Key Congressional Leaders and the Administration cleared the decks of a possible acrimonious debate over government funding by agreeing to pass a six month Continuing Resolution (CR) when Congress returns in September. The agreement calls for a clean CR for six months near the spending levels contained in the Budget Control Act passed a year ago as part of the legislation increasing the statutory debt limit. That number was endorsed by the Senate and is $19 billion higher than the House passed number. The move to a higher spending level will likely lead to some opposition from House Republicans, but House Democrats, by and large, are poised to throw substantial support behind the measure ensuring its passage in September.

Both the House and Senate Appropriations Committees wrapped up Committee consideration of the regular appropriations bills with both Committees reporting 11 of the 12 appropriations bills. The House was unable to report the Labor/HHS bill while the Senate failed to report Interior/Environment. In all, the full House considered six of the 12 bills while the full Senate did not consider a single bill.

With the debate on funding levels punted into the next Congress, both the House and Senate can focus on a large laundry list of bills that have huge budgetary impact. With only 14 days of session remaining prior to the election, consideration of most of these issues will be forced into the lame-duck session after the election. The Congress will face some fundamental choices over canceling all or part of the looming sequester, extending all or part of the Bush-era tax cuts, extending the temporary payroll tax cuts, an alternative minimum tax fix, the extension of an assortment of tax provisions (commonly known as the tax extenders) and a Medicare Doctors' payment fix. All would have enormous impact on the deficit. But the quandary facing Congress is that canceling all or part of the sequester and extending all or part of the tax cuts would add to the deficit, while allowing the sequester to occur and letting the tax cuts expire could provide an additional drag on the economy.

While the dynamics of this Congress may change after the election, it is difficult to envision a scenario in which either party concedes ground on the high profile issues that are at the core of their respective identities and philosophy. More likely is a series of agreements that act as stop-gap measures on the issues of taxes and spending cuts that push off the major decisions into 2013 that are designed to help avoid careening off of the "fiscal cliff."

In the meantime, both the House and the Senate will continue their efforts to frame the debate on issues with an eye to the election and scheduling high-profile, symbolic votes designed to rally their core constituencies.

A partial list of the items still remaining to be addressed by the Congress includes:

Expiring Bush-era tax cuts;

Temporary payroll tax cuts;

Alternative minimum tax fix;

Tax extenders;

The looming sequester;

Postal Service default;

Farm Bill;

Medicare Doctors' payment fix;

PNTR for Russia.