CONGRESSWOMAN ELISE STEFANIK
On Tuesday, December 20, 2011, the House is scheduled to consider a motion that the House disagree to the Senate amendments to H.R. 3630, The Middle Class Tax Relief and Job Creation Act of 2011, subject to a rule. Under the rule (H.Res. 502), the motion would be debatable for one hour equally divided and controlled by the chair and ranking minority member of the Committee on Ways and Means.
The motion would affirm that the House disagrees to the Senate amendments to H.R. 3630 and requests a conference with the Senate on the bill. H.R. 3630 was initially introduced by Rep. Dave Camp (R-MI) on December 9, 2011, and referred to the Committee on Ways and Means as well as 11 other House committees. The House approved the bill by a roll call vote of 234–193 on December 13, 2011. The bill was amended in the Senate and approved on December 17, 2011, by a vote of 89-10. A Summary of the Senate Amendment to H.R. 3630 is available below.
Summary of The Senate Amendment to H.R. 3630
The Senate Amendment to H.R. 3630 would provide a two-month extension of the current payroll tax rates and federally funded Unemployment Insurance (UI) benefits, as well as a two-month delay in the implementation of the Medicare Sustainable Growth Rate (the so-called “Doc Fix”). Unlike the House-approved version of H.R. 3630, the Senate Amendment would only extend these provisions of current law through February 29, 2012. The bill would offset these provisions by increasing fees charged by government-sponsored enterprises (GSEs) to lenders for assuming the credit risk on loans in the secondary mortgage market. In addition, the bill would require the President to make a determination on a permit for the Keystone XL pipeline within 60 days.
According to CBO, the two-month extension of provisions in the legislation would result in a deficit increase of $32.732 billion. The increase in GSE fees used to offset the bill would reduce the deficit by $35.7 billion. Thus, the bill would result in a deficit reduction of $2.968 billion over ten years.
Extending the Payroll Tax Reduction: The legislation would extend the current payroll tax rate reduction, which lowers the standard Social Security payroll tax rate by two percentage points for employees, for two months, expiring on February 29, 2012. The bill would extend the current rate of 4.2 percent for employees, and 10.4 percent for the self-employed. The bill would make no changes to the payroll tax rate for employers (6.2 percent). Prior to 2011, employees and employers each paid 6.2 percent of covered earnings (for a total of 12.4 percent) up to an annual income limit. The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 reduced the FICA tax rate for employees by two percentage points for calendar year 2011. The bill would require amounts to “be transferred from the general fund at such times and in such manner as to replicate to the extent possible the transfers which would have occurred to such Trust Fund had such amendments not been enacted.” According to CBO, this provision would reduce revenue and thus increase the deficit by $20.4 billion.
Extending Unemployment Insurance Benefits: The bill would extend federally funded benefits under the Emergency Unemployment Compensation (EUC) and the Extended Benefit (EB) programs for two months, though February 29, 2012. Under the Senate Amendment, UI would be available for up to 99 weeks in certain states with high unemployment. The Senate Amendment would not include reforms to gradually reduce the current maximum amount of time total benefits could be distributed in states with high unemployment from 99 weeks to 59 weeks by mid-2012. In addition, the Senate Amendment would not reform the UI benefit program to require that participants are actively working and training towards employment and to streamline the program. According to CBO, this provision would increase spending and thus the deficit by $8.39 billion.
Medicare Physician Payment Rates: This provision would delay a 27.4 percent cut in Medicare physician payment rates slated to begin on January 1, 2012, for two months, through February 29, 2012. According to CBO, this provision would increase spending and thus the deficit by $4.1 billion.
Physician Work Geographic Adjustment: This provision would extend, through February 29, 2012, the current floor used in calculating the portion of Medicare physician payments that accounts for the geographic area where a physician practices. This provision would increase physician payment rates in roughly 54 of the Medicare program’s 89 geographic areas.
Outpatient Therapy Caps: This provision would extend the therapy caps exceptions process through February 29, 2012, with modifications that will require that the physician reviewing the therapy plan of care be detailed on the claim, reject all claims above the spending cap that do not include the proper billing modifier, and provide for a manual review of all claims for high cost beneficiaries to ensure that only medically necessary services are being provided. Furthermore, the spending caps ($1,880 in 2012), which have been in effect since 2006, would be extended to the hospital outpatient department setting to prevent a shift in the site of service to higher cost settings once enforcement of the current exceptions process begins. Exempting these services in the HOPD setting made sense when the hard therapy cap was in place, but it no longer makes sense with the exceptions process.
Ambulance Add-On Payments: This provision would extend through February 29, 2012, the following add-on payments: 2 percent for urban ground ambulance services, 3 percent for rural ground ambulance services, and an increase to the base rate for ambulance trips originating in qualified “super rural” areas as calculated by the Secretary (currently 22.6 percent).
Qualified Individual (QI) Program: This provision would extend the QI program, which provides federal reimbursement for states to cover Part B premiums for seniors with incomes between 120 and 135 percent of poverty, through February 29, 2012. The provision would reduce the capped allotment states receive to administer the program from $1 billion in 2011 to $730 million in 2012, which is anticipated to still fully fund the program.
Extension of Transitional Medical Assistance (TMA): This provision would provide for a one-year extension of TMA, through February 29, 2012, for low-income families transitioning into employment. In addition, this provision ensures that only those individuals with incomes below 185 percent of the federal poverty level (FPL) can qualify for TMA benefits.
TANF Extension: The bill would extend the authorization of the Temporary Assistance for Needy Families (TANF) state block grant program at current level of $16.5 billion annually, through February 29, 2012. The legislation does not include a prohibition against welfare funds from being accessed in strip clubs, liquor stores, and casinos by blocking welfare EBT cards from working in ATMs there.
GSE Guarantee Fees Offset: The bill would increase guarantee fees charged by the government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac to lenders for assuming the credit risk on the loans GSEs purchase in the secondary mortgage market. In addition, the Senate Amendment would increase the guarantee fees charged by the Federal Housing Administration (FHA) as well, which the House bill did not. The bill would increase these fees by 10 basis points, or one-tenth of one percent, over 2011 levels. These fees are in effect a premium to guarantee the repayment of principal and interest on those securities, insuring Mortgage Backed Securities (MBS) investors from the risk that the securities will default. The increase is to be phased-in over the next two years. According to CBO, this provision would increase revenue and thus reduce the deficit by $35.7 billion.
Keystone XL Pipeline: The bill would require the President to issue a permit for the Keystone XL pipeline unless he determines that the pipeline would not serve the national interest. The permit would be required within 60 days of enactment of this Act. If the President makes such a finding he would be required to submit a report to Congress providing justification for such a determination. Any permit issued under this section would be required to comply with all applicable Federal and state laws and would require the reconsideration of routing within the State of Nebraska.
Key Differences Between the House-Approved Version of H.R. 3630 and the Senate Amendment
Length of Payroll Tax Cut and Unemployment Insurance Extensions:
Length of “Doc Fix” Extension:
Unemployment Insurance Reforms:
Expanding Job Creation:
According to CBO, the two-month extension of provisions in the Senate Amendment would result in a deficit increase of $32.732 billion. The increase in GSE fees used to offset the bill would increase revenue by $35.7 billion. Thus, the bill would result in a deficit reduction of $2.968 billion over ten years.