November 24, 2010
Members of Congress returned to DC last week for a lame-duck session intended to address pressing issues, namely the need to finish the fiscal year 2011 appropriations process as well as to extend various tax cut provisions that expire at the end of the calendar year. Members spent the first week of the session largely in party caucuses, electings leaders of the Congress that will be seated in January 2011. Very little was accomplished on any of the substantive issues identified by the current leadership as under consideration. Congress will return from a week-long Thanksgiving recess on November 29th. Given the many issues to address and the intense political maneuvering underway, it is now expected that the lame-duck session will last well into December.
The federal government is currently funded through a continuing resolution (CR) that expires on December 3rd. A CR was required when Congress failed to pass a new budget in time for the beginng of fiscal year 2011 back on October 1st. The CR provides Congress additional time to produce a budget, and temporarily funds agencies/programs at last year’s levels. After the holiday, it appears that Congress will need to pass either a second short-term CR that temporarily continues government operations and rests the final outcome with the new Congress, or pass a year-long CR that essentially ends the FY11 appropriations process. The latter scenario would result in lost opportunities for research agencies (e.g. NIH, NSF) expecting increases over last year’s allocation. Further, a longterm CR would likely provide another setback to attempts to plug a $5.7 billion shortfall in the Pell Grant program. A year-long CR would also result in the removal of all congressionally directed appropriations from the spending bills. Completion of the FY11 appropriations process through an omnibus spending bill remains a remote possibility.
The extension of Bush era tax cuts seems to be one area drawing some consensus on Capitol Hill. However, the details of a so called “tax extenders” bill remain uncertain. Several provisions of interest to the higher education community are part of the tax debate, though generally less controversial. The items include an extension of the research and development tax credit, IRA charitable rollover that would facilitate giving to our institutions, and the above the line tuition and fees deduction.
At present, Congress also seems likely to pass another fix on physician Medicare reimbursements. On November 18th, the Senate approved an extension of current reimbursement rates through December, which would provide more time to approve a longer-term solution.
Majority Leader Reid (D-NV) is pushing to fulfill a campaign promise to bring the DREAM Act to a vote. The legislation would provide a path to citizenship for some individuals who entered the country illegally with their parents. Despite support from a majority in the current Senate, and broad backing by the higher education community, the legislation is not likely to garner the 60 votes necessary to break an expected fillibuster.