A bipartisan agreement was reached on the payroll tax extension. Negotiations lasted until late Wednesday evening, with several members of the House-Senate conference committee objecting to some of the preliminary language. However, it remains to be seen if there will be a Friday vote on the conference report; according to House rules, the legislation needed to be made public before midnight on Wednesday. Conference leaders had hoped for a Friday vote, prior to next week’s recess.
The conference agreement extends the payroll tax cut through the remainder of 2012, reforms the unemployment insurance program, and averts a 27% cut in reimbursement rate for doctors under Medicare. Unemployment insurance benefits were a major point of contention in the negotiations. In the end, a tiered approach was adopted:
- In states where unemployment is over 9%, benefits will be available for 99 weeks at the beginning of the year. However, benefits will decline to 73 weeks by the end of the year.
- In most states, unemployment insurance benefits will be limited to 63 weeks.
The cost of the legislation would be roughly $150 billion, over ten years. However, $50 billion would be offset through spending cuts and revenue increases. Approximately $15 billion would be raised by auctioning portions of the electromagnetic spectrum, while more than $20 billion would be derived from healthcare savings.
As always, we will continue to monitor this and update you accordingly. Please do not hesitate to contact us if we can be of additional assistance.
B. Jeffrey Brooks
Partner in Charge
Adams and Reese LLP
20 F Street, NW
Washington, DC 20001
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