Congress returns to Washington Monday in an unsettled political environment that will serve as the backdrop for a robust year-end push on spending, taxes and, potentially, raising the debt limit.
Republicans appear on course to gain a narrow House majority next year, putting Democrats under enormous pressure to finish fiscal 2023 spending bills and enact priorities like enshrining same-sex marriage rights into law. In the Senate, Democrats have secured control in the next Congress, lessening the urgency for a rush on judicial confirmations. That bodes for more action on legislation, including the debt ceiling, in the weeks ahead.
"I'm going to sit down and talk to my caucus about broadening the agenda for the lame-duck session," Senate Majority Leader Chuck Schumer told reporters on Sunday.
President Joe Biden wants to see the same-sex marriage bill, legislation bolstering federal electoral procedures, the annual defense policy bill and an energy permitting bill supported by West Virginia Senator Joe Manchin passed in the coming weeks, White House press secretary Karine Jean-Pierre told reporters last week.
Republican leaders in both the House and Senate are facing potential revolts from within their rank over the disappointing GOP showing in the midterm election. Senate GOP leader Mitch McConnell's decision on how far he can go in cooperating with Democrats and still keep his support will shape bills in the coming weeks.
Here's a look at the top items on the congressional agenda, including the finale of the Jan. 6 investigation:
Tax breaks
Businesses are lobbying hard for Congress to pass a package of tax breaks worth about $100 billion before the end of the year.
Republicans want tax breaks for private equity, manufacturers and businesses. In exchange, many Democrats want to expand the child tax credit along the lines of the maximum $3,600 per child credit from the now-expired 2021 stimulus bill.
The business breaks at issue are: the deduction for research and development costs, a more generous deduction for interest expense write-offs and a tax break known as "bonus depreciation" that allows businesses to write off their equipment purchases in a single year.
Spending
The biggest item on the to-do list is preventing a government shutdown after the current stopgap bill expires on Dec. 16. Doing so, however, will require the cooperation of at least 10 Senate Republicans on everything from domestic spending to Ukraine. House conservatives have balked at more money for Ukraine, making a lame-duck spending bill push all the more important for Democrats and attractive to Republican defense hawks.
Republicans will have to decide whether to settle for a deal now, or wait until next year when they will likely have more say in the House. Conservatives argue that government spending drove the current spike in inflation and the new round of spending bills should have a lower top-line than the $1.5 trillion for fiscal 2022.
Debt ceiling
Democrats have discussed addressing the debt ceiling in the lame-duck session to forestall any risk that a GOP-controlled House will use it as leverage to demand cuts to mandatory spending programs like Medicare, potentially provoking a financial crisis in the latter half of 2023. House Speaker Nancy Pelosi on Sunday said she favors raising the debt ceiling this year before it can be made into a bargaining chip as it was in 2011 by Republicans seeking spending cuts.
Democrats could use a budget maneuver to raise the debt ceiling without GOP help, but doing so means the Democrats own the debt politically. Schumer has given no public indication he intends to do that, and he may not have the 50 votes he needs to succeed with a time-consuming process that would put other priorities at risk.
Defense
The annual defense policy bill could be pulled from the floor this week to confirm appointees. That would put talks on the must-pass measure behind closed doors.
Among the issues that hang in the balance are arming Ukraine and replenishing U.S. weapons stocks. The leaders of the Senate Armed panel, Rhode Island Democrat Jack Reed and Oklahoma Republican Jim Inhofe, have a proposal that would authorize the Pentagon to sign contracts in 2023 and 2024 to buy a laundry list of weapons that have been instrumental in Ukraine.
Elections
Senators are under pressure to complete legislation that would raise the bar for challenging presidential election results. House Republicans oppose most of the changes and the measure could be doomed if it doesn't clear by year's end.
The Senate version of the bill would greatly increase the number of lawmakers needed to raise an objection to a state's electors and force a vote and create a fast-track process to rein in governors who refuse to certify an election. It would also strike vague language from the 1887 Electoral Count Act that former President Donald Trump and his allies tried to leverage to delay or stop certification of Biden's victory.
The bill has attracted enough Republican support to clear the Senate. The House version goes much further and would not pass the Senate's 60-vote threshold.
Energy
The White House supports a proposal from Manchin to speed energy project permits in a way that benefits both fossil fuel production and renewable projects.
The effort, opposed by liberal Democrats, collapsed in September when the GOP refused to back Manchin's version of the bill as part of the last stopgap spending bill. Manchin says he wants to make changes to get Republicans on board.
Same-sex marriage
Schumer has promised a vote on legislation that would codify protections for same-sex unions and repeal the 1996 Defense of Marriage Act, which defined marriage for federal purposes as between a man and a woman and was later struck down by the Supreme Court.
All Senate Democrats support the bill, but it would need at least 10 GOP votes to get the 60 required to advance under Senate rules. A handful of Senate Republicans — including Rob Portman of Ohio and Thom Tillis of North Carolina — have said they're on board and others are expected to join them now that the midterms have passed.
Cannabis
Schumer said in October he is working to draft a bipartisan compromise on the SAFE Banking Act, which would prohibit federal banking regulators from penalizing banks and other depository institutions for providing banking services to legal cannabis businesses.
The compromise focuses on adding restorative justice provisions to the bill, such as expungement of criminal records.
Judges
Since Biden was sworn in, the Senate has confirmed 25 appellate court judges, 58 district court judges and one Supreme Court justice. Democrats are eager to do more, but judges may take a back seat now that Democrats have secured the Senate for next year.
There are 21 judges who have been approved in the Judiciary Committee and are ready for Senate floor votes, and another four received tie committee votes and require a full Senate vote to move them forward. An additional 12 judicial picks have had a confirmation hearing and are awaiting a vote in committee.
Jan. 6 investigation
The select House Committee that has been investigating the Jan. 6, 2021 Capitol attack is facing an end-of-year sunset to its authority and is set to release a comprehensive report of its findings before then.
Trump's legal team last week sued to block the panel's subpoena for his testimony. A protracted legal fight will likely run out the clock on that happening if Republicans take the House majority; they are unlikely to renew the panel's charter in January. GOP Representative Liz Cheney, the committee's vice chair, said Friday that the report will include information from its 16 months of investigation not revealed in hearings, along with proposals for legislation "and possible criminal referrals."
— With assistance from Jarrell Dillard and Roxana Tiron
