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Federal Shutdown: Will Congress Ruin the Holidays?

The current government spending bill runs out in less than two weeks — December 11 — and it must be re-upped to prevent another federal shutdown.

Thanksgiving is over and Christmas songs are officially playing on repeat. ‘Tis the season for another Congressional crisis.

The current government spending bill runs out in less than two weeks — December 11 — and it must be re-upped to prevent another federal shutdown. The good news is that Congress set the deadline with nearly three weeks before December 25, allowing a buffer of negotiating time before Social Security payments are jeopardized and national parks close.

The Back Story

Funding the government was supposed to be done by October 1, but neither body of Congress completed the outstanding 12 separate funding bills before then, forcing them to pass what’s called a Continuing Resolution. A CR is a short-term funding bill that keeps the government running at the same levels as the previous fiscal year. The CR runs out on December 11.

The Options

Republicans won control of the Senate and increased their majority in the House in the November midterm elections, but their rule doesn’t start until January. Leaders in the GOP-dominated House could decide to fund the rest of the fiscal year — until September 30, 2015 – which would require working with Democrats as key negotiating partners. Or they could pass another short-term CR so that the Republican-controlled legislature, including the new GOP Senate majority — can tackle government funding in the new Congress.

Both options are on the table.

The Controversy

To say that Republicans are not happy with President Barack Obama’s executive order on immigration is an understatement. Republicans are working on a way to voice that opposition using the government funding bill. Options range from restricting funding to adding legislation that would block the executive order.

But attempts to block President Obama’s deportation deferment for nearly 5 million people are likely to lead to a presidential veto, risking a government shutdown and surely starting a standoff between the executive and legislative branches.

Anything Else?

Well, yes. Tax extenders. That’s a wonky term used all over Washington to describe tax cuts that are set to expire. Congress is in the habit of using a patchwork process to deal with expiring tax cuts, so, absent any real tax reform (which has no chance of happening before the holidays), the piecemeal approach is possible.

In this set of expiring tax cuts, at least one is likely to hit every taxpayer. The set includes deductions for state and local sales taxes, deductions for tuition, research tax credits, bonus depreciation tax credits and incentives for energy efficient homes — as well as deductions for NASCAR, the movie and film industry.

Reports reveal that Congress wanted to make some of the tax cuts permanent, but President Obama threw a wrench in that plan last week when he said he would use his veto pen.