WASHINGTON – The House voted on Friday to avoid cuts estimated at $ 36 billion in medicare next year and tens of billions more in farm subsidies and other social protection programs, in order to ‘Avoid deep spending cuts that would otherwise be made for A $ 1.9 trillion stimulus bill was passed last week.
The action, opposed by the vast majority of Republicans, would effectively exempt President Biden’s pandemic assistance program from a deficit reduction law that requires all spending to be offset by automatic and widespread cuts by some. government programs. It was passed by a vote of 246 to 175, with 29 Republicans joining Democrats in backing it.
In adopting the virus aid plan, Democrats used a fast-track budget process to overtake Republican opposition, arguing that urgent needs brought on by the pandemic outweighed concerns about rising national debt. But the maneuver meant Congress had to act separately to prevent the automatic cuts, which would take effect in January if lawmakers failed to act.
Democrats remained convinced that even if they opposed the stimulus package, Republican senators would end up supporting legislation to avoid cutting Medicare, farm subsidies, and block grants to social services to pay them off. . But the debate provided an opportunity for members of both sides to present their dueling arguments over government spending priorities after the enactment of one of the most expansive federal bailouts in modern times.
In an address to the House, Representative John Yarmuth of Kentucky, chairman of the Budget Committee, described the bill as “a cowardly end that we must tie up before our work is done.” He argued that the legislation would put the stimulus bill on a par with previous pandemic relief bills passed under the Trump administration. All of these bills were approved by an overwhelming bipartisan majority and waived the demand for corresponding spending cuts.
Voting Margin indicated waiver legislation could be negotiated later in the year, as lawmakers approach a deadline to address the debt ceiling and dozen bills. spending necessary to maintain government funding. It’s unclear when the measure will be taken in the Senate, where 10 Republicans are expected to join Democrats for it to become law. Similar waivers have been repeatedly approved regardless of the party.
The politically unpopular specter of drastic cuts to health insurance during a pandemic is likely to prompt lawmakers to strike a deal before the end of the year.
“Very few of them would actually want the pay-go escrow to strike,” said Marc Goldwein, senior vice chairman of the Committee for a Responsible Federal Budget, a group that urges budget cuts. Mr Goldwein predicted that Republicans would likely end up voting for a waiver, as part of a larger deal. “They can try to get something in return.”
The stimulus payout debate stems from a 2010 law known as the PAYG Act, which requires certain deficit spending to be automatically offset by cuts to federal programs. Typically, when Congress wanted to spend big, it also voted to ignore this rule. But because the recent pandemic relief bill was passed using a special budget process called reconciliation, a waiver could not be included.
The Congressional Progressive Caucus has called for the law to be removed to avoid automatic cuts.
Stimulus payments would be $ 1,400 for most recipients. Eligible people would also receive an identical payment for each of their children. To qualify for the full $ 1,400, a single person would need an adjusted gross income of $ 75,000 or less. For heads of households, the adjusted gross income should be $ 112,500 or less, and for married couples reporting jointly, this figure should be $ 150,000 or less. To be eligible for payment, a person must have a social security number. Read more.
Buying insurance through the government program known as COBRA would temporarily become much cheaper. COBRA, for the Consolidated Omnibus Budget Reconciliation Act, generally allows a person who loses a job to purchase coverage through the former employer. But it’s expensive: under normal circumstances, a person may have to pay at least 102% of the cost of the premium. Under the relief bill, the government would pay the full COBRA premium from April 1 to September 30. A person who qualified for new employer-based health insurance elsewhere before September 30 would lose their eligibility for coverage at no cost. And someone who voluntarily quit their job would not be eligible either. Read more
This credit, which helps working families offset child care costs for children under 13 and other dependents, would be significantly expanded for just one year. More people would be eligible and many beneficiaries would benefit from a longer break. The bill would also make the credit fully refundable, meaning you could collect the money as a refund even if your tax bill was zero. “This will be helpful for people at the bottom of the ladder,” said Mark Luscombe, senior federal tax analyst at Wolters Kluwer Tax & Accounting. Read more.
There would be a big one for people already in debt. You would not have to pay income tax on the forgiven debt if you qualify for forgiveness or loan cancellation – for example, if you followed an income-based repayment plan during the number years required, if your school defrauded you, or if Congress or the President pays off $ 10,000 in debt for a large number of people. This would be the case for the debt canceled between January 1, 2021 and the end of 2025. Find out more.
The bill would provide billions of dollars in rent assistance and utilities to people in difficulty and at risk of eviction from their homes. About $ 27 billion would go to emergency housing assistance. The vast majority of it would replenish the so-called coronavirus relief fund, created by the CARES Act and distributed by state, local and tribal governments, according to the National Low Income Housing Coalition. This is in addition to the $ 25 billion in assistance provided by the relief plan adopted in December. To receive financial assistance – which could be used for rent, utilities, and other housing expenses – households would have to meet several conditions. Household income cannot exceed 80% of the area’s median income, at least one member of the household must be at risk of homelessness or housing instability, and individuals should be entitled to unemployment benefits or have experienced financial hardship (directly or indirectly) due to pandemic. The assistance could be provided for up to 18 months, according to the National Coalition for Low Income Housing. Low-income families who have been unemployed for three months or more would receive priority assistance. Read more.
The Congressional Budget Office, in a letter to Representative Kevin McCarthy of California, the minority leader, estimated that without the waiver enacted before the end of the calendar year, $ 36 billion would be cut from Medicare spending – 4 percentage points – in 2022 alone and billions more from dozens of other federal programs. Many mandatory spending programs could be postponed altogether, including Block Grants for Social Services, a Department of Justice program that provides assistance to victims of crime, and the Black Lung Disability Trust Fund.
Waiver bills of this type were usually passed on time to avoid major cuts. In 2017, after Republicans passed their $ 1.5 trillion tax cut, also using the budget reconciliation process, many Democrats voted to prevent automatic spending cuts on a project. end-of-year financing law.
“We have to work together, as we did for you when you gave tax cuts to the wealthiest Americans,” Illinois Democratic Representative Jan Schakowsky said in a comment to Republicans.
Republican lawmakers criticized Democrats for creating their own problem, arguing that there would be no need for a separate vote to avoid the cuts if the stimulus package had been bipartisan.
“We are here today because Democrats want to ‘solve’ one of the many problems caused by President Biden’s $ 1.9 trillion bailout bill,” said Rep. Jason Smith of Missouri, the main Republican on the budget committee. “They want to do it by simply wiping $ 1.9 trillion in spending off the nation’s books – pretending that $ 1.9 trillion in spending won’t happen.”
The Conservatives see the confrontation as an opportunity to criticize the Democrats’ overspending.
“I think it would be irresponsible not to do something about the level of overspending,” said Matthew Dickerson, director of the Grover M. Hermann Center for the Federal Budget at the Heritage Foundation. He said Republicans should use the impending cuts as leverage to pressure Democrats to agree to new measures to cut federal spending.