House, Senate Approve Payroll Tax Cut, Unemployment Insurance Extension

Posted on February 21, 2012 by Ilyse Schuman

Updated: February 23, 2012

As expected, both chambers of Congress approved the conference report to the Middle Class Tax Relief and Job Creation Act of 2012 (H.R. 3630) before adjourning for the Presidents’ Day recess. The measure extends the 2% payroll tax cut and emergency unemployment insurance benefits through December 2012, and delays the planned cut of Medicare reimbursement rates to doctors, commonly known as the “doc fix” provision. The conference report reconciled the differences between the House and Senate versions of the legislation. The House approved the changes made by the conference report in a 293-132 vote. The Senate approved the measure 60-36 shortly thereafter.

Generally, the bill extends through 2012 the reduction (to 4.2%) in the employee-paid portion of social security payroll taxes. The emergency unemployment insurance program is similarly extended through December 2012, although the number of weeks individuals would be entitled to collect benefits would be contingent on the rate of unemployment in their home state. Moreover, as explained in the Joint Statement of Managers (pdf) accompanying the conference report, the tiered unemployment benefits system would be restructured, resulting in fewer weeks of benefits.

The measure also delays the imposition of a 27% cut in reimbursements to doctors who provide services covered by Medicare.

The bill is funded, in part, by increased federal employee pension fund contributions. More information on this legislation can be found here.

President Obama has stated that he would sign this bill into law as soon as he receives it.

Update: On February 22, 2012, President Obama signed this measure into law.
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President Signs Bill Providing Temporary Extension of Expiring Benefits

Posted on December 23, 2011 by Ilyse Schuman

Ending a political stalemate, both the House and Senate on Friday approved a measure that provides a two-month extension of the payroll tax cut, emergency unemployment insurance benefits, and delay in the planned cut of Medicare reimbursement rates to doctors, commonly known as “doc fix” provisions. President Obama signed the Temporary Payroll Tax Cut Continuation Act of 2011 (H.R. 3765) into law hours later. This bill is similar to legislation (H.R. 3630) the Senate approved last Saturday, but includes provisions allowing businesses to use their current accounting structure to process the temporary payroll tax break, and will require the House and Senate to work together to draft a bill that would extend these provisions for all of 2012.

In a press release, bill sponsor Rep. David Camp (R-MI) said that the amended bill “fixes a critical flaw in the hastily passed Senate bill, which failed to provide employers with a workable mechanism with which to implement a partial-year payroll tax holiday.”

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Obama Signs "Doc Fix" Bill Containing Pension Funding Relief Measures into Law

Posted on June 25, 2010 by Ilyse Schuman

On Friday, President Obama signed into law the Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act (H.R. 3962), (pdf) legislation commonly known as the “doc fix” bill. This measure reverses a 21 percent payment cut for doctors in Medicare and TRICARE, updates the physician payment formula through November 30, 2010, and provides temporary, targeted funding relief for single employer and multiemployer pension plans that suffered significant losses in asset value due to the 2008 financial downturn. On Thursday, the House of Representatives overwhelmingly approved this measure by a 417-1 vote. The Senate cleared this bill last week after the larger tax extender bill failed to gain sufficient support.

With respect to the pension funding relief provisions, according to a summary (pdf) of the bill, “[e]mployers that elect the relief would be required to make additional contributions to the plan if they pay compensation to any employee in excess of $1 million, pay extraordinary dividends, or engage in extraordinary stock buybacks during the first part of the relief period. Additional relief is available to certain plans sponsored by charitable organizations.”

As outlined in the legislation, single employer plan funding relief measures include: extended period for single employer defined benefit plans to amortize certain shortfall amortization bases; application of an extended amortization period to plans subject to prior law funding rules; lookback for certain benefit restrictions; and lookback for credit balance rule for plans maintained by charities.

Multiemployer plan funding relief measures include adjustments to funding standard account rules, such as expanded “smoothing” periods for losses incurred during the period of economic decline; and modification of certain amortization extensions under prior law, among other provisions.
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Senate Approves Pension Funding and "Doc Fix" Bill; Larger Tax Extender Bill Stalls

Posted on June 21, 2010 by Ilyse Schuman

On Friday, the Senate unanimously approved the Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act, (pdf) a bill that reverses a 21 percent payment cut for doctors in Medicare and TRICARE, updates the physician payment formula through November 30, 2010, and provides temporary funding relief for single- and multi-employer pension plans that suffered significant losses in 2008. With respect to the pension relief provisions, according to a summary, (pdf) employers that elect the relief would be required to make additional contributions to the plan if they pay compensation to any employee in excess of $1 million, pay extraordinary dividends, or engage in extraordinary stock buybacks during the first part of the relief period. Additional relief would be available to certain plans sponsored by charitable organizations. The legislation now needs approval by the House.

This last-minute compromise comes after the Senate on Thursday failed to move forward a more expansive “tax extender” bill, the American Jobs and Closing Tax Loopholes Act (H.R. 4213). (pdf)  On Wednesday, Senate Finance Committee Chairman Max Baucus (D-MT) unveiled an amended version of the bill in order to reduce its price tag from $140 billion to $110 billion. Generally, this measure would have continued a number of individual and business tax cut programs and extended emergency unemployment, in addition to providing a number of pension funding relief measures.

This bill had been gradually scaled back over the last few weeks in the hope of gaining sufficient support. In May, the House approved this legislation once COBRA premium subsidy extensions were dropped. Last week, the Senate introduced a substitute version of the bill that lacked certain defined contribution pension plan fee disclosure provisions. After it became evident Wednesday that the Senate did not have enough votes to limit debate on the bill, Baucus introduced the trimmed down draft. Despite Baucus’s efforts to reduce the bill’s costs, however, the Senate voted 56-40 – four votes shy of the necessary 60 – to limit debate on the measure and submit it to the Senate floor for a final vote.

During yesterday’s Senate session, Sen. Robert Casey (D-PA) offered an amendment (S. Amt. 4371) to the bill that would extend the COBRA premium subsidy program through November 2010. In urging approval of his amendment, Casey stated that “[w]ithout the extension of the COBRA Premium Assistance Program, a report from the National Employment Law Projects predicts as many as 150,000 Americans each month will lose out on the subsidies necessary to afford quality health care.” At this point, however, the fate of the tax extender bill – and its amendments – is unclear.
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