There is significant confusion surrounding the recent debate on the extension of the payroll tax cut, extension of unemployment insurance and preventing the pending cut to physician Medicare reimbursement rates. These three issues are urgent. They will impact millions of middle class families, unemployed Americans and Medicare patients. The deadline for action on all three is January 2012.
The Details:
- Extension of Payroll Tax Holiday
o Currently, employees pay a payroll tax of 4.2% of their income to Social Security, on wages earned up to $106,800.
o On January 1, 2012, if Congress does not pass an extension of the "Holiday," then the payroll tax will revert back to previous law, which is a 6.2% tax on those same wages
o This equates to a 2% tax increase, if Congress fails to extend the Payroll Tax Holiday.
o This tax impacts 160 million Americans nationwide. For an Iowan making $50,000 per year, this equates to a $1,000 tax increase.
o Congress must reauthorize provisions that maintain long-term unemployment benefits for laid-off workers. These provisions will begin to expire on January 3, 2012 if Congress does not pass an extension.
o Currently, states provide up to 26 weeks of unemployment benefits, so those who will be harmed by the expiration of the federal provisions are the long-term unemployed (ie, those unemployed for longer than 26 weeks).
o Without Congressional action, approximately 6,600 Iowans will lose their long-term unemployment benefits.
- Medicare Reimbursements to Doctors
o If Congress does not act, a scheduled 27% cut in Medicare reimbursements will occur on January 1, 2012, due to the flawed Sustainable Growth Rate (SGR) in the Medicare formula. This means that every time a doctor sees a Medicare patient, the doctor would receive 27% less in his Medicare reimbursement.
o This could harm Medicare patients' (seniors) access to care, if doctors no longer find it cost-effective to accept Medicare patients.
The Votes:
Ignoring the rhetoric and partisan positioning on both sides of the aisle, there have been two substantive votes in the House of Representatives to resolve these three urgent issues.
- Vote "On Passage" of HR 3630, the Middle Class Tax Relief and Job Creation Act of 2011 (called "the House GOP bill"), on Tuesday, December 13, 2011
o Braley crosses party lines and supports. Only 10 Democrats supported.
o The Senate did not allow a vote on this bill.
o This vote would do the following:
§ Extend for one year, until December 31, 2012, the Payroll Tax Holiday
§ Extend for 13 months, until January 31, 2013, the long-term unemployment benefits provisions
§ Prevents any reduction in the SGR for 2 years, through January 1, 2014. Instead, gives a 1% increase in Medicare reimbursement rates.
- Vote on "Motion that the House Disagree to the Senate Amendments" on HR 3630, the Temporary Payroll Tax Cut Continuation Act of 2011 (called "the Senate bipartisan bill"), on Tuesday, December 20, 2011
o Braley supports the Senate Bill, by voting "nay" on the Motion to Disagree.
o The Senate bill died in the House when this Motion to Disagree passed 229-193.
o This bill had earlier been Agreed to in the Senate by a vote of 89-10
o This vote would do the following:
§ Extend for 2 months, through February 29, 2012, the Payroll Tax Holiday
§ Extend for 2 months, through March 6, 2012, the long-term unemployment benefits provisions
§ Prevents for 2 months, through February 29, 2012, the 27% cut to Medicare reimbursement rates.
Both of these votes would prevent the damage from occurring in January if passed into law:
- Prevent a tax increase to 160 million Americans.
- Prevent 6,600 Iowans from losing unemployment benefits.
- Prevent Iowa doctors from seeing a cut of 27% in their Medicare reimbursement rates.
Rep. Braley is 1 of only 14 to support BOTH SOLUTIONS:
Of the 535 members of both the House and the Senate, Rep. Braley was 1 of only 14 to vote at every opportunity to extend the middle class tax cut and stop the loss of unemployment benefits and the 27% reduction to Iowa doctors. He supported BOTH the House GOP's 1-year extension, and the Senate bipartisan 2-month extension.
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