Bill of Extenders and Tax Breaks May Include Doc Fix
Policymakers will soon be focusing on passing a new package of extenders and tax breaks that – at a potential cost of around $200 billion over ten years – may get pushed through Congress before Memorial Day. Among other things, the bill would prevent a 21 percent cut in Medicare reimbursements to physicians, scheduled to take effect June 1st, from occurring for five years.
This fix, which is exempt from statutory pay-as-you-go requirements, would cost more than $80 billion over the next five years, but would do nothing to repair the Sustainable Growth Rate (SGR) formula which calls for these cuts in the first place. As a result, when this fix expires, physician payments will have to be cut by 30% -- a scenario future Congress’s will most likely avoid through further deficit financing. Extending the ‘Doc Fix’ through 2020 could cost nearly $200 billion beyond the original $80 billion in the first give years. Technically, updates to physician payments through 2015 are considered current policy exemptions to the statutory PAYGO law. However, such patches are not exempt from House and Senate PAYGO rules.
Other details that have emerged about the bill indicate that it could include:
- $5 billion towards minority farmers' discrimination claims, as well as settlement on the mismanagement of funds for American Indian tribes.
- A $35 billion tax package that would revive provisions such as the research and development tax credit and the state sales tax deduction. This would not be exempted from PAYGO rules.
- Around $80 billion for doc fix, which would be exempted from PAYGO under current policy exemptions.
- Around $80 billion for extending unemployment insurance, COBRA health subsidies for laid-off workers and Medicaid reimbursements to states. This would be exempt from PAYGO under emergency fund designation.
CRFB issued a press release on this topic yesterday, which can be seen here.