The 111th Congress is trying to address big ticket items, such as tax cuts, funding the federal government and the START Treaty, before they can turn off the lights of the Capitol and wait for the 112th Congress to convene in January. The 112th Congress will have the largest group of new members to Congress since the 1940s.
Here is a snap shot of what Congress has done this week and what they hope to finish up next week before adjourning for Christmas.
The Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act -- Late Thursday evening, the House voted to extend the Obama tax package, which included an extension of the Bush era tax cuts and other provisions that were worked out with the administration and congressional leaders when they returned from the Thanksgiving break. The vote in the House was 277-148 with 112 democrats and 36 republicans voting against the measure. The $858 billion package sailed through the Senate earlier in the week by a vote of 81-19.
One of the more controversial parts of the agreement, particularly to House democrats, was the estate tax provision. The bill provides a $5 million estate tax exemption indexed for inflation, a top rate of 35 percent, full step-up in basis and a provision to allow the exemption amount to transfer to a spouse (the Lincoln/Kyl estate tax legislation). The estate tax rate in 2009 was 45 percent with a $3.5 million exemption. There was no estate tax this year. The agreement also permits businesses of all sizes to write off the entire value of their capital investment next year. The President signed the bill this afternoon.
Funding the Federal Government -- The federal government is scheduled to shut down on Monday after the current stopgap funding measure (a Continuing Resolution (CR)) expires this weekend unless Congress comes to an agreement on some form of an appropriations bill. On Thursday, there was a good possibility that the Senate would pass a $1.1 trillion omnibus appropriations bill, which also contained Sen. Tester's (Mont.) Montana wilderness legislation as well as the food safety legislation. Today, that possibility seems very distant. In fact, Thursday evening, Senate Majority Leader Reid (Nev.) walked away from the omnibus admitting that he did not have the 60 votes necessary to overcome a republican filibuster of the legislation because it contained congressional-directed funding or earmarks. He believed in the morning he had the votes needed, but by Thursday evening, he had lost the nine republican votes he thought he had. Now there is only one viable option--a short term continuing resolution, probably through mid-February when the 112th Congress will be in place. There is a chance that the House and Senate may agree on a short-term funding bill today and send it to the President this weekend to avoid a government shutdown.
However, there may be some problems with this scenario. The administration would like to see any CR contain 'anomalies' (special requests for additional funding for high-priority programs such as Department of Defense activities that they argue would be 'harmed' by a straight CR). A CR typically extends current funding levels for federal programs and activities. Also, strong republican opposition to policy riders on the CR puts the passage of any food safety legislation in serious doubt. The food safety legislation was included in the Senate omnibus legislation as well as an earlier CR that had been sent by the House to the Senate.
What's Left -- Once the Congress decides how or if they intend to fund the federal government, there are several other issues that may land on the President's desk before the 111th Congress calls it quits. The Senate will now turn its attention to a repeal of the prohibition of gays serving openly in the U.S. military, the SAFE Act and ratification of the START Treaty. The SAFE act appears to have the necessary votes to proceed. The "don't ask, don't tell" legislation looks to have the necessary votes to proceed while the START Treaty ratification is facing serious opposition. The Omnibus Trace Act, H.R. 6517, awaits action by the Senate.