What I Didn’t Know About the Payroll Tax Cut/UI Benefits Extension

January 12, 2012

I suppose everyone breathed a sigh of relief when the House Republicans agreed to temporarily extend the employee payroll tax cut and long-term unemployment insurance benefits.

The bill they’ve passed will also extend other legislation — but again, only for two months. So there’s more hinging on the House-Senate negotiations than the two items that have been getting the headlines.

And that, I think, means the Republicans have more bargaining chips — or to switch metaphors, hostages — than some of us realize.

One of them is the “doc fix,” i.e., the annual tweak to existing law that keeps Medicare reimbursements to physicians from dropping as they would if a cost-control measure adopted long ago took effect.

That you probably know about, since it’s already gotten major press coverage.

Not so for some about-to-expire programs for low-income individuals and families. I’ve heard barely a peep about these, except from advocacy organizations.

Temporary Assistance for Needy Families

I already knew TANF was expiring — though I confess that wasn’t at the forefront of my consciousness when the proverbial hit the fan in mid-December.

As I’d nervously noted back in October, Congress passed only a three-month, pared-back extension. Now TANF has a lease on life until March.

But it’s at risk, I think, of further cost-cutting and/or some “reforms” that achieve the same thing through the back door.

The big sticking point, after all, is how to come up with offsets equal to the cost of the extensions. The House Republicans’ Welfare Reform Act may be a preview of what they’ll push for.

Other Programs for Low-Income People

I didn’t know that other programs were expiring — and thus now also have just two months of official life. Maybe you didn’t either. So a brief introduction to these hostages.

One of the programs provides a funding stream for the Child Care and Development Fund — a major source of the funds states use to subsidize child care for low-income parents.

The Fund also ensures states invest in helping these parents find child care and in improving the quality of care their children receive.

Two other just-extended programs partially cover health care costs.

One provides funding for transitional Medicaid assistance so that TANF families continue to have affordable health insurance as they transition from dependence on cash assistance to gainful employment.

The other pays the Medicare Part B premiums for “qualified individuals,” i.e., some low-income seniors who have a bit too much to be eligible for Medicaid.

The premium cost for most seniors this year will be $99.90 per month — automatically deducted from their Social Security benefits.

A big bite for QI-eligible seniors, whose incomes barely top 150% of the federal poverty line.

But without Part B, they’d have no insurance coverage for outpatient medical care, home health care services or “durable medical equipment,” e.g., wheelchairs, walkers, oxygen tanks.

Looking Forward

All four of the above programs have bipartisan support. Even a lot of far-right Republicans voted to keep them going, since they were part of the original House payroll tax cut/UI extension bill.

So we can be quite certain they won’t die. Nor indeed, will TANF. But the very fact the Democrats care about them gives the Republicans leverage.

We can thus expect the Republican negotiators to use them as trade-offs for some very problematic parts of the House year-long extension bill — or at least, try to use them that way.

I’m not clear what leverage the Democrats have — besides another upsurge of public outrage and a potential for campaign messaging.

These worked last month, but the string of crisis situations we’ve experienced shows that ransoms do get paid.

Sigh of relief, therefore, but also breath-holding in this quarter.

NOTE: I’m indebted to the Coalition on Human Needs for alerting me to the broader implications of the extensions stalemate and to its Executive Director, Deborah Weinstein, for help with particulars. I’m solely responsible for the political perspective and for any errors here.


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