Congress Not Expected To Do Much With 2010 Election Looming

A small business jobs bill, extending the Bush tax cuts, and lots of fighting are on the agenda.

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As Congress returns from its August recess, it faces a full plate of legislation, including leftovers from the summer and new offerings from President Obama. But with lingering partisan rancor—and the midterm election season revving into full gear—observers wonder whether Congress will finish anything during the next month.

"Clearly, the Republicans have not been in a very cooperative mood, since the beginning of the Obama presidency," says the Brookings Institution's William Galston, who was a domestic policy adviser in the Clinton White House. "With the election campaign now in full swing, it's hard to imagine that things will get better." Michael Tanner, a senior fellow at the libertarian Cato Institute, agrees, predicting that annual appropriations bills will likely have to be wrapped up into an omnibus bill to prevent holdups in government activities. "It's an election year, and the Republicans are not inclined to cooperate to get things done."

First up is the Small Business Jobs Act, which includes $12 billion in tax breaks and would establish a $30 billion lending fund for small businesses. Although Senate Democrats previously fell two votes shy of the 60 needed to bring the matter to a vote, they are now optimistic that a deal struck on the legislation—which would ease some of the vendor tax-reporting requirements included in the recently enacted healthcare law—will bring in enough votes to secure passage. "We've got a pretty firm commitment that we'll be able to see it through," says Richard Carbo, a spokesman for Democratic Sen. Mary Landrieu of Louisiana, a sponsor of the bill.

The Senate will begin procedural votes on amendments to the bill Tuesday morning.

After that, the House and Senate will also likely consider competing proposals to extend some or all of the so-called Bush tax cuts passed in 2001 and 2003, as well as legislation to continue a number of tax exemptions and breaks, such as corporate tax credits for research and development and biofuel use. Congress also is expected to take up food safety legislation and the Disclose Act, which would increase disclosure requirements for corporate campaign spending. With Senate Democrats one vote shy of the 60 votes needed to cut off a filibuster, they will have to woo Republicans if they hope to accomplish any of their agenda before lawmakers leave for the campaign trail.

Extension of the Bush-era tax cuts could take up much of the congressional oxygen—likely carrying over into a lame-duck session after the November elections. In a speech last week in suburban Cleveland, Obama aggressively pushed his proposal to extend the tax cuts for most Americans, but to allow the rates to rise for individuals earning more than $200,000 annually and joint filers earning more than $250,000.

[Read both sides of the debate over extending the Bush tax cuts.]

Because Republicans have vowed to oppose legislation that would let any of the tax cuts expire, Democratic sources in the Senate say their strategy is to force the GOP into the awkward position of opposing a tax cut for the middle class.

On Sunday, House Minority Leader John Boehner, an Ohio Republican, indicated he might be willing to budge, stating that he'd be in favor of extending only the middle tax cuts if it were the "only option." But Republicans overall remain strongly opposed to Obama's plan. Galston says the Republicans might ultimately have the upper hand, since an impasse would let all the current tax cuts expire as scheduled at year's end, raising rates across the board. "It's relatively unlikely that Democrats would like to be fingered as the people who allowed tax cuts for the middle class to expire," he says. "If the net result for the legislative process is that taxes go up for everybody, that goes into the familiar Republican narrative."

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