Savings Proposed by House Republicans in the Middle Class Tax Relief and Job Creation Act Reflect Areas of Bipartisan Agreement

Posted by Steve Johnston on

The House Republican proposal fully offsets the cost of extending payroll tax relief, extending unemployment benefits and preventing a reduction in physician payments under Medicare. In fact, the House Republican proposal results in deficit reduction of $5.8 billion over ten years and significantly more savings in the second decade.

 

Most of the savings used to offset the costs in this bill reflect areas of common agreement between House Republicans and President Obama.

 

The table below compares the savings in the House Republican proposal and President Obama’s Plan for Economic Growth and Deficit Reduction that was released in September.  Over 90% of the savings come from provisions the same or similar to those the President has supported.

 

 

Savings

In Billions

House Republican Proposal

President’s September 2011 Proposal

Fannie Mae & Freddie Mac Guarantee Fee

$35.7

10 basis point fee.

Same.

WEP/GPO Program Integrity

$3.2

Data matching to improve enforcement of current law.

Same, using a different collection method.

End UI and Food Stamps for Millionaires

$0.02

Prohibit those with income above $1 million from receiving Food Stamps or UI benefits

Not Proposed.

FERS Annuity Supplement

$1.6

Repeal for new federal retirees 62 and younger (except for those subject to early mandatory retirement) the special retirement benefit equal to Social Security.

Same proposal but would only apply to new hires when they retire in the future.

Federal Employees Retirement Contributions

$36.7

Increase by 0.5% a year for three years the employee contribution for the defined benefit pension plan, and for new employees: increase the contribution by 3.2% for new hires and calculate retirement benefits based on the high 5 rather than the high 3 years of salary and a smaller multiplier.

Increase the contribution for current employees by 0.4% for three years. While the Administration did not propose a higher contribution for new employees or the change in benefit calculation, these were discussed and tentatively agreed during the summer debt limit discussions.

Civilian Pay Freeze

$26.2

Extend the current pay-freeze for federal workers and Members of Congress for an additional year through 2013.

The President proposed and implemented a pay freeze pay through 2012.

Flood Insurance Reform

$4.5

Eliminate certain premium subsidies.

Same.

Spectrum Auctions

$16.5

Enact comprehensive spectrum bill.

Similar policies to generate savings, but spent $11 billion of savings on a wireless initiative which reduced net savings.

Require Social Security # for Child Tax Credit

$9.4

Require filers to provide a Social Security number to receive a refundable tax credit just as is done currently for the EITC.

Not Proposed.

Increase Income-Related Premiums Under Medicare Parts B & D

$31.0

Further income-relates premiums for high-income seniors, including by increasing existing high-income premiums by 15% and freezing the income thresholds going forward.

Same.

ACA Excessive Subsidy Recapture

$13.4

Increase the maximum amount of subsidy overpayments that must be repaid to taxpayers under the ACA.

While the President did not specifically propose this he has signed similar policies into law twice already.

Reduction in the Prevention and Public Health Fund

$8.0

Reduces the mandatory spending account created in the ACA that allows the Secretary to spend fund on any authorized public health activities.

The President proposed a reduction of $3.5 billion, but during the bipartisan summer debt discussion savings ranged up to $8 billion.

Parity in Medicare Payments

$8.5

Equalizes certain Medicare payments regardless of where the service is performed.

Not Proposed.

Reduction in Bad Debt Payments

$10.6

Phase-down Federal reimbursements for bad debts owed to hospitals, skilled nursing facilities and other providers from 70%+ to 55% over 3 years.

Proposal reduced payments to 25%, saving $20 billion.

Rebasing of State DSH Allotments

$4.1

Rebase Disproportionate Share Hospital allotments for FY 2021

Same.





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