Lawmakers talk of punting issues to 2013

Lawmakers are growing increasingly anxious about the overstuffed lame-duck session, when they will likely be confronted with a slew of major decisions on taxes and spending.

Democrats and Republicans are now raising the possibility that, with little expected to get done on Capitol Hill before the November election, some or most of those determinations will have to be punted until 2013. 

{mosads}It is impossible to predict what will happen in the lame duck, though more and more people around Washington believe there will be a lot of talk in November and December, and little action. A six-month bill that raises the debt ceiling and basically adheres to current policy has attracted a fair amount of chatter on K Street and in the halls of Congress.

That sort of delay could further undermine how the financial markets and credit-rating agencies view the U.S. government. But leading dealmakers in Congress who want to lay the groundwork now for lame-duck deals on taxes and budget cuts are pessimistic they can even get that done. 

“I’ve been through a lot of lame ducks, and you really can’t do [these issues] just in a lame duck,” said Sen. Orrin Hatch (Utah), the ranking Republican on the Finance Committee. “These are earth-shaking issues and any one of them can take time. The only way you can do that is if both sides got together and said ‘we have had enough of that combativeness and let’s work together,’ but I haven’t seen any of it.”

Senate Finance Committee Chairman Max Baucus (D-Mont.) said that short-term extensions could be looming.

“We’ve got to try the best we can to get as much as we can get done,” Baucus said. “Everything is on the table.”

Punting until 2013 might sound easy, but in practice, it would be very difficult. A temporary measure that raises the debt ceiling and retains current policy on taxes and Medicare reimbursement would have a large price tag. In order to pass Congress, much of the bill’s cost would have to be offset, and there aren’t a lot of low-hanging pay-fors that have attracted bipartisan support.

Of course, November’s results will greatly influence how the lame duck plays out. President Obama’s thinking will be shaped by whether he’s preparing for a second term or packing his bags, and Capitol Hill will certainly take the composition of the next Congress into account. 

 “If you can tell me the outcome of this — who wins, who loses — it makes it a lot easier,” Senate Majority Whip Dick Durbin (D-Ill.) told reporters on Thursday. “The election leaves so many things in doubt, from the White House through the Capitol.”

 As it stands, legislators face a long list of policies that will expire at the end of the year — the so-called “fiscal cliff” that Federal Reserve Chairman Ben Bernanke says could imperil the economic recovery. 

The Bush-era tax rates on income and capital gains are scheduled to expire come year’s end, while an automatic $109 billion worth of spending cuts triggered by the failure of the congressional supercommittee are set to go into effect at the start of the year.

 In the eight weeks between the election and the new year, lawmakers also face an expiration of the payroll tax cut, an across-the-board decrease in Medicare payments to doctors, differing Senate and House appropriations bills and perhaps a need to raise the debt ceiling. 

JPMorgan said Thursday that failing to deal with those issues “would lead to an almost certain recession.” But so far, efforts to avert a lame-duck pileup have only served to reinforce this partisan divide.  

Sen. Olympia Snowe (R-Maine) on Thursday called on Senate Majority Leader Harry Reid (D-Nev.) to cancel next week’s recess in order to start work on the matters that are being left to the end of the year

“We have sufficient time over the next months to consider the array of options rather than relegating these issues to the lame-duck session with last-minute, poorly thought out measures assembled by just a relative few,” she said.

But Senate Democrats shot back that GOP opposition to any new taxes for the wealthy is the reason work is not getting done.

“Most of the looming, end-of-year business could be resolved fairly quickly if Sen. Snowe could convince her Republican colleagues to stop protecting millionaire tax breaks. We look forward to such a reappearance of her trademark independent streak,” said Brian Fallon, a spokesman for the Senate Democratic Policy Committee.

Given the bickering, former Capitol Hill staffers see little possibility that Congress does anything other than punt.

“There is no way on God’s green earth that the last four weeks of the 112th Congress can address all the issues they have effectively been ignored for the previous 48 weeks,” said William Hoagland, a former senior GOP aide who works for Cigna Corp.

Yet, some aides and lawmakers on Capitol Hill maintain they are laying significant groundwork for the lame duck, and argue that hammering out a six-month punt might not be any easier than crafting a longer deal.

And some members who have already announced they won’t be back for the 113th Congress, such as Senate Minority Whip Jon Kyl (R-Ariz.), say they want to act now.

“It would be a big mistake and bad for the country try to put off everything to the lame-duck session,” Kyl told The Hill. 

House Republicans say they are preparing for the lame duck by instructing committees to find replacement cuts for the automatic spending cuts, also known as the sequester. Democrats have ripped those cuts, asserting they would hurt the poor. 

GOP leaders in the lower chamber are also using planning sessions with their rank-and-file members to prepare for tax issues that could come up before or after the Nov. 6 election. 

On the other side of the Capitol, Durbin and Senate Budget Committee Chairman Kent Conrad (D-N.D.) claim the recommendations of Obama’s fiscal commission could serve to jump-start talks in the lame duck. A budget based on those recommendations, however, was soundly rejected earlier this month by the House, 38-382.

Meanwhile, House and Senate Appropriations committees are preparing bills at different spending levels, with the House pushing to come in below the mark from last August’s debt deal. 

While the House is preparing sequester replacements with big cuts to social programs, Obama has said he will veto any plan that does not include some revenues. 

Rep. Chris Van Hollen (Md.), the ranking Democrat on the Budget Committee, hinted that the ultimate remedy could be producing a “work plan” tied to the extension of some existing provisions that also sets out deadlines for Congress to develop final solutions.

“I think it is difficult to come to some global agreement in six weeks,” Van Hollen said.

Tags Dick Durbin Harry Reid Max Baucus Orrin Hatch

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