Those gearing up to oppose House Republicans’ “Plan B” budget solution received a welcome surprise last night, when Speaker Boehner announced that the plan would not come to the floor.  The measure failed to garner enough Republican support to make even a viable statement.

But what does this mean for the fiscal cliff? Should the lemmings prepare? The President and Congress now have just over a week to strike a deal, and as of yet things aren’t looking good, at least for any hope of a grand bargain.

Reports now indicate that the White House will push for an interim measure that would extend the Bush-era tax cuts on income below $250,000, pause sequestration, and renew unemployment insurance benefits.  This means a large number of tax provisions would expire, bringing in new revenue, and budget cuts would be left to another day.  

A cynical mind might begin to wonder if this could signal the quiet death of sequestration cuts, given that at its outset the mechanism was meant to force Republican members of Congress into a deal on tax cuts.  With the larger goal accomplished, the budget could gently slip back into its old routine, Republicans having dodged the defense budget bullet and Democrats having succeeded in raising taxes on the wealthy.

There’s still a chance for the two sides to come together after Christmas, and who knows, maybe the spirit of the season will take hold.  But just days from the deadline, when any agreement will have to contend with what could be a tough fight in the House, the cliff is beginning to look more and more realistic.

Merry Christmas!  Hope you’re not afraid of heights.

On December 18 the Senate and House Armed Services Committees filed the Conference version of the FY 2013 National Defense Authorization Act (NDAA). Click here for the text of the Conference report and here for the Joint Explanatory Statement. The House is scheduled to take up and approve the bill on December 20, with the Senate expected to act soon thereafter.

The Conference report authorizes $633.3 billion for defense, including $527.5 billion for the Pentagon base budget, $88.5 billion for the war in Afghanistan and $17.4 billion for the national security programs in the Department of Energy and the Defense Nuclear Facilities Safety Board.

The House version of the NDAA included a number of policy and funding proposals that would 1) block the Pentagon’s ability to implement the New START treaty; 2) prevent the President and senior military leaders from making changes to U.S. nuclear posture beyond those outlined in the 2010 Nuclear Posture Review and agreed to in the New START treaty; and 3) drastically increase spending on nuclear weapons programs and national missile defense. See our full analysis of the House bill here.

The Senate version generally did not impose policy or funding limitations on New START implementation or future changes to US nuclear policy, posture, and force size. However, like the House version of the bill, the Senate version required construction of a new plutonium facility at Los Alamos National Laboratory in New Mexico (aka the Chemistry and Metallurgy Research Replacement Nuclear Facility (CMRR-NF)) by the end of 2024. See our full analysis of the Senate bill here.

The Conference report watered down or eliminated most of the objectionable House nuclear provisions, usually substituting certification requirements or reports. However, the agreement requires the construction of an unnecessary new plutonium facility at Los Alamos, authorizes the expenditure of funds to complete the design (but no construction funds) of this new facility, and prohibits the expenditure of funds on an alternative strategy to sustain US plutonium capabilities that does not include achieving full operational capability of a new facility by the end of 2026. Senate and House appropriators have refused to appropriate funds for the new facility at this time as essential plutonium missions can be performed for less money by the existing complex.

The Conference report also calls for a study of at least three possible additional missile defense locations in the United States, but eliminated a House requirement for deployment by 2015. Given the severe limitations of existing long-range defenses, rushing to develop a plan to deploy an additional defense site on the East Coast or elsewhere does not make technical or financial sense.

Despite objections from the Obama Administration, the legislation includes additional economic sanctions on Iran’s energy and shipping sectors. The Conference report does “increase some of the time that is available to them to implement this legislation,” according to Chairman of the Senate Armed Services Committee Carl Levin, but remains largely unchanged from the original Senate version.

The Conference report rejects House language that would encourage a large-scale troop presence in Afghanistan until 2014. It endorses the President’s stated goal of transitioning lead responsibility to the Government of Afghanistan by mid-summer 2013 and states that the President should end all regular combat operations by December 31, 2014.

Additionally, the legislation rejects Senate language banning indefinite detention of suspects held as a result of the “war on terror,” bars the transfer of detainees from Guantanamo Bay to the US for one additional year, and rejects a House provision that would ban the purchase of biofuels by the US military.

Click the image below for a detailed overview of many the key nuclear and non-nuclear provisions.