In the Nation's Interest

2014 Lame Duck Legislative Issues

To:  Interested parties
From:  Wexler | Walker
Date:  October 20, 2014
Re:  2014 Lame Duck Legislative Issues

Overview: 

Only in Washington would we need to qualify what “must” be done by what “will” be done and what might only be partially done.  This is the nature of the Congressional gridlock we have observed.   We classify lame duck legislation into 4 categories:
1. ‘Must & will’:  Legislation that must and will be done;
2. ‘Must, but’:  Legislation that must be done, but potentially will only be partially done;
3. ‘Ought-to, but’:  Legislation that should be done, but may not get done; and
4. ‘Maybes’: Legislation that may be considered if there is any ‘oxygen’ left over. 

Congressional action largely will be dependent on the outcome of the Senate elections and its post-election mood.  House Republicans are expected to gain seats and in August and September that seemed to quell earlier intra-party discord.  At this juncture, House and Senate staff are meeting and working on deals, but without Members on the floor of each body, and with constant party lunches and leadership meetings, the outlook for the 2014 Lame Duck is unclear. 

Wexler | Walker believes if the Republicans win a majority of the Senate, the odds favor many issues being held over until 2015.  Both chambers of Congress return November 12th, 2014. However, the legislative calendar is unclear.   The House Majority Leader’s Office will not publish its calendar of legislative days until after the leadership elections are completed, which will occur soon after the November 12th return.  The Senate calendar and election plans will also occur after the election, but may be delayed if run-offs occur in December and January.

‘Must & Will’ Legislation:

1. Funding of Government Operations:  The current Continuing Resolution (CR) providing funds for agency operations expires December 11th and must be extended by changing the date or completing an Omnibus Package (“Omni”).

• Omni: Leadership of the Appropriations committee would like to make this an Omnibus/CR, and so would House Leadership, but that would be unlikely in this environment.

- An Omni would most likely include the Defense, Military Construction, Homeland Security, Commerce Justice Science, and perhaps Agriculture Appropriations bills for the entire fiscal year, while the remaining bills/agencies would operate under their FY14 levels.

• Extension of the current CR: The experience with CR extensions is mixed at best for the functioning of the new Congress.  Moreover, if the Senate has switched who is in control, a considerable amount of time will be spent figuring out committee ratios, gavels, staff, and other perks.  This will certainly complicate any quick passage of bills in the new Congress (2015).  With the ISIL issue looming and other pressing tasks, a short term CR may be the default option.

- March 15th was used a couple of years back for a mid-short length CR.  For 2015, this date would mean that funding the government would coincide with raising the debt limit – always a hot button issue for conservatives and possible a recipe for a return to brinksmanship.  However, some in leadership are looking to make sure the debt limit and CR stay uncoupled – i.e., no return to cliffs and crisis management.  In addition, the mood in the Senate will impact what can get done and when. We will not know what will transpire until we can ascertain if it’s a big win for Senate Republicans, a squeaker, or Democrats maintain their majority in the Senate.

- Organization and functioning of the Senate if it flips – In the past reorganizing the Senate when there is a change in power makes for bit of chaos in January and February.  Moreover, runoff elections could extend uncertainty of which party is in the majority, leading to a longer period of disorganization, even into early 2015.

2. Expiring Authorizations that MUST get done – most likely in CR/Omni:
Internet Tax Freedom Act–extended until December 11th in the current CR, it is unlikely to be coupled with Marketplace Fairness Act (which would allow state governments to collect sales tax from remote retailers that have no physical presence in the state).

Satellite Television Extension and Localism Act–STELA–which allows retransmission of broadcast content by satellite companies – copyright authorization expires 12/31/14

‘Must, But’ Legislation:

1. Tax Extenders:
• Discussion: Senate’s “Expire Act” takes all 50 or so current expiring tax provisions and extends them for two years, through 2016.  House has passed a subset of those provisions that they have made permanent, with the others expiring.  Included in this package is also the “Doc fix,” or Medicare Sustainable Growth Rate (SGR).
• Some in the Senate see a likely deal as:  47 of the 50 provisions get a 1 or 2 year extension, and 3 are made permanent (e.g., R&D tax credit, stimulus tax provisions that expire in 2017).  There is some question about viability of the corporate inversions provision sought by Democrats as a trade for permanency on something Republicans want. 
• We are picking up some optimism on Senate side about getting a deal done.
• House Leadership has told us that this is an issue that must get done.
• Note: Some of the expiring provisions have in fact expired already at the end of 2013, and the question of what goes into the package and for what duration will be a complex and politically difficult issue regardless of who wins the Senate. 
• This question will again be kicked to the Leadership.

2. Terrorist Risk Insurance Act (TRIA):
Industry has been getting out its message, and Members have been hearing about it back home.  We believe Leadership will continue to give the Chairman of House Financial Service Committee room to negotiate, but that at some point the pressures to act will be enormous. 

‘Ought to, but’ Legislation:

1. National Defense Act Authorization (NDAA) for FY15. 
• House passed a bill as did the Senate Armed Services Committee, but not the full Senate.  Pre-conferencing is going on now.  Both the House and the Senate will try to move this in November with a no amendment strategy.
• ISIL, Ebola, and other war-related issues are now front and center, so fast movement in lame duck may not be possible.

2. Capital Standards (Senator Susan Collins (R-ME)):
• There is a high degree of understanding in House Leadership and at the Committee about the importance of this issue.  We believe Leadership will give the Chairman room to pursue his policy goals, but as with TRIA, there will be enormous pressure to act as we get closer to Sine Die adjournment at the end of the year.

3. Medicare Sustainable Growth Rate – a.k.a. the Doc Fix
• Medicare SGR, a.k.a. physician payment, is currently ‘patched’ through March 15th
• When it expires, physician payments will plummet by over 25% because of the flaw in the formula. 
• Some would like to do the permanent fix in lame duck and get it off the table so that they can deal with health care and other tax issues in a clean manner.
• Agreement on how to fund the fix remains elusive, and may be a bigger issue than can be solved in a short and chaotic lame duck session.

‘Maybe’ Legislation:

1. Postal reform
2. Some financial services/banking bills beyond Capital Standards
3. Technical bills, e.g., land swaps, etc.
4. VA related matters
5. Nominations.  We believe this will be a big area of focus if Democrats lose the Senate.
6. Unanimous Consent requests (UC’s) at the end…stay tuned

Guest blogs are the views of an individual and/or entity and not the official policy of CED.

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