Washington on One - 1/5/2026

THE LEDE:  Lawmakers return to Capitol Hill this week with plans to pick up where they left off in December: arguing over health-care costs as Affordable Care Act premiums rise and scrambling to avert another government shutdown by Jan. 30… Venezuela dominating the agenda. At 5:30 p.m., Secretary Rubio, Defense Secretary Hegseth, AG Bondi, CIA Director Ratcliffe, and Gen. Caine will provide a classified briefing to the “Gang of Eight” and committee leaders. Senate leadership is also planning a mid-week all-member briefing.  President Trump addresses House Republicans tomorrow. Meanwhile, Democrats will force a Senate war powers vote this week. Though the resolution lacks GOP support, it—along with disputes over operation funding—will clarify congressional stances on military action…Venezuela’s acting president, Delcy Rodríguez, invited the US to work with her country on a “cooperation agenda” following the capture of President Nicolás Maduro. It’s a striking turnaround from the remarks she made in the hours after US forces snatched Maduro on Saturday…Krishnamoorthi (D-IL) steps down as top Democrat on House China panel (he is running for US Senate)…US negotiators will join European leaders in Paris on Tuesday in the latest effort to hash out postwar security guarantees for Ukraine…Scrutiny over the Department of Justice’s slow release of the Jeffrey Epstein files is still swirling, with advocates saying they’re considering all legal options to force the remaining documents to be publicized...The administration is stepping up its battle with Minnesota officials over a wide-ranging fraud investigation as Gov Walz says he won’t seek reelection…More than two months after Trump and Chinese leader Xi Jinping’s “amazing meeting” in South Korea, there’s still no formal language outlining the terms of their agreement…MTG’s resignation from the House becomes official today…

VENEZUELA:  Reaction to President Trump’s January 3 seizure of Venezuelan President Nicolás Maduro largely followed party lines. Republicans praised the removal of a "narcoterrorist," while Democrats condemned the unauthorized use of force.  Although pre-arrest polls showed public opposition to intervention, Democrats are framing the operation as a distraction from domestic economic woes. Senate Minority Leader Chuck Schumer called it an "escapade" meant to divert attention from the affordability crisis—a line echoed in key Senate races in Ohio and Maine.  Nuance exists within the parties. Rep. Henry Cuellar (D-Texas) supported the move, comparing it to the 1990 Noriega arrest. Conversely, Rep. Thomas Massie (R-Ky.) questioned its constitutionality, and outgoing Rep. Marjorie Taylor Greene (R-Ga.) argued it violated "America First" principles.  Congress is now demanding clarity on Trump’s plan to "run" Venezuela. Senate Democrats plan a vote this week on a resolution restricting further military action. While backed by Sen. Rand Paul (R-Ky.), the measure faces a steep path in the GOP-controlled chamber.  The administration insists congressional approval was unnecessary. Secretary of State Marco Rubio defended the seizure as a "law enforcement function" against an indicted trafficker rather than an act of war, setting the stage for a constitutional clash.

ACA:  The expiration of enhanced Affordable Care Act tax credits on January 1 has triggered premium spikes for over 20 million Americans. While a path to restoration exists, significant hurdles remain.  In the House, four GOP moderates joined Democrats to force a vote on a three-year extension, ensuring all members go on record. The measure is expected to pass, shifting the focus to the Senate, where Republicans are demanding reforms in exchange for any deal.  Democrats may leverage the looming January 30 government shutdown deadline to push for an extension. However, Senate Minority Leader Chuck Schumer (D-N.Y.) appears reluctant to engage in another shutdown fight, despite rising pressure from his caucus to play hardball. Ultimately, bipartisan negotiation in the Senate will determine if the subsidies are revived.  Rep. Brian Fitzpatrick (R-Pa.), who signed the Democratic discharge petition, said he and other House centrists have been in steady talks with senators to figure out a delicate compromise on the ACA subsidies.

FROM THE SPEAKER’S OFFICE:  Speaker Johnson faces a contentious agenda as the House returns today, confronting internal divisions and looming deadlines. While Johnson seeks to rally Republicans around housing initiatives and public benefits fraud, old conflicts threaten GOP unity ahead of the midterms.  Healthcare is the immediate flashpoint. Following the 2025 expiration of ACA tax credits, Democrats—aided by four GOP rebels—plan to force a vote on a three-year extension this week. While the measure may pass the House via discharge petition, it faces a Senate blockade and opposition from President Trump, who favors Health Savings Accounts.  Simultaneously, Johnson must navigate friction over Venezuela intervention and a congressional stock trading ban. Leadership is drafting a compromise allowing members to hold existing stocks, but hardliners and Democrats argue it falls short.  Tensions are also boiling over the Jeffrey Epstein files. Bipartisan frustration regarding the DOJ's slow release has prompted Reps. Massie and Khanna to threaten a contempt vote against Attorney General Pam Bondi.  On the spending front, appropriators are nearing a deal on a three-bill "minibus" (Interior, Energy-Water, CJS) to avoid a Jan. 30 shutdown, with a possible vote Thursday. However, even "unity" issues spark debate: conservatives are pushing to reinstate Elon Musk to probe fraud, a move moderates reject. Despite Johnson’s public confidence, the path forward remains fraught.

APPROPRIATIONS:  Following a historic shutdown and a wasted December, appropriators must pass nine remaining funding bills to avoid another stopgap or shutdown.  Complicating matters is the Venezuela crisis. Democrats, led by Senator Tim Kaine, threaten to use the funding deadline to force a vote barring defense funds for military action in Venezuela, potentially stalling negotiations.  A strategic rift exists between chambers. Senate Republicans prefer a five-bill minibus covering most discretionary spending (Defense, Labor-HHS, etc.). However, this stalled in December due to internal GOP objections and Democratic opposition over the administration's targeting of the National Center for Atmospheric Research.  House Appropriations Chairman Tom Cole argues a five-bill package is "too big to swallow" for the House. He proposes three separate three-bill packages, starting with Commerce-Justice-Science, Interior, and Energy-Water, leaving difficult Defense and Labor-HHS bills for last.  While Cole and Senate Chair Susan Collins reached a private topline deal to keep spending below current stopgap levels, Democrats remain frustrated by their exclusion from planning. "The summer was wasted, December was wasted," said Ranking Member Rosa DeLauro.  Work remains incomplete. The Senate has yet to release its State-Foreign Operations bill, though negotiations are essentially at the conference stage. Meanwhile, the partisan Senate Homeland Security proposal faces Democratic opposition over administration impoundments. With the House out the last week of January, the path to a deal remains tight.

CHINA:  President Trump’s October meeting with Xi Jinping has yet to yield a formal agreement, dimming prospects for a broader 2026 trade deal. While the White House announced China would resume agricultural purchases and lift critical mineral export restrictions in exchange for a tariff pause, Beijing has not confirmed specific commitments.  Implementation remains messy. The U.S. claimed China would buy 12 million tons of soybeans by late 2025; with actuals lagging, officials have shifted the timeline to mid-2026. Similarly, rare earth supply chains remain unpredictable despite U.S. assurances.  Critics warn this ambiguity invites conflict. "The Chinese don't want a real, definitive agreement," noted former Commerce Secretary Wilbur Ross. Meanwhile, Trump’s authorization of Nvidia AI chip sales to China—without reciprocal concessions—has alarmed national security hawks who fear the President prioritizes transactional dealmaking over long-term strategy.  Ultimately, this unwritten truce falls short of the structural reforms and "reciprocal" trade realignment the administration originally promised, leaving the relationship vulnerable to renewed economic chaos in the coming year.

MTG:  Marjorie Taylor Greene’s resignation today triggers a crowded special election for Georgia’s 14th District. Governor Brian Kemp (R) is expected to schedule the vote quickly for this deep-red stronghold. With nearly 20 Republicans filed—including state Sen. Colton Moore and prosecutor Clayton Fuller—a runoff is likely under the state's "jungle primary" rules.  Greene’s exit narrows the House GOP majority to a razor-thin 219-213, complicating leadership's path ahead of the January 30 shutdown deadline. Her departure follows a public fallout with President Trump, who attacked her for demanding the release of the Jeffrey Epstein files.  While Republicans are poised to retain the seat, the temporary vacancy adds pressure in Washington. Elsewhere, Democrats are filling vacancies in Texas’ 18th District (Jan. 31 runoff) and New Jersey’s 11th (April 16).

THE MONTH AHEAD:  A Non exhaustive list of what we’ll we talking about this month.  OBAMACARE SUBSIDIES:  Enhanced ACA tax credits expired Jan. 1, triggering an estimated 26% premium hike. While the Senate rejected an extension in December, four House Republicans signed a discharge petition to force a January vote. If passed, the Senate may reconsider, potentially pairing a temporary extension with GOP priorities like HSA expansion or anti-fraud measures.  MEDIA:  Eyes on media ownership: The industry is watching the FCC’s handling of the 39 percent national audience cap for broadcasters. The broadcast lobby seeks to lift this cap to compete with streamers, while Democrats and consumer groups warn consolidation could redune viewpoint diversity and raise prices.  FED CHAIR: President Trump is expected to announce his nominee for Federal Reserve Chair soon, ahead of Jerome Powell’s term expiration in May. The Supreme Court will hear arguments Jan. 21 regarding Trump's attempt to fire board member Lisa Cook. Meanwhile, the Federal Open Market Committee meets Jan. 27-28, with signals pointing to a rate pause after three consecutive cuts.  HOUSING: The House is expected to vote on a housing package cleared by the Financial Services Committee. However, broader appropriations and bipartisan homebuilding legislation remain stalled, with significant differences persisting between the Senate’s ROAD to Housing package and the House’s Housing for the 21st Century Act.  GLOBAL TAX:  Treasury is working to ratify an exemption for U.S. businesses from the global minimum tax (Pillar Two). After Republicans dropped a retaliatory "revenge tax" based on a G-7 agreement, the administration is now pressing the OECD to finalize the U.S. exemption early this year.  ENERGY:  Global crude prices have dropped 20 percent since Trump took office, allowing him to tout sub-$3 gas. While OPEC+ has paused production hikes to prevent oversupply, economic uncertainty from tariffs has kept demand soft.  U.S. production is showing signs of waning due to low profitability, with rig counts dropping. However, analysts expect oil to remain below $60 a barrel through 2026, bolstering the administration's defense against Democratic attacks on the cost of living.  NLRB: Following late-2025 confirmations of Trump nominees, the National Labor Relations Board is poised to shift power back toward employers. Business groups expect the reconstituted board to begin reversing Biden-era pro-union precedents.  EEOC: Chair Andrea Lucas plans to raise the agency's profile in 2026, encouraging white men to file discrimination charges and promising a "higher volume of public actions."  H-1B VISAS: A federal judge upheld the Trump administration’s $100,000 H-1B visa fee. Concurrently, DHS finalized a lottery overhaul prioritizing higher earners, a move officials claim protects entry-level American jobs.  PELL GRANTS: The Education Department has reached a consensus on "Workforce Pell Grants," extending federal aid to training programs as short as eight weeks. The final proposal aligns with the "One Big Beautiful Bill Act."  The Department now turns to accountability, implementing the "do no harm" standard. Programs failing to ensure graduates earn more than the typical non-college worker in two of three years will lose federal aid eligibility. Negotiators will also revisit "financial value transparency" rules to ensure debt-to-earnings viability.  FARM BILL:  Talks are set to restart, now two years behind schedule. Stick points include pesticide regulation, animal welfare standards, and a ban on intoxicating hemp products.  SAFETY NET:  SNAP work requirements and a ban on purchasing junk food with benefits take effect this month.  TARIFFS: The administration has paused planned tariff hikes on furniture and cabinets and canceled anti-dumping duties on Italian pasta. Trump also eliminated tariffs on agricultural goods not produced in the U.S., a move aimed at mitigating cost-of-living criticism.