Update 825 — Lame-Duck Session Preview
Econ. Issues on 118th’s Must-Pass Agenda
The 118th Congress may turn out to be one of the least productive ever, but a few precious weeks remain before the books are closed and it can be evaluated. Between now and adjournment late next month, several economic policy must-pass items are on the table, led by government funding for what remains of the fiscal year, disaster relief, NDAA, and the farm bill, all covered below.
We will get to the Mar-a-Lago palace intrigue around economic policy cabinet nominations, most importantly Donald Trump’s choice for Treasury Secretary, as they are made, except to note the nomination yesterday of billionaire Howard Lutnick, the Cantor Fitzgerald CEO and Trump loyalist heading up the transition team, to “lead our Tariff and Trade agenda” as Commerce Secretary, to quote Trump.
Best,
Dana
Before adjourning, the 118th Congress and Biden administration will have until December 20 – just three legislative weeks – to address must-pass legislation in what is often called the lame-duck session of Congress: the period following the election before the new Congress and President are sworn in.
Lame-duck sessions can be contentious, and this session will likely be, given the long list of legislative priorities Congress must address in the short time period as well as the upcoming shift in power that will certainly shift legislative priorities next Congress. Below, we outline a few of the biggest priorities we have been tracking given our focus on domestic economic policy, including FY25 funding legislation and disaster relief, the National Defense Authorization Act, and the farm bill.
Budget Deal or Government Shutdown on Dec. 20?
One of the biggest tasks facing Congress during the lame-duck session will be passing funding legislation for Fiscal Year 2025 (FY25), which began on October 1. In late September, before adjourning for its month-long recess ahead of the November elections, Congress passed a Continuing Resolution (CR) that temporarily funds the government at prior year (FY24) levels until December 20.
The CR was “clean,” meaning it did not contain significant partisan policy priorities that could have endangered its passage and risked triggering a shutdown. It did contain some additions with bipartisan support, including an additional $231 billion in funding for the Secret Service following assassination attempts on President-elect Trump and extended replacement benefits for Supplemental Nutrition Assistance Program (SNAP) recipients who have had their benefits stolen through skimming – a technique in which criminals copy EBT card information at points of purchase.
Biden Requests Funding, incl. Disaster Relief
The Biden administration has made a myriad of requests for additional anomalies – exceptions to a previous year’s funding legislation when using a CR – that remain unaddressed, including unfreezing $20 billion in enforcement funding for the IRS provided through the Inflation Reduction Act (there were cuts to the IRS last year that were carried over in the stop-gap measure, though the funding has not been officially rescinded) and additional funding for:
- Special Supplemental Nutrition Program for Women, Infants, and Children (WIC)
- Social Security Administration
- Department of Veterans Affairs (partially addressed in September)
- Disaster Relief Fund (DRF)/FEMA (The CR does allow FEMA to spend temporary funding at whatever rate it needs, but does not specifically allocate additional funds beyond FY24 levels)
- Navy’s Virginia-class Submarine Program
In addition to these long-standing priorities, newfound concerns about our capacity for federal disaster assistance surfaced in the weeks following the CR’s passage due to the extensive damage caused by Hurricane Helene and Hurricane Milton. The Small Business Administration (SBA), which provides low-interest loans for recovery efforts, has put a hold on paying out these loans as the program ran out of funding provided under the CR in a matter of weeks. The SBA originally requested $524 million for the program in FY25 but has since increased this figure to $1.6 billion given the scale of disasters this year.
The Biden administration officially issued a request for emergency supplemental funding on Monday of this week to address disaster relief, which could be passed as a stand-alone or, more likely, packaged together with FY25 funding legislation. The package, which totals $98.6 billion, includes $40 billion in funding for FEMA’s DRF and $2 billion for the SBA, in addition to funding for the Department of Agriculture, Department of Health and Human Services, and other agencies that assist in disaster relief and recovery efforts.
Road to Resolution
Before these needs can be addressed, House and Senate Appropriators will have to agree on top-line funding levels for full-year appropriations bills. Despite guidance provided by the Fiscal Responsibility Act (FRA), the debt limit agreement between former Speaker Kevin McCarthy (R-CA) and Senate Majority Leader Chuck Schumer (D-NY) that set funding caps for FY24 and FY25, there are still major differences between funding values in the House and Senate-proposed appropriations bills. On the Senate side, Appropriations Chairwoman Patty Murray (D-WA) and Ranking Member Susan Collins (D-ME) negotiated an extra $34.5 billion in emergency funding for non-defense discretionary programs ($13.5 billion) and defense ($21 billion) above the FRA caps. The House bills are generally smaller in value but are filled with extreme policy riders, often referred to as “poison pill provisions,” that Democrats will need to see removed before casting an affirmative vote.
After securing a trifecta next Congress, some Republicans such as Senator John Boozman (R-AK) and House Appropriations Chair Tom Cole (R-OK) have argued in favor of “clearing the decks” or completing work on FY25 appropriations so President-elect Trump can focus on other priorities in the first 100 days of his second term. Still, Speaker of the House Mike Johnson (R-LA) suggested this week that Congress may opt for another short-term CR that pushes the funding fight into next spring – most likely a three-month stop-gap until March. Even with control of the two chambers of Congress and the presidency, Republicans will face real challenges to getting anything partisan across the finish line necessitated by the 60-vote threshold to break a filibuster in the Senate – it’s unclear that kicking-the-can will lead to tangible Republican victories on the funding front.
Congress will be out next week for Thanksgiving recess, leaving only three legislative weeks until the government shutdown deadline of December 20 if a budget deal isn’t passed by then.
Defense Authorization Conferencing Underway
The other must-pass legislation of the 118th Congress is the National Defense Authorization Act (NDAA). The NDAA is the defense policy bill that outlines and provides direction to the country’s defense agencies. The legislation does not appropriate funding but rather authorizes critical projects and identifies priorities ahead of the appropriation process.
On June 14, the House passed its version of the bill while the Senate’s version of the bill has not yet made it to the floor. Many of the discrepancies between the two drafts will shake out in the conferencing process. But the top line remains the major negotiating point to be taken up. The House-passed legislation abided by the debt ceiling agreement increase of 1 percent and is in line with the White House’s request. On June 13, the Senate Armed Services Committee bill passed 22-3 with a top line $25 billion higher than the House.
The compromise text is expected by Thanksgiving with floor action to follow in December – similar to last year when legislation was passed by both chambers and sent to the White House in mid-December before lawmakers left for holiday recess.
The NDAA has passed for 63 straight years and neither chamber or party seems to be willing to break that tradition. For this reason, this bill is likely to be one of the last trains out of the station under this Congress and may serve as a vehicle for unrelated but non-controversial legislation that would risk a failure to pass.
Farm Bill Negotiations as Stabenow Releases Draft
Congress will also consider legislation to extend or reauthorize the farm bill – a broad and complex omnibus bill that authorizes funding for an array of agricultural and food programs every five years – before the end of the year. The current farm bill expired on September 30 and funding for many farm programs included in the bill will dry up on December 31. The most recent omnibus farm bill was enacted in December 2018 and extended for one year.
In May, the House Agriculture Committee passed its $1.5 trillion farm bill proposal in a 33-21 vote. The five-year reauthorization bill, led by House Agriculture Chair Glenn “GT” Thompson (R-PA) is riddled with partisan policies – including limiting future increases to the Thrifty Food Plan (TFP) which is used to determine SNAP benefit levels – and fails to address the extreme levels of consolidation within the agricultural sector.
That month, Senate Agriculture Committee Chair Debbie Stabenow (D-MI) released the section-by-section summary of her farm bill framework, the Rural Prosperity and Food Security Act of 2024. Following negotiations over the past several months, Chair Stabenow released draft text of the proposal on Monday. The draft builds on the earlier proposal and notably also includes important provisions to improve competition in America’s food systems, including provisions to establish an Office of the Special Investigator for Competition Matters within the USDA to investigate and prosecute violations of the Packers and Stockyards Act, a proposal previously put forward by Senator Jon Tester (D-MT), Chuck Grassley (R-IA) and Mike Rounds (R-SD).
With the 118th Congress drawing to a close and no markup currency scheduled, opportunities to negotiate and finalize a full five-year farm bill reauthorization are waning and with each passing week, the chances of Congress instead passing a one-year extension of funding at current levels grows. Chair Stabenow has been a remarkable fighter for America’s farmers and food system, leading three farm bills as Chair, and will be retiring at the end of this Congress. Ranking Member John Boozman (R-AK) is expected to chair the Committee next Congress. It is imperative that the farm bill include steps to tackle dangerous consolidation across the industries that produce our food.
Conclusion
Congressional Republicans will likely seek to resolve outstanding must-pass legislation in the coming weeks so that the incoming Republican trifecta can hit the ground running without having to take up unfinished business in January. The lame duck is Democrats’ last opportunity to wield their Senate majority to shape legislation significantly until at least the 120th Congress in January 2027. Legislative work and negotiations over the coming weeks will be key to pushing forward Democratic priorities ahead of fierce fights next Congress.