Congress is back from holiday recess

Congress is back from the holiday recess to begin what the President says "needs to be a year of action."  However, the collective assessment is that it will be difficult for 2014 to be more productive from a divided Congress in an election year.

Still, the next 10 weeks may hold some genuine prospects for disproving the conventional wisdom, while it may only be temporarily. The three major issues that Congress has the potential to pass during the beginning of the year include the following:

Appropriations – It may appear to be very difficult to produce a single measure in five weeks that apportions all $1 trillion in discretionary spending for the rest of this fiscal year.  However, the omnibus spending package that's supposed to be unveiled this week has a good chance of being completed during that time. The spending bill needs to be signed to make the bipartisan promise of no further government shutdowns a reality. 

Debt limit - If failure is not an option is the focus being taken on the spending bill it holds equally true to granting the Treasury permission to borrow more.

The last fiscal showdown ended only when the potential for a market-rattling default was just hours away. The Republicans will talk a while longer about demanding concessions from the Administration in return for a higher debt ceiling, but is likely that no real substantive confrontation will materialize. The Administration has left absolutely no room in the rhetoric for making the borrowing limit part of any deal.

Farm bill - Negotiators are signaling a breakthrough is imminent on an impasse that began 15 months ago. For farmers, the most important feature will be a new subsidy system to replace direct payments, which are widely ridiculed outside rural America because they are delivered regardless of crop prices.

However, there is a significant issue that must be resolved before the bill can be passed; how much to pare nutrition assistance for the poor. House Republicans appear united behind the view that, with the economy growing that a six percent cut to food stamps is not unreasonable. A bipartisan majority in the Senate, viewing the safety net fundamentally differently, opted for a cut of about half of one percent. Negotiators have settled on 1.5 percent, or $8 billion over a decade, combined with some of the solidified work requirements for Supplemental Nutrition Assistance Program recipients.

Even if the farm bill doesn’t get done it is expected that Congress will pass a year-long stopgap bill. Lawmakers may remain gridlocked, but the absence of a temporary farm bill would threaten a doubling of retail dairy prices.  A dramatic increase in the cost of a gallon of milk would not be the best way to begin a campaign year.