The Democratic strategy on the budget is coming into focus.  I have doubts.

There are more stories suggesting that the Democrats are preparing to hang tough in budget negotiations.  But it’s not clear if their tough talk is just marketing aimed at appeasing base voters, or if it reflects a newfound commitment to budgetary hardball.  Nor is it clear that Democrats have a negotiating strategy that will be sustainable and achieve their goals.

Let’s think this through.   

Democrats appear to be focusing their demands on rolling back the Medicaid cuts that were a centerpiece of the One Big Beautiful Bill and extending Affordable Care Act premium subsidies which are set to expire this year.  Republicans are politically and ideologically committed to their Medicaid cuts, but some “moderates” in competitive districts want the ACA subsidies extended.  As a result, the emerging Democratic bargaining position could well lead to a compromise in which the ACA subsidies are extended for a year or two, and the Medicaid cuts remain in place. 

As I argued previously, and others have noted, such a compromise would be a big political win for Republicans.  The ACA subsidies will lapse in 2026, and this will become apparent to low income voters this fall, when renewal paperwork for 2026 is sent out to millions of people who rely on the ACA exchanges for coverage.  Extending the subsidies would help moderate Republicans in close races avoid voter anger over rising premiums.  Democrats are unlikely to get much credit for letting Republicans extend the existing ACA subsidies, or even for insisting that they do so. 

It is possible that Democrats want to trigger a shutdown over Medicaid cuts, even if they ultimately lose on that issue.  How a standoff over Medicaid will play out politically is far from clear.  I am more optimistic than some that Democrats can win the battle for public opinion if the government shuts down, and Democrats are trusted on health care.  But Republicans are unlikely to pay a large price with low information voters at the ballot box next year for Medicaid cuts that are scheduled to take place in the future and are hard to understand.  If the Republicans do pay a big electoral price for their Medicaid cuts, it will be in 2028, when recipients have experienced the cuts first-hand.  If Democrats win a fight over Medicaid, they may well damage their political prospects for regaining the presidency.

In short, a Democratic win on the ACA subsidies and Medicaid seems likely to help Republicans and hurt Democrats in the 2026 midterms and in 2028.

This does not mean that the democratic strategy of focusing on health care is a mistake.  Maybe the Democrats will win (or lose) in 2026 regardless of whether the ACA subsidies expire.  In this case, we should try to preserve the ACA subsidies, because doing so will not help Trump and the Republicans in the mid-terms, and it is important to provide low-income people with affordable health insurance. 

This is a serious argument; I flagged it earlier.  There is a good chance the Republicans will lose the House in 2026.  Trump is highly unpopular.  Remarkably – let’s give credit where credit is due – almost everything he is doing is unpopular.  As G. Elliot Morris points out, Trump’s net approval is falling, the number who strongly disapprove of Trump is rising, and the fraction of his supporters who strongly approve of his actions has gone down.  Plausibly this will give Democrats an advantage in enthusiasm and turnout in the mid-terms.  Trump’s budget cuts, tariffs, deportations, reductions in foreign students, and interference with the Bureau of Labor Statistics and the Fed may lead to a recession, inflation, or stagflation.  The courts may act to protect the integrity of the 2026 vote, just as they did in 2020.  In short, the Democrats may cruise to a comfortable mid-term victory in 2026 even if the ACA credits are extended. 

The problem is that none of this is guaranteed.  The courts will not prevent an aggressive mid-decade Republican gerrymander, and the Supreme Court may well remove protection for black-majority districts, which would open a new avenue for GOP ratfucking.  We do not know if the courts and state election officials can or will contain efforts to intimidate voters or counter new efforts at rigging the vote.  The economy may well remain strong despite Trump’s efforts at mismanagement.  The Supreme Court may strike down his tariffs, removing a major source of uncertainty and setting off an optimism-fueled wave of growth with modest inflation.  Even if the tariffs remain in effect, tariff-induced inflation and labor market weakness may not be noticeable to most voters.  Some low-wage workers may benefit from the expulsion of low-wage immigrants.  Trump’s budget deficits are reckless and may eventually trigger a real financial crisis, but even if these turkeys come home to roost it may not happen in a visible way for decades.

Democrats may decide to extend the ACA premium subsidies regardless of the political costs.  If they do this, it is critical to get major concessions in return.  I have not seen this discussed in any detail.  I also have not seen any serious discussion of how to ensure that the GOP and the Trump administration honor any concessions they make in budget negotiations.  I hope this does not reflect the state of strategizing within the party.