As shutdown looms, differences persist on payroll tax cut, spending bills

Dec 16 2011

Among the items held up in the end-of-year negotiations is the Medicare physician reimbursement fix, which would prevent a 27 percent cut in doctors' payments from taking effect. A House Republican plan to pay for the "doc fix" with dollars from the health law's prevention fund is opposed by some Democratic senators.

The Washington Post: Payroll Tax Cut And Spending Bill Stall In Senate, Raising Threat Of Shutdown
If there was any sign of progress, it was that Senate Democratic leaders met with President Obama on Wednesday to weigh whether to drop their demand that the $120 billion payroll tax cut be paid for with a new surtax on millionaires. Republicans have rejected the idea, but it was not clear Wednesday whether that concession from Democrats would be enough to produce a deal (Helderman, 12/14).

The New York Times: Congress Takes Up A Partisan Battle, Again, Over Spending
For the third time in a year, the divided 112th Congress is dancing on the edge of catastrophe, locked in a bitter partisan battle over fiscal measures, with unrelated policy debates hanging in the balance. Republicans and Democrats do not agree on how to pay for something both sides say they want -; extension of a payroll tax holiday for almost every worker.  They have until the end of the year to work it out or see the tax go up, something most economists say would further damage the nation's fragile economy by taking money out of consumers' pockets (Steinhauer, 12/14).

The Associated Press/Washington Post: Eager To Avoid Government Shutdown, Democrats May Drop Millionaires Tax In Year-End Spending Bill
At issue now are three year-end bills that Obama and leaders in both parties in Congress say they want. One would extend expiring Social Security payroll tax cuts and benefits for the long-term unemployed, provisions at the heart of Obama's jobs program. Another is the $1 trillion spending measure that would lock in cuts that Republicans won earlier in the year. The third measure is a $662 billion defense bill setting policy for military personnel, weapons systems and the wars in Iraq and Afghanistan, plus national security programs in the Energy Department. …  Wednesday's maneuvering occurred the day after the House passed a payroll tax extension that contained no higher taxes. ... That House measure drew a veto threat from Obama. …  The bill would extract nearly $43 billion from the year-old health care bill; extend a pay freeze on federal employees while also increasing their pension contributions and raise Medicare premiums on seniors with incomes over $80,000 beginning in 2017 (12/14).

Reuters: Democrats Mull Dropping Millionaire Surtax
Still unclear is whether the payroll tax cut extension can be completed this week as leaders had hoped, or if lawmakers would have to delay the start of their holiday break. A possible tradeoffs for dropping the millionaire surtax could be Republicans backing off their demands to reduce jobless benefits and tighten Medicare eligibility (Ferraro and Cowan, 12/15).

Modern Healthcare: Senator Fights To Keep An Ounce Of Prevention Free From Pounds Of Budget Cuts
Sen. Tom Harkin (D-Iowa), chairman of the Health, Education, Labor and Pensions Committee, had some harsh words this week for House Republicans, who have included cuts to a prevention fund he championed as a way to pay for an extension of current Medicare's physician reimbursement rates. "They don't believe in prevention; they don't believe in public health; they believe just go ahead and get sick and then somehow magically somebody is going to take care of you," he told reporters Tuesday when asked about the proposed cuts to the Prevention and Public Health Fund (Zigmond and Daly, 12/14).

In other news from Capitol Hill -

Reuters: Big U.S. Deficit-Reduction Bill Needed: Boehner
House Speaker John Boehner said on Wednesday that one of his top wishes for the new year is to help win passage of a bill to cut the record - and still mounting - U.S. debt... Asked how he would advance a deficit-reduction deal next year, Boehner did not change the demands Republicans have made this year: reforming Medicare and Medicaid programs for the elderly and poor and the Social Security retirement plan (12/14).