Billion-dollar budget questions loom as we move through the lame duck and into 2007, including: the scope of a continuing resolution (CR), how many years to extend the popular tax credit package that foundered with the Trifecta, whether to attempt an ATM patch, what havoc reinstatement of PAYGO would mean for all of the above. Congress adjourned at the end of last week for a two-week Thanksgiving break, leaving all these questions behind. Current leading speculation and the budget implications of the choices ahead are as follows:

• a CR: on or before December 8, Congress will extend the current CR, either until early next near, or for the entirely of FY2007; in the balance would be spending of perhaps $10-15 billion dollars in Labor-HHS slice of the pie alone
• the Extenders: current debate focuses on whether the package of tax credits, ranging from the R&D credit to the tuition tax credit, should be extended by one year or two, the difference between the two being $20 billion
• ATM patch: a one-year patch would cost about $40 billion, and the working assumption is that it would be subject to PAYGO and thus require that amount in offsets. Even repealing the oil and gas industry subsidies in last year’s energy bill and the pharmaceutical sector’s tax breaks — oft-mentioned targets — would not suffice

Watch this space for further developments.