February 19, 2012
There is a lot more to the $150 billion economic package passed by Congress on Friday besides the Big Three provisions: The Social Security payroll-tax cut, extended unemployment benefits through the end of the year, and postponement of sharp cuts in Medicare reimbursement rates for doctors.
The 270-page legislation that received scant attention during the final week of hard bargaining between the White House and congressional leaders is larded with new provisions that will help some people, enrich some companies, and encourage others to be on their best behavior. But let’s look at the core of the legislation.
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The extended two percentage-point reduction in the payroll tax will save the average family about $1,000 for the year. The unemployed will be able to claim between 63 weeks and 73 weeks of unemployment benefits, depending on how hard the recession has hit their states, but they will no longer be able to collect up to 99 weeks of benefits. And the legislation will temporarily block a 27 percent reduction in Medicare fees paid to doctors who treat the elderly – the so-called “Doc Fix.”
With a crucial election looming that will determine the political control of the House, Senate and White House, we are not likely to see many more -- if any -- major pieces of legislation sailing through Congress this year. Instead, more political gridlock and posturing will be the order of the day.
“It took the president a while to realize this, but there is nothing he can persuade the Republicans to do beyond this immediate bill that would relate in any way to the immediate economic recovery,” Thomas Mann, a government expert with the Brookings Institution, told The Fiscal Times. “There are other things hanging – the transportation bill, the energy bill, ‘No Child Left Behind.’ But it appears the Congress is in no position to act on those. There are profound differences remaining between the parties, and basically Republicans don’t want to see the president rack up any more successes, and the president would just as soon not be associated with the Congress anymore.”
Any bill anointed for passage by the two squabbling parties automatically become a legislative train for members to load up with as many measures as possible, and this bill is no different.
Drug testing for some unemployed: The legislation encourages states to enact legislation to require applicants for unemployment insurance to pass a drug test under the following conditions: 1) the individual was fired from his or her most recent job because of the unlawful use of controlled substances, or 2) the individual’s only suitable work involves employment in an occupation that regularly conducts drug testing.
Crack down on unemployment insurance fraud: The bill changes the law to say that states “shall” go after people who have received federal or state overpayments of unemployment insurance, rather than the current permissive language saying that states “may” do this. Congress wants to show it is getting tough with scofflaws.
Spectrum Auction: The new legislation grants the Federal Communications Commission the authority to auction off public airwaves now used for television broadcasts – a move designed to raise an estimated $15 billion for the government over the next decade. The new policy will allocate necessary spectrum for a nationwide interoperable broadband network for first responders, provide $7 billion for further development of a public safety broadband network, and provide up to $1.75 billion for relocation costs for broadcasters. This looks like a good deal for private companies that for the first time will be compensated with proceeds from the auctions, and could lead to major advances in wireless Internet systems and services.
Medicare Outpatient Therapy Services: Current law places an annual per beneficiary payment limit for all outpatient therapy provided by non-hospital providers but makes an exception for cases in which additional therapy is deemed medically necessary. The legislation extends that exception through December 31. It also extends the cap to services received in hospital outpatient department through the end of the year.
Transitional Medical Assistance: This plan allows low-income families to maintain their Medicaid coverage as they make the transition from government assistance to employment and increased earnings. Under current law, TMA expires at the end of his month. The new law extends TMA until December 31.
Treatment of Medicare Bad Debt: Medicare currently reimburses providers for 70 percent to 100 percent of beneficiaries’ unpaid coinsurance and deductible amounts after reasonable collection efforts. This new provision will save the federal government an estimated $6.9 billion over the next decade by ratcheting down bad debt reimbursement for all providers to a maximum of 65 percent.
Extension of welfare benefits: The legislation reauthorizes the Temporary Assistance for Needy Families (TANF) program through the end of the fiscal year, a move that will preserve a lifeline for families in dire circumstances. TANF replaced the old federal welfare system that was gutted in the late 1990s. The new law also creates a data standardization process to simplify reporting requirements, prevents use of TANF assistance at certain establishments and makes technical legislative corrections.
Federal retirement benefits: Most federal civilian employees who started their federal service after 1986 are participants in the Federal Employees Retirement System (FERS), under which they contribute toward a retirement annuity. The employee contribution rate is currently 0.8 percent of their pay. Employee contributions and benefits for special occupational groups and Members of Congress are higher.
Under the new legislation, contributions will increase by 2.3 percentage points for employees who join the federal service after December 31, 2012. Corresponding increases in employee contributions will be made for newcomer employees in the CIA and Foreign Service pension systems. No change will be made to government workers’ pension benefits. And just to demonstrate that lawmakers are not above the law, people who are elected to Congress or take congressional jobs after Dec. 31 who have less than five years of creditable civilian service will be subject to the same new rates as other new federal workers.