WASHINGTON-With the Congressional Budget Office predicting a possible "fiscal cliff" in the nation's immediate future (see "On the 'fiscal cliff,'" by Edward Lee Pitts, Aug. 23), Congress is gearing up for a jam-packed finish to 2012.
The 112th Congress has repeatedly kicked the can of responsibility down the road in the last 20 months, and that's no longer an option on some issues. Inaction will equal action.
To complicate matters, lawmakers are only scheduled to work eight days in September and five days in October as election season reaches its peak. The 2012 calendar closes out with eight days of work in each of November and December. That gives lawmakers a total of 29 workdays to solve issues that will have long-term implications.
Here is a rundown of some of the most notable issues facing lawmakers:
Budget sequester: Part of last year's debt-ceiling negotiations-which culminated in the Budget Control Act of 2011-included a provision that would slash defense and non-defense spending by $1.2 trillion over 10 years. The deal was supposed to force policymakers to craft a strategic deficit-reduction plan. If they don't act before the end of the year, $110 billion in across-the-board cuts will take effect on Jan. 2, 2013.
Both parties agree that massive, indiscriminate budget cuts are not the answer, but they disagree on how to stop it. Democrats say any agreement to avoid the sequester must include tax increases for high-income earners. Republican vice presidential candidate Paul Ryan, who voted for the sequester last year, said Thursday that a Mitt Romney administration would retroactively undo the military portion of the cuts once taking office in January.
Bush tax cuts: Passed in 2001 and 2003, the tax-relief package collectively known as the Bush tax cuts is set to expire at the end of the year. Republicans want to extend the cuts for all Americans, who would have to pay about $1,300 to $5,700 in additional taxes, depending on the state. Democrats say they will not extend the cuts for families making more than $250,000 annually, or individuals making more than $200,000 annually.
Farm Bill: Before departing for a five-week recess, the House passed a bill aimed at providing livestock owners with drought relief. But the Senate balked, saying it wouldn't settle for less than a renewal of the 2008 Farm Bill. But among other problems, the Farm Bill includes $5 billion a year in "direct payments," government subsidies paid to farmers whether they plant crops or not.
Both parties agree direct payments need to go, but farm lobbies are pushing to replace them with a "shallow loss" program that would lock in high consumer food prices and cost taxpayers between $8 billion and $14 billion over the next five years, according to Vince Smith, an agriculture economist with the American Enterprise Institute.
Postal reform: The United States Postal Service announced a $5.2 billion loss for the third quarter, pushing Congress to address long-debated legislation to help the embattled agency. The Postal Service has asked for permission to eliminate Saturday delivery and reduce yearly $5 billion health payments to future retirees, but the House has yet to take up a reform bill that passed the Senate in April.
Extenders package: A package of tax breaks known as "extenders"-ranging from deductions for home mortgages to wind energy production-passed the Senate Finance Committee earlier this month. The number of breaks was whittled from 73 to 54, but the $150 billion, 10-year price tag means it will have a much harder time passing the full House or Senate.
If Congress cannot come to agreement on any of these issues, the Bush tax cuts will expire, the mandatory cuts in the Budget Control Act of 2011 would take effect, and the CBO projects a recession. If the tax cuts are extended and the mandatory cuts not allowed, the CBO says a recession would be avoided, but the 2013 budget deficit would again top $1 trillion.