It’s time for jargon and acronyms, that classic end-of-the-year game on Capitol Hill where serious policy is treated as farce. Here’s an example: The fate of the SGR “fix” might or might not be tied to the timing of the AMT “patch,” and both could influence the fate of UI.
Get all that?
Of course you didn’t. And neither will anyone else, not until the final days of this year of daggers-drawn legislative brawling. Quietly, congressional leaders have set a “goal” of recessing for the year on Dec. 16. They will let things seep into the weekend of the 17th and 18th but fear dithering beyond that will keep lawmakers cooped up in the Capitol until the eve of Christmas Eve. This won’t improve the final legislative product, but enterprising members may be able to schedule one more round of fundraisers.
Deck the halls with boughs of campaign checks.
The most immediate calamity (and actually the only calamity) of the dumpster fire that was the super committee is that a whole bunch of work Congress assumed would be taken care of is now pending. Big decisions with big consequences—on politics and policy—need to be made faster than Walmart can sell out of Xbox 360 consoles (hold the pepper spray, please).
There’s a big list of policy goodies Congress will try to provide this holiday season. As we consider this list, we must also consider a question every cash-strapped American would love to confront while trying to pay for this year’s holiday booty: Can you buy real gifts with phony money?
Congress just might (more on this later).
First, back to jargon and acronyms.
In order from above, SGR stands for sustainable growth rate. That’s the formula Congress has used since 1997 to set reimbursement rates for Medicare-participating doctors. Each year since 2000, the SGR has targeted Medicare doctors for lower reimbursement rates. Each year the doctors have fought against the lower rates. The Center for Medicare and Medicaid Services projects next year’s cut at 27.4 percent. To stop that, Congress will pass a temporary “fix,” which isn’t a fix at all. It’s just a delay of the pending SGR formula. The one-year cost is about $21 billion, according to the Congressional Budget Office.
The AMT “patch” is another annual ritual Congress goes through, this time to protect middle-income taxpayers from finding themselves in a higher tax bracket designed in 1969 (and called the alternative minimum tax) to catch the super-rich who craftily avoided paying income taxes. There was an AMT “patch” in the 2010 lame-duck tax deal. Rates are scheduled to rise significantly next year for at least 20 million taxpayers. It costs about $65 billion for this “patch.” Must be silk from Hermes.
UI is unemployment insurance. The current policy of providing up to 99 weeks of jobless benefits is due to expire in February. That will stop checks for 2.2 million Americans. President Obama and congressional Democrats want this eligibility extended for another year. The price tag: $50 billion.
There’s one other item on the holiday shopping list. It has no jargon or acronym; it’s just a misfit toy. It’s the 2 percent payroll-tax cut passed in 2010. Obama wants it extended another year (and would like to make it twice as generous). It costs about $110 billion to extend the current payroll tax for one year ($265 billion for Obama’s more generous version). Obama wants to pay for these temporary tax breaks with a permanent 3.25 percent surtax on millionaires. Republicans like this idea as much as the Grinch likes who-hash.
For those keeping score at home, the cost of jargon and acronyms (and one misfit toy) is $255 billion, and $410 billion if you add in Obama’s more generous payroll-tax cut. How could Congress pay for all this?
With spending cuts?
Only if the eggnog is spiked with moonshine.
A more tempting scenario, and one very much a topic of hushed conversations on K Street and paneled leadership offices, is to use funds available for future combat operations in Iraq and Afghanistan.
Which brings us to one last acronym. OCO. That stands for Overseas Contingency Operations. Right now, the Congressional Budget Office assumes Congress will spend roughly what it’s spending now for the wars in Iraq and Afghanistan, even though the war in Iraq ends this month and all U.S. troops are due to leave Afghanistan by the end of 2014. The CBO will count as “savings” up to $1 trillion in projected war-fighting costs that everyone knows will never be requested or spent.
In the rush to “pay for” the jargon and acronyms listed above, important policies all, Congress may be tempted to pay for real programs with phony money. The costs will be real. The savings will not. It hasn’t happened yet, but it could.
And if it does, a strange holiday miracle will come to pass. Congress will have turned nothing into something. From a fiscal standpoint, that something will be a lump of coal.
This article appears in the November 30, 2011 edition of NJ Daily.