What’s on Congress’ Christmas list?
Move about $275 billion in spending/extending lower tax rates alongside three-quarters of the bills responsible for funding the federal government.
Bankrupting America has a terrific breakdown of just what Congress has to get done before year’s end, excepting some sort of temporary punting maneuver that would just slide all of this into the first few weeks of 2012.
The fiscal year’s government funding
- “So far Washington has only passed three of the 12 spending bills needed to ensure the government remains open. For the nine spending bills that haven’t been signed into law, Congress has passed temporary stopgap funding bills, also known as Continuing Resolutions (CRs). The current CR will expire on December 16.”
Medicare’s Payment to Doctors - the “Doc Fix”
- Back in 1997, Congress passed a bill (called The Balanced Budget Act) that mandated a different way of determining payments to the doctors of Medicare beneficiaries that, shall we say, put a dent in your local MD’s checkbook. Every year, Congress puts in what’s called the “doc fix” to prevent that old 1997 law from going into effect at the cost of around $15 billion.
Emergency Unemployment Insurance
- As part of the 2009 stimulus legislation, unemployment insurance was upped from a maximum of roughly 26 weeks (it varies state to state) to 99 weeks. Congress has to decide whether to keep this support going for an estimated 1.8 million Americans at a cost of $56.5 billion.
Payroll Tax Holiday
- A two percentage point cut (to 4.2 percent from 6.2 percent) to the Social Security payroll tax is also up for grabs - although both parties support it, they can’t decide how to pay for it (it wasn’t paid for last year) to the tune of $111.7 billion.
- "Many tax code provisions will also expire at the end of this year. Some of these provisions may not be renewed but many are likely to be, including the research and development tax credit. These expiring provisions generally ‘…fall into a group of tax deductions, credits and provisions — now known as ‘extenders’ — which Congress has repeatedly renewed, but never makes permanent, simply because it doesn’t want to acknowledge their true costs.’" Total cost? Somewhere north of $20 billion.
Alternative Minimum Tax (AMT)
- “The stated goal of the AMT was to make sure the wealthiest Americans owed some income taxes… The AMT isn’t indexed for inflation, which means more and more middle class families now fall under the AMT. To limit the impact of the AMT, Congress traditionally passes a ‘patch.’ ‘Patching’ means raising the income level automatically exempt from the AMT, usually for one year or two.” Cost: roughly $70 billion.