Washington, D.C. – Congressman Charles Rangel applauded today's passage of H.R. 3630, the Middle Class Tax Relief and Job Creation Act by a vote of 293-132 in the House and 60-36 in the Senate.  The bill extends the payroll tax cut for the remainder of 2012, keeping an average of $1,000 in the pockets of 160 million middle-class families.  The bill also extends unemployment benefits for the millions of Americans who lost their jobs through no fault of their own and ensures that tens of millions of seniors can continue to see the doctor of their choice under Medicare.

“I am pleased that my Republican Colleagues were able to compromise on Democrats’ immediate priorities, protecting America’s middle-class, the unemployed and seniors,” said Rangel.  “The American people just can't afford another Republican holdout like last December.  We can now focus on rebuilding our economy and getting Americans back to work.”

As part of the payroll tax cut extension, New York families with two workers will be able to retain their take-home pay increase of $1,081 through 2012.  The extension of the payroll tax cut is not offset and will cost approximately $93 billion over eleven years.  Revenue that is foregone to the Social Security Trust Funds due to the payroll tax reduction is fully replaced with savings from Treasury’s General Fund.

Unlike the Republican version that would have cut federal Unemployment Insurance (UI) benefits by more than half, and added draconian requirements in order to receive UI benefits, the bill continues federal UI programs through the end of 2012, gradually reducing the number of weeks, and with some adjustments in requirements.  For New Yorkers, it will retain the current maximum level of 93 weeks through May, reduces the maximum to 73 weeks over the summer, and to 63 weeks in September. Each state will be different dependent on its unemployment rate, and will change throughout each quarter of the year. 

Said Rangel:  “Unemployment insurance has kept millions of Americans out of poverty during the economic downfall. It is crucial that we continue to buy time for those struggling with their job search.”

This compromise rejects many damaging offsets originally proposed in the House Republican bill that would have raised the costs for Medicare beneficiaries and caused 170,000 individuals to lose health coverage. The bill that passed today ensures Medicare beneficiaries continued access to their physicians by blocking a 27.4 percent cut in Medicare physician payment rates, scheduled for March 1, 2012, and instead extends current payment rates through December 31, 2012. 

“Thanks to the hard work of Democrats, millions of America's seniors, including 80,000 Medicare recipients in our Manhattan Congressional District, will keep the right to choose their own doctors,” said Rangel.  “I hope that Republicans will continue to join our efforts to help American small businesses, entrepreneurs, manufacturers, and the middle class by passing more portions of President Obama’s American Jobs Act.”

More information on H.R. 3630, the Middle Class Tax Relief and Job Creation Act:

• Through May, unemployed workers will receive the same number of weeks as under current law (or more) – with 89 to 99 weeks available in high unemployment states.

• From June through August – Three of the four tiers of the Emergency Unemployment Compensation (EUC) program will become harder to access because of higher unemployment rate requirements.  Up to 79 weeks of total benefits available in high unemployment States with a few States still receiving more through the Extended Benefits Program (EB).

• From September through December – All States would lose 6 weeks of EUC benefits.  This would cap total unemployment benefits at 73 weeks by this fall.  

• GED and Drug Screening:  Drops draconian provisions in the House GOP bill requiring people to get a GED and allowing blanket drug testing. Instead, the bill permits states to drug screen and test anyone who (1) lost their job because of drug abuse, or (2) is seeking a job that regularly requires a drug test.  

• Job Search Requirements:  Codifies current state practices requiring those receiving unemployment benefits at both the state and federal level to look for a job.

• Re-employment Programs:  Allows the Department of Labor to approve waivers for up to 10 states for re-employment programs. 

• Includes provisions to extend the nation’s primary welfare program, Temporary Assistance for Needy Families, through Fiscal Year 2012 and House GOP provisions ensuring that welfare funds cannot be accessed at ATMs in strip clubs, liquor stores, and casinos.

• Spectrum Auctions:  Authorizes the Federal Communications Commission (FCC) to pay TV broadcasters for underutilized broadcast spectrum and resell it at higher prices to wireless companies to meet the growing spectrum demands of smartphones and tablets.  This is expected to make a large band of prime spectrum available for auction, raising over $25 billion. The bill also provides $7 billion to build a nationwide broadband network for police, firefighters, emergency medical service professionals, and other first responders --  fulfilling the final recommendation of the 9/11 Commission.  The bill also enables and equips 911 call centers to receive emergency text, picture and video messages. Messages during the Virginia Tech shootings and countless other emergencies go unreceived. The legislation also authorizes the FCC to create room for innovative unlicensed uses like Super WiFi. Estimated revenue:  $15 billion over the next 11 years.

• Increased Retirement Contributions for New Federal Employees:   Under the bill, new federal employees (including Members of Congress) would pay 1.5 percent more than current employees enrolled in the Federal Employees Retirement System.  This applies to those joining federal service in 2013, with less than five years of federal service.  Current federal workers would not have to pay more for their benefits, and there is no change in benefits for either new or existing employees.  Estimated revenue:  $15 billion over the next 11 years.

• Blocking 27.4 Percent Cut in Medicare Physician Payment Rates:  Ensures Medicare beneficiaries continue to have access to their physicians by blocking a 27.4 percent cut in Medicare physician payment rates, scheduled for March 1, 2012, and instead extends current payment rates through December 31, 2012.  However, Republicans missed an opportunity to permanently repeal the Medicare sustainable growth rate (SGR) system by stubbornly refusing to use savings from reducing overseas war spending.  Since Republicans failed to either permanently repeal the flawed formula or pay for the debt from the flawed formula, the agreement makes it more expensive to fix the problem next year.  Cost:  $18 billion over 11 years.

• Extension of Transitional Medical Assistance:  Transitional Medical Assistance (TMA) allows low-income families to maintain their Medicaid coverage for up to one year as they transition from welfare to work.  Under current law, TMA expires on February 29, 2012.  The agreement extends TMA until December 31, 2012.  Cost:  $1.1 billion over 11 years.

• Extension of Qualifying Individual (QI) Program:  The QI program assists low-income Medicare beneficiaries with incomes between 120 percent and 135 percent of poverty in covering the cost of their Medicare Part B premium.  Under current law, QI expires on February 29, 2012.  The agreement extends QI until December 31, 2012. Cost:  $600 million over 11 years.  

• Extension of Exceptions Process for Medicare Therapy Caps:  Current law places annual per beneficiary payment limits on outpatient therapy services provided by non-hospital providers; however beneficiaries can get an exception to the cap for medically necessary therapy services.  The agreement extends the exceptions process through December 31, 2012, while also newly applying the caps and exceptions process to outpatient hospitals for the same time period.  Cost:  $700 million over 11 years.

• Other Health Extenders:  Several other health extenders are included in the agreement, including extending the Medicare work geographic adjustment floor, the outpatient hold harmless provision, and the add-on payment for ground and air ambulance services, through December 31, 2012.  Cost: $800 million over 11 years.

• Reducing Medicare Coverage of Bad Debt:  Medicare reimburses providers for beneficiaries’ unpaid coinsurance and deductible amounts after reasonable collection efforts.  Currently, Medicare reimburses providers between 70 and 100 percent of beneficiary bad debt.  The House Republican bill would have lowered Medicare reimbursement for this “bad debt” to 55 percent but, due to Democratic efforts, the agreement modifies that policy so that bad debt will be reimbursed at 65 percent.  Savings:  $6.9 billion over 11 years.

• Reducing Prevention and Public Health Fund:  The Affordable Care Act established the Prevention and Public Health Fund to help shift the focus of the health care system to prevention rather than treatment.  Last year, the Fund invested in proven community-based prevention programs all over the country, serving approximately 120 million Americans.  The House Republican bill would have cut the authorized amount for the Fund by $8 billion.  Due to Democratic efforts, the agreement cuts the Fund by $5 billion instead.  Savings:  $5 billion over 11 years.  

• Rebasing Medicaid State DSH Allotments in 2021:  Medicaid Disproportionate Share Hospital (DSH) payments provide additional payments to hospitals that serve a disproportionate number of low-income patients.  The Affordable Care Act reduced DSH payments, starting in 2014, to reflect the expected decrease in uncompensated care as reform increases the number of patients with insurance.  The agreement extends the DSH payment reductions for an additional year, through FY 2021.  Savings:  $4.1 billion over 11 years. 

• Rebasing Medicare Clinical Laboratory Payment Rates:  Medicare pays for clinical laboratory services under carrier-specific fee schedules subject to national payment limits.  Most lab services receive the national payment.  The agreement reduces clinical lab payment rates by 2 percent in 2013.  Savings:  $2.7 billion over 11 years. 

• Technical Correction to the Disaster Recovery FMAP Provision:  The Affordable Care Act included a provision known as the ‘disaster-recovery FMAP’ designed to help states adjust to drastic changes to FMAP following a statewide disaster.  Once triggered, the policy would provide assistance for as many as seven years following the disaster, as long as the state continued to experience an FMAP drop of more than three percentage points.  The agreement makes a technical correction to recoup monies not intended for disaster relief.  Savings:  $2.5 billion over 11 years.