Health Center Federal Policy

The Status of Final Negotiations on Capitol Hill: Payroll Tax, the “Doc Fix” and “Extenders”

 by Heather Foster

On Saturday, Congress seemed poised to wrap up 2011 with a bang and pass one final piece of compromise legislation that would address any as yet unresolved issues and unextended programs.  The Senate passed legislation by a vote of 89-10 that would extend many programs for two additional months—allowing sufficient time for Congress to debate how to pay for longer-term extensions.

Included in the legislation was the “doc fix,” or adjustment to the Medicare Sustainable Growth Rate (SGR) formula to prevent a reduction in Medicare payments to most physicians (though not physicians practicing in health centers) of nearly 30 percent.  In addition, the bill included an extension of Unemployment Insurance and Transitional Medical Assistance, or “TMA,” which provides benefits for individuals transitioning from welfare to work.  Most notably was the “Payroll Tax Extension,” which would save most working individuals approximately $1,000 annually on taxes.  The legislation was paid-for entirely with fees on mortgages paid for by Fannie Mae and Freddie Mac. 

The Senate passed this legislation on Saturday with a bipartisan vote of 89-10 and with the expectation that the House would shortly do so as well, however, rank and file House Republicans expressed their outrage at the legislation over the weekend and have said that they will not vote for this legislation.  The House prefers  a year-long extension that it recently passed which includes significant spending cuts as offsets. That bill would resolve the outstanding issues until after the 2012 elections.  Information on the House-passed bill, the Middle Class Tax Relief and Job Creation Act can be found here

It is unclear exactly how this disagreement will play out in the final days of 2011, but the House plans a vote related to this legislation later today so keep your eyes on the blog and we will be sure to keep you posted!