November 13, 2018

The dust has barely settled on the midterm elections, but there are a number of key fiscal issues not only facing the current Congress in coming weeks, but also awaiting the new Congress, which will convene in early 2019.

Fiscal items that the current Congress may address include:

  • Wrapping up appropriations. Currently, five of the twelve regular appropriations bills have been funded for fiscal year 2019 — but seven remain. On September 21, Congress passed a continuing resolution that is set to expire on December 7. If lawmakers can’t agree on the remaining appropriation bills by then, they will need to pass yet another continuing resolution — or risk a partial government shutdown. They may also choose to enact funding for disaster relief from hurricanes and wildfires.
  • Budget reform. The Joint Select Committee on Budget and Appropriations Process Reform must present recommendations by November 30, but there is no requirement that the Congress vote on them before adjourning. Although there is broad agreement on the need for budget reform, recent reports indicate that the committee has scaled back its recommendations, perhaps only proposing a shift to biennial budgeting.
  • Tax Cuts 2.0. Back in September, the House passed another round of tax cuts, including a provision that would make permanent the reductions for individual taxpayers in the Tax Cuts and Jobs Act. The House proposal would further increase the deficit since the provisions would not be offset; however, it looks unlikely that the Senate will act on the legislation during the lame-duck session. In addition, certain “tax extenders” expired at the end of December 2017 and may be considered for renewal before the end of this year.

The incoming 116th Congress will also face pressing fiscal issues, and may choose to address other policy areas:

This last point is the most essential, as all other policy decisions could affect the country’s already worrisome fiscal outlook. Furthermore, voters from both parties have identified rising debt and deficits as a priority for the incoming Congress.


Related: How The Lack of Action on The Debt Limit Can Hurt The Economy


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