Government Relations

Government Relations Legislative Update

Government Relations Legislative Update

Updates on state and federal issues relating to the UW System.

Thursday, December 22, 2011

Federal Update for December 22, 2011

As Washington waits to see if House Republicans will bend to pressure to approve the Senate-passed two-month extension of expiring tax provisions, the House schedule is vague. The House met in pro forma session yesterday and is scheduled to meet in pro forma session tomorrow, December 23, but no other information has been published.

The Senate is out of session. The chamber is scheduled to meet twice a week in pro forma session through the rest of December, and then will reconvene for the second session of the 112th Congress on Tuesday,
January 3.

The Senate has approved a two-month extension of several expiring tax and policy provisions on a bipartisan vote of 89 to 10, but House Republican leaders, apparently faced with a rebellion in their ranks, rejected the deal and called for a House-Senate conference to work out a year-long extension. With Senate Democrats and the White House holding firm, Senate Republicans providing no support, and even the conservative Wall Street Journal editorial page urging approval of the two-month extension, House Republicans are facing significant pressure to approve the measure before the end of the year.

Senate Majority Leader Harry Reid (D-NV) and Minority Leader Mitch McConnell (R-KY) had originally hoped to reach agreement on a full-year extenders package, but they could not settle on how to pay for it; they agreed on the short-term extension to provide time to continue negotiations early next year. News reports indicate that Senate leaders believed House Speaker John Boehner (R-OH) supported the short-term extension; however, the House Republican caucus rejected the measure, and the House voted instead to appoint conferees to a formal conference.

The two-month Senate-passed package includes extensions of the payroll tax holiday, unemployment benefits, and the Medicare "doc fix," which prevents a significant cut in Medicare payments to physicians. The measure also includes a provision from the House-passed extender bill that requires the President to speed up his decision on the controversial Keystone oil pipeline.

The House approved its own one-year extension of the provisions (H.R. 3630) on December 13 by a vote of 234 to 193. Along with the extenders, the package contains the provision on the Keystone pipeline, as well as provisions to reduce the length of unemployment benefits, impose a one-year pay freeze on federal employees, and cut funding for the health care reform law.

Regarding other tax provisions expiring on December 31—such as the IRA Charitable Rollover, the above-the-line tuition deduction, and the R&D tax credit—Senate Finance Committee Chairman Max Baucus (D-MT) said expiring tax provisions would be considered in the new year. In some previous years, those provisions have been reauthorized retroactively. (It should be noted that the payroll tax holiday and other high-profile items can also be extended retroactively if the House fails to act now on the two-month extension.)

As reported earlier, Congress gave final approval to the FY12 "megabus" package of nine appropriations bills (H.R. 2055), and the President signed it into law. The deal averted a partial government shutdown when the FY12 continuing resolution (CR) expired at midnight December 16. (The other three FY12 appropriations bills were approved as a package on November 18.)

Both chambers also passed a measure providing $8.6 billion in emergency disaster aid for the rest of FY12 (HR 3672). The Senate rejected a companion House measure that would have covered the cost of that aid with a 1.8 percent across-the-board cut in all discretionary spending except in Defense and Military Construction-Veterans (H. Con. Res. 94).

Agencies and programs funded in the nine-bill package include the National Institutes of Health, student aid and higher education programs, Departments of Energy and Defense science programs, and the National Endowment for the Humanities. 

The agencies and programs funded in the earlier three-bill "minibus" (H.R. 2112) included the National Science Foundation, NASA, and the Agriculture Food Research Initiative, including a non-Land Grant capacity-building grant program advocated by the UW System.  

Happy holidays to all!

(AAU and the UW System Office of Federal Relations contributed to this report.)