mykeystrokes.com

"Do or Do not. There is no try."

The Republicans’ Deceptive Payroll Tax Compromise

Republicans finally came to their senses yesterday and realized they were waging a losing battle with their opposition to a payroll tax extension. The two-month extension Congress passed in December was set to expire by the end of this month, and Republicans were adamant that any further extension be paired with equal spending cuts. Democrats balked, instead suggesting a surtax on millionaires that the Republicans would never accept, and another last minute legislative showdown appeared inevitable. Then out of nowhere yesterday afternoon Congressional Republicans announced that they would drop their resistance:

“Because the president and Senate Democratic leaders have not allowed their conferees to support a responsible bipartisan agreement, today House Republicans will introduce a backup plan that would simply extend the payroll tax holiday for the remainder of the year while the conference negotiations continue regarding offsets, unemployment insurance, and the ‘doc fix,’” said GOP leaders in an official statement Monday afternoon.

The last impasse on the tax extension left Republicans limping out of Washington for the Christmas recess. The payroll tax cut—which maintains the current 4.2 percent rate that, for a family earning $50,000 a year, amount to about $80 extra per month than the standard 6.2 percent rate—is a widely popular measure and Republicans faced public scrutiny as their obstinacy risked raising taxes on 160 million people, all in the name of political brinkmanship. By slipping this announcement out far in advance of the deadline on the same day the president released the 2013 budget, Republicans hoped to avoid a repeat of their previous public relations debacle.

Seems like an unabashed win for the Democrats, right? It’s certainly reassuring that the payroll tax extension, a form of stimulus bolstering the still shaky economy, will remain in place through the end of the year. Except unlike the December concession, this change of heart only covers the politically popular payroll tax. Excluded is an extension of unemployment benefits for the long-term jobless and the so-called Doc Fix, which stalls a drastic drop in the fees paid to Medicare physicians.

I imagine Republicans will also find common ground on the latter half—they wouldn’t want to position themselves against your grandma’s doctor during an election year—but the agreement seems designed as a ploy to put an end to the increased unemployment benefits that Republicans have fought against throughout Obama’s presidency. While the payroll tax cut helps keep the economy afloat, the unemployment benefits are the more simulative part of the equation, possibly dropping GDP by 0.3 percent if no extension is passed. But since those benefits aren’t dolled out to as wide a base as the payroll tax, there is less of a public groundswell whenever Republicans hold the extension hostage.

If Democrats buy into the Republicans’ attempts to separate the various measures, it’s unlikely that any offsets would be enough to convince Republicans to support extending unemployment. The party is secretly crossing their fingers, hoping the economy doesn’t improve before Obama is on the ballot this fall. Any form of stimulus that lacks widespread appeal would be a nonstarter.

By: Patrick Caldwell, The American Prospect, February 14, 2012

February 15, 2012 Posted by | Congress, Economy | , , , , , , | Leave a comment

How The Budget Deal Affects The Affordable Care Act

So how does this mammoth budget-cutting deal, with its congressional “supercommittee” affect health reform?

Good question, because lots of people in Washington are asking it too.

More specific answers will become clearer in the next few weeks, but here’s a first version of the road map to both the policy and the politics.

First, understand there are two different processes – and each, separately, aims at cutting more than $1 trillion over the next decade.

The one that you’ve probably heard most about is the “supercommittee” of 12 members of Congress. They are supposed to identify savings by Thanksgiving. Entitlements – Medicare, Medicaid, Social Security and aspects of the Affordable Care Act – are part of their turf. So are taxes and revenue – at least in theory. It’s not so clear that the Republicans see it that way given the public statements of Congressional leaders.

If they agree on some kind of grand deal by Thanksgiving, Congress has to take it or leave it by the end of December, eliminating the usual congressional dilly-dallying. (It looks like dilly-dallying to the casual observer or much of the public, but remember that all that arcane, tedious process IS policy in Congress. If you slow something down, make it go through hoops, amend it, hold it up, etc., it doesn’t become law. That may be good or, depending on your point of view, bad politics.)

If Congress takes any recommendations that the supercommittee agrees on, that’s the law. If the committee fails, or Congress rejects it, then the “trigger” gets pulled. The official name is “sequestration.” That’s a fancy name for automatic cuts – 2 percent across-the-board cuts in Medicare, for instance, affecting all health care providers, doctors, hospitals, etc. It won’t affect beneficiaries – at least not directly.

Medicaid is not subject to the trigger. Neither, according to the preliminary interpretations I’ve received from analysts and congressional staff, are the big, key subsidies in the health care reform law – the Medicaid expansion and the subsidies that will help low-income and middle-income people afford health care in the new state exchanges.

Other parts of the health reform law are, however, subject to automatic cuts. Among them: Cost-sharing subsidies for low-income people. This isn’t the help paying the premium; this is the help with the co-pays when people do get care. But the payments are made to health plans, not directly to beneficiaries so it won’t have the direct impact of discouraging care. It may affect how health plans make decisions about what markets to participate in. Gary Claxton and Larry Levitt at Kaiser Family Foundation explain here.

Also, the supercommittee could have a partial deal – meaning there’s still a trigger, but a smaller one. Maybe they won’t reach agreement on $1.2 trillion to $1.5 trillion in savings, which would avoid the trigger. But maybe they could agree on, say, $500 billion. That means a trigger wouldn’t have to go as deep because some of the savings would already be identified.

To recap – before we go on to the second stage of this process: The “super-committee” can do whatever it wants to health care, Medicare, Medicaid, Social Security, etc. – if it can agree, if it can get the rest of Congress to agree and if the president doesn’t veto it.

Will the Democratic Senate and the Obama White House agree to cuts that eviscerate health reform? Not likely. In fact, the Democrats “won” on very few aspects of the budget/debt deal. Walling off Medicaid and key parts of the health coverage expansion were two of the “wins.” That’s a bright line worth paying attention to as this moves forward.

Does that mean other health-reform related spending will be untouched? Given how many moving parts there are to any spending deal, and the fact that defense and tax policy are also part of the mix, chances are it will be affected. But expect to see that bright line remain visible – maybe not quite as bright, but visible. (The CLASS Act, the voluntary long-term care program created under health reform, is a different story; it’s quite vulnerable.)

The second part is the annual appropriations process. The budget deal provides for cuts – real cuts in spending, not just slowing the rate of growth. Health programs (aspects of the health reform legislation touching on exchange creation, prevention, community clinics, etc., and just about everything else at the Department of Health and Human Services – the FDA, NIH, CDC, etc. – will be subject to these cuts. But this isn’t an across the board process, it’s a line-by-line, or at least category/agency-by-category/agency, process. And there is some horse trading.

It’s safe to say that the Republicans will try to cut discretionary portions of the new health law. That’s not a new political dynamic, it doesn’t arise out of the debt ceiling or the Wall Street woes. It’s what we’ve seen since last fall’s elections and the repeal/defund fights of the past few months. And House Budget Chairman Paul Ryan has publicly tried to insert health care into any potential deal. So expect to see more Republican push to cut, and continued Democratic push back. Will health spending emerge unscathed? It’s too soon to know but, given the amount of savings Congress needs to find –both in this budget deal and in the perennial quest to fund the “doc fix” payments – some cuts are clearly possible. Some of it may affect aspects of exchange establishment, regulation, prevention, public health, etc. But it’s hard to see the Democrats allowing cuts so deep that they basically constitute a side door to repeal.

One further twist – some Republicans are calling for a delay in health reform implementation to save money.”Delay” may sound better to an ambivalent public worried about spending than “repeal.” What’s delayed (if anything), how it’s delayed, how long it’s delayed, and what stopgaps are created in the meantime could have an impact on how many people get covered in 2014.

Assorted committees and government agencies are still examining the new budget law and how it will affect … everything. So the perspective I’ve outlined here – and I’m writing amid all the market turbulence – may change as the economic and political climates change. But the lines in the sand around the trigger – health reform, Medicaid and Social Security – tell us something about where the White House will come down.

By: Joanne Kenen, Association of Health Care Journalists, August 10, 2011

August 11, 2011 Posted by | Affordable Care Act, Budget, Congress, Conservatives, Debt Ceiling, Debt Crisis, Deficits, Democrats, Economy, GOP, Government, Health Care, Health Reform, Ideologues, Ideology, Individual Mandate, Insurance Companies, Journalists, Lawmakers, Medicaid, Medicare, Politics, Public Health, Republicans, Right Wing, Social Security, Tax Increases, Tax Loopholes, Taxes, Teaparty | , , , , , , , , , , , , , , , , , , | 1 Comment

   

%d bloggers like this: