Week ahead: Budget clock ticks for Congress

Lawmakers are returning to Capitol Hill with fewer than two weeks left to pass a stopgap budget bill and reach an agreement on extending expired tax breaks.

But President Obama’s executive action on immigration policy could force some tough choices on Republicans as they look for a way to block or limit his plans while keeping the government funded.

{mosads}GOP lawmakers are split on whether they can defund the action. House appropriators last week said the agencies in question are funded by fees, apparently leaving lawmakers little recourse to prevent deferred deportations for as many as 5 million illegal immigrants.

Congress must pass a spending bill by Dec. 12, and Republicans, who were battered in the polls after the October 2013 budget fight, insist they will find a way to avoid another shutdown before they take over in January.

Polls also show most voters would oppose shutting down the government to block Obama’s immigration action.

Lawmakers must also weigh how much funding to provide for the military campaign against the Islamic State in Iraq and Syria and for the administration’s anti-Ebola efforts, as the deadly disease continues to ravage West Africa.

Aside from the stopgap budget, Congress must also vote to extend tax breaks for businesses, known as “extenders.”

Lawmakers were sent back to the drawing board after the White House on Tuesday threatened to veto a deal being brokered by Senate Majority Leader Harry Reid (D-Nev.) and House Ways and Means Committee Chairman Dave Camp (R-Mich.). The White House said the deal was too favorable to business groups.

Republicans have said that if a deal on making the tax breaks permanent can’t be found, the party could extend them temporarily and take up the issue again when they have control of Congress.

Tax gurus anticipate that the research and development tax credit is the mostly likely of the dozen or so extenders to be made permanent.

Congress must also vote to reauthorize its terrorism insurance program, the Terrorism Risk Insurance Act (TRIA) by the end of the year or it will also shut down.

Tea Partyers, led by House Financial Services Committee Chairman Jeb Hensarling (R-Texas), are pushing to reform TRIA because they fear that taxpayers will be left on the hook to recoup costs after a massive terror attack.

But the business community is pushing for a long-term reauthorization. It’s up to Sen. Charles Schumer (D-N.Y.) and Hensarling to strike some sort of deal. The industry says a short-term, six- to nine-month TRIA extension is a non-starter.

Elsewhere, New York Federal Reserve President William Dudley will speak on Monday in New York. Dudley has come under increased pressure from Senate Democrats who are concerned that the New York Fed has been lax in policing Wall Street.

Fed Vice Chairman Stanley Fischer could be asked about Fed oversight during his appearance in Washington on Tuesday at a forum hosted by The Wall Street Journal. It’s unclear if Fischer will take questions.

On Wednesday, Federal Reserve officials will release their Beige Book, an economic report used by the central bank in crafting monetary policy. It could provide clues for when federal officials may raise interest rates next year.

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