After its second work week of the lame duck session, Congress appears to have focused it’s attention on the five main issues that it expects to address before adjourning:  1) extending the Bush tax cuts in some form; 2) passing some kind of appropriations bill for FY2011; 3) extending emergency unemployment benefits; 4) ratifying the new Strategic Arms Reduction Treaty (START) with Russia; and 5) passing the FY2011 Defense Authorization Act with or without the “don’t ask, don’t tell” provision. 

Extending the tax cuts.  Congressional action on extending the tax cuts moved forward, but no final agreement was reached.  The House voted 234-188 to extend tax cuts for only individuals earning $200,000 or less or families earning up to $250,000.  Tax cuts for all others would end under the bill.  Meanwhile, the Senate tried, but failed to proceed to a vote on two versions of tax cut extension.  Sen. Max Baucus (D-MT) offered a bill similar to the House bill and Sen. Charles Schumer (D-NY) proposed permanently extending the tax cuts for earnings of $1 million or less.  Both bills failed to achieve enough votes to cut off debate and move to a final vote as Republicans remained firm in opposition to any bill that does not extend tax cuts for all income levels.  They have threatened to block any other legislation until such an extension is approved.  The White House is continuing to negotiate with congressional Republicans on a bill that provides some extension of the Bush tax cuts.

FY2011 Appropriations.  Last week the Congress passed and the president signed a bill to extend the Continuing Resolution (CR) for FY2011 until Dec. 18, 2010.  This allows Congress time to agree on a way to act on FY2011 appropriations.  The House appears to be preparing a year-long CR while the Senate is said to be working up a FY2011 Omnibus Appropriations bill to include all 12 appropriations.  Meanwhile, House and Senate defense appropriators continue to work on a compromise FY2011 DoD Appropriations bill that could be included in either a CR or an Omnibus bill.  Even so, it is very possible that the only acceptable compromise is to extend the CR until early next year and allow final action on appropriations to be taken by the 112th Congress.  On a related issue, the Senate rejected consideration of a proposed amendment to the Food Safety Modernization bill to ban earmarks in appropriations bills.

Extending emergency unemployment benefits.  Some emergency unemployment benefits began to expire last week as Congress continued to wrestle with whether or not  to offset the cost of extending them.  Republicans propose to use unspent stimulus funds to offset the cost of extending the benefits.  Democrats object to such offsets saying that even though the funds have not yet been spent, they are committed to needed stimulus projects.  While it may be difficult for both sides to reach agreement on a separate bill to extend unemployment benefits, a temporary extension could be included in either a compromise tax cut bill or some kind of an FY2011 appropriations bill.

Ratifying a new Strategic Arms Reduction Treaty (START).  The debate on approving a new START treaty to replace the treaty that expired last year heightened in the Senate this week.  The White House and Senate Democrats argued that quick action on the treaty is necessary to U.S. and world security and important to enhancing America’s leadership role.  Republicans maintained the Senate should take more time to debate the treaty to address their concerns about future arms modernization and Russia’s commitment.  Newly elected Republican Senators urged delaying a ratification vote until the 112th Congress so they have an opportunity to debate the issue.  The White House is cautiously optimistic that a Senate vote can occur before adjournment, especially now that Sen. Richard Lugar (R-IN), ranking Republican on the Foreign Relation Committee, has expressed optimism that ratification can be achieved this month.

Passing the FY2011 Defense Authorization Bill.  The Senate Armed Services Committee (SASC) held hearings on the DoD report on repealing the “don’t ask, don’t tell” (DADT) policy on gays serving openly in the military.  Senate Republicans, led by Sen. John McCain (R-AZ), have opposed the repeal and as a result have held up a Senate vote on the FY2011 Defense Authorization bill.  Sen. Carl Levin (D-MI), chair of the SASC, had requested an early release of the report so that he could hold a hearing to focus support for approving the repeal and passing the bill before adjournment.  Senate Majority Leader Harry Reid (D-NV) earlier stated he would bring the bill to the Senate floor this week, but it remains uncertain whether he can garner the 60 votes needed to force a final vote on the bill in the lame duck session.