Debt panel failure sets up contentious December for Congress

On Capitol Hill, it's shaping up to be another punishing December.

While the failure of the deficit-cutting supercommittee came with no immediate policy consequences (the $1.2 trillion in automatic cuts won't take effect until 2013), December's agenda is another story.

Funding for the federal government expires on Dec. 16, forcing Congress to pass another continuing resolution before that deadline to prevent a government shutdown. A host of other issues — including measures to protect Medicare payments for doctors and to prevent the alternative minimum tax from hitting millions of middle-income Americans — are also considered by most lawmakers to be "must-pass" initiatives.

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In the wake of the recent supercommittee failure, lawmakers from both parties moved quickly to frame the looming budget debates that will dominate the rest of the year and reverberate through next year's elections.

Neither side, however, is straying far from its well-worn policy priorities — the same entrenchment that sunk the deficit super-panel — setting the stage for what could easily be another long December of high-stakes battles over federal spending and tax policy against a backdrop of voter unrest and the threat of a government shutdown.

Just hours after the supercommittee conceded defeat on Monday, President Obama was already calling for Congress to enact elements of his $447 billion jobs plan — particularly an extended payroll tax holiday that Republicans have panned. Senate Democrats are preparing next month to take up a legislative wish list totaling roughly $400 billion — a heavy lift in the face of Republicans who have crusaded all year against new deficit spending.

Across the aisle, GOP leaders were similarly defiant after the supercommittee conceded defeat. They immediately vowed to continue their year-long effort to slash spending on federal programs, including many low-income aid initiatives Democrats have promised to protect.

If recent statements are any indication, the parties remain miles apart on how to navigate the coming month. And an impasse on any number of things could keep lawmakers in Washington well past Dec. 8, when the House is scheduled to adjourn for the year.

Behind House Speaker John Boehner (R-Ohio), Republicans have championed legislation to slash spending, roll back federal regulations and cut taxes on businesses and individuals alike. GOP leaders have passed a number of those bills through the House this year and are pressuring Senate Democrats to take them up.

"The American people continue to await action on the more than 20 bipartisan jobs bills passed by the House that are currently stuck in the Democratic-controlled Senate," Boehner said last week after the supercommittee failed to reach a deal.

"With one single statement," Boehner added, Obama "could dislodge these bipartisan jobs bills and ensure they are brought to a vote. I hope the president will put country before party and call on the Senate to bring these bipartisan jobs bills to a vote immediately after Thanksgiving."

Sen. Chuck Grassley (R-Iowa) was even more terse.

"Congress and the President need to stay focused on reducing spending," he said after the supercommittee's collapse.

Democrats were quick to push back. They've argued that increases in spending on targeted initiatives like education, infrastructure and other public works programs will jump-start the economy and bring down unemployment, which has hovered around 9 percent for months.

On Tuesday, the top three House Democrats wrote to Boehner, urging the Speaker to extend jobless benefits, expand the payroll tax holiday and protect Medicare physician payments.

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"Independent economists from across the political spectrum estimate that failure to pass these essential pieces of legislation could reduce economic growth by as much as 2 percentage points next year," wrote House Minority Leader Nancy Pelosi (D-Calif.), House Minority Whip Steny Hoyer (D-Md.) and Rep. James Clyburn (S.C.), the assistant Democratic leader.

Lending some steam to the Democrats' stimulus push, the Congressional Budget Office last week released figures indicating that Obama's $800 billion economic stimulus package — deemed a failure by Republicans — added as many as 0.9 million jobs in 2009, 3.3 million jobs in 2010 and 2.6 million jobs in 2011.

During a visit to New Hampshire Tuesday, Obama pushed his plan to extend and expand the payroll tax holiday, warning Congress that a failure to do so would hinder the economic recovery.

"If Congress refuses to act, then middle-class families are going to get hit with a tax increase at the worst possible time," Obama said. "We can't let that happen."

Although generally supportive of tax cuts, Republicans have been unenthusiastic about the president's payroll tax break, arguing, in the words of Budget Committee Chairman Paul Ryan (R-Wis.), that the temporary cut is just "sugar-high economics."

Still, Boehner on Tuesday said Republicans "stand ready to have an honest and fruitful discussion with him regarding the payroll tax extension."