In what is being called the “status quo election,” President Barack Obama became the first president since FDR to be re-elected with a higher unemployment rate than on the date of his inauguration, and Congress remained under current control, albeit with some gains for the Democrats.
» To avoid sequestration, Congress must get something done in the next five weeks prior to Christmas break.
» No major changes expected in leadership of either chamber.
» Disaster relief — in the form of a supplemental appropriation — for the states affected by Hurricane Sandy is also top on the agenda.
Congress came back for a lame duck session the week of Nov. 12 with the challenging task of avoiding the so-called fiscal cliff of automatic budget cuts known as sequestration and a slew of expiring tax cuts and other provisions. Some of these provisions include unemployment benefits, the payroll tax cut, the automatic rate decrease for Medicare providers (known as the “Doc fix”) and the alternative minimum tax patch.
Both the president and House Speaker John Boehner (R-Ohio) have expressed a willingness to compromise, and there was a summit scheduled at the White House, but there are a lot of questions about whether they will be able to reach an overarching deal during the lame duck session.
Time constraints are always an issue. Yes, Congress came back, but the first week was expected to be devoted to House Republican leadership elections and then Thanksgiving recess kicked in. House Democrats were expected to hold their elections after Thanksgiving. That would leave nearly five weeks to get something done, not counting Christmas recess, to avoid the sequestration.
In addition to time constraints, the reality is that both sides are still quite far apart on their vision for deficit reduction. Even if the so-called grand bargain is reached, it’s likely to look more like a grand blueprint, leaving the details of tax and entitlement reforms for next year. This scenario could also include a delay on sequestration and a short-term extension of expiring provisions.
Other Pending Issues for the Lame Duck Session
Disaster relief — in the form of a supplemental appropriation — for the states affected by Hurricane Sandy is also top on the agenda. It could become part of an omnibus appropriations bill that funds the government through the remainder of FY13. The current continuing appropriations bill is in effect through the end of March, but leadership seems inclined to go for a catchall bill that could serve as a vehicle for other legislation.
Congress could also deal with the farm bill, but there are wide differences in the funding for the nutrition title. The House has a much lower funding level for the Supplemental Nutrition Assistance Program (SNAP), aka food stamps, than the Senate, and there are some in the House who want even larger cuts. This may be another area where a short-term extension is a possibility and it could be attached to an omnibus spending bill.
Some supporters of transportation programs have suggested that any deal on the “grand bargain” include an increase in funding for the highway and transit programs. MAP-21, the surface transportation reauthorization legislation that was enacted last summer, did not include an increase in the federal gasoline tax because of opposition to such an increase from the Obama administration and most of the congressional leadership.
There is some history of deficit-reduction packages being better places to include gas tax increases than highway-transit reauthorization bills, in part because such an increase would be just one of a list of tax increases or reforms, but also because if done on a bipartisan basis it would happen almost two years before the next congressional election.
The Temporary Assistance for Needy Families Block Grant is set to expire at the end of March. It could also be part of an omnibus bill.
What Else to Expect?
If comprehensive tax reform is not achieved in a grand bargain before the end of the year, which is the likely scenario, it will be the leading debate on the Hill in 2013. Tax-exempt municipal bonds and the deductibility of state and local taxes are just two examples of provisions that will be on the table for discussion.
One other noteworthy issue is the online sales tax legislation — The Marketplace Fairness Act. Although bill sponsors are vocal in their wishes to pass it before the end of the year, its path is unclear in the lame duck. If Marketplace Fairness does not pass this year, it is likely to play a part in the overall tax reform debate next year.
Entitlement reform, of course, looms large in the new Congress as part of deficit-reduction efforts. Potential Medicaid changes would be the biggest concern to counties. NACo is also concerned that the Social Services block grant could fall victim to cuts in entitlement reform.
The payment in lieu of taxes (PILT) program, Secure Rural Schools-federal timber revenue sharing payments, and the Fiscal Wildlife Service Refuge Revenue-Sharing program will all need to be addressed as well as funded in the 113th Congress.
With the continued emergence of the Hispanic vote, immigration reform is another issue that could have a potential for bipartisan agreement. The president wants to make this a priority next year, and several Republicans are also calling for action. The Senate is expected to act first. There is a difference of opinion on whether reform should be comprehensive or incremental, with the president and the Senate Democrats preferring the comprehensive approach and House majority leadership leaning toward incremental steps, but at least there is room for negotiation.
There are no major changes expected in the leadership of either chamber. The only exception in the Senate is the need to replace retiring Senate Minority Whip Jon Kyl (R–Ariz.). Sen. John Cornyn (R–Texas) is expected to be the top contender for that post. Cornyn has been very good on some issues of interest to counties, such as child support enforcement.
If Rep. Jeb Hensarling (R–Texas) becomes the chair of the House Financial Services Committee, there will be a vacancy for the chair of the Republican Conference, with possible contenders including Rep. Cathie McMorris Rodgers (Wash.) and Rep. Tom Price ( Ga.) On the Democratic side, Rep. Xavier Becerra (Calif.) may take over as caucus chair, replacing outgoing chair Rep. John Larson (Conn.)
In the Senate, there are several chairmanship positions available to Democrats due to retirements, including the following:
- Budget: current Kent Conrad (N.D.), potential Patty Murray (Wash.)
- Energy and Natural Resources: current Jeff Bingaman (N.M.), potential Ron Wyden (Ore.)
- Homeland Security: retiring Joe Lieberman (Conn.), potential Tom Carper (Del.)
- Indian Affairs: current Daniel Akaka (Hawaii), potential Maria Cantwell (Wash.)
- There are several possible changes among Senate ranking GOP members, due both to retirements and Republican Conference term limits, which include:
- Appropriations: term-limited Thad Cochran (Miss.), potential Richard Shelby (Ala.)
- Banking: current, Shelby (could move to appropriations), potential Mike Crapo (Idaho)
- Commerce: retiring Kay Bailey Hutchison (Texas), potential Jim DeMint (S.C.)
- Environment and Public Works: term-limited James Inhofe (Okla.), potential David Vitter (La.)
- Health, Education, Labor and Pensions: term-limited Mike Enzi (Wyo.), potential Lamar Alexander (Tenn.)
- Homeland Security: term-limited Susan Collins (Maine), potential Tom Coburn (Okla.)
In the House, the most watched race for committee chair is that of Homeland Security, where Rep. Peter King (N.Y.) is term limited and Rep. Candice Miller (Mich.) may get the nod over Rep. Mike Rogers (Ala.), making her the only female to chair a House Committee. Rep. Paul Ryan (Wis.) is expected to get a waiver from the caucus rules and remain as chair of the Budget Committee. Other possible chairmanship changes include:
- Judiciary: term-limited Lamar Smith (Texas), potential Bob Goodlatte (Va.)
- Natural Resources: current Doc Hastings (Wash.) (could move to Rules), potential Rob Bishop (Utah)
- Rules: retiring David Dreier (Calif.), potential Pete Sessions (Texas) or Hastings
- Transportation and Infrastructure: term-limited John Mica (Fla.), potential Bill Shuster (Penn.)
The only major change among House Democratic ranking members is expected in the Appropriations Committee due to the retirement of Norman Dicks (Wash.). Reps. Nita Lowey (N.Y.) or Marcy Kaptur (Ohio) are considered potential replacements.
In addition to the potential committee leadership changes, the Senate Finance Committee, the House Energy and Commerce Committee, and the House Ways and Means Committee will have several vacancies due to retirements and losses.
Finally, there may be additional reshuffling, especially if any senators are tapped to fill Cabinet vacancies.