The 113th Congress Ends With a Whimper

On Reid's last night as leader, Senate approves a tax bill and several Obama nominees, but can't finish a terrorism insurance measure.

The 113th Congress finished in fittingly mixed fashion Tuesday night, with the Senate approving a host of Obama administration nominees and a compromise tax-extender bill but unable to renew a federal terrorism insurance program that's set to expire.

The night marked the end of a historically unproductive and largely dysfunctional Congress, and of Harry Reid's tenure as Senate majority leader. Reid did manage to hand President Obama a farewell gift, as the chamber confirmed 69 executive branch nominees just since Friday. And the Senate also kept the government running, passing an omnibus bill over the weekend that Obama signed Tuesday night.

Senators passed the final controversial bill of this Congress easily earlier Tuesday evening, sending a deal to extend more than 50 tax breaks that expired at the end of 2013 through December to the president's desk. The bill passed after a fight between Reid and the White House scuttled a more ambitious deal last month.

Reid had negotiated a deal with Republicans in November to extend the tax credits for at least two years, with several tax breaks favored by the business community earning permanent extensions. The bill lacked, however, a permanent extension of the Earned Income Tax Credit and the Child Tax Credit, as the White House had pushed for, leaving both to expire in 2017.

And so, as Reid has emphasized, before the deal was even done, the White House issued a veto threat. The fight underscored tensions between the outgoing majority leader and the Obama administration that have marred Reid's final days in office. Reid's deal, the White House argued, helped corporations while neglecting working families. The veto threat ended bipartisan conversation about the deal and forced members back to the drawing board.

What emerged was a significantly smaller, retroactive one-year tax extender bill that the House passed before leaving town last week and the Senate passed in a 76-16 vote Tuesday evening. The one-year extension will give clarity to Americans as they enter tax-filing season early next year. The bill extends all 50 tax credits that expired last year through Dec. 31, allowing individuals and businesses to claim them on their 2014 filings with the Internal Revenue Service. But, proponents of a bigger deal have pointed out, it leaves those tax credits in limbo for 2015.

It wasn't the deal Reid was initially gunning for. And Senate Finance Committee Chairman Ron Wyden, the chamber's top tax writer, has lambasted the bill, warning that an extension through Dec. 31 gives low-income families just two weeks of certainty about their future tax responsibilities. With Republicans taking over the chamber in January, Wyden and other Democrats worry about what will become of those tax breaks in 2015.

"When everybody comes back in January of 2015, you can be sure that the powerful will be well represented," Wyden said in early December, "and the question will be what will happen to the working-class priorities."

But Wyden conceded weeks ago that with the House gone for the rest of the year, there was no other procedural path forward. He, along with Sen. Orrin Hatch, the ranking Republican on the Finance Committee, would have preferred a two-year deal, but neither objected to moving forward with the one-year deal.

"At this point," Hatch said earlier this month, "[the two-year package] wouldn't go anywhere. The House wouldn't pass it anyways, so I'm not one that does feckless things if I can avoid them."

With the possibility of their holiday break beginning as soon as Tuesday evening, senators were eager to let the legislation go through. Many other Democrats who had hoped for a longer-term deal also conceded that the House-passed package was inevitable. But Reid held the bill in his pocket for several days, using it as a bargaining chip to keep members in town as he has pushed to confirm a number of the president's nominees before recessing for the year.

The Senate confirmed those nominees but dropped a controversial bill before recessing Tuesday.

The legislation to reauthorize the federal terrorism risk insurance program (called TRIA), which had Democratic support, was scuttled after Republican Sen. Tom Coburn refused to lift his hold on the bill. Coburn and other fiscally minded Republicans objected to renewing the program, believing that the free market will step in to insure individuals and business from future terrorist attacks without the federal backstop program. But Democrats also mounted strong objections over the last-minute inclusion of a provision reforming the Dodd-Frank Wall Street law by House Republicans.

Sen. Chuck Schumer, who had worked with House Republicans to pass a clean TRIA re authorization this month, put the onus on House Republicans to take up the issue next year in a statement Tuesday.

"We hope that next year, the House Republican leadership will work with us in the same bipartisan way that the Senate did when we passed a TRIA bill 93-4. We hope the House will pass a bill quickly, because billions of dollars of projects and hundreds of thousands of jobs are at risk," Schumer said.

But House Republicans have pointed out that their chamber passed its version of a TRIA reauthorization last week on an overwhelmingly bipartisan 417-7 vote, so the failure to renew the program should lay at the Senate's doorstep.

The TRIA program will now expire at the end of December.