December Deadlines Mean Year-End Crunch for Washington

(Bloomberg) -- Congress is heading for a classic December pile-up of must-pass bills and sticky negotiations that threaten to ruin the holidays for lawmakers -- a fate that has happened so many times before.

Congress has to deal with dueling deadlines on the debt ceiling and government funding, not to mention President Joe Biden’s entire economic agenda. The members really have no one to blame but themselves for procrastinating. 

The end-of-year lineup brings back memories of the Senate’s Christmas Eve 2009 vote on Obamacare and New Year’s Eve 2012 spent haggling over averting a fiscal cliff. The Senate rang in 2021 with a veto override of the annual Pentagon policy bill, so it seems only fitting the year will end with a flurry of deadlines. 

Debt Limit

Senate Majority Leader Chuck Schumer has agreed to take his GOP counterpart Mitch McConnell up on his offer for a short-term expansion of the government’s borrowing ability to Dec. 3, to break the current stalemate on the matter. 

An agreement staves off immediate crisis but merely delays the fight to the same time government funding runs out, increasing the prospects that one or both could be subjected to more short-term extensions. What’s more, the debt limit debate could eat up time and political energy when Democrats are in the critical stages of finalizing a deal on Biden’s expansive economic package.

Biden’s Economic Priorities

Speaking of that package, Democrats see the end of the year as the practical deadline to pass both the $550 billion bipartisan infrastructure bill, as well as a large package of education, child care, climate and health spending funded by tax increases. That gives time for the legislation’s effects to be felt, allowing Democrats to tout their successes ahead of the crucial mid-term elections next November. 

But keeping that schedule depends on moderates and progressives reaching agreement, something that could take weeks, or even months. 

Government Funding

To avoid a fiscal cliff, Democrats need not only to deal with the debt ceiling but also figure out how to keep the government open before the current stopgap spending bill expires Dec. 3. Senate Democrats intend to release their remaining spending bills in the coming weeks. But Senate Republicans -- who can block appropriations bills -- want greater increases for defense and reduced spending on domestic accounts, making another stopgap spending bill increasingly likely. 

Federal Reserve Chair

All this economic movement comes as the prospects heighten for a bruising campaign for the next Fed chair, which could further divide Democrats. 

Jerome Powell, who currently leads the central bank, has broad bipartisan support and could easily be re-confirmed in the chamber when his term runs up in February 2022. But Senator Elizabeth Warren, a Massachusetts Democrat, is leading a charge against Powell, saying he is too lax on regulating banks and that he is responsible for a stock trading scandal among top Fed officials. 

©2021 Bloomberg L.P.