Lame-duck Congress's first task: avoid a government shutdown

Funding for fiscal year 2011 is set to run out Dec. 3. Will emboldened Republicans be willing to shut down government rather than pass a trillion-dollar budget that expands the deficit?

Of all the unfinished business on Capitol Hill, two issues – taxes and spending – are running up against tough deadlines when a lame-duck Congress returns next week, but the GOP surge at the polls on Nov. 2 is making consensus tougher on both issues.

To date, Congress has passed none of the 12 annual spending bills that keeps federal agencies functioning. Funding for fiscal year 2011 is set to run out on Dec. 3. In past years, the fix has been a single, massive spending bill, often pumped full of member projects derided as pork-barrel spending – a.k.a. earmarks – to grease passage.

But midterm elections changed both the partisan head count and the politics of spending in the lame-duck session as well.

For one, Republicans in the House and Senate say that voters will not tolerate another $1 trillion-plus spending bill loaded with pork and are threatening to block it. Moreover, the swearing in of Sen.-elect Mark Kirk (R) of Illinois on Nov. 29, will give Senate Republicans 42 seats in the lame-duck session, and Democrats will need to find at least two Republican votes to break a filibuster.

“The voters sent a clear message that the administration needs to come toward us,” said Senate Republican leader Mitch McConnell in a speech before the Federalist Society Friday. “If there’s a message out of this election to the Democrats, it’s certainly not to continue what they are doing."

In a surprise move, both House and Senate Republicans last week voted to voluntarily ban earmarks for two years. For Senator McConnell, a longtime defender of earmarking, the decision marked a dramatic shift that he attributed to listening to the voice of the people.

Government shutdown: Who would get the blame?

In order to avoid a government shutdown, Congress may have to accept another short-term measure, called a continuing resolution, leaving the spending bills to the new Republican House and an increased Republican minority in the Senate next year.

For their part, conservative activists and some new GOP lawmakers are not repudiating the prospect of a shutdown.

“Republicans are going to refuse to spend as much as Obama had hoped,” says Grover Norquist, president of Americans for Tax Reform. And unlike 1995, when President Clinton and a new GOP House majority clashed over a government shutdown, this time Republicans won’t get blamed, he adds.

“If Obama chooses to shut down the government, it’s not going to be a repeat of 1995. Several things are different, including Fox News and the Internet,” he adds. “That means that, unlike the last time, people will get the word out … that this is a fight about spending, and that Obama is shutting the government down to increase spending.”

Republicans say they are also prepared to go toe to toe with the White House over Bush-era tax cuts, now set to expire at midnight Dec. 31. The president has called on extending all the tax cuts except those to individuals earning more than $200,000 a year or couples earning more than $250,000.

House and Senate Democratic leaders said last week that they would bring this plan to the floor after Thanksgiving. But it has little chance of passing the Senate.

Senate Republicans, to a member, say it’s wrong to raise taxes on anybody in a recession. Several moderate Democrats have publicly joined them. McConnell is proposing legislation to permanently extend these tax cut, at an expected cost of $4 trillion over a decade. That, too, has little chance of passing the Senate.

Will 'don't ask, don't tell' be repealed?

Meanwhile, Senate Democratic leaders are hoping to move immigration legislation to allow children of people in the country illegally to attend US colleges and universities, the so-called “DREAM Act.”

They also hope to pass a defense authorization bill that includes repeal of a controversial “don’t ask, don’t tell” policy that prohibits the military service of openly gay men and women. In response to pressure from the White House, the Pentagon is releasing early its report on reaction to proposed changes in the policy by military men and women.

Democrats expect strong opposition from Republicans on both issues. “I’m afraid Republicans are not going to make anything easy for us in the last days of the session,” says Jim Manley, a spokesman for Senate majority leader Harry Reid.

Even with control of both the House and Senate, Democrats failed to produce a budget document for fiscal year 2011 that could win support in both bodies. Budget analysts say that could be even more challenging in the new fiscal year.

“There’s going to be at least as much trouble to get a budget resolution through this year,” says Stan Collender, a budget expert at Qorvis Communications. “You’re asking members to vote for a very, very high deficit for the new year, and many of them just won’t do it.”

“You can cut spending, but are you actually going to reduce the size of government?” he adds. “Interest on the debt goes up depending on interest rates, Medicare spending is dependent on the number of people eligible for the programs,” he adds. “Reducing what you spend doesn’t mean that government will stop doing things.”