November 1, 2014

Work awaiting lame-duck Congress worries Senators (AUDIO)

Nebraska’s United States Senators expect Congress to put off a lot of work until after the election and expect it will be difficult for a lame-duck Congress to get it all done.

The top items likely to be put off until after the November elections: whether to extend the Bush-era tax cuts, stop drastic budget cuts from automatically going into effect, a host of appropriations bills and the Farm Bill.

Waiting worries Sen. Mike Johanns, a Republican.

“I just think waiting until mid-November is just high-stakes gambling.”

It might be, but both Johanns and Sen. Ben Nelson will wager that’s exactly what will happen.

Nelson, a Democrat, says what Congress does with the left-over issues isn’t clear.

“I don’t what will happen during the lame-duck (session),” “I wish I could paint a prettier picture, but I just can’t.”

Nelson and Johanns agree Congress needs to tackle the tax cuts and pending budget cuts first.

If Congress fails to act, a series of tax cuts adopted during the presidency of George W. Bush will expire at the end of the year. In addition, payroll taxes – cut the past two years to help an ailing economy – will return to their normal rates. A deal made to raise the debt ceiling now looms large, because a special legislative committee failed to reach agreement on budget cuts. Under current law, $27 billion would be cut from both defense and domestic spending. Another $12 billion will be cut from Medicare.

The Congressional Budget Office projects the combination of tax increases and budget cuts will indeed reduce the federal budget, by as much as $607 billion, between FY 2012 and 2013. But the CBO predicts such a drastic reduction will weaken the economy and raise unemployment.

The shock to the economy will jolt economic growth, dropping it to a near stand-still. The CBO projects that under the scenario, economic growth in 2013 will be just 0.5% with the economy contracting in the first half of the year by 1.3% and expanding in the second half by 2.3%, likely throwing the economy back into recession.

Other important issues remain unresolved. With the Farm Bill pending, drought relief has not been authorized. Farm policies and the Food Stamp program expire September 30th. Financial problems with the Postal Service have not been addressed. A cyber security bill sits in the Senate.

Congress returns in September in what is expected to be a short session prior to the November elections. Attention will likely turn to a six-month spending bill needed to keep government running and avoid a shutdown.

AUDIO: Brent Martin reports [:45]