This week Congress proved once again that nothing focuses the attention of Senators and Members like fast approaching politically-charged deadlines.  Facing a tax increase and expiring unemployment benefits by December 31, and a potential government shutdown as the Continuing Resolution (CR) funding the government expires December 18, Congress moved forward this week on its remaining legislative priorities.  But, it wasn’t easy and it wasn’t pretty.  And it is not yet finished.  Congress is expected to work into the middle of next week.

FY2011 Appropriations still in doubt:   Final disposition of the FY2011 appropriations bill by the Congress remains in doubt as the current Continuing Resolution (CR) runs out Saturday night.  The House passed a year-long Continuing Appropriations bill last Friday.  The Senate Appropriations Committee, taking a different approach, prepared a FY2011 Omnibus appropriations bill that wraps up the 12 separate appropriations bill.  However, Republicans, led by Sen. John McCain (R-AZ), critical of the $8 billion in congressional earmarks, threatened to require a full reading of the bill (taking some 50 hours) and then oppose a final vote if it came to the Senate floor.  After much discussion and negotiation, Senate Majority Leader announced that the omnibus appropriations bill will not be considered by the Senate.  Instead, he said he will work with Senate Republican Minority Leader Sen. Mitch McConnell (R-KY) to work out a short-term CR by Saturday night.  It is likely that the CR will be extended into next week to give the House and Senate leaders more time to reach a final agreement.  If they decide at that time extend the CR until early next year, it would essentially end congressional action on appropriations in the 111th Congress.

Congress passes and President signs tax cuts and unemployment benefits extension:  Congress completed action this week on the compromise tax cut bill and the President quickly signed it.  On Wednesday, the Senate passed legislation, agreed to by the President and congressional Republicans, to extend the so-called “Bush era” tax cuts for two years for all income earners.  The bill (expected to cost about $850 billion) also extends emergency unemployment benefits for 13 months, reduces the social security payroll tax from 6.2 percent to 4.2 percent in 2011 for all workers’ earnings up to $106,800 and sets the estate tax maximum rate at 35 percent for two years with a $5 million per person exemption.  It adjusts the alternative minimum tax (AMT), and includes a number of tax breaks for business.  The House took up the Senate bill on Thursday afternoon.  After defeating a Democrat proposal to amend the estate tax provision, the House approved the Senate bill late Thursday night by a vote of 277-48.

Senate debates Strategic Arms Reduction Treaty (START):  The Senate began debate on the bill to ratify the START treaty yesterday and will continue through the weekend.  Critics of the bill, led by Sen. John Kyle (D-AZ), are pressing for more time to debate the treaty.  However, supporters think they have enough votes force a final vote on ratification and appear confident it will pass early next week.

House passes “Don’t Ask, Don’t Tell” repeal:  The House passed on Wednesday by 250-175 a stand-alone bill to repeal the “Don’t Ask, Don’t Tell” (DADT) policy on gays serving openly in the military.  After the Senate rejected a procedural move to proceed on a FY2011 Defense Authorization bill that contained the DADT repeal, supporters decided to offer a stand-alone bill.  The House bill now goes to the Senate where supporters believe there are enough votes to forestall a filibuster on the bill and proceed to a vote. 

House passes final FY2011 Defense Authorization bill:  The House today overwhelmingly passed (341-48) a compromise FY2011 Defense Authorization bill agreed to by House and Senate conferees.  The compromise bill excludes a provision repealing the “Don’t Ask, Don’t Tell” (DADT) policy.  Earlier, the Senate rejected a move to proceed on a bill that included repealing DADT.  A summary of the bill shows that it provides a 1.4 percent military pay raise and avoids a potential presidential veto by not authorizing funding for an alternative engine for the F-35 (Joint Strike Fighter).  However, the bill does include a provision that could impede quick action in the Senate.  The bill prohibits the transfer into the United States of detainees held at Guantanamo Bay unless the President submits a plan to the Congress for a 45-day review.  This prohibition has been strongly opposed by the president and some Senate Democrats.  It is not clear when the Senate will take up the bill, given its full floor schedule in the waning days of the lame duck session.  However, there is reasonable chance it  may act before adjournment.