Road Map: Beyond Tax Extenders, Uncertainty This Week

Posted September 22, 2008 at 7:01pm

It might be a case of so much money to spend and so little time to spend it.

With the rush to pass a jaw-dropping $700 billion Wall Street bailout, a $50 billion “economic recovery” package and a multibillion-dollar measure to fund the federal government through who-knows-when, both the House and Senate schedules have been thrown into disarray this week, as Congress scrambles to get out of town by Friday for the November elections.

[IMGCAP(1)]“The only thing we know for sure is we’re doing tax extenders” Tuesday, one senior Senate Democratic aide said. Indeed, the Senate is set to vote today on tax-extenders legislation that includes several popular renewable energy tax credits as well as a one-year fix for the alternative minimum tax.

But a planned debate on offshore drilling legislation appeared to be scuttled as of press time.

“We’ve got a clock ticking, and that clock is not an ally. The tax extenders should go through — and that’s terrific — but that’s likely to be it this week for energy,” Bill Wicker, spokesman for Senate Energy and Natural Resources Chairman Jeff Bingaman (D-N.M.), said in a statement. “The market bailout bill has moved to the head of this week’s legislative queue, where it belongs. And the end of the week will be dominated by the CR. In between, we might also see a second stimulus and some defense bills. Those are all powerful priorities, and this stiff competition is probably going to squeeze any debate on energy.”

That statement was made before the price of a barrel of oil jumped more than $15 on Monday, and it was unclear whether Congress would feel renewed pressure to act on an energy measure if energy prices continue to climb.

Of course, the increase in oil prices might simply be chalked up to the general volatility of the financial markets, which are getting almost all the attention this week as Congress seeks to thread the needle between acting quickly — presumably by the end of the week — and not causing further turmoil on Wall Street.

Senators on both sides of the aisle, including Majority Leader Harry Reid (D-Nev.), said they understood the urgency of the issue while sounding a note of caution about moving too quickly.

“We’re convinced that inaction could be a disaster,” Sen. Bob Bennett (R-Utah) said after meeting with a bipartisan group of Banking, Housing and Urban Affairs Committee members. “But we want to make sure we don’t take the wrong action.”

House Financial Services Chairman Barney Frank (D-Mass.) said the bailout package should move separately from a stimulus or a continuing resolution, but the details of how the three pieces will move have not yet been determined. Frank said he would like to have the details of the bailout worked out with the Senate and the administration before going to the floor so both chambers could simply pass the bill and send it to the president.

But getting to agreement on any of the major pieces is anything but a done deal. Democrats want to attach strings to the bailout package that some Republicans find anathema, and the House and Senate are not yet on the same page in terms of those add-ons. Plus, Republicans continue to resist stimulus spending, and the Bush administration continues to want items such as the Colombia free-trade agreement as part of any agreement for a long-term CR that would fund the government into the next president’s term.

Frank said negotiations could conceivably last into next week, and markets would be more interested in knowing that a package is coming rather than whether it is done in a few days or a week.

“It’s essential that we seem to be making progress,” he said. “A great deal of progress has already been made.”

Even if Frank, Treasury Secretary Henry Paulson and Senate Banking Chairman Chris Dodd (D-Conn.) reach an agreement quickly, swift passage in the Senate is not a slam dunk.

Although GOP sources indicated that Sen. Jim DeMint (R-S.C.) would likely not use Senate rules to draw out debate on the Wall Street bailout, DeMint issued a scathing indictment on Monday of Paulson’s plan to rescue financial markets.

“It’s a sad fact, but Americans can no longer trust the economic information they are getting from this administration,” DeMint said.

DeMint has often been the cause of Senate legislative delays as he seeks to either filibuster or change legislation.

One senior Senate GOP aide acknowledged that many Republicans like DeMint are still getting used to the idea that a bailout might be necessary, which has led to uncertainty about the timing. The aide said Paulson has been invited to speak to the Republican lunch today.

“Members need to get comfortable with it in order for this to work” logistically, said one senior Senate GOP aide. “But there will be a full-court press by the administration to make sure Members on both sides are comfortable with it.”

Even if DeMint or others object to the measure, the practical result will only be a delay of a couple of days because a filibuster-proof majority is likely to vote for it.

“They’re not going to be able to stop it,” the senior Senate GOP aide said. “Ultimately, it’ll get a lot more than 60 votes.”

And as if their plates weren’t already overflowing, Democrats are also looking for a way around letting a decades-long moratorium on offshore drilling expire at the end of this month. Because the moratorium has been renewed yearly on appropriations measures, it was initially expected to be included in any CR to fund the government. But House Democrats have acknowledged that they lack the votes to keep the moratorium in place and are now proposing a compromise to preserve it on the first 50 miles from shore — something Republican leaders panned.

Meanwhile, Reid and Speaker Nancy Pelosi (D-Calif.) want the CR to last until March 6, but the White House has hopes for passing the Colombia free-trade agreement and an India nuclear deal in any lame-duck session.

House Democratic aides said the majority would like to pass a CR spending bill that would include funding for Defense, Homeland Security and military construction- Veterans Affairs while funding the rest of the government at existing levels until after the next president takes office.

Democratic leaders and presidential nominee Sen. Barack Obama (Ill.) are pushing strongly for a second “Main Street” stimulus package that Republicans have resisted for months as part of the price for moving forward with the Wall Street bailout. But exactly how much leverage Democrats hold is unclear.