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November 09, 2012

Lame Duck Congress Has Lots of Work to Do Even Without Fiscal Slope

Posted in: Uncategorized

Among the many other reasons not to engage in a grand bargain during the lame duck session is that Congress actually needs to get busy with other matters. For a variety of reasons, mainly that they’re not good at their job, Congress left a multitude of items on the table for the lame duck, many of which must pass aside from the fiscal slope measures like the Bush tax cuts, the sequester, unemployment insurance, the payroll tax cut and the alternative minimum tax patch. The Hill rounds some of them up.

I put these in the categories of “good” and “must avoid disaster.” The capital gains tax rate will go up to 20% (good). Medicare payments to doctors would drop 27% without a “doc fix” (not so good). The postal service has defaulted on $11 billion in retiree benefit payments and needs a reform measure (must avoid disaster). There’s a tax extender bill that has passed the Senate Finance Committee that includes a number of corporate tax breaks and the like which would expire if nothing is done (good). But inside that are patches to the AMT, an extension of the wind production tax credit, tax preferences for research and development, and a one-year extension of the Mortgage Forgiveness Debt Relief Act, without which homeowners who got principal reduction or other debt forgiveness would have to list the amount forgiven as income for tax purposes (must avoid disaster).

There’s more. The farm bill has already expired, and if nothing is done by the end of the year disruptive changes to farm programs would take effect (must avoid disaster). The FISA Amendments Act, which expands warrantless surveillance, expires at the end of the year without Senate action (good). A new defense authorization bill, which has passed annually for the last 50 years, is overdue (good). Congress didn’t get a cybersecurity bill done in the last session (good). The Violence Against Women Act has expired (must avoid disaster). There are a few other possible measures that aren’t very likely to happen, like stopping the EU from charging US airlines for global warming emissions, allowing tariff increases on countries branded currency manipulators, legalizing online poker, granting permanent normal trade relations with Russia, normalizing online sales tax regimes, and more.

But perhaps the most important lame duck session item at this point is an immediate aid bill for those suffering from Hurricane Sandy. We need an Atlantic Coast restoration bill that actually goes further than replenishing FEMA budgets. This could be tied to infrastructure spending, which Democrats support. But fixing the coasts is much more critical in the near term than fixing the debt. Unless you like inundated subway systems and flooded streets and homes without power for a week or more in the most population-dense region of the country as a regular occurrence.

Many of these priorities are absolutely critical, certainly more so that a so-called cliff that can be managed for months before having a legitimate economic impact.


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