The Obamacare subsidy fight exposes who Washington really serves

The failure of both Democrat and Republican plans to extend or partially replace enhanced Obamacare subsidies offers a clear lesson: Escaping an entitlement trap almost never happens.

Yes, the House of Representatives on Thursday voted to extend the COVID-era Affordable Care Act subsidies that expired at the end of 2025. Seventeen Republicans even joined a unanimous Democratic Caucus in voting for the extension. But Senate Majority Leader John Thune (R-S.D.) said Republicans have “no appetite” for an extension — at least not without reforms.

Republicans remain an impediment to the necessary reforms and are working hand in hand with Democrats to bring on economic collapse. Time is not on our side.

The reality is, once government creates a welfare entitlement, logic and sustainability exit the conversation. Politicians do not debate whether to grow the program. They argue only over how much to increase spending and how to disguise the costs. That pattern now governs the fight over enhanced Obamacare subsidies.

Why the premise never gets challenged

When the Senate rejected a nearly identical bill in December, the Wall Street Journal reported that Congress faces “no clear path for aiding millions of Americans facing soaring Affordable Care Act insurance costs next year.”

The Journal’s framing accepts the entitlement premise without question. It treats “aiding millions” as morally self-evident while ignoring the coercion necessary to fund that aid. Government assistance does not materialize from thin air. It transfers responsibility, money, and risk from one group of Americans to another.

Once imposed, that transfer only grows.

Both rejected plans would have sent more taxpayer money to insurers than the ACA already guarantees. With no deal in sight, the Journal observed last month that hope for extending the subsidies is fading. That assessment may be accurate politically, but an extension does not deserve hope. It deserves scrutiny.

How entitlement politics works

Democrats want Republicans to extend an expansion they never voted for of a program they never supported. Republicans respond by proposing modest adjustments to reduce political damage without challenging the underlying structure.

Rep. Max L. Miller (R-Ohio), who voted for the bill, summarized the dilemma perfectly. “I just want to make this abundantly clear: This is a Democratic piece of legislation. It is absolutely horrific. Now, it is the best alternative to what we have at the moment.”

That is how entitlement traps operate.

For decades, big-government advocates have followed a reliable strategy. They create a benefit for a defined group, allow costs to spiral, then dare the opposition to take something away from a newly entrenched constituency. When the moment arrives, those who claim to favor limited government retreat or propose cosmetic reforms that leave the core system untouched.

That dynamic explains why the country remains locked into the socialist ratchet, the uniparty routine, and a political class that acts as tax collector for an ever-expanding welfare state.

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Trapped voters, trapped taxpayers

Entitlements squeeze the nation from both sides. They trap recipients by discouraging work and mobility, and they trap taxpayers by locking future governments into permanent obligations.

The Affordable Care Act stands as one of the most powerful modern examples of this system. The law forced millions into government-regulated insurance markets while guaranteeing insurers a growing pool of subsidized customers. The result was predictable: higher costs, deeper dependency, and a massive political constituency invested in permanent expansion.

Not a single Republican voted for the ACA. They understood what the law would do. Democrats passed it anyway, and it worked exactly as designed.

Who Obamacare was really built to serve

As Connor O’Keeffe has argued at Mises Wire, federal health care policy has long served industry interests. Government interventions channel money toward providers, pharmaceutical companies, and insurers under the guise of helping patients.

Obamacare accelerated that process by mandating coverage and expanding what insurers must provide, driving demand and cost growth in tandem. Once people rely on government assistance to afford insurance, any reduction becomes politically unthinkable.

Republicans now scramble to avoid electoral consequences. House Speaker Mike Johnson says the GOP will advance health care proposals without extending subsidies, yet many lawmakers privately admit that only an extension prevents immediate pain ahead of the 2026 midterms.

That admission exposes the trap. Spending limits become cruel. Taxpayer costs disappear from the conversation. Only the next premium increase matters.

Why conservatives keep losing

History explains where this leads. Entitlement debates almost always end with higher spending. Political power depends on payments to voters. Reducing benefits means losing elections.

Progressives act decisively when in power. Conservatives obsess over procedure and restraint, even as the administrative state grows unchecked.

Last week alone offered two examples. The House overturned President Trump’s March 2025 executive order blocking collective bargaining for over a million federal employees, with 20 Republicans joining Democrats. Even Franklin Roosevelt opposed public-sector unions. Modern conservatives could not summon the resolve to block them.

On the same day, Indiana Republicans declined to redraw their congressional map despite the risk of losing the House and triggering impeachment proceedings against Trump. They clung to unwritten norms while their opponents prepared to exploit the outcome.

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This pattern defines conservative failure. Republicans manage decline. They preserve a decaying system rather than reverse it.

Donald Trump broke from that habit. A former Democrat, he understands power. Win elections, then act. Trump restored a political energy absent on the right for decades.

His approach to entitlements focuses on restraining growth outside Social Security while expanding private-sector freedom to increase economic output. The goal is not austerity. It is to shrink government’s share of the economy by growing everything else faster.

Reform or collapse

That strategy may succeed or fail. It remains the only alternative to collapse. Without reform, federal spending and debt will overwhelm the system within a decade, possibly sooner. Borrowing costs will explode. Inflation will surge. Control will vanish.

The United States approached that danger under unified Democrat control and Joe Biden’s autopen in 2021 and 2022. Voters halted the slide by electing Republican majorities and returning Trump to the White House.

Trump failed to drain the swamp in his first term, largely because congressional Republicans refused to legislate when they had the chance. In his second term, he has advanced reforms through executive action. Congress has responded with delay and timidity.

The country will escape the entitlement trap one way or another. Reform can arrive through disciplined growth and economic expansion, or through collapse driven by massive overspending.

With their conservative approach to governance, Republicans remain an impediment to the necessary reforms and are working hand in hand with Democrats to bring on that collapse. Time is not on our side.