After the House failed to move forward with Speaker of the House John Boehner’s (R-OH) Plan B proposal to avoiding the fiscal cliff, President Obama called on Congress December 21 to pass a basic agreement on the fiscal cliff that would preserve middle class tax cuts and unemployment insurance funding, while laying the groundwork for growth and deficit reduction. However, the Administration has since expressed a willingness to settle for a less comprehensive package after a short Christmas recess, but doing so will still require bipartisan cooperation.

An outcome for the tax extenders debate, as part of the fiscal cliff negotiations, remains up in the air. Whether or not $70 billion in tax extenders funding is even included in an final end of the year fiscal cliff avoidance package has yet to be determined, as Congress focuses primarily on blocking the full impact of $607 billion in tax increase and spending cuts scheduled to take effect in January. Though there is bipartisan support for renewing most of the extenders provisions, the tax extenders package may be passed instead on a retroactive basis early in the new year, and House and Senate leaders are attempting to review the various incentives to eliminate the least effective, thus reducing the price tag.

Advocates for the extension of the expiring production tax credit continue to voice their support for the program. Energy Secretary Steven Chu warned December 19 that failure to extend the production tax credit could force wind energy investments overseas, and called the credit incredibly important for the growth of the domestic industry. A group of senators also sent a letter December 20 urging Senators Harry Reid (D-NV), Mitch McConnell (R-KY), Max Baucus (D-MT), and Orrin Hatch (R-UT) to adopt commence construction language for both the Section 45 production tax credit and the Section 48 investment credit in any year-end deal.

In other end-of-the-year measures, Congress approved a $633.3 billion fiscal year 2013 National Defense Authorization Act (H.R. 4310, S. 3254) and the President is expected to sign the bill. Restrictions on the military’s use of biofuels were removed from the final version of the measure, as was a provision that would have prevented the Pentagon from entering into a contract to plan, design, or construct a biofuel refinery, but the final version does limit funds for biorefinery construction until the Defense Department receives equivalent contributions from the departments of Agriculture and Energy.

Potential forward movement for the Farm Bill before the end of the year is becoming increasingly unlikely, as leaders in both houses fear that including it in a fiscal cliff package could cost votes, even though it offers billions in savings. The House is likely to markup a new bill at the end of February if it does not pass a bill this year.