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Congressional Agenda Forecast: More Gridlock

The second session of the 112th Congress is set to be just as gridlocked as the first, but leaders this year will be even more saddled by the awareness that the White House and Senate hang in the balance with their every move.

The high-stakes presidential race will likely dictate every agenda item Congress considers — and when — from the repeal of the much-maligned automatic $600 billion defense spending cuts to the extension of the Bush-era tax breaks. Moreover, the quest to unseat President Barack Obama could help reunite a Republican Party fractured in Congress by a vocal conservative bloc and still bruised from bungling a year-end fight over a payroll tax holiday extension.

“Once we have a nominee in place and he is the figurehead of the party, we can all operate with one voice,” said one Republican leadership aide. “Even more so, I really don’t foresee anything different than what last year was like.” The aide added that there is more pressure to come together in a presidential year.

The common goal, of course, is defeating Obama. It was the stated mission back in January 2009 of Senate Minority Leader Mitch McConnell (R-Ky.), who is now angling to be Majority Leader. And though much has transpired between now and then, including a GOP wave election in 2010, the toolbox from which Congressional Republicans will now work is more narrowly tailored than ever.

Their most potent weapon could be fighting the sizable defense sequester negotiated in last summer’s Budget Control Act. Those automatic cuts were criticized by Defense Secretary Leon Panetta and could be used by many GOP lawmakers as a talking point against the national security credentials of a president who will be touting his accomplishments in withdrawing from Iraq and killing terrorist mastermind Osama bin Laden.

Republican sources in both chambers point to the seriousness of the defense cuts and the importance of swing states such as North Carolina and Virginia, which went to Obama in 2008 and are home to many military bases and contractors. For example, the defense industry accounts for 7 percent of North Carolina’s gross domestic product and generates $23 billion annually, according to one of the state’s economic development commissions.

Though Republican leaders such as McConnell and Speaker John Boehner (Ohio) agreed to the sweeping summer budget deal, Republicans are banking on the idea that as the election nears, Obama, in his capacity as commander in chief, will have to shoulder most of the blame for the cuts. At the end of last year, there had been a push from conservatives such as House Majority Leader Eric Cantor (Va.) to try to bundle a replacement of the defense cuts with the payroll tax cut extension. But the GOP, if they can keep their rank and file in line, likely will try to wait for spring before making a big, orchestrated push on defense.

Democrats, on the other hand, have so far shown little interest in rolling back the defense cuts unless Republicans agree to raise taxes on the rich or consider other revenue raisers. Indeed, as long as polls continue to bolster Democrats’ contention that most Americans support more taxes on the wealthy, Senate leaders will likely continue to push the issue on the floor as a way to pay for a variety of agenda items from “job creation” measures to deficit reduction.

But Senate Republicans especially plan to spend the year stressing the need for comprehensive tax code reform, arguing it is the best way to deal with the deficit and bring more revenues into federal coffers, according to sources. That push will only go so far, however, as they imagine an ideal situation for them in which they could pass a tax overhaul in 2013 when they hope to have control of the White House, Senate and House.

Meanwhile, Democrats are likely to continue trying to box in Republicans as the “party of no.” Obama has found great success running against Congress, which faces all-time low approval ratings. Even House Democrats began to cash in at the end of last year, emboldened by a victory on the payroll tax holiday and unemployment insurance extension. House Minority Leader Nancy Pelosi told CNN recently that she believed Obama “should” run against Congress, a shift from Democratic leaders’ positions last summer when they were outwardly peeved with the administration for failing to distinguish between Republicans and Democrats in Congress.

“People wonder why the approval rating of Congress is so low. I don’t wonder. Seems that everything we’ve done this last year has been a knockdown, drag-out fight. There is no reason to do that,” Senate Majority Leader Harry Reid (D-Nev.) said in a year-end session with reporters.

“If there were a message received from this last thing we’ve been through, I would hope, especially, I repeat, the new Members of the House will understand that legislation is the art of compromise, consensus building, not trying to push your way through on issues that you don’t have the support of the American people,” Reid continued, referring to a two-month stopgap deal on the payroll tax cut and unemployment benefits that House Republicans nearly squashed.

The very beginning of 2012 will be packed with as much work as the rest of the year, according to aides familiar with talks that already have begun on a full-year extension of the unemployment insurance and payroll package. Congress will have until the end of February to resolve those issues and also has to deal with preventing a potential Federal Aviation Administration shutdown by month’s end.

From then until November, Congress will spend its time on message votes intended to shore up incumbents and possibly a few relatively noncontroversial bills. The last outstanding issue, which is most likely to be addressed in a post-election, lame-duck session, would be what to do with the expiring Bush-era tax cuts.

How Congressional leaders choose to tackle the cuts will likely depend on who has more momentum by summer’s end — Obama or the GOP nominee. If Obama appears to be falling in the polls, and Senate Republicans gaining, Democrats could feel more pressure to try to negotiate a compromise before losing control of the government.

In his year-end press conference, Reid was asked about extending the cuts, which currently include breaks to high earners and the middle class, but declined to address the challenge their extension might pose.

“Well, I think the first thing we’ll do — rather than worry about the Bush tax cuts being extended, which I’m not worried about that at this stage — we have work at hand,” Reid said.

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