Now that we have a few lame ducks down in Washington, I thought this peculiar phrase worth tracking down. So here is what I found.
First, referring to Congress as a whole as a “lame duck congress” is a misuse of the word, since those congressmen who were reelected are not lame ducks. In this context, the expression has taken on a slightly different meaning, a congress controlled by a party that loses that control at the end of the year. In this sense we have a lame duck House but not a lame duck senate.
The word more generally refers to people finishing their last term at some position, knowing they will soon be replaced. But this expression probably originates on the high seas as British naval slang referring to a disabled ship or a ship damaged at sea. The term duck makes more sense in this context.
If this is correct, then the term migrated from naval slang to financial slang, referring to a bankrupt investor or an investor in default of his debt at the exchange. At the stock exchange there are bulls, bears, and lame ducks, people who can not raise the liquidity to invest in any market.
From the stock market the word then migrated to politics where it is used mostly today. It is available outside politics, though, in reference to any thing or person who is disabled in any way. The American Heritage dictionary says that it may refer to “an ineffective person; a weakling.”