As Congress closes in on its threat of being in session to Christmas Eve, it seemed as if two significant measures (the tax bill and FY11 appropriations bill) were on the path towards enactment. However, by the end of the week only one of those bills – the $858 billion dollar tax cut extension – had made it to President Obama’s desk for signature. Although much media attention was devoted to the fact that the legislation passed by wide margins in both houses (with nearly two-thirds of both bodies voting in favor) as evidence of new found bipartisanship, it seemed that those high hopes had evaporated as quickly as they had materialized when Senate Majority Leader Harry Reid was forced to pull the omnibus spending bill on Thursday evening. Although the bill had initial support from key Republican’s, including Senate Minority Leader Mitch McConnell, this support dwindled after pressure from conservative groups in large part in response due to earmarks, including spending supported by Republican’s like McConnell, in the bill. McConnell is instead proposing a two-month “clean” one-page extension of the current continuing resolution, which is set to expire this week.

We believe that two distinct ways that these bills moved (or didn’t move) provide critical insight into how legislation will be able to move in the upcoming Congress and the political sensitivity afforded to the Tea Party and concerns about any new spending measures. Perhaps most fascinating is that any legislation that significantly added to the deficit was able to be enacted only two short weeks after so much attention was devoted to the President’s Budget Deficit Commission and the need to rein in spending.