Legislative Update For Week Ending February 17, 2012

Legislative Update For Week Ending February 17, 2012

This week, the Obama administration released its much-anticipated 2013 budget proposal, and the House-Senate conference committee compromised on a deal to prevent payment cuts to Medicare physicians and extend the payroll tax holiday. In addition, four new cosponsors signed on to the Social Security Fairness Act.

Obama Releases Budget Plan

On Monday, President Obama released his $3.8 trillion budget request for fiscal 2013, calling it “a blueprint for how we can rebuild an economy where hard work pays off and responsibility is rewarded.” While the proposal leaves Social Security as is, many Medicare beneficiaries – especially those considered “high earners” – would see major changes.

Beginning in 2017, monthly premiums for Part B and Part D would increase by fifteen percent for those with higher incomes.  If the plan were adopted, the income threshold would drop from $85,000 to $80,000, and it would not be adjusted for inflation until one-quarter of all Medicare beneficiaries qualify to pay the increased premiums.

In addition, the proposal calls for more than $200 billion in Medicare cuts to hospitals, skilled nursing facilities, and pharmaceutical companies. These cuts could lead to staff reductions, and seniors could see changes in their access to quality care.

Many on Capitol Hill consider the proposal to be a political document and deemed it “dead on arrival,” though Congress could use the proposal as a road map while forming their own fiscal 2013 budget.  TSCL will keep a close eye on this debate over the coming months.

Conference Committee Announces Compromise

The House-Senate conference committee reached a deal this week to extend the payroll tax break and unemployment benefits, and prevent a 27% pay cut to Medicare physicians. The agreement came after months of debate and only after Republicans dropped their requirement that the payroll tax extension be offset by spending cuts.

The extensions will cost approximately $150 billion over ten years, and $50 billion of that will be paid for by spending cuts and revenue increases. The remaining $100 billion, however, will be added to the budget deficit.

Most of the negotiators seem relieved to have reached a compromise, but it’s clear that neither party is thrilled with the concessions they had to make. In a telling statement, one of the twenty conferees, Rep. Henry Waxman (CA-30), said of the deal: “It’s not so bad that I would vote against it.” Another conferee, Rep. Kevin Brady (TX-8) stated however, “At the end of the day, we have prevented a disruption to our economy, avoided a tax increase on working families ...  and ensured our local doctors will not be punished merely for treating seniors in Medicare.”

The deal will likely move to the House and Senate for a vote before the Presidents Day recess begins.

New cosponsors sign on to Social Security Fairness Act

Four cosponsors signed on to the Social Security Fairness Act this week. Two Representatives – Ben Chandler (KY-6) and Mike Quigley (IL-5) – signed on to Rep. Buck McKeon’s H.R. 1332, and two Senators – Sherrod Brown (OH) and Frank Lautenberg (NJ) – signed on to Sen. John Kerry’s S. 2010. The cosponsor totals for these bills are up to 149 and 9, respectively.

If signed into law, the Social Security Fairness Act would repeal the windfall elimination provision (WEP) and the government pension offset (GPO), which have long prevented certain civil servants from receiving the full Social Security benefits they have earned. TSCL believes these two provisions should be repealed, and we were pleased to see support grow for the Social Security Fairness Act this week.