25 problems facing Obama, Congress
By Erik Wasson -
A slew of thorny issues awaits President Obama and Congress in the lame-duck
session, ranging from taxes to defense to Medicare.
Obamas victory increases the chances that the lame duck will be productive,
but it remains to be seen if the president and leaders on Capitol Hill can
break the gridlock that has gripped the 112th Congress.
The following are 25 policy matters most likely to be addressed in the
coming weeks.
Expiring Bush-era tax rates
House Speaker John Boehner (R-Ohio) quickly sought to define the terms of
this debate, saying on election night that Obamas victory is not a mandate
to raise taxes. But Obama clearly has leverage, especially because the 2001
and 2003 tax reductions expire at the end of the year. Obama has vowed not
to renew the tax reduction for families making more than $250,000 a year;
the GOP wants all the reductions extended. Despite the rhetoric, a
compromise at a $1 million threshold could be reached. Another possibility
is extending the Bush rates temporarily in exchange for future tax revenue
increases as a part of tax reform.
Sequester
Under the terms of the August 2011 debt-ceiling deal, $109 billion in
across-the-board spending cuts is set to hit in January. Defense would take
a $55 billion hit. Congress will look to replace at least this first slice
of $1 trillion in 10-year cuts with targeted cuts to mandatory spending and
possibly tax increases. A grand bargain replacing all the cuts and tax
increases in the fiscal cliff is probably not entirely feasible in the lame
duck, but a framework for future action in 2013 could materialize.
Hurricane Sandy supplemental spending bill
The damage from Sandy will still be big news when Congress returns next
week. Forty-four members of the House signed a bipartisan letter urging
leaders to be prepared to increase the federal disaster relief funds $7.1
billion budget.
Alternative Minimum Tax patch
Unless Congress acts, millions of middle-class earners will come under the
umbrella of the AMT for the current tax year. Indexing the AMT exemption for
inflation retroactively would be a nightmare, so some form of AMT patch is
highly likely in the lame-duck session.
Capital gains tax rate
After Dec. 31, the tax rate on investments held for more than one year will
rise for middle-income and higher-income earners, from 15 percent to 20.
Obama wants to preserve the rise for higher-income earners. Some Republicans
want the rate dropped to zero to spur investment.
Medicare doc fix
Unless Congress acts, Medicare payments to doctors will be slashed by 27
percent in January.
Omnibus appropriations bill
The six-month continuing resolution put the government on autopilot until
March. If replacing the sequester involves discretionary cuts, there would
be momentum to replace the continuing resolution with 12 detailed bills.
Postal reform
The beleaguered U.S. Postal Service this fall defaulted on $11 billion in
retiree healthcare payments. The Senate and House have different approaches
to revamping the USPS.
Payroll tax cut extension
House Democrats, led by Budget Committee ranking member Chris Van Hollen
(Md.), have suggested continuing the 2-percentage-point reduction in the
payroll tax that was extended in February. Some liberals are suggesting that
reviving the 2009 stimuluss Making Work Pay tax credit is a better idea.
Unemployment insurance extension
Under an agreement forged in February, extended federal benefits have been
gradually curtailed and are set to expire for the long-term unemployed at
years end. Expect the battle to, once again, be contentious, with some
lawmakers reluctant to spend federal dollars despite a national employment
rate that recently rose to 7.9 percent.
Tax extenders
A package dealing with most of 73 targeted tax credits has passed the Senate
Finance Committee. The $205 billion bill would patch the AMT and contains
items like the research and development tax credit and a production tax
credit for wind projects.
Infrastructure bank
Sandy has exposed weaknesses in transportation and water infrastructure and
could boost plans to fix crumbling roads, bridges, ports and tunnels. Obama
incorporated a bipartisan proposal to create a national infrastructure bank
in his stalled 2011 Jobs Act. It would take $10 billion in government seed
money to identify worthy projects and seek out private financing to
supplement government loan guarantees.
Defense authorization
A defense authorization bill has passed for each of the last 50 years, and
the Senate is unlikely to break that streak in the lame duck. The main
issues have been Senate floor time and Majority Leader Harry Reids (D-Nev.)
desire to avoid giving the GOP a chance to blame Obama for sequestration.
The Senate Armed Services Committee passed a $631.4 billion bill with $4
billion less in funding than the House-passed bill. The House measure seeks
to ban gay marriage on military bases.
Farm bill
The Senate has passed a bill, but House GOP leaders have refused to act on a
pending plan in the lower chamber. Liberals are opposed to food-stamp cuts
in both bills, while conservatives want deeper cuts. The farm bill could get
wrapped into a fiscal cliff deal replacing the sequester.
Airline emissions
The European Union has enacted a climate-change plan whereby airlines
servicing the continent will have to buy carbon credits. The Senate on Sept.
22 passed a bill aimed at shielding U.S. airlines from paying greenhouse-gas
penalties. The House passed a similar version of the bill in 2011 and might
be amenable to passing the Senate version.
Online poker
Reid wants action in the lame duck on a bill legalizing online poker and
online lottery sales. Companion legislation has been introduced in the House
by Rep. Joe Barton (R-Texas).
Foreign Intelligence Surveillance Act
The Senate might consider the controversial FISA amendments bill in the lame
duck. The legislation would reauthorize spying on foreign communications
without a judicial warrant. The House has approved a five-year extension of
the authority, which expires in January.
Violence Against Women Act
VAWA became a major campaign-season talking point for Democrats, who claimed
the GOP was waging a war on women. The House and Senate have passed
different VAWA legislation, which seeks to extend funding to investigate and
prosecute domestic violence.
Permanent Normal Trade Relations (PNTR) for Russia
Russia joined the World Trade Organization (WTO) this summer with the
backing of the United States. At this point, U.S. exporters cannot enjoy the
lower tariffs Russia is granting other WTO members because the U.S. has not
permanently removed longstanding conditions on trade with Russia stemming
from the Soviet era. PNTR is heavily supported by the business community.
Benefits for same-sex partners of federal workers
Retiring Sen. Joe Lieberman (I-Conn.) has pushed a bill that would provide
retirement and health benefits to same-sex domestic partners of federal
workers. Sen.-elect Tammy Baldwin (D-Wis.) sponsored the House version.
Online sales tax
Retail groups have been pushing hard for an online sales tax measure they
say will level the playing field between brick-and-mortar stores and online
retailers. Similar, but not identical, bipartisan measures in both the House
and Senate would allow states to collect from out-of-state retailers. Some
conservatives, such as Sen. Jim DeMint (R-S.C.), oppose it.
Cybersecurity
Senate Republicans blocked the Cybersecurity Act of 2012, sponsored by Sens.
Lieberman and Susan Collins (R-Maine), in September, and a compromise has
been elusive, given business opposition.
China currency
China currency played a big role in the presidential campaign, with Mitt
Romney vowing to name China a currency manipulator on day one of his
administration. The Senate passed a bill 63-35 last year hitting China with
tariffs, but it has not been taken up by House GOP leaders.
Mortgage Forgiveness Debt Relief extension
Under permanent tax law, mortgage debt that is forgiven by a bank, either
through a principal reduction or a short sale, is taxed as income. But the
Mortgage Forgiveness Debt Relief Act, passed in 2007 in an effort to boost
the ailing housing market, allowed taxpayers to exempt that forgiveness from
their tax bill. Now the law is set to expire, and industry groups and
housing advocates are pushing to get it extended as part of any broad
legislative package.
Consumer Financial Protection Bureau fix
Obamas win means that repealing Dodd-Frank is off the table. But the
financial industry and both parties want to tweak part of the Wall Street
reform law, which created the CFPB, that contains a technical oversight that
could endanger vital information handed to the new regulator.
Bernie Becker and Peter Schroeder contributed.
Updated at 8:17 p.m.
Thé Mulindwas Communication Group
"With Yoweri Museveni and Dr. Kiiza Besigye Uganda is in anarchy"
Kuungana Mulindwa Mawasiliano Kikundi
"Pamoja na Yoweri Museveni na Dk. Kiiza Besigye Uganda ni katika machafuko"
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