Political
Struggle in Congress Delayed, Not Resolved
Published: December 26, 2011 - New York Times
WASHINGTON — When Congress handily passed a bill to set payroll
tax rates, jobless benefits and Medicare
doctors’ fees for the next two months, it seemed to end an epic political
struggle between President
Obama and Republicans on Capitol Hill. In fact, that was just the beginning.
Every issue in dispute remains unresolved, waiting to be addressed when
Congress returns next month for an election-year session in which agreements
could be even more elusive.
Basically, the new law, signed on Friday by Mr. Obama, preserves the status
quo through February, so House and Senate negotiators can try to reach
longer-term agreements on the Social
Security payroll tax, unemployment insurance, Medicare and a few other
issues, like the shape of the welfare program that provides cash assistance to
more than 4.6 million poor people.
The law says that Mr. Obama shall grant a permit within 60 days for
construction of the Keystone
XL oil pipeline, from Canada to the Gulf Coast, unless he finds that the
project “would not serve the national interest.” Republicans in Congress are
already looking for additional ways to put pressure on Mr. Obama if he blocks
the pipeline or delays a decision.
Under growing political pressure, House Republican leaders accepted
the two-month extension of payroll tax relief. But many rank-and-file
members of the House Republican caucus said they doubted that the tax break
would do much to stimulate the economy and saw no urgent need to continue it for
10 more months. By contrast, Mr. Obama and Congressional Democrats say the
payroll tax cut is needed to bolster the economy.
An extension of the tax cut and jobless benefits “should be a formality,” Mr.
Obama said. But he added, “We have a lot more work to do,” and said he expected
“some tough fights.”
Even if Democrats and Republicans could agree on extending the payroll tax
cut, they fundamentally disagree about how to offset the additional cost, $100
billion for the last 10 months of 2012.
The Senate majority leader, Harry Reid of Nevada, made clear on Friday that
Democrats would keep pressing for a tax surcharge on individual income over $1
million — a demand dropped by Democrats in talks that led to the two-month
compromise.
“There should be a fair tax on rich people,” Mr. Reid said.
With a few exceptions, Republicans in Congress have opposed a “millionaires’
tax,” saying it would hurt the economy and people who create jobs.
House Republicans would pay for the legislation, in part, by freezing the pay
of federal employees through September 2013.
Democrats generally oppose that idea.
A 20-member conference committee will try to work out differences between the
House and the Senate on a yearlong bill. Mr. Reid said he had appointed Senator
Benjamin L. Cardin of Maryland to the panel because he knew that Mr. Cardin
would guard the interests of federal employees. More than 275,000 federal
workers live in Maryland.
The fate of the main federal-state welfare program, Temporary Assistance
for Needy Families, was largely overlooked in the fight over payroll taxes.
Money and the legal authority for the welfare program were due to run out on
Dec. 31.
Jennifer Hrycyna Wagner, the welfare director in Illinois, said state
officials around the country feared a possible interruption in benefits and
services for “our most vulnerable residents.”
Congress extended the program for two months, but its future beyond that is
up in the air. If Congress provides additional welfare money, it is likely to
come with new conditions.
Many states deliver cash assistance using electronic benefit transfer cards.
The House has voted twice this month to forbid use of the cards at any liquor
store, casino or strip club — any “retail establishment which provides
adult-oriented entertainment in which performers disrobe or perform in an
unclothed state for entertainment.”
Several states have been embarrassed by the disclosure that welfare
recipients were claiming benefits at such places.
Representative Gwen Moore, Democrat of Wisconsin, opposed the restriction,
saying it would “humiliate and marginalize” poor people.
“In many neighborhoods,” she said, “the closest A.T.M. is located in a nearby
liquor store.”
Some state officials also question the provision. Miki Allard, a spokeswoman
for the Nevada Department of Health and Human Services, said: “It may be very
appropriate for our public assistance recipients to access benefits from casino
machines. A large proportion of our clients work in casinos. They are not there
to gamble. They are there to work.”
A bigger fight looms over unemployment insurance. House Republicans want to
reduce the maximum duration of benefits to 59 weeks, from 99. They would allow
states to require drug testing. And they would require most recipients of
jobless benefits to search for work and to enroll in G.E.D. programs if they had
not completed high school. Republicans also want to allow waivers of federal law
so some states could divert money from the payment of benefits to the retraining
of workers. Democrats oppose most of those ideas, saying they would cut a
lifeline for millions of people who have been out of work for a year or more.
Senator Jack Reed, Democrat of Rhode Island, will be a member of the
House-Senate conference committee. In picking him, Mr. Reid noted that Rhode
Island had high unemployment and said “no one in the Senate has been more
protective of the unemployed.”
The negotiators will also try to find a new way to pay doctors treating
Medicare patients, to avoid the continual threat of deep cuts in fees.
Unless Congress steps in, doctors will see a 27 percent reduction in Medicare
reimbursements in March. As a result of such cuts, lawmakers say, many older
Americans could lose access to their doctors, because doctors would be less
willing to take Medicare patients.
One of the five House Democrats named to the conference committee,
Representative Allyson Y. Schwartz of Pennsylvania, is drafting legislation to
scrap the current payment formula, which penalizes doctors if Medicare spending
on physician services exceeds annual goals linked to growth of the nation’s
economy.