On Congress' To-Do List, Future Agenda

November 25, 2011 01:16 AM
 

via a special arrangement with Informa Economics, Inc.

A kick-the-can-down-the-road Congress has some lingering issues

NOTE: This column is copyrighted material, therefore reproduction or retransmission is prohibited under U.S. copyright laws.


By most accounts, this Congress has been labeled dysfunctional or so ideologically divided as unable or unwilling to pass legislative initiatives. With the failure of the Super Committee to find even $1.2 trillion in debt reduction over 10 years, the following is a list of issues Congress could tackle by the end of this year, or carry over the topic into next year, including a likely lame-duck session, or punt them to a new Congress in 2013:

  • Remaining Fiscal Year 2012 appropriations bills. Most if not all of the nine remaining measures will be packaged into an omnibus spending measure, and that approach will be seen as the "last train out of town" and thus lawmakers will see to add various bills to the mega spending measure – these could include renewable energy policy items such as extending the expiring ethanol import tariff (but not the expiring ethanol tax incentive) and a move on altering the RFS mandate and perhaps a push by the corn-based ethanol industry to make that feedstock an "advanced" biofuel and thus a higher mandate. Three of the 12 annual appropriations measures and a stopgap continuing resolution good through Dec. 16 were cleared Nov. 17 in a "minibus" package. Sources are not ruling out another continuing resolution into Jan. 2013.

  • Payroll tax cut. Congress will find a way to extend the expiring payroll tax past year-end. If not, failure would boost the average family's overall tax bill by around $900....in an election year. Even this Congress would not allow that.

  • Jobs bill. The expiring payroll tax cut (see related item) and other measures could be groups into a package. But any plan will move without the expedited procedures that legislation from the Super Committee would have enjoyed. Besides the payroll tax reduction extension, and a possible add-on for employers, other potentials include renewing extended federal unemployment compensation, preventing a scheduled reduction in Medicare payments to health care providers, hiring incentives and infrastructure funding, including additional funds for school construction (pushed by Democrats). Republicans will push spending cuts, tax cuts and regulatory curbs.

  • Across-the-board (ATB) cuts. With the Super Committee's failure, sequestration, or ATB cuts, are set to take effect Jan. 2, 2013 – unless Congress alters that mandate, perhaps in a lame-duck session following Nov. 2012 elections.

  • New omnibus farm bill. A far more open process is now likely and will take the form of hearings (especially in the Senate which has not held many) and a mark-up process. This will push the issue into 2012, and some contacts are not ruling out extending current programs for another year and finishing the process in 2013, but we think that is unlikely. Still, if the farm bill gets to the amendment process on the House and Senate floors, this version could look far different than the closed-door process that failed along with the Super Committee process.

  • Russia WTO accession; need for US to approve Permanent Normal Trade Relations (PNTR). Russia is expected to enter the World Trade Organization (WTO) in 2013. But PNTR with the US must be approved by the US Congress before the US garners the trade concessions Russia agreed to relative to its WTO entry negotiations. Congress is in no mood to do that this year and this could take a totally new Congress in 2013. That means US exporters to Russia will continue to pay higher tariffs then others will under the WTO rules. To accede to the WTO, Russia greed to lower tariff for most items to 7.8 percent, from 10 percent. For farm products, the tariff generally goes to 10.8 percent, from 13.2 percent.

  • Extension of expiring business tax breaks and a tax provision that limits the reach of the alternative minimum tax (AMT) may be put off until 2013.

  • Reform of the U.S. Postal Service to reduce costs and deal with a $5.5 billion payment to the Treasury for retiree health benefits is a likely topic before the end of this year.

  • Balanced-budget amendment to constitution. Senate Majority Leader Harry Reid (D-Nev.) must find time for a December vote because this is mandated by the debt limit law. The House rejected a similar measure (HConRes 2) by a vote of 261-165, well short of the necessary two-thirds majority.

  • MF Global. Oversight hearings are already on tap in the House Financials Services Committee on the bankruptcy of the trading firm. That and the Commodity Futures Trading Commission (CFTC) review of the situation will be ongoing well into 2012.


NOTE: This column is copyrighted material, therefore reproduction or retransmission is prohibited under U.S. copyright laws.


 


 

 

 

 

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