Congress returned to Washington the week of Sept. 8 to a jam-packed schedule and just three weeks left to complete work for the year before the target adjournment date of Sept. 26. Below is a brief summary of some of the major pieces of legislation covering fiscal policy issues that will likely be addressed:

Appropriations: A new fiscal year will begin on Oct. 1, and without approved appropriations legislation, the federal government will lack the funds necessary to continue its day-to-day operations. With only one of the 12 bills passed by the House (Military Construction-Veterans Affairs) and none passed by the Senate, it is virtually guaranteed that a continuing resolution (CR) will be enacted in the next three weeks. Although one or two individual appropriations bills may pass (particularly the Defense bill), a CR will be necessary to keep the rest of the government operating past the start of the new fiscal year. The CR will most likely provide funds at current-year levels for several months into 2009. When inflation and population growth are taken into account, a level-funded CR represents a cut in funding for many vital programs.

AMT Patch: Because the Alternative Minimum Tax (AMT) was enacted without a provision for inflation indexing, every year it threatens to affect millions of middle-income taxpayers — a scenario unimagined by the architects of the tax. Rather than permanently fix the tax — at a 10-year cost of $710 billion - $1.3 trillion — Congress opts to apply one-year "patches" that prevent the AMT from affecting millions of middle-income families. In 2008, the AMT patch will cost $63.5 billion and will not be offset with other revenue raisers or cuts in mandatory spending, adding that cost to the already growing federal deficit. If Congress fails to enact AMT legislation, over 22 million families will be hit with thousands of dollars of increased tax liabilities.

Tax Extenders: The "extenders" is a collection of miscellaneous tax cuts that expire every one to three years. Like the AMT patch, without congressional action, many of these tax cuts will expire in 2008. The current package contains a number of tax cuts for businesses (like a research and development credit) and some tax cuts for households (like a deduction for state sales tax in states that do not have a state income tax). Passage of this year's extenders package will cost approximately $55 billion over 10 years (JCT scores: House bill, Senate bill).

The House version (H.R. 6049) passed in May by a vote of 263-160 and is fully offset. Completion of the extenders package has been blocked by the Senate, which is steadfast in its resistance to offset the cost of these tax cuts. The Senate Finance Committee approved a $123 billion bill (S. 3125) that contains a deficit-financed AMT patch and a fully offset extenders package. Four times Senate Majority Leader Harry Reid (D-NV) has tried to bring this bill up for a vote in the Senate, and four times a group of 40 Senate Republicans has rebuffed him.

Energy: Leading up to the August recess (and even throughout it), congressional Republicans were adamant that Democratic leadership bring to the floors of the House and Senate a bill that would allow energy companies to drill for oil and gas on the Outer Continental Shelf (OCS). House Speaker Nancy Pelosi (D-CA) appears ready to relent as she may offer an energy package containing the OCS drilling provision along with a repeal of some oil and gas industry tax cuts.

Defense Authorization: The $613 billion FY 2009 Defense Authorization bill not only authorizes spending for national defense but contains a host of other measures affecting military policy. In the version passed by the House (H.R. 5658) in May (384-23) is a set of provisions designed to improve contractor oversight. House Oversight and Government Reform Committee Chair Henry Waxman (D-CA) was successful in attaching his Clean Contracting Act as an amendment to the bill. The measure is a bundle of contracting reforms including provisions that would:

• Establish a database of contractors found in violation of federal laws and regulations (this provision was also passed in the House by voice vote as a stand-alone bill in April: H.R. 3033).
• Close a fraud reporting requirement loophole (also passed by the House by voice vote as a stand-alone bill: H.R. 5712)
• Establish a database of the names and salaries of top executives of private contracting firms that receive more than 80 percent of their revenue from contracts (passed by the House by voice vote as a stand-alone bill: H.R. 3928)

Passage of the DoD bill in the Senate has been stymied by a Republican filibuster, as Senate Minority Leader Mitch McConnell (R-KY) has instructed his colleagues to insist that a vote on the OCS drilling bill be brought to the floor before any other bill. Enactment of the bill is also in doubt because President Bush has threatened to veto the House version over numerous provisions. Some of these provisions include a prohibition on public-private competitions for government contracts, a requirement to videotape detainee interrogations, a rejection of an executive order regarding earmarks, Iraq war policy, missile defense, and many others.

Other Priorities: Hurricane Gustav spared the Gulf Coast cataclysmic damage but did not leave the region unscathed. Although a damage estimate has yet to be tallied, and the extent the damage is unknown, hurricane victims seeking relief may find more than a few sympathetic ears in Congress. And as hurricanes continue to form in the Atlantic and threaten the Southeast, Congress may be compelled to appropriate funds for hurricane recovery before they adjourn for the year. In fact, this may become a high enough priority that a lame-duck session of Congress would be called after the elections in November.

In addition to hurricane relief, the prospects for a second economic stimulus package are improving as indications of a souring economy continue. Although gross domestic product (GDP) figures remain somewhat above levels typically seen during recessions, a rapidly increasing unemployment rate (currently at 6.1 percent) is within recession territory. Further, insurance claims are also at levels seen in recessions. While tax rebates keep the economy afloat, there are millions of households struggling to keep their heads above water. In an effort to boost the economy and provide aid to families that need it most, groups such as the Coalition on Human Needs (CHN) and the Emergency Campaign for America's Priorities (ECAP) have been asking legislators to enact a number of stimulus measures including:

• Unemployment Insurance extension and reforms
• Increased spending on Food Stamps and Emergency Food
• Assistance for home heating and cooling bills (LIHEAP)

Given the overloaded list of priorities and the glacial pace at which Congress has moved in 2008, completion of all of these items is unlikely. Whether congressional leaders will decide to bring members back after the elections to try to complete some of the unfinished work or simply wait until the start of a new Congress in 2009 is still undetermined.