This holiday season, the president isn’t asking for anything new--he just doesn’t want to lose what he already has. The super committee’s failure means that five programs--some that cut, some that spend, and all of which cost millions--now face a 2012 expiration date. President Obama seems to be devoting all his energy to the item on the top of his list: the payroll-tax cut. We review what the White House is doing—or not doing—to see that each extension is granted and what’s at stake should Congress not act in time.
Payroll-tax cut, $250 billion: Obama has urged Congress to extend payroll-tax cuts to employees and employers in his first address after the super committee's failure and then again in Manchester, N.H., last week, and he'll do it again on Wednesday during a speech in Scranton, Pa. It’s easy to see why the president would spend so much time stumping for the bill: Its vote will position congressional Republicans to decide between tax breaks for middle-class Americans and tax breaks for those making more than $1 million. According to the White House, the average American family would save $1,500 with an extension or lose $1,000 if the cut expires. The bill is sponsored by Sen. Robert Casey, D-Pa., who estimates an extension would cost $250 billion but would be fully offset by an increased tax on the wealthiest Americans.
Unemployment benefits, $45 billion: Although the extension of payments for the unemployed has not been one of the president’s top talking points thus far, the White House maintains that it is committed to its passage. “It’s vitally important to extend it and to assist those Americans who are unemployed, and to, through the unemployment insurance, assist the economy,” said White House press secretary Jay Carney on Monday. If the extension does not pass, 2.1 million Americans would lose their benefits by mid-February and 6.1 million would lose them by the end of 2012. But Senate Republicans will block the extension if it adds to the deficit. The Congressional Budget Office estimates a reauthorization would cost a minimum of $45.25 billion to extend emergency benefits alone. A spokesman for Sen. Orrin Hatch, R-Utah, ranking member of the Senate Finance Committee, said, “If these benefits are to be extended, then we need to find a way to ensure they don’t add to the nation’s over $15 trillion debt.”
The “doc fix,” $22 billion: A patch to keep doctors from seeing a large cut in payments for treating Medicare patients known as the “doc fix” could reveal a 27.4 percent hole in payments if dismantled this year. Currently, doctors get paid for seeing Medicare patients based on a calculation dating to the 1990s. The fix would raise their payments to more-current levels. That’s a boost many doctors say they need in order to keep seeing Medicare patients. The Congressional Budget Office estimates a one-year patch would cost $22 billion over 10 years, while a permanent fix would cost $300 billion over 10 years. The Obama administration says it is confident the patch will come in time to save the options currently available to Medicare patients, but a senior Washington lobbyist told The Huffington Post that ideological differences over tax increases blocked such a proposal in super-committee deliberations.
Alternative minimum tax, $1.5 billion: The AMT was created to prevent the wealthiest Americans from using excessive tax breaks to reduce or eliminate their liability to the government. The tax is not adjusted for inflation, so every year, more people fall subject to the AMT. Until now, Congress has kept the effects from running too deep, but without yearly preventative action, families with incomes as low as $30,000 could face a new set of taxes, according to The New York Times. Obama has proposed wiping out the tax but has yet to comment on it since the committee's failure. The Congressional Research Office estimates the adjustment would cost $1.5 billion over 10 years.
Transit benefits, cost unknown: Known to Washington Metro riders as “Smart Benefits,” the program that allows public-transit fees to be deducted from paychecks and applied to fare cards before taxes, could come to an end at the end of the year. Federal transit agencies say its demise could cause ridership to drop. Rep. Earl Blumenauer, D-Ore., sponsored the expansion of the program as a standalone, but the text of the bill has yet to be received or its cost determined. The president has not mentioned the extension publicly, although improvements in transportation have previously ranked high on Obama’s list of priorities—and on Republicans' list of bills to block.
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