federal government. Let’s make sense of what happened and what to look for next.
Who Broke?
After 41 days of shutdown, eight Senate Democrats stepped across the line to help reach the 60 votes needed for the procedural measure. Their actions have raised questions about whether the stalemate was worth it.
On Sunday, a centrist bloc of Democrats voted with Republicans to advance a funding deal that would reopen the government in exchange for a future vote on extending Affordable Care Act subsidies. The move signals that Congress could finally end the longest shutdown in U.S. history within days.
The group, many from swing states and several with gubernatorial experience, includes Catherine Cortez Masto (NV), Dick Durbin (IL), John Fetterman (PA), Maggie Hassan (NH), Tim Kaine (VA), Angus King (ME), Jacky Rosen (NV), and Jeanne Shaheen (NH).
None are up for reelection in 2026.
The Deal
The proposed plan funds the government through January 30 while setting up a later vote on ACA tax credits, which is the very issue that triggered the standoff. Republicans offered no guarantee to extend those credits, but Senate Majority Leader John Thune pledged a floor vote by mid-December.
That promise was enough for moderates seeking a path forward. As Sen. John Fetterman put it, it’s time to “take the win.” Ending the shutdown, he argued, lets lawmakers refocus on lowering health-care costs rather than holding federal workers and families hostage.
Progressives were less convinced. Sen. Richard Blumenthal (CT) called it “no deal without health care.” Rep. Ro Khanna (CA) went further, calling on Senate leadership to be replaced for conceding ground on ACA subsidies. Bernie Sanders says moderate Democrats voting with GOP are making a ‘horrific mistake’.
This tension underscores a recurring theme in fiscal politics: who blinks first often depends on who can afford the political cost.
The Economics
The Congressional Budget Office estimated that the 2019 shutdown shaved 0.1 to 0.2 percentage points off quarterly GDP growth. This one has likely done more.
Each day of delay compounds uncertainty, and uncertainty is toxic to both business planning and household confidence.
That’s why even a stopgap reopening can have a significant impact; it restores predictability. However, what is unclear is how the GOP will negotiate when they don’t have to.
The Bottom Line
For weeks, the federal government has been a symbol of gridlock. Tonight, centrists, rather than partisans, drove the movement.
If the Senate passes the full measure this week, agencies will reopen, delayed paychecks will resume, and the nation will regain the one resource government shutdowns drain the fastest: trust.
What to Watch Next
Senate Final Vote: Expected within days; watch for progressive defections.
House Response: Speaker Johnson faces pressure from both fiscal hawks and business groups to move the bill.
Economic Data Delays: Expect delays of several weeks before agencies catch up on releases, especially for jobs and inflation reports.
Health-Care Vote in December: This will test whether moderates’ compromise creates momentum or merely buys time.
Stay curious. Share Decode Econ with a friend who wants to understand how politics shapes the economy.
As we get on the other side of this, what do you think about ideas floating around (most recently from Rep. Jake Auchincloss) to reform budget appropriations so that different agencies are funded at different intervals (every year, every other year, or every 5-10 years, for example)?
As I write this 75% of my staff, who work in Federal Contracting throughout the D.C. area, have been sitting for 6 weeks. From a budgetary aspect, it's no different than when someone loses their job and needs to balance their expenditures. The company can carry only a portion of those costs (healthcare, salary, etc) for a very limited period of time. I've deferred salary, along with other Officers, so that we can help best we can. But after 6 weeks of not getting compensation from the Feds, it's late-night laddering of what payments to make and what ones to ask for some "grace".
That isn't the position of most Federal Contractors. They let their people flounder and offer lip-service about bringing them back immediately. (For those who don't know, most of the cleaning staff for agencies are outside contractors. Hourly workers.)
Now consider Federal employees, of which my wife is one, not having received pay for 4 weeks and only partial compensation for the previous 2 weeks. Again, we're in a position to ride it out without any change to our daily lifestyle. But a member of her staff has recently gotten married and bought a house (With a spouse also employed by Feds).
There's a cost people people don't calculate in their partisan positioning. Humans.
42M needing food assistance. 1.2M Veterans not receiving help. Services that have fallen apart, S.S. is a mess for call centers and that ignores Government Data we all rely on for financial decisions.
My point? This was always a failure of leadership in BOTH parties. Legislation that is not designed to be sustainable and too often changed by the whims of the party in control.
It wasn't "caving" or "winning" based on your media choices. The reality of Innocent Violence couldn't be the theorem Congress hid behind anymore.