We already reported on this excellent piece in the journal by Allysia Finley, but we will do it again because we think it's such an important aspect of the discussion around ACA tax credits and subsidies, which itself is part of the shutdown discussion.

The basic gist is this: big municipalities (that is to say, big Blue municipalities) are saving money by dumping their retirees onto the ACA exchanges; this is a huge source of the growth in spending on ACA exchanges; and it's essentially a stealth ways for these big Blue cities to get a Federal bailout.

But let's recap from the top. The ACA, enacted in 2010, created federal health insurance exchanges designed to provide coverage for individuals lacking employer-based insurance. Subsidies—funded by federal taxpayers—offset premiums for low- and middle-income enrollees. Originally, these subsidies were capped for those earning under 400% of the federal poverty line. Pandemic-era legislation under Democratic majorities removed that cap and increased subsidy levels, making ACA coverage cheaper for many higher-income individuals, including retirees with six-figure pensions. These enhanced subsidies are set to expire, but Democrats in Congress are demanding their extension as part of the shutdown brouhaha.

Illinois, New York, New Jersey, and California face massive unfunded liabilities from public-sector retiree health benefits, often referred to as “other post-employment benefits” (OPEB). Courts generally protect pensions as contractual obligations but allow greater flexibility on retiree health coverage. As a result, municipalities have found it easier to offload those costs by directing retirees to ACA exchanges, where the federal government picks up most of the premium cost.

For example, Finley points out, in 2013, Chicago faced a $369 million deficit and a $2.1 billion unfunded retiree health-care liability. Then-Mayor Rahm Emanuel eliminated the city’s retiree health plan and shifted those retirees, mostly in their 50s and early 60s, to the ACA exchanges. This saved the city hundreds of millions of dollars annually while transferring the burden to federal taxpayers. Detroit, Stockton, and San Bernardino made similar moves during municipal bankruptcies in the 2010s.

By keeping retirees off local health plans, municipalities lower their liabilities and free up budget space for other programs, while taxpayers absorb the expense. It's time to stop this subsidy to blue cities, and to hold the line on the shutdown.

Policy News You Need To Know

#SNAP #Shutdown — The battle over SNAP continues. The admin is requesting the dismissal of a district court judge's ruling that the federal government must fully fund SNAP this month, as opposed to the partial funding currently budgeted.

#Shutdown — The FAA is placing a curfew on all US commercial spaceflight launches and re-entries.

#Immigration #H-1B — DOL has launched 175 investigations into suspected abuses of the H-1B visa program. The initiative, called “Project Firewall,” was introduced in September. Officials report cases of underpaid H-1B workers, falsified job postings, and employers failing to report terminations to immigration authorities. Good news. It's an open secret that H-1B fraud is rife.

#FirstAmendment — The Sixth Circuit Court of Appeals has ruled en banc that Ohio public schools cannot compel students to use preferred pronouns, deeming such policies a violation of the First Amendment. The decision asserts that forcing students to affirm transgender ideology discriminates against those who hold traditional views on biological sex as immutable. This ruling vacates a prior panel decision. Good news, good news, and a victory for the good people at Defending Education who brought the suit.

#Popcorn #LGBT #JamesDamore — Funny story, let's keep an eye on it. Google spent $3 billion (with a b) dollars to hire an AI genius. Said AI genius then posted on an internal Google forum that he believes biological sex is real. Cue screaming. We already have our popcorn out.

#Ed #StudentLoans — Ed finalized rules for implementation of the OBBA provisions on student loans. These rules include caps on grad student loans and a simpler repayment system.

#DEI — Treasury will audit agency contracts awarded by so-called preference-based contracting programs, which exploded under the Biden administration with very little oversight.

#Governance — Fed employee unions are suing the Trump administration over an essay question option that asks the applicant how they would advance the President's agenda.

#Strategy #RareEarths — The Department of the Interior released the final 2025 List of Critical Minerals, identifying 60 minerals deemed essential to the nation’s economy and security and vulnerable to supply disruptions. The new list adds 10 minerals, including copper, uranium, and silicon. The move continues a policy trajectory begun under the first Trump administration back in 2017, which directed federal agencies to secure domestic mineral supply chains. With the US still importing roughly 80% of its rare earth elements, the list is part of the broader effort for mineral independence.

Friday Essays

There's been a lot of talk about Nick Fuentes lately. Which is why, if you've got the stomach for it, this might be a good time to revisit this reported deep dive by Chris Brunet into the cult-like, weirdly sex-depraved world of the groypers, which runs under the not-exaggerated, and highly-revealing title of "Top 50 Nick Fuentes Pedophile Scandals."

Speaking of: "The best way to understand Nick Fuentes is as an actor upon the stage of 'hyperreality,' promoting an empty simulation of Nazism, which is a gift to the Left and bait for the Right. Outrage drives the phenomenon; a cold, calculated response could stop it." Thus writes the invaluable Chris Rufo at City Journal.

Final contribution on L'Affaire Fuentes: Ross Douthat, very intelligently and correctly to our mind, points out that cancel culture is out, the Israel-skeptical tendency among young conservatives cannot be wished away, and yet neither do we need to surrender to the groypers.

But enough about that…

Did you know? (We certainly did not.) Fewer than 1% of Japanese people are Christians. And yet, one in five post-World War II Japanese prime ministers have been Christians. Japanese Christians, apparently, are a highly elite group. Why? How did that happen? Fascinating article by the statistics blogger Crémieux.

"Writers (…) for better or worse, need publishers (and vice versa), and their relationships, involving taste, friendship and money, can be as long-lasting, as complicated and as asymmetrical as any marriage(.)" This gives a good taste of this fascinating review essay by Julian Barnes in the London Review of Books, on "Gustave Flaubert et Michel Lévy : Un couple explosif," a new historical book about the relationship between the great 19th century French writer Flaubert and his publisher.

Women, amirite? Helen Andrews made an explosive recent contribution to the Woman Debate (and the Wokeness Debate) with her recent viral speech at the National Conservative conference, expanded into a viral essay at Compact. At his must-listen podcast Interesting Times, Ross Douthat has brought her into conversation with Leah Libresco who, he notes, is another conservative woman writer and critic of contemporary liberal feminism, but one who arrives at it from a different perspective. This has led to a very interesting confrontation of views, one which occasionally threw up a few sparks.

The multi-talented writer and great New Yorker John Carney has written a very insightful essay for Commonplace on the "Park Slope Populists" who powered Zohran Mamdani's victory.

Mike Pence has published an argument for his own brand of Reagan-Kemp conservatives: individual liberty, classical liberalism, and pious Christianity. At the Washington Post, Dominic Pino interviews him on this theme.

"Leo Strauss is often accused of inspiring not only neoconservatism, (…) but specifically the vigorous interventionism championed by the most vociferous voices within its ranks." This is unfair, writes Ronald Dodson at The American Mind. Instead, Leo Strauss can be a guide to a foreign policy that is "realist in understanding and restrained in action, because it recognizes that both domestic and international politics are governed by the tragic limits of human wisdom and the necessity of prioritizing one’s own polis."