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The Lame Duck Congress and the Fiscal Cliff

by Mark Whitacre on November 13, 2012
Lame duck Congress addresses fiscal cliff

If one were to look up the definition of “lame duck,” the entry should read: A two-headed, three-legged, and four-winged blind bird. What this means is that the duck may fly, but it will look ugly, it won’t know where it is going, and somehow it will find its way.

The “fiscal cliff” will dominate the seven-week session that starts today, November 13. Unless Congress and President Barack Obama can reach a deal on budget issues, starting in January 2013 tax cuts enacted during President George W. Bush’s administration will expire and cuts totaling $110 billion per year will be applied for a decade to defense and non-defense discretionary spending.

The election maintained the political status quo, with the Republicans gaining a few more seats in the House of Representatives to increase their majority and Democrats maintaining control of the Senate. Both sides are likely to remain entrenched in their pre-election positions.

The recent conciliatory statements from our political leaders notwithstanding, Congress and the Administration are likely to take a pass on making any meaningful changes. Instead, the lame duck Congress may vote to delay a decision until the new Congress is seated in January. Why?

  • Republican leaders may be unwilling to compromise on some issues until its newly elected members have taken their seats in the House. This would strengthen their hand in negotiating with the President and Senate Democrats.
  • The “fiscal cliff” is symptomatic of larger issues that will be debated in the new, 113th Congress. Namely: Reforms to entitlement programs (Social Security, Medicare, food stamps, etc.); tax cuts/increases; and spending reductions/investments. Until those larger issues are addressed, the “fiscal cliff” will look like a rut in the road.
  • Spending on current programs is funded until March 27, 2013. Lame duck sessions usually deal with emergency issues. The pressure to fund current programs won’t occur until March.
  • Hurricane Sandy: Billions will be required to help repair the power infrastructure and to help localities deal with the devastating effects of Hurricane Sandy on the East Coast. The Federal Emergency Management Agency’s disaster assistance fund may be overwhelmed by claims. However, as the disaster is so fresh, we may not know for a couple months the exact needs to replenish the fund or what additional help the east coast will need. Therefore, any discretionary funds that would have been invested in some programs may be held back until the price tag of Hurricane Sandy is fully known.

While the behind-the-scenes negotiations continue on the fiscal cliff issues, Congress will have time on its hands. Let your congressional members (representatives and senators) know of programs and issues that are important to your local government so she/he will know the impact of budgetary decisions will have on communities within their congressional districts/states. Members appreciate knowing the facts so they can make an informed vote.

About the Author

Mark Whitacre, grant writing, lame duck Congress and the fiscal cliff Mark Whitacre, GPC, owner of Goldstone Grants (www.goldstonegrants.com), is a grants consultant with more than 20 years in the grant industry. He has developed proposals that have secured more than $27 million in funding from federal, state, local, and private organizations. He posts regular blogs on grant development topics.

Topics: Grant Articles & News