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Unemployment Extension, Tax Cuts, and Spending -- What to Expect in the Lame Duck

November 14, 2010 - by Donny Shaw

Congress comes back to work today for the first time since the midterms for what is known as a “lame duck” session, a post-election work period with defeated incumbents still in office, but unaccountable, and newly-elected members waiting in the wings. Lame duck sessions have historically been relatively unproductive, but there is a lot that could happen this time and there’s a certain unpredictability to lame duck sessions that make it extra important that we pay close attention.

The first sign that this lame duck might be…well…lame is that the outgoing Democratic majority has yet to really set an agenda. In fact, they’ve spent some time lowering expectations about what they’ll actually get done. Here’s a quick look at what Congress might take up in the lame duck.

Funding the Government

Before the elections, Congress passed a continuing resolution that keeps the government funded and operating until December 3rd. Recently, the top Democrat and Republican on the Senate Appropriations Committee have been developing a “compromise” omnibus spending package to fund the government for the rest of the fiscal year at a level about $20 billion below what Obama has requested. Many Democrats want a higher spending level more in line with Obama’s request — they argue that the high unemployment demands more stimulus — and many Republicans want no spending package in the lame duck at all, preferring to address the issue in the next session when they hold more seats. At this point, another continuing resolution keeping the government running and passing the buck to the next session is the most likely outcome.

Bush Tax Cuts

When President Bush and the 107th Congress passed their 2001 tax cut package, they did so using the filibuster-resistant budget reconciliation rules, which require that all legislation passed using them sunset automatically after 10 years. The tax cuts are set to expire on January 1, and whether or not Congress should step in and renew them is one of the most contentious and important debates in U.S. politics right now. Obama, as we have know since he was a candidate, wants to extend the cuts for all earned income up to $250,000, but let the cuts for income above that level expire per the 2001 law. Most Democrats in Congress support the Obama plan. Republicans, on the other hand, want all the cuts extended and made permanent. Between these two options, various compromises have been floated — extend all cuts for 3 years, “decouple” and extend the upper-income cuts temporarily and the lower-income cuts permanently, etc. It’s totally unclear what’s going to happen with this.

Extending Unemployment Benefits

The current extension of federal unemployment benefits is set to expire on November 30th. If Congress fails to extend the benefits, an estimated 2 million long-term unemployed workers will be without a government lifeline by the end of the year. For the past couple years, Congress has repeatedly passed legislation to keep the extended benefits active (albeit with a few lapses). But it has recently become very difficult and quite time consuming for the Democrats to overcome filibusters on the issue in the Senate. The disagreement is typical — Republicans want the cost of the benefits offset while Democrats want to let the deficit spending produce a stimulus. Legislation to extend benefits is not on the calendar this week for either chamber at this point (House, Senate), but it could still be added. The legislation will likely include extensions of other expiring programs, like the “doc fix,” which overrides Medicare’s payment formula and stops doctors from getting hit with a pay cut. If the unemployment extension is not done this week, the filing deadline will almost definitely expire, at least temporarily, because Congress will not be in session next week and won’t return until Nov. 29th.

Other Domestic Policy

The backlog of bills the Democrats want to get done before losing their strong majority next session is extensive, but a handful of bills are clear front-runners for lame duck action.

  • Repealing “Don’t Ask, Don’t Tell” is a priority for the Administration and the Democrats, and they know that if they don’t get it done before January, it won’t happen until 2013 at the earliest. Repeal language is currently included in the pending 2011 Defense bill, but there is some talk about a deal to strip it out.
  • The DREAM Act is also a longstanding goal. It would give some undocumented immigrants would establish a path to citizenship for some undocumented immigrants under the age of 35 who graduate high school or promise to serve in the military. Applicants for citizenship under the DREAM Act would have to meet certain criteria designed to prevent the bill from being exploited and to weed out applicants that have been in trouble with the law. Majority Leader Sen. Harry Reid [D, NV] promised his constituents in Nevada during a campaign event that he would hold a vote on the bill in the lame duck session.
  • The FDA Food Safety Modernization Act has been waiting for a vote in the Senate for years. The bill would give the FDA greater regulatory powers over the national food supply and food providers with the goal of preventing food-borne illnesses and ensuring food safety. More specifically, it would increase the frequency of FDA inspections of food processing plants, expand the FDA’s traceback capabilities for when outbreaks do occur, give the FDA mandatory recall authority, and require food facilities to have safety plans in place in order to mitigate hazards. The House passed a similar bill in in July 2009 (H.R.2749), but the bill has stalled in the Senate over concerns that it would be too tough on small farms. Harry Reid filed for cloture on the bill before adjourning for the midterms and it is scheduled to come up for a vote this week on overcoming a Republican filibuster. You can read more details on the most recent iteration of the bill here.

Obviously, there are lots of moving parts in all of this, and thins will be developing very quickly over the next several weeks in Congress. Keep checking back here for updates (or just subscribe by RSS) and we’ll do our best to bring you the best information about these important issues as soon it’s available.

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