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Wednesday, October 27, 2010

What Quacks Like a Duck, Looks Like a Duck, and Limps?

What Quacks Like a Duck, Looks Like a Duck, and Limps?

October 27, 2010.  The 20th Amendment of the Constitution, states that regular sessions of Congress convene on January 3 of each year, unless an alternate date is set in the previous session. Since elections are held in November, some lawmakers will lose their job, but will still be members of Congress until the session ends. These un-elected members are called ‘lame ducks’ in a ‘lame duck session.’ Lame ducks are not good, since you have the un-elected voting on and passing laws, even though they won’t continue to serve. Only 11 states allow lame duck sessions, but then most states are required to balance their budget as well.



The worst of the lame ducks (the lamest duck?) is when a party with majority control loses that majority control. Then, the lame ducks can flex some muscle (become mighty ducks?) and pass old legislation, hinder new legislation, or generally be a nuisance to the newcomers. America has had some disastrous lame ducks, like James Buchanan’s transition to Abraham Lincoln, which may have exacerbated the Civil war, or Herbert Hoover’s transition to Franklin Roosevelt, which prolonged the Depression and made Hoover the ‘most hated man in America’.

In some lame duck sessions, legislation gets pushed through, like in the 1980, session when the Democratic congress hastily pushed two major bills through before president Reagan took office. The 111th Congress has a high probability of fitting the Bill as a lame duck, becoming the 18th lame duck since 1940. What will happen?

2010 Lame duck legislation. The 111th Congress has a very full plate of duck. There are at least 17 bills on the agenda. Here are some:

Extension of unemployment benefits

Freezing physician Medicare payments

NASA authorization

China Currency

Renewable electricity standard

Pre-empting EPA action on carbon emission

Defense authorizations (repeal of ‘don’t ask/don’t tell’)

DREAM act (to allow children of illegal immigrants to become citizens)

Cybersecurity

START arms-reduction treaty with Russia

Mine Safety

Child nutrition

The Spending bill

The extension of the Bush Tax Cuts

Now, I could be wrong, but the 111th Congress goes back into session after the election on November 15th. They generally take a break for Thanksgiving, and always for Christmas. Twice a lame duck session has run until January 2 (both during wartimes). The longest a lame duck has run since 1992 is 12 days.

So my question is: which, if any of these bills will be passed, and the most important question to me, is ‘What is the tax law going to be on January 1, 2011?’ I’m skeptical that the direction of legislation will be toward what’s good for everyone and maybe more toward what’s on the party agenda. If the tax cuts expire, everyone gets a tax increase, and a big one. The lowest tax bracket taxpayers get an increase in their rate of 50% (!) and the upper bracket folks get a slew of increases. For example, a married couple with three kids, both working and making $50K each would have their taxes increase by about $3,900, or a 50.4% increase. Anyone with an estate over $1M, could now prospectively be taxed on their assets at 55%.

I’m watching the election closely. Congress is important, the Senate is important, and the governors’ races are maybe even more important (governors set the Congressional districts every 10 years). But for all the elections may say, what happens AFTER the election is directly affecting every American’s pocketbook. And that is one ugly duckling.

Leon