Congress is expected to leave town either late Wednesday or early Thursday to campaign for the fall elections after approving stopgap spending legislation that would keep the federal government running in fiscal 2011, which starts on Oct. 1.
The lawmakers will depart without having taken action on key muni-related proposals affecting the top tax rates and temporary provisions for Build America Bonds and other municipal bond programs that were authorized by the American Recovery and Reinvestment Act.
The continuing resolution, which would temporarily fund federal agencies, including the Treasury Department and the Securities and Exchange Commission, is necessary because Congress failed to pass any of the 12 appropriations bills that usually provide funds for them.
It seemed possible the lawmakers would take speedy action on the CR when the Senate on Tuesday voted 84 to 14 to limit debate on the measure — a procedure that virtually ensures its passage in that chamber.
However, lawmakers were still debating the specifics of the CR, including how long it should last and the levels at which programs should be funded, at press time. For example, Rep. Jerry Lewis, R-Calif., the ranking minority member of the House Appropriations Committee, wanted to fund federal agencies at fiscal 2008 levels.
But Senate Appropriations Committee chairman Daniel Inouye, D-Hawaii, warned that such cuts would force the agencies to lay off employees and jeopardize the tenuous economic recovery.
When members return after the elections on Nov. 15, they will have about six weeks to tackle pending legislative issues such as whether to extend some or all of the Bush income tax cuts that are set to expire at the end of the year. They also must consider whether to act on legislation that would extend several expiring or expired tax provisions, including the BAB program.
But the elections could complicate the legislative agenda, especially if Republicans become the majority in the House. New members are not expected to be sworn into office to begin work until Jan. 3. Extenders legislation has been introduced by the top taxwriters in both chambers, but has failed to gain significant traction thus far. While the bills contain similar provisions that would extend programs authorized by the ARRA, a key difference is that the Senate measure would extend the Build America Bonds program for just one year, whereas the House version would extend it by two years.
Both bills also would extend by one year the increased small issuer exception for bank-qualified debt and the exemption from the alternative minimum tax for all bonds.
In addition, they would extend the two recovery zone bond programs authorized by the stimulus law, and make an additional allocation under those programs to ensure that every locality receives an allocation equal to at least its share of national unemployment at the end of 2008. Absent action by Congress, these programs will expire at the end of the year.
House members are waiting for the Senate to act first on extenders legislation, saying that it already passed those provisions as part of a jobs bill before they were stripped out in Senate legislation.