Two Hurdles Requiring a Lame Duck Solution

When the lame duck session emerges, two agenda items carry complexity that introduces significant risk at year-end. The first is extending the FY 2027 funding bill, and the second is raising the debt ceiling. Both can bring significant consequences—a government shutdown and defaulting on debt—that could impact the world economy.  

At the same time, advancing solutions will be tough coming out of a consequential election. Parties are divided on how to approach these issues and, while the election is over, efforts to gain an advantage over the other party are not. There may be an interest in moving these issues when the next political season is far away, but real questions emerge: will they get the votes to pass legislation, will the President align on the solution, and will some policymakers seek to leverage these issues to force inclusion of other priorities (effectively introducing additional risk).  

The legislative vehicle also remains up in the air.  Some Republicans would like to include a debt ceiling increase in a new budget reconciliation bill, but that will require a significant lift that Republicans may not have the votes to pull off. Others see an avenue to combine a group of issues with the FY 27 funding extension in hopes of moving everything at once.  

The lame duck session of Congress will be interesting, but these two issues may define its success or failure. In a hyper-partisan Congress, moving big-ticket items will be tough, at best. Moving two major initiatives (especially the debt ceiling) that naturally bring many different options to the table might define the success or failure of this lame duck session.