2012: The Year Ahead

Today, the House of Representatives returns to Washington. Since the days of pro forma sessions are behind us – at least for now – it’s important to know what legislation (and important battles) will most likely dominate the headlines this year. While it’s very unlikely major initiatives (true tax reform or entitlement reform) will get done in an election year, it is possible that some minor reforms – or steps in the right direction – could take place.

President Obama will have a hard time winning over his base with his budget this year, due to the fact that he will have to remain within the discretionary spending levels set by the Budget Control Act (BCA) last August. The levels he must abide by set the discretionary spending cap at $1.047 trillion dollars, and as we all know, President Obama doesn’t believe in spending restraint, considering his FY2012 budget increased spending dramatically and would have lead to a budget deficit of $1.6 trillion. It is also revealing just how dug in the left is against decreasing government, which the BCA doesn’t actually do.

Republicans will likely release a budget plan similar to the Ryan Budget of last year, which was a bold blueprint of reform and would paint a clear picture of the differences between President Obama’s big-government ideals and the kind of reforms needed to actually rescue our economy. This would, of course create a battle of epic proportions – as we saw last year – in which conservatives try to have a conversation with the American people about what needs to be done in order to change the trajectory our country is currently on, and Democrats demagogue the issue and call the reformers “murderers,” “terrorists,” “hostage-takers” and any other terrible word they can think of.

But beyond the budget battle, other issues will come up. Within the first weeks of the Congress’ full return, a new fight over the payroll tax cut extension will arise. By the time the Senate comes back from pro forma sessions, there will only be about a month left in the 2-month extension. President Obama and the left think that they are winning this argument, and we can expect them to obstruct Republicans at every turn when it comes to a full year extension – because they would love to fight this war over and over again in an election year – even if it hurts the taxpayers.

Included in the payroll tax cut deal was also an extension of unemployment insurance benefits. These too, will expire at the end of February, and while Congress should stop providing permanent unemployment insurance dependence, neither party wants to seem like they are against the unemployed while the economy is so poor. These will probably also be extended for some time.  In addition to the unemployment benefits, Congress is likely to approve another extension of the “doc fix” in order to avert a fee hike for doctors who see Medicare patients.

A host of other tax extenders expired last month, and Congress will need to decide whether or not to reinstate any or all of them. Some of the extenders which expired included ethanol subsidies, which most agree should be expired.

Even more urgent are the FAA reauthorization bill and the transportation bill, which, even though Democrats controlled all of Congress and the White House for two years, never got more than temporary extensions. Now, of course, they are claiming that these are urgent issues and surprise, surprise, blaming Republicans for not getting them done. Transportation presents a real opportunity for conservatives, who want to move power out of Washington and return it to the states.

While comprehensive tax code reform will most likely never pass during an election year, the discussion of what should be done about the issue will probably be a hot topic. Both parties will try to frame the debate in their favor – with liberals claiming to make it fairer by adding more credits and loopholes to their favored special interests and hiking taxes on job creators; and conservatives trying to remove credits, loopholes and subsidies for everyone while lowering the rates to make it simpler. Neither of these proposals will make it to the President’s desk, but it will be yet another opportunity for conservatives to distinguish their vision for the country from that of the President and his party.

Energy legislation will also be a major campaign issue, with conservatives pushing President Obama to approve the Keystone pipeline in order to create thousands of jobs, lower energy prices and reduce our dependence on foreign oil. The President has until next month to decide whether he will approve the pipeline, but environmentalists are lobbying for the President to cancel the project. And as we’ve mentioned recently, the President has been inclined to give in to environmentalist demands. Other energy bills, such as H.R.3768 and H.R.3308 – which would being the process of cleaning up the tax code and removing market-distorting energy subsidies – could come up for a vote.

And finally, defense cuts will likely be a big issue throughout the year. The failure of the super committee ensured nearly half a trillion dollars in Pentagon budget cuts over the next ten years, far more than any other department received. Those who value our national defense will try to avert the cuts – as they should. Trying to protect our country on a penny budget is not only unfeasible, it’s dangerous.

2012 is gearing up to be a difficult year, and will be a true test of conservatism. Heritage Action will continue to hold Members of Congress accountable for their actions, and push them in the direction towards reform and rescuing our economy. Just because this is an election year doesn’t mean that Congress can stop doing their jobs.

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