Can Congress Pass an NDAA This Year?

With the House scheduled to adjourn for the year on Friday, both chambers will try to address a bevy of unfinished business this week, including the budget, a defense bill, and legislation to fund food stamps and farm programs.

All eyes will be on Rep. Paul Ryan and Sen. Patty Murray, as the budget conference committee is set to announce whether a deal has been struck. While there were signs of optimism last week, leaders in both parties were also discussing backup plans in case the committee fails.

Ryan says he expects the framework of any deal to be given to both parties by Tuesday, which would be a bellwether moment. Without a deal, House Republicans leaders will come under pressure to pass a short-term spending measure before lawmakers leave town for the holidays. It is unclear how such a measure will play in the Senate.

Without a budget deal or a continuing resolution, the threat of a government shutdown looms when the current CR expires Jan. 15.

Meanwhile, as many as 1.3 million Americans would be without long-term unemployment insurance at the end of the year if the House and Senate do not vote by then to extend those benefits.

There's also literally dozens of other types of extenders set to expire, including provisions related to charitable deductions, energy, community assistance, and disaster relief. Some of these matters could be addressed retroactively early next year, although doing so would lead to uncertainty.

Schedules can be changed, but Speaker John Boehner has said the House intends to stick to its plan to adjourn for the year at the end of this week. Senate Majority Leader Harry Reid has not yet released the upper chamber's schedule, but aides expect the Senate's last day of the year to be Dec. 20.

In a week expected to be jammed with activity, here are the highlights:

• Reid is expected to take his new, post-nuclear option caucus for a spin, as the Senate votes as soon as Monday on Patricia Millett's nomination to be a judge on the D.C. Circuit Court of Appeals. The Senate may also act on two other D.C. Court nominations, as well as Rep. Mel Watt, D-N.C., who was tapped to head the Federal Housing Finance Agency.
• On Tuesday, Secretary of State John Kerry is scheduled to testify before the House Foreign Affairs Committee amid congressional skepticism over the interim nuclear deal with Iran. He is expected to explain why the administration believes easing sanctions is prudent.
• Nearby, the Supreme Court on Tuesday will hear oral arguments in a showdown over a major piece of the White House air-quality agenda. The justices are reviewing a 2012 Appeals Court decision that struck down the Environmental Protection Agency's cross-state air-pollution rule.
• Senate Finance Committee Chairman Max Baucus, D-Mont., is set to unveil legislation to deal with the Sustainable Growth Rate formula used to reimburse doctors under Medicare, also known as the "doc fix." His bill could come as early as Tuesday and will be considered by the committee on Thursday.
• Health and Human Services Secretary Kathleen Sebelius is set to testify Wednesday on the implementation of the Affordable Care Act before the House Energy and Commerce's Health Subcommittee.
• The Senate Finance Committee is to hold a hearing Tuesday to consider the nomination of John Andrew Koskinen to head the Internal Revenue Service.
• Treasury Secretary Jacob Lew Lew will appear before the House Financial Services Committee on Wednesday for his annual testimony on the international financial system.

BUDGET AND TAXES

Final Days

The 29-member House and Senate budget conference committee enters its final week of negotiations before its recommendations are due to Congress on Friday.

Cochairs Ryan and Murray are closing in on a narrow deal in the range of $1 trillion (the midway point between the House Republican budget top-line of $967 billion and the Senate Democrats' $1.058 trillion) that could be announced early this week.

Ryan told caucus members last week that he is optimistic a deal can be reached, but that if he and Murray haven't come to an accord by Tuesday, he is unlikely to get one at all.

Boehner has said that if no deal is forged this week, he is prepared to move a short-term continuing resolution to avoid another government shutdown Jan. 15.

Many House Republicans are pushing for a CR vote on Friday, assuring that they can go home for the holidays that afternoon without the pressure of another fiscal crisis when they return Jan. 7. But GOP leaders are undecided about when they would bring such a stop-gap alternative to the floor—if at all—hoping to give Murray and Ryan more time to work out the details of a final deal.

With the House slated to leave for the holidays on Friday, Democrats are hard at work on coming up with a replacement plan for sequestration, as well as an extension of unemployment insurance benefits, which are set to expire Dec. 28.

If there is no budget deal this week, or the unemployment-insurance extension is left out of that agreement, House Democrats say they are prepared to push separate legislation. But there would be little time left in the House calendar for consideration.

DEFENSE

Selling an Iran Deal

The administration is bringing in its big guns to try to sell its interim nuclear agreement with Iran on Capitol Hill this week. Meanwhile, Armed Services Committee leaders and the leadership are trying to strike a deal on the stalled defense bill.

In anticipation of Kerry's appearance before the House Foreign Affairs Committee, Chairman Ed Royce, R-Calif., has said he is skeptical about the agreement and wants to hear an explanation from Kerry about why the administration is convinced easing sanctions is prudent.

On Thursday, Wendy Sherman, the undersecretary of State for political affairs, and David Cohen, the undersecretary of Treasury for terrorism and financial intelligences, are slated to discuss the Iran agreement in a hearing before the Senate Banking Committee.

On the defense authorization bill, the Senate returns from a two-week recess trying to break a logjam that crippled the bill before Thanksgiving. With no agreement on amendments, House and Senate Armed Services Committee leaders have worked to put together a slimmed-down version of the defense bill.

One strategy under consideration would be to pass the revised bill in the House and then send it to the Senate, but it's unclear whether Senate Republicans will agree to a plan that does not allow amendments.

Republicans had complained that Reid had closed off the amendment process on the bill last month—and that was before Reid changed the Senate's filibuster rules for nominees. So the Senate might well have to allow some amendments in order to pass the bill in the chamber.

That would complicate the path to passage this year.

With the House scheduled to adjourn for the year at the end of next week, it is unclear whether leaders can reach an agreement and get a final bill through both chambers before they adjourn.

Meanwhile, the defense authorization bill has passed for 51 years in a row. If it doesn't reach the finish line before the end of the year, leaders would likely try to resuscitate it in January.