INSIDE (THE BELTWAY) SCOOP – JENNIFER ZEITZER
Created by on 12/18/2012 12:00:00 AM

The high stakes drama concerning whether the United States would go over the “fiscal cliff” continued in Washington following Congress’s Thanksgiving break and threatened to cancel lawmakers’ Christmas plans as well. House Majority Leader Eric Cantor (R-VA) told a Republican Caucus meeting on December 12th that weekend votes are possible prior to Christmas. Cantor also warned members of Congress that they should be prepared to spend the holiday in Washington if action on the fiscal cliff has not been resolved by December 25th. With only two weeks until a number of tax breaks expire and sequestration goes into effect, many on Capitol Hill are worried that no agreement will be reached before the December 31st deadline.
 
Democrats and Republicans are beginning to speculate about the advantages of waiting until January to reach a deficit reduction agreement. Some Republicans believe that letting the Bush era rates expire this month will allow them to avoid voting for a tax increase now, while also giving them an opportunity to support a tax cut in January after the rates have increased. Democrats think that President Obama will benefit because a delay will make it possible to achieve his campaign promise to raise tax rates on the highest earners, giving him political cover to agree to cuts in Medicare and other entitlement programs that the Republicans want in exchange for tax increases. A third scenario is that going over the cliff will cause the financial markets to plunge, increasing the pressure on lawmakers to quickly pass a plan in the new year to stabilize the economy. The speculation comes amid frustration that individual members of Congress are not involved in the ongoing discussions about the fiscal cliff. To date, all of the negotiations have been conducted in private between President Barack Obama and House Speaker John Boehner (D-OH).
 
After a tense few weeks that saw little progress between the two lead negotiators, news broke that the President and the Speaker met briefly at the White House on the morning of December 17th. The meeting offered hope that the once- stalled conversations are beginning to move forward, although spokespeople for both the President and the Speaker cautioned that they are still far apart on the issue of tax rates and entitlement changes, the elements that are the key to a deal to avert the fiscal cliff. Given that most of the conversation has focused on tax issues, it is not clear if sequestration will be avoided. The automatic cuts for both defense and non-defense (NDD) programs are not popular, but there is still a desire among some Republicans to include further spending reductions in a fiscal cliff deal. Speaker Boehner asked for $300 billion in additional discretionary cuts in a proposal that he sent to the President the week of December 3rd. The offer did not specify how much of the $300 billion would come from NDD versus defense programs. President Obama has continued to insist that the NDD cuts made through the Budget Control Act caps must count toward the overall deficit reduction total in the final fiscal cliff agreement.    
 
FASEB has continued to rally the research community to advocate against sequestration. More than 12,000 emails have been sent to members of Congress in response to a FASEB e-action alert, and members of the Federation’s Board went to Capitol Hill on December 4th to personally urge their elected officials to reach an agreement that cancels sequestration (see related story in this newsletter). In addition, FASEB signed-on to a December 11th letter sent by the Ad Hoc Group for Medical Research to all members of Congress. The letter expressed “grave concern” about the impact of continued budget cuts on medical research supported by the National Institutes of Health (NIH). FASEB also sent a letter to Capitol Hill highlighting how sequestration will affect funding for NIH and the National Science Foundation and joined another letter organized by the Agriculture and Food Research initiative coalition.  
 
As expected, negotiations about ways to avoid the fiscal cliff have dominated the agenda on Capitol Hill, and Congress has made almost no progress on its long list of unfinished legislative business. There appears to be little hope that lawmakers will get an agreement on the farm bill before the end of the year. Instead, a short term extension of farm programs is likely. The possibility that Congress will complete work on the fiscal year (FY) 2013 appropriations measures has also faded, despite earlier optimism that an omnibus package could be considered in the waning days of the legislative session.
 
While the nation waits to see if there will be action on the fiscal cliff, House and Senate leaders are moving forward with plans for the 113th Congress. Schedules for 2013 have been released by both chambers and committee assignments are being finalized (see related articles in this newsletter). Members of Congress typically receive the President’s annual budget request on the first Monday in February. However, the release of the President’s FY 2014 spending proposal may be delayed due to the fiscal cliff negotiations. A White House official confirmed to several media outlets that there has been no decision regarding the date that President Obama will submit his next budget to Congress. 
 
Editor’s Note: This is the last Washington Update for 2012. Updates will be posted on the FASEB website when there is breaking news from Capitol Hill about the fiscal cliff. You can also keep up with the other legislative and policy developments by following FASEB on Twitter and Facebook.


 

 





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