Funding the government to avert a shutdown before a December 16 deadline is must-pass legislation for Congress as the clock runs down on a lame duck session, but serious differences between the parties over spending amounts and policy riders is bogging down budget negotiations.
Democratic leaders are already discussing whether to extend the current continuing resolution (CR) for another week to December 23, with some lawmakers floating the possibility of a year-long CR. Democrats are pushing for an expansion of the child tax credit with the possibility of luring Republican votes with tax breaks for business, including immediate deductions for research costs and expanded write-offs for interest on debt.
Another factor that could impact budget negotiations is the December 6 run-off election in Georgia which will determine the strength of the Democrats’ majority in the Senate. With the composition of Congress settled, lawmakers may find themselves more decisive on which policies to prioritize.
In addition to a spending bill, Congress must approve the National Defense Authorization Act, or NDAA, the annual must-pass legislation that sets the policy agenda and authorizes funding for the Department of Defense. Other possible add-ons include further aid to Ukraine and hurricane recovery assistance. Passing retirement legislation remains a possibility in the lame duck, as are tax extenders, although chances are fading fast for both of those initiatives.
Lawmakers are also facing the possibility of running into the debt limit which is expected to occur around the third quarter in 2023 and whether to address it during the lame duck or wait until the new Congress is sworn in. Lawmakers, however, seem to agree that there may be little time left in this session to consider raising the debt limit.
In the worst-case scenario, Congress could see a government shutdown, which some House conservatives may favor if they don’t get the concessions they want in the budget. Another possibility, and not as remote, is that Congress remains in session during the Christmas holiday to resolve the budget impasse.
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