What the lame-duck Congress tells us about 2015


The 113th Congress, among the least productive in history, returns for a final lame-duck session this week that should be instructive on what to expect when the next session begins in January.

U.S. Capitol in Washington, D.C.
Bill Clark | CQ Roll Call | Getty Images

The current Congress has one main job before it goes out of business next month: passing a bill to fund the government past Dec. 11, when the continuing resolution runs out. If the lame-duck session gets into a big fight over the duration of the next stopgap spending bill or what else to put in the must-pass legislation, it will not be a good sign for the 114th Congress.

But even if legislators do manage to agree on a new spending bill without a lot of shutdown brinkmanship, it will not necessarily portend a return to regular congressional order next year that avoids spooking markets or slowing the economy.

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Congress could just punt the issue to January, leaving the new GOP majority in both houses to come up with a plan to fund the government through the end of the fiscal year in September. And that would mean a very early test over whether GOP leadership can deliver on its promise of no new drama over shutdowns or the debt limit.

And there is reason to believe that restive GOP conservatives coming off a big wave election win will not want to put away the government shutdown weapon so easily. Over the weekend, Thomas J. Fitton, president of the prominent conservative group Judicial Watch, told The New York Times: "I think the members of the leadership need to decide what they're willing to shut down the government over."

That comment came on the heels of a joint Wall Street Journal op-ed by incoming-Senate Majority Leader Mitch McConnell and House Speaker John Boehner pledging to continue to fight to overturn Obamacare, something that cannot actually be done, but which sets conservatives up to expect a combative GOP majority prepared to take the fight to Obama at every opportunity.

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And when conservatives get a look at the price tag of a continuing resolution to fund the government, there is likely to be either an all-out rebellion or at least demands to keep the duration of the measure short and move the fight to January.

The price tag will likely be high because the measure is expected to include not just base-level government funding but also the cost of new money to fight Ebola and the military efforts against ISIS in Iraq and Syria. It's also likely to include "tax extenders" that would retroactively extend a big pile of tax breaks for a wide array of industries.

Chris Krueger of Guggenheim Securities predicts that an omnibus continuing resolution covering all those things could add $100 billion to the deficit. The lame-duck session is not expected to include "offsets" for any of the new spending or tax provisions.

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Such a number is not likely to sit well with conservative Republicans who just crushed Democrats in the midterms. Will they really just swallow a fat new spending bill as their electoral reward?

Assuming the GOP House and expiring Democratic Senate can in fact get a bill through dealing with all these issues, the price tag Republicans are likely to put on it is a promise to revisit the spending issue first thing next year.

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And what will the environment look like then? The conventional wisdom is the Obama administration will wait until after Congress passes a continuing resolution funding the government to unveil its expected unilateral moves on immigration reform. Those moves will presumably confer legal status upon millions of currently undocumented immigrants in the U.S. and will send Republicans into a rage spiral before the next Congress even convenes.

The 114th session, with GOP majorities in both houses, would then have two big weapons at its disposal to extract concessions from the White House both on immigration and Obamacare: funding the government the rest of the year and raising the debt limit in the spring.

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They will not have a filibuster-proof majority in the Senate so will not be able to simply challenge Obama to veto immigration and Obamacare bills. Conservatives led by GOP presidential hopefuls such as Sens. Rand Paul and Ted Cruz could demand that Republicans refuse to fund the government unless new spending is offset and Obama dials back his unilateral moves on immigration.

That is far from a guaranteed scenario but it is at least as likely as a highly functional lame duck leading to an equally smooth 114th Congress moving forward on trade deals and tax reform and otherwise lighting a fire under the sluggish economy.

—Ben White is Politico's chief economic correspondent and a CNBC contributor. He also authors the daily tip sheet Politico Morning Money []. Follow him on Twitter @morningmoneyben.