H.R. XX: Temporary Extensions Act of 2010

H.R. XX

Temporary Extensions Act of 2010

Sponsor
Rep. Charles B. Rangel

Date
February 25, 2010 (111th Congress, 1st Session)

Staff Contact
Communications

Floor Situation

The House is scheduled to begin consideration of H.R. __, the Temporary Extensions Act, on Thursday, February 25, 2010, under a suspension of the rules, requiring a two-thirds majority for passage.  The legislation is expected to be introduced on February 25, 2010.

Note:  According to reports, the legislation under consideration is identical to an amendment introduced in the Senate on Wednesday, February 24, 2010.  The following analysis is based on the text of that amendment.  However, the final text of the bill the House is scheduled to consider has not been introduced as of yet and could potentially be subject to change.  This document will be updated if any changes are made.

Bill Summary

The bill would extend a number of funding expansions from the Democrats' "stimulus" bill and several other provisions for one month, through March 28, 2010.  Under current law, the programs are set to expire on February 28, 2010.  According to CBO, the bill provides $10.26 billion in funding and revenue reductions to extend the expiring program funding.  Funding in the bill is designated as "emergency" spending, and thus would not be subject to the Democrats' statutory PAYGO requirements.  In addition, legislation would extend three provisions of the Patriot Act for seven days.  The specific extensions in the bill are outlined below.

Extension of "Stimulus" Unemployment Provisions:  Extends the nationalization of the extended benefit unemployment program through March 28, 2010, at a cost of $6.8 billion in direct spending and a loss of $1.1 billion in lost revenue, and further designates such spending as "emergency spending" exempt from PAYGO compliance.  The bill would extend 100 percent federal funding for the U.I. extended benefits program, as well as an additional $25 per week for U.I. recipients.  However, given that the bill would use entirely federal funds to extend unemployment benefits, some Members may echo the concerns of noted economist Martin Feldstein, who previously testified that extended unemployment would "create undesirable incentives for individuals to delay returning to work.  That would lower earnings and total spending."

During economic downturns, Congress has acted to extend unemployment benefits beyond the statutory requirement of 26 weeks.  Last year's wartime supplemental (P.L. 110-252) provided a new program of extended unemployment compensation benefits for up to 13 weeks (39 weeks total).  Legislation signed by President Bush in November 2008 (P.L. 110-449) extended the period of extended unemployment compensation from 13 to 20 weeks (46 weeks total), with an additional 13 weeks (59 weeks total) available in high unemployment States.  Legislation passed by Congress in October (P.L. 111-92) extended unemployment benefits for 14 weeks for all individuals (73 weeks total), with an additional six week extension (79 weeks total) for individuals in States with total unemployment rates above 8.5 percent.

In addition, the "stimulus" bill, in addition to shifting the financing for extended unemployment compensation benefits to the Treasury (as opposed to the Unemployment Trust Fund), and increasing all unemployment benefits by $25 per week through the end of 2009, effectively nationalized for the first time the Federal/State extended benefit program authorized in permanent law.  That program has since its inception in the 1970s paid extended benefits in high unemployment States using 50 percent State funds.  Extended benefits last up to 20 weeks, meaning the total maximum duration of 100 percent federally funded extended benefits today is a record 73 weeks-up to 53 weeks under the "temporary" program and another 20 weeks under the "permanent" program, which is currently entirely federally funded.  Thus unemployed workers can receive a total of 73 weeks of federal benefits, or 99 weeks (counting 26 weeks of State unemployment benefits) available nationwide-with a total of 105 weeks available in high unemployment states.

Extension of "Stimulus" COBRA Premium Subsidy:  The bill would also make employees losing their jobs through March 28, 2010, eligible for the 15 months of COBRA subsidies.  The length of the subsidy eligibility was expanded from nine to 15 months by H.R. 3326 on December 19, 2009.  CBO estimates that this provision will increase direct spending by $94 million and reduce revenue by $991 million.

Provisions of the Consolidated Omnibus Reconciliation Act of 1985 (COBRA) provide for separated employees and their dependents to remain on their previous employer's group policy for 18 months, or up to 36 months in some cases.  Employers are permitted to charge former workers electing COBRA coverage the full cost of their group insurance premiums, plus a 2 percent fee to cover administrative costs.  The "stimulus" (P.L. 111-5) provided a 65 percent premium subsidy to employers to cover the costs of individuals electing COBRA coverage for up to nine months, provided such election came as a result of the individual's involuntary termination from employment during the period from September 1, 2008 to December 31, 2009.  Under the "stimulus", subsidies continue for a maximum of nine months, but terminate once the individual becomes eligible for other employer-based coverage or Medicare.  Subsidies begin to phase out for individuals with adjusted gross incomes over $125,000 and families with incomes over $250,000, phasing out completely at income levels of $145,000 and $290,000, respectively. 

Some Members may view this further extension of health insurance subsidies-again, totally unpaid-for-as part of an attempt to circumvent the President's promise that his health "reform" bill will cost "only" $900 billion, and will not increase the deficit.  If Democrats hope to extend provisions like the COBRA subsidies piecemeal through 2014 or beyond-when the major provisions of their "reform" bills will finally take effect-such efforts would cost several hundred billion dollars-yet the majority has made no attempt to offset the costs of such a federal spending binge.

Extension of Highway Trust Fund:  The bill would extend federal highway and surface transportation programs and authorize the appropriation of funding from the Highway Trust Fund (HTF), through March 28, 2010, or until a longer term extension is passed.  The existing federal transportation programs and spending authority under the Safe, Accountable, Flexible, Efficient Transportation Equity Act: a Legacy for Users (SAFETEA-LU) will expire on February 28, 2010.

The HTF was established in 1956 for the purpose of funding the construction of an interstate highway system.  The account is administered by the Federal Highway Administration, within the Department of Transportation, and distributes about $33 billion of gasoline tax revenues annually to States for highway projects.  Eighty-eight percent of total receipts for the HTF come from the federal highway users excise tax (the remainder comes from truck-related taxes such as truck and trailer sales, truck tires and heavy-vehicle use taxes).  Currently the 18.4-cent federal gasoline tax is distributed with one-tenth of one cent to the Leaking Underground Storage Tank Trust Fund and the rest to the Highway Trust Fund's two accounts: 2.85 cents per gallon to fund the mass transit account, and 15.44 cents per gallon to fund the highway account.

Medicare Sustainable Growth Rate:  The bill provides for a one-month adjustment to the Sustainable Growth Rate (SGR) conversion factor for physician payments.  Specifically, the bill provides for a zero percent update for the period from January 1, 2010 through March 28, 2010.  The bill further provides that the adjustments made for this period will be disregarded for the purposes of determining the conversion factor for 2010 and future years, resulting in at least a 21 percent reduction in physician payments beginning on March 28, 2010.  According to CBO, this provision will cost $1 billion.

Medicare Therapy Caps:  The bill retroactively extends allowances for certain Medicare Part B recipients to exceed their yearly $1,860 cap for outpatient physical and speech language therapy services.  The provisions expired on December 31, 2010, and the bill would retroactively extend it through March 28, 2010.  According to CBO, this provision would increase direct spending by $37 million.

Poverty Guidelines:  Extends the expanded Health and Human Services poverty guidelines through March 28, 2010, to ensure that eligibility for certain means-tested benefits will not be reduced because of new poverty guidelines for at least one month.  According to CBO, this provision will cost $20 million.

Flood Insurance:  Extends the National Flood Insurance Program through March 28, 2010.

SBA Loans Fee Waiver Extension:  Includes $60 million for continuation of reduced fees for Small Business Administration (SBA) 7(a) loans and extends their authorization through March 28, 2010. The "stimulus" bill gave the SBA $375 million to increase its guarantee on 7(a) loans and to reduce or eliminate fees on both its 7(a) loans.  These funds included in the "stimulus" bill have run out.  The 7(a) Loan Program is the SBA's primary program to help start-up and existing small businesses obtain financing when they might not be eligible for business loans through private lending channels.  SBA itself does not make the loans, but rather guarantees a portion of loans made and administered by commercial lending institutions.  Participating lenders agree to structure loans according to SBA's requirements, and apply and receive a guaranty from SBA on a portion of this loan.   According to CBO, this provision would cost $60 million.

Satellite Home Viewer Reauthorization:  Includes a one month extension (through March 28, 2010) of current law which permits satellite television providers to retransmit certain network programming to subscribers.  This would allow households that subscribe to various satellite television services to continue to view network broadcasts.  According to CBO, this provision would cost $2 million and increase revenues by $2 million.

Patriot Act Reauthorization:  The bill reauthorizes three provisions of the PATRIOT Act that are set to expire through March 7, 2010.  The USA PATRIOT Improvement and Reauthorization Act of 2005 made permanent 14 of the 16 provisions from the original PATRIOT Act.  The 2005 bill extended the sunset on Section 206 FISA roving wiretaps, Section 215 FISA business records, and section 6001 of the Intelligence Reform and Terrorism Prevention Act (IRTPA).

•  The So-Called "Library Provision" (Section 215 of the PATRIOT Act):  This provision allows the FBI to apply to the FISA court for an order granting access to tangible items-including books, records, papers, and other documents-in foreign intelligence, international terrorism and clandestine intelligence cases.  In order to ensure protection against abuses of Section 215 authority, the USA PATRIOT Reauthorization Act of 2005 contains several conditions including Congressional oversight, procedural protections, application requirements and a judicial review process.  Several of the 9-11 terrorists used public computers to review their September 11 plane tickets.

•  Roving Wiretaps Provision (Section 206 of the PATRIOT Act):  This provision authorizes U.S. Foreign Intelligence Surveillance court (FISA) orders for multipoint or "roving" wiretaps for foreign intelligence investigations.  A "roving" wiretap applies to an individual and allows the government to use a single wiretap order to cover any communications device that the suspect uses or may use.  This type of wiretap differs from a traditional criminal wiretap that only applies to a particular phone or computer used by a target.  Without roving wiretap authority, investigators would be forced to seek a new court order each time they need to change the location, phone or computer that needs to be monitored.  Terrorists and foreign spies use multiple communications devices to evade detection.

•   "Lone Wolf" Provision (Section 6001 of Intelligence Reform Act):  This provision amends the definition of "agent of a foreign power" to include individual foreign terrorists who may not be directly affiliated with a foreign power or international terrorist organization.  Under this provision, terrorists who work on their own cannot escape surveillance simply because they are not agents of a foreign power or avowed members of an international terrorist group.  Examples of "lone wolf" terrorists are Richard Reid (the "Shoe-Bomber"), Timothy McVeigh, Ted Kaczynski-however, this doesn't apply to them because they are US citizens.  This provision ONLY applies to foreign terrorists or agents of a foreign power.

A one-year reauthorization of these three provisions would likely occur sometime in the next week. 

Cost

According to CBO, the legislation would cost $8.14 billion and reduce revenue by $2.1 billion over ten years.  Thus, the bill would have the net effect of increasing the deficit by $10.26 billion.