Congress punts budget . . . again

US Capitol Building

KAI RYSSDAL: If you blinked, you might have missed it. Congress was in session today for just a few brief moments. Outgoing lawmakers are back in Washington this week tying up loose ends before the end of the term. Lame duck's a phrase we'll be hearing a lot this week: Denotes politicians without any real power. But we got Congressional Quarterly reporter Jill Barshay on the phone earlier today. She said au contraire, there's plenty happening up on Capitol Hill.

JILL BARSHAY: What's really become an interesting drama is this bill of tax cuts. The biggest one in them is the research and development tax break. But there's also one that lots of Americans use and that's the deduction for state sales taxes, which they take advantage of in Texas and places where they don't have a local income tax. These are enormously popular, bipartisan tax breaks. But all those tax cuts have expired and Congress needs to renew them. But there are many members of Congress that want to attach something to this bill and there is a huge battle going on on whether it should be a Medicare bill, whether it should be some trade bill, whether it should be another tax bill attached to it. And there's a danger that extending these popular tax breaks, the whole thing can go down.

RYSSDAL: No pressure here, but all these tax things have to be decided before December 31st, at least for consumers, right?

BARSHAY: That's right. And, in fact, the tax forms, I believe, have already been printed without these tax breaks. So even if Congress extends them, I think there's going to be a lot of confusion on April 15th next year.

RYSSDAL: As long as we're talking about consumer taxes, what are you hearing, as I am, about a possible break in the alternative minimum tax?>

BARSHAY: That is one of the controversies about whether this should be attached to this tax bill this week. If Congress does not make some adjustments to the alternative minimum tax, more than 20 million Americans — mostly middle-class ones — will have to start paying for it. But if they attach this to this popular tax bill it's going to add $48 billion to the cost and could sink it.

RYSSDAL: What about the regular budget process? I mean, something like nine of 13 appropriations bills have yet to be passed. The Congress basically has funded the government through a continuing resolution. Are they going to fix that?

BARSHAY: That's right. So the idea is before they leave this week is to pass a continuing resolution that is to fund the government at current levels and try to pick up the pieces again next year.

RYSSDAL: And next year, of course, Jill, it's the Democrats in charge of Congress, not the Republicans, and we've all read about how the Democrats have felt about the Republican budgeting process.

BARSHAY: The game plan next year will be really interesting because they're supposed to be starting the budget process for next year. Meanwhile, they haven't finished the budget process for this year. So there's a couple options on the plate. They can do a big omnibus, which tends to be full of earmarks, that the Democrats probably don't want to do. Or, they can punt it again to the end of the year and that means we'd just be funding the government at the levels they'd determined way back in 2005 for the rest of this coming year while they work on the budget for fiscal 2008.

RYSSDAL: So when they go back and check the history books there will be no federal budget for '07?

BARSHAY: They managed to do one for Defense and Homeland Security but that's right, they never will have done a fiscal '07 budget for education, for health, for housing, for things that normally get done.

RYSSDAL: Jill Barshay covers Congress for Congressional Quarterly. Jill, thanks a lot.

BARSHAY: Thank you.

About the author

Kai Ryssdal is the host and senior editor of Marketplace, public radio’s program on business and the economy.

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