September 14, 2010 / 9:08 PM / 9 years ago

Obama seeks a few more wins in Democratic Congress

WASHINGTON (Reuters) - President Barack Obama wants to eke out at least a few more victories in Congress this year before Republicans possibly wrest control of it from his fellow Democrats.

Lawmakers returned this week from their August recess, with Obama apparently headed toward winning passage of a long-stalled bill to help small business.

But it was unclear if he would get much else, including extension of a middle-class tax cut without also extending tax cuts for the wealthy, Senate ratification of an arms treaty with Russia and approval of his latest plan to stimulate the economy.

Republicans are not particularly interested in cutting deals with Obama since they would soon call the shots if they win the House of Representatives and Senate in the November 2 election.

Lawmakers will remain at work until a few weeks before the election, and then return for a few more weeks before a new Congress is sworn-in in January.

Here’s a look at what Obama and lawmakers face:

SMALL BUSINESS

Retiring U.S. Senator George Voinovich plans to break ranks with fellow Republicans this week and back Obama on a $30 billion small business lending proposal.

The move will give Democrats the needed 60th vote in the 100-member Senate to overcome a Republican procedural roadblock and finally pass it. The House is expected to also approve it, clearing the way for Obama to sign it into law.

The bill includes about $12 billion in tax incentives for small businesses and establishes a $30 billion fund the government would invest in independent community banks to encourage lending to small businesses.

TAX CUTS

The biggest remaining battle seems to be over extending Bush-era tax cuts that are set to expire at year’s end.

House Republican leader John Boehner offered a hint of flexibility on Sunday, saying if he had no choice he would support extending tax cuts for the middle class — even if cuts for the rich are allowed to expire, effectively raising their taxes.

But Boehner said he would still push for extending tax cuts for all. And other Republicans said they stood firm against any tax hikes. A number of Democrats said they also favor extending all tax cuts.

A decision may be pushed back until after the election. One possible compromise, Democratic and Republican aides said, would be to extend all tax cuts for a year.

Obama on Monday pressed his case for limiting an extension of the tax cuts to those families making $250,000 or less a year and blamed Boehner and Senate Republican Leader Mitch McConnell for holding it up.

“We could get that done this week. But we’re still in this wrestling match with John Boehner and Mitch McConnell,” Obama said.

ECONOMY

Obama is making another uphill bid to jump-start the economy, the top concern of voters. He may not get very far.

While his past efforts failed to significantly lower the jobless rate, now at 9.6 percent, Obama wants a $180 billion package of new infrastructure spending and tax breaks.

He faces skeptics on both sides of the political aisle. They note that his $814 billion stimulus package last year fell short of its projected goal of getting unemployment below 8 percent.

BUDGET DEFICIT

The U.S. deficit hit $1.4 trillion last year and is expected to be about the same this year. Total U.S. debt has topped $13 trillion, and could double over the next decade.

The deficit and the debt have become major election-year issues, raising pressure on Democrats and Republicans to bring them down.

A bipartisan presidential commission is to make recommendations by December on how to reduce the deficit. Implementation of its recommendations will depend on always elusive bipartisan cooperation.

Republicans will push for spending cuts; Democrats think tax increases should be considered as well.

SPENDING

Lawmakers will likely come together on at least one issue — they seem certain to pass a massive temporary spending bill to keep the government running into the new fiscal year that begins on October 1.

The measure is needed because Congress is again running behind schedule in approving 12 annual appropriation bills on matters from environmental protection to national defense.

The temporary bill will likely maintain spending at current levels, giving lawmakers more time to agree on funding levels for the balance of fiscal 2011.

Still, House Republican leader Boehner is stirring up a battle, proposing that Congress slash non-defense spending for next year back to fiscal 2008 levels.

U.S.-RUSSIAN ARMS TREATY

Obama negotiated an arms-reduction treaty with Russia. Now he must convince two-thirds of the Senate to ratify it, which he would like to get done before year’s end.

First, though, Obama needs to overcome Republican worries that the United States has little to gain from the treaty and could lose its freedom of action on missile defense.

ENERGY/CLIMATE CHANGE

Legislation to tackle global warming by reducing U.S. carbon dioxide emissions appears dead in the Senate for the rest of the year, even though the House approved such a bill in mid-2009.

But Senate Democratic leaders might try to pass a modest energy bill by year’s end that would tighten controls on offshore oil drilling in the wake of the BP disaster in the Gulf of Mexico. Such a bill also could provide new incentives for cleaner-burning vehicles and require electric utilities to generate a small percentage of their power from wind, solar or other “green” sources.

An offshore oil drilling bill passed the House in July.

CHINA CURRENCY

Anger over China’s currency practices combined with Democrats’ election jitters could lead to action to force Beijing to raise the value of the yuan against the U.S. dollar.

Both the House and the Senate will hear testimony on the issue this week from U.S. Treasury Secretary Timothy Geithner.

Many U.S. manufacturers complain that China’s currency is undervalued by 25 to 40 percent, giving Chinese products an unfair advantage over those made in the United States.

One solution backed by lawmakers in both parties would be to authorize the U.S. Commerce Department to apply anti-dumping and countervailing duties to make up the difference. That would likely rile Beijing and put Obama in a difficult spot if a bill reaches his desk.

FREE TRADE

Congress is still considering whether to ratify three free-trade agreements negotiated during the Bush administration with South Korea, Panama and Colombia.

Additional reporting by Doug Palmer, Kim Dixon, Richard Cowan, Donna Smith, Susan Cornwell and John Whitesides; Editing by Vicki Allen

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