The Senate has left for the week and is scheduled to be in recess next week, beginning January 19, and return to session on Monday, January 26. A proposal reflecting efforts to address expired enhanced Affordable Care Act (ACA) premium tax credits (PTCs) by a group of senators that includes Susan Collins (R-ME), Bernie Moreno (R-OH) and Angus King (I-ME) doesn't appear close to being released, with some persistent sticking points and, as Punchbowl News reported January 15, GOP leadership unwilling to intervene to break a logjam.

Meanwhile, Republicans in the House appear increasingly inclined to pursue a second budget reconciliation bill with a focus on health care, despite a months-long split among members over whether that is necessary and feasible. House Speaker Mike Johnson (R-LA) said that he and members including Budget Committee Chairman Jodey Arrington (R-TX) met Wednesday to discuss what could be included in a reconciliation bill, according to a Politico story, "Johnson pledges to push ahead on another party-line megabill." Chairman Arrington has long said a second reconciliation bill is likely, though Ways and Means Committee Chairman Jason Smith (R-MO) has noted the challenges of passing the one-party bill in the narrowly divided chamber.

President Trump January 15 released The Great Healthcare Plan, which calls for Congress to codify the Administration's Most Favored Nations drug pricing deals with pharmaceutical companies and details policies to lower health insurance premiums, including redirecting the Affordable Care Act's enhanced premium tax credits to consumers instead of insurance companies, increasing transparency into coverage costs, and funding cost sharing reduction payments. The plan was more of a framework or blueprint than a series of detailed proposals. The White House did not release legislative text needed to enact these policies.

Congressional Republicans generally praised the plan's market-oriented approaches, cost transparency ideas and regulatory relief, though outside observers expressed doubt that it would get Democratic votes.

Meanwhile, as a matter of procedure, the House passed a resolution to request the Senate return to the House the bill H.R. 1834, the vehicle for the three-year extension of the enhanced ACA credits passed by the House on January 8 pursuant to a discharge petition. It's been reported that the wrong version of the bill was sent over to the Senate, which would be unlikely to pass the bill as-is given that a three-year extension failed there in December, but the bill could be used as a vehicle for a potential agreement. The Senate agreed to send the bill back on January 15.

Appropriations — The Senate January 15 approved, 82-15, the House-passed Commerce, Justice, Science/Energy and Water Development/Interior and Environment appropriations package (H.R. 6938).

The House January 14 approved the Financial Services and General Government and National Security, Department of State, and Related Programs Appropriations Act, 2026, which includes funding for the Treasury Department and Internal Revenue Service (IRS). The vote was 341-79.

Remaining will be Department of Homeland Security, (DHS) Labor-HHS, Defense and Transportation-HUD appropriations bills. DHS, which covers immigration enforcement, is potentially the most controversial, and appropriators hope to release the final four bills at the beginning of next week. Punchbowl News reported that the House-passed Financial Services/National Security package would likely need to be paired with the remaining bills to be cleared by the Senate the week of January 26, before the funding deadline.

The House is scheduled to be out of session the week after next, ending on January 30, after which a portion of government funding will run out absent further congressional action. That raises the question of whether members will need to patch some funding through a continuing resolution (CR) or change the recess schedule, both of which leaders hope to avoid.

Crypto — Senate Banking Committee Chairman Tim Scott (R-SC) canceled a markup of landmark cryptocurrency market structure legislation that had been set for Thursday (January 14), after a key industry stakeholder dropped his support for the latest version of the bill. Coinbase CEO Brian Armstrong withdrew the company's support upon seeing Republicans' latest draft, citing language restricting crypto exchanges' ability to offer stablecoin rewards programs that pay an annual yield, as well as a ban on tokenized equities and concerns about the CFTC's authority vs. the SEC. No rescheduled date has been set for the markup, and negotiations on the bill are likely to stretch well into February. Sen. Cynthia Lummis (R-WY), a key sponsor of the bill on the Banking Committee, told Politico, "It's going to take a while to develop a plan on how to make another run at it. I'm not going to reach out to do it immediately. People need a chance to soak in what happened."

Speaking on Fox News Digital, Chairman Scott said, "We've taken over 90 of the Democrats' priorities, and we've filtered them. We really have come to the conclusion that [the priorities are] overall good enough to be a part of the process. So we have taken a lot of their input and some of the issues that they were concerned with, we as Republicans were concerned with as well … the money laundering issue being a priority for the Democrats." White House crypto & AI czar David Sacks said industry should use the delay to "resolve any remaining differences."

Tax — IRS Notice 2026-11 released January 14 announced that Treasury and IRS intend to issue proposed regulations that would implement the additional first year depreciation deduction under IRC Section 168(k), as amended by the "One, Big, Beautiful Bill Act" (OBBBA), including proposed regulations to include applicable qualified sound recording productions commencing in tax years ending after July 4, 2025.

Revenue Procedure 2026-08 sets forth updated procedures to obtain recognition of exemption from federal income tax on a group basis for 501(c) organizations that are affiliated with and under the general supervision or control of a central organization.

What to Expect in Washington will not be published on Monday, January 19.