The Senate is back in session today (December 8), with a vote at 5:30 p.m. related to a judicial nomination. The chamber is likely to vote this week on an extension of enhanced Affordable Care Act (ACA) premium tax credits (PTCs) expiring at the end of this month, which Senate Majority Leader John Thune (R-SD) promised as part of the agreement ending the government shutdown. Compromise text of the National Defense Authorization Act (NDAA) released last evening could also see a vote this week.

The appropriations process is the other main issue facing lawmakers, with the January 30 deadline for funding the government through the remaining nine of 12 annual appropriations bills, but it's unclear how much progress will be made before the end of the year. Three appropriations bills — Military Construction and Veterans Affairs, Department of Agriculture, and Legislative Branch — were approved for the full duration of fiscal year 2026 in legislation to reopen the government on November 12. Congress is only scheduled to be in session for another two weeks prior to the holidays.

The House returns to session tomorrow, December 9, with votes on bills under the jurisdiction of the Agriculture Committee, Natural Resources Committee, and Oversight and Government Reform Committee. Later in the week, there is a planned vote on the INVEST Act (H.R. 3383) from the Financial Services Committee, a bipartisan package of regulatory reforms designed to promote capital formation. Among other provisions, the bill allows a closed-end fund to increase its investment in private investment funds; increases thresholds for venture-capital funds, such as the cap on capital (from $10 million to $50 million) and the cap on the number of VC investors (from 250 to 500); expands streamlined registration for companies going public; and broadens the SEC's "accredited investor" definition. The bill would also allow 403(b) retirement plans to invest in collective investment trusts (CITs), making their investment options more like 401(k) plans.

Health care -A three-year extension of the ACA PTCs expected to be put forward by Senate Democrats appears unlikely to win the support of 13 Republicans necessary for the bill to pass with the required 60 votes.

On Fox News Sunday, Senate HELP Committee Chairman and Finance Committee member Bill Cassidy (R-LA) expounded upon his alternative to the current credits, saying, "It's a political decision whether or not to continue the subsidies to some extent, but if we did continue those subsidies to a certain extent, you'd either be giving 100% of the money to the insurance companies … or you give 100% to the patient." He said if members could agree to give consumers a choice, "they can stay with the policy they have with a $6,000 deductible or they can go to another policy with a lower premium and money in a health savings account for them to purchase that which they do, the rest is just political decisions."

Speaker Mike Johnson (R-LA) has said House Republicans would likely release a health care bill this week. Politico reported on Friday that Speaker Johnson and other leaders would hold a discussion with rank-and-file members over the weekend over what to include in the package.

Trump Accounts — A story in the December 5 Wall Street Journal, "Wall Street Wants In on 'Trump Accounts,'" followed the IRS December 2 Notice 2025-68 announcing upcoming regulations and providing guidance regarding the accounts and the announcement of high-dollar donation to the program. "Participating financial firms likely would earn lower management fees than their typical rates, but the program would be a potential gateway to acquire millions of new customers the companies hope will stay with them into adulthood and grow their accounts over time … " the story said. "Many of the largest banks, brokers and asset managers plan to make pitches to the Treasury Department."

An EY Alert, "IRS releases first set of guidance on Trump accounts," is available here.

On Face the Nation yesterday, Treasury Secretary Scott Bessent said there won't be restrictions on how the money is used. Asked why they are structured as tax-deferred investment vehicles instead of a savings account, Sec. Bessent said, "Well, a savings account just gets interest. This is the compounding power of the stock market … And this is going to bring a whole group of new investors into the market. We're going to couple it with a big amount of financial literacy, so that children understand what they own."

Elections — The Supreme Court's December 4 ruling allowing Texas Republican state lawmakers to implement their redistricting plan for the 2026 elections, reversing a lower court's ruling that the new map was unconstitutional, has focused even more attention on redistricting. Redistricting usually occurs after the decennial US census, and the Court's ruling is viewed as further bolstering mid-decade efforts as a "new normal." The Texas proposal was the first in an ongoing multistate redistricting effort — some in favor of Republicans and others, like California, intended to add Democratic seats in response — after President Trump advocated Republican efforts to help retain the House majority in the 2026 midterms.

A story in the December 6 Washington Post, "After Supreme Court win, GOP rushes to draw more House maps," discussed debate on an Indiana map that would likely give Republicans two more House seats and cited a state lawmaker as highlighting the prospect that Democrats in Illinois could retaliate by drawing a new map.

The story said, "How much of an upper hand the GOP has remains uncertain. There's no guarantee the new map in Indiana will pass the state Senate, and Democrats are seeking new districts of their own. California voters adopted a map that could give Democrats as many as five more seats there, and a judge in Utah approved a map that will likely give them another one. Virginia Democrats have initiated a process that could give them two to four more seats there."

NDAA agreement — The final text of the annual, must-pass National Defense Authorization Act (NDAA), released last night, has a top-line number of $900 billion, including a 4% pay raise for enlisted troops. Among many other items in the final agreement, the bill includes a long-sought export controls bill by Sen. John Cornyn (R-TX), giving Treasury authority to prohibit or require notification of U.S. investments in sensitive foreign tech sectors such as advanced semiconductors, AI systems and hypersonics. The bill extends and "refocuses" the 1950 Defense Production Act, which allows the president to require private companies to expand production of critical materials and technologies. It extends the Ukraine Security Assistance Initiative by $400 million for the next two years. The final agreement also includes language from Rep. Elise Stefanik (R-NY) requiring the FBI to notify Congress when it opens an investigation involving presidential or federal candidates.

Notably left out of the final NDAA agreement was the Senate Banking Committee's bipartisan ROAD to Housing Act, which was rejected by House Republicans despite support from the White House, as well as Rep. Tom Emmer's (R-MN) language banning a U.S. central bank digital currency (CBDC), a priority for the House's pro-crypto members. Other negotiated items that were ultimately dropped from the final agreement included language members had sought pre-empting state regulation of artificial intelligence (AI), and Sen. Tammy Duckworth's (D-IL) language expanding Tricare's coverage of in-vitro fertilization (IVF) for military families.

Retirement — The Senate Health, Education, Labor and Pensions Committee has scheduled a hearing for Wednesday, December 10 (10 a.m.), on "The Future of Retirement."

Trade — As the USMCA review process continues, companies should prepare for further uncertainty and disruption across the North American trading block. The latest thoughts and insights from Washington Council EY on the process and substance of the review are available here.

Friday, December 12 is the EY Center for Tax Policy monthly update for December 2025, formerly known as "Tax in a Time of Transition." Register here.