Lawmakers Look to a Short-Term CR to Avoid a Shutdown While They Finish Omnibus Spending Bill

Hopes for a com­pre­hens­ive pack­age of tax breaks began dim­ming Tues­day, as con­gres­sion­al ne­go­ti­at­ors lowered their ex­pect­a­tions to a con­tinu­ation of cur­rent law, even as lead­ers threatened a rare week­end ses­sion to fin­ish talks over a catchall spend­ing bill.

Ne­go­ti­ations over the two pack­ages of le­gis­la­tion—one a six-year, $800 bil­lion ex­ten­sion of sev­er­al pop­u­lar tax breaks and the oth­er a $1.1 tril­lion bill fund­ing every as­pect of the fed­er­al gov­ern­ment—had be­come in­ter­twined in re­cent days. But House Speak­er Paul Ry­an sought to put some dis­tance between the two on Tues­day, as lead­ers in­tro­duced a two-year, clean reau­thor­iz­a­tion of sev­er­al ex­pir­ing tax pro­vi­sions as a fall­back plan.

House Minor­ity Lead­er Nancy Pelosi had been in­sist­ing on Demo­crat­ic-favored tax pro­vi­sions, in par­tic­u­lar in­dex­ing the child tax cred­it to in­fla­tion. But Ry­an told his con­fer­ence at a closed-door meet­ing Tues­day morn­ing that he had no qualms fall­ing back on the two-year bill.

“We’re not go­ing to get jammed,” Ry­an said, ac­cord­ing to a source in the room.

Top tax-writ­ing staffers from both parties were meet­ing as re­cently as Tues­day af­ter­noon. But some mem­bers wor­ried that the pack­age, which would make per­man­ent some tax breaks pre­ferred by each party, ap­pears to be col­lapsing un­der its own weight. The Sen­ate too began pre­par­ing a two-year fall­back plan, even though Ma­jor­ity Lead­er Mitch Mc­Con­nell said Tues­day that he is still push­ing for the “more ro­bust” deal.

Sen­ate Minor­ity Lead­er Harry Re­id, who has pushed force­fully for a lar­ger tax-ex­tenders agree­ment des­pite the re­ser­va­tions of some of his mem­bers, said Tues­day that ne­go­ti­at­ors ac­com­plished little over the week­end and only really got back to the busi­ness of try­ing to fi­nal­ize a pack­age on Monday night.

“Be­fore we start talk­ing about wheth­er it’s a good pack­age or a bad pack­age, let’s have a pack­age,” Re­id said. “We don’t have any­thing to fo­cus on right now.”

He was dis­missive of con­cerns voiced by some Demo­crat­ic mem­bers that the bill un­der dis­cus­sion would be­ne­fit large cor­por­a­tions over middle-class Amer­ic­ans and lacks pay-fors. “These tax ex­tenders—many of them are good for busi­ness, but those that are good for busi­ness are also good for every­day Amer­ic­ans,” Re­id said. “And each year we [pass these ex­ten­sions], they’re not paid for—with rare ex­cep­tion. So I don’t know what people are talk­ing about.”

Sen­ate Ma­jor­ity Whip John Cornyn said Tues­day that he’s un­happy with the pos­sib­il­ity of abandon­ing the lar­ger tax plan in fa­vor of a two-year ex­ten­sion of cur­rent law, but he ad­ded that he trusts Rep. Kev­in Brady and Sen. Or­rin Hatch, the chair­men of the two cham­bers’ tax-writ­ing com­mit­tees, “who are con­duct­ing ne­go­ti­ations on our be­half.

“It’s a ter­rible way to do busi­ness every year or two years to do this,” Cornyn said. “We ought to make the ones per­man­ent that de­serve on the mer­its to be per­man­ent, like the re­search and de­vel­op­ment tax cred­it. … What they’ve got is the de­fault, the two-year bill and hope­fully will make it more ro­bust, like I said, with some per­man­ent [ex­ten­sions].”

Brady said Tues­day even­ing that he is con­sid­er­ing adding a delay on two Obama­care-re­lated taxes to the two-year ex­tenders pack­age—a med­ic­al-device tax and the Ca­dillac tax, a charge on em­ploy­er-sponsored health in­sur­ance plans.

“We’re still strongly con­sid­er­ing adding that on be­fore we go to Rules. We don’t know when that will be,” Brady said. “A lot de­pends on how the ne­go­ti­ations con­tin­ue.”

Both Brady and Cornyn ad­ded that as dis­cus­sions on both the tax and spend­ing bills con­tin­ue, they may be com­bined in­to a single bill be­fore Con­gress leaves town un­til Janu­ary.

But when they’ll break for the hol­i­days is still up in the air.

After lead­ers in both parties ini­tially ex­pressed op­tim­ism that they’d meet the Dec. 11 dead­line to avoid a gov­ern­ment shut­down head­ing in­to this week, the words “con­tinu­ing res­ol­u­tion” began to echo through both cham­bers of the Cap­it­ol on Tues­day. Mem­bers on the ap­pro­pri­ations com­mit­tees say that the bulk of the work on spend­ing is done, but a few dozen riders are stalling ne­go­ti­ations as Con­gress nears its dead­line.

“We know we’ll have to deal with a short-term CR. We will not al­low the gov­ern­ment not to be fun­ded, so we’ll do a short-term so we can fin­ish our work,” House Ma­jor­ity Lead­er Kev­in Mc­Carthy told re­port­ers Tues­day morn­ing.

Mc­Con­nell said Tues­day that he has already asked mem­bers to “be pre­pared to be here this week­end” in or­der to fin­ish up work on the om­ni­bus and tax le­gis­la­tion.

And Re­id, who told re­port­ers last week, “Ser­i­ously, I feel good about the om­ni­bus,” down­graded that as­sess­ment Tues­day, say­ing that the spend­ing and tax-ex­tender is­sues were, at least, “alive.”

Even how long to delay the fight had be­come a point of con­ten­tion. In a private meet­ing of Ry­an’s circle of ad­visers from dif­fer­ent fac­tions in his con­fer­ence, House Free­dom Caucus Chair­man Jim Jordan ad­voc­ated for a six-week CR to give Re­pub­lic­ans more time to fight for their riders, par­tic­u­larly a House-passed meas­ure that would make the ad­min­is­tra­tion sign off on every Syr­i­an refugee ad­mit­ted to the coun­try.

Free­dom Caucus mem­ber Matt Sal­mon said that would al­low Con­gress to work through the is­sues without fa­cing what he called an ar­ti­fi­cial dead­line of ad­journ­ment for Christ­mas break.

“Every time that we get jammed up against a hol­i­day sched­ule with people want­ing to be back in their dis­tricts and back with their fam­il­ies, we seem to end up get­ting things that we dis­like in­tensely. And when we don’t have that kind of pres­sure, there’s a little bit more of an abil­ity to fight,” Sal­mon said.

Yet the idea did not seem to be tak­ing off in the con­fer­ence. Lead­ers in­stead began plan­ning a CR of only a few days, with the hope that a one-year pack­age could be hammered out and voted on over the week­end or as soon as early next week.

That was in part be­cause House Demo­crats said they would be amen­able to a short-term con­tinu­ing res­ol­u­tion, but not one that lasts sev­er­al weeks. “A hand­ful of days is not un­reas­on­able,” House Minor­ity Whip Steny Hoy­er said.

Rep. Joseph Crow­ley, the Demo­crat­ic Caucus vice chair, ad­ded that his party has the back­ing of the White House in op­pos­ing a longer-term CR. “I don’t be­lieve the pres­id­ent is sup­port­ive of an ex­tender at this point bey­ond a few days maybe so we can cross the T’s and dot the I’s. The an­ti­cip­a­tion was that we’d get this done by the 11th,” Crow­ley said. “I don’t see how [a six-week ex­ten­sion] changes any­thing. It just post­pones the in­ev­it­able.”

Sen­ate lead­ers were no more amen­able to a longer-term CR, with Re­id ar­guing: “If they did that, it would be a very, very bad be­gin­ning for the new speak­er.”

As far as riders, Hoy­er said that his mem­bers would sus­tain a veto if a bill to re­strict the flow of Syr­i­an refugees were in­cluded in the om­ni­bus. Though such a bill earned veto-proof num­bers a few weeks ago, Hoy­er said “there’s no doubt in my mind” Demo­crats would not give it such a mar­gin as part of an om­ni­bus pack­age.

Mean­while, Hoy­er ad­ded that a meas­ure to lift the crude-oil ex­port ban is “on the table,” and, though not a pref­er­ence of Demo­crats, it doesn’t rise to the level of oth­er tox­ic riders they op­pose.

Rep. Charlie Dent, a Re­pub­lic­an ap­pro­pri­at­or, said Demo­crats’ lever­age is in­creased by the re­luct­ance from some in his party to vote for a large spend­ing bill.

“They have a lot of lever­age be­cause they’re go­ing to put up a hell of a lot of votes on the omni. And giv­en our track re­cord on the CR and the omni, we don’t have as much lever­age as we should,” he said. “Some of my col­leagues on my side have to un­der­stand that—that our lever­age is wounded be­cause we have too many people who hope yes and vote no.”

Rachel Roubein contributed to this article.