"SLOWLY I TURNED"

October 24, 2006

The more 'seasoned' among us will recall that phrase from a vaudeville sketch made famous by Abbott and Costello; a younger generation will connect it to The Three Stooges.  Whatever your reference point, once lawmakers get past election day they will eventually have to turn their attention back to a lot of unfinished business in Washington. 

Lame-duck sessions are seldom productive and almost never fun.  Originally, the term "lame duck" referred to bankrupt British businessmen who had lost their power and were vulnerable to attack. In today's parlance the term refers to a legislative session convened after an election, and includes lawmakers who will not be returning for  the next session of Congress. 

Congress has convened 15 lame-duck sessions over the last 80 years.  World War II and the Korean conflict forced Congress to be back at work; historical lame-duck sessions were convened in 1974 to approve the nomination of Nelson Rockefeller as vice president, and in 1998 to deal with the impeachment of President Clinton.  But the more recent occurrences are the result of Congress simply not finishing its work on time, most notably the appropriations bills required to keep the federal government in business.

In 1970, lawmakers came back to work on seven appropriations bills.  In 1982, the political climate had so deteriorated that even a lame-duck session failed to do the trick.  That year, lawmakers were unable to reach agreement on several appropriations bills and were forced to pass a full-year continuing resolution.  Appropriations issues also drew Congress back to town again in 2000, 2002 and 2004.

This year, lawmakers have a laundry list of issues to be considered when Congress re-convenes November 13.  At the top of the list are nine appropriations bills, including Labor-HHS-Education and Military Quality of Life.  (Thus far, Congress only managed to approve two spending bills: defense and homeland security).  Other issues likely to be considered are a health IT bill to promote more widespread use of electronic medical records and an attempt to block a 5.1 percent cut in Medicare payments to physicians. 

Post-election dynamics

We will leave election day predictions to the pundits because, for the short term, whatever happens November 7 does not change what remains to be done this year.  Nor will the elections change fiscal realities. 

In mid-October the Congressional Budget Office estimated that the fiscal year 2006 deficit would be about $250 billion, substantially less that what it estimated at the beginning of the year.  Federal government receipts were up 11.8 percent, to $2.4 trillion, the second-highest increase since 1981.  But the champagne and celebrations were short-lived, because CBO also reported that the trend line goes back up next year, when the deficit grows to $286 billion, and is likely to rise even higher as entitlement spending grows and baby boomers begin to retire.

More to the point, when Congress returns to work November 13—and before House and Senate negotiators begin haggling over the nine remaining appropriations bills—lawmakers will have to decide how much money to allocate to those bills in light of looming deficits. 

Setting the stage for Fiscal year 2008

Last spring, the House and Senate set aside a total of $872.7 billion for discretionary spending programs, though the two chambers differed on how those funds would be spread.  But with the war on terrorism foremost on lawmakers' minds in the weeks leading up to the mid-term elections, lawmakers in late September voted to add back nearly $2 billion to defense spending levels, funds the Senate had originally set aside for non-defense programs.  So if Congress adheres to its overall spending plan, additional funds will have to be squeezed from the remaining appropriations bills to make up the difference.  At $141 billion, the fiscal year 2007 Labor-HHS-Education spending bill is a prime target for achieving a sizable amount of the required savings, meaning even popular programs like the National Institutes of Health and college student aid would face the chopping block.  Special project earmarks, the target of budget reformers throughout the year, are likely to remain in the appropriations bills.  But these, too, could be subject to trimming, especially if a government-wide across-the-board cut is imposed.   

With the current continuing resolution due to expire November 17, lawmakers will return to work November 13, when they will come face-to-face with some tough choices.  If, as expected, Congress cannot complete its work in a few days time, the legislative session will resume after Thanksgiving and probably extend through mid-December.  However, if lawmakers are unable to resolve the remaining issues by then, no doubt they will punt them to the new 110th Congress, leaving next year's budget debate in terrible shape months before it even begins.