Democrats scale back 'doc fix,' COBRA subsidy in jobs bill

Without congressional action this week on a tax "extenders" and jobs bill, a number of benefits, including a subsidy for COBRA health insurance benefits for newly laid-off workers, will expire.

The New York Times: "House Democratic leaders spent much of Wednesday trying to figure out ways to pare back the measure to attract enough votes for a bill that is chock-full of provisions Democrats would typically embrace — extended jobless pay, health insurance subsidies for the unemployed, a summer jobs program and a tax increase on wealthy investors." As House Democrats aim for a vote today, they cut $40 billion from the bill by scaling back a fix to the Medicare doctor reimbursement rate and by extending unemployment benefits for a month less than originally proposed. "Aides said the changes would result in about $90 billion of the measure's overall costs of around $150 billion being branded as emergency spending and added to the deficit — a level they hoped a majority could swallow" (Hulse, 5/26).

The Hill: "Republicans have demanded that any large-scale extension be paid for in accordance with the pay-as-you-go (PAYGO) rules approved by the House and the Senate earlier this year. [Senate Majority Leader Harry] Reid said the spending bill before the Congress was an 'emergency' with the economy as bad as it's been, and that voters would 'understand' why the spending wouldn't be offset by spending cuts elsewhere. 'We have some emergencies,' he said. 'We believe that the American people understand that there are things that are emergencies'" (O'Brien, 5/26).  

The Washington Post: "House leaders scheduled a Thursday vote on the slimmed-down package in hopes of pushing it through both chambers before the 10-day Memorial Day recess, which is scheduled to begin Friday." If the House and Senate don't pass the bill and send it to the president by June 1, "millions of people could cease to be eligible for up to 99 weeks of jobless benefits and doctors' Medicare payments could fall by [21] percent." Republicans say any added deficit spending is irresponsible (Montgomery, 5/27).

The Wall Street Journal/Dow Jones Newswires: "The revised bill will postpone scheduled cuts in Medicare payments to doctors for 19 months, instead of the 3 1/2 years included in a version of the bill introduced last week. Democratic leaders also trimmed the extension of unemployment benefits and COBRA health-insurance subsidies by one month, so that those programs would now be extended through the end of November 2010, according to a House Democratic aide." The Congressional Budget Office has not released a cost projection for the bill (Vaughan, 5/26).

Politico: The shortened jobless benefits will save $8 billion, while still including a 65 percent subsidy for COBRA benefits -- to help those newly laid off stay on their former employer's health benefits. The scaled-back "doc fix" will save more than $43 billion from the final cost of the bill. "Republicans argue that this is a problem Democrats brought on themselves by not addressing the 'doc fix' in the health care debate — when it would have raised their costs. But frustrated health care experts say both parties are kicking the can — and physicians — down the road and missing a chance for a more permanent solution and reforms" (Rogers, 5/26).

The Associated Press: "If the [Medicare reimbursement] problem is allowed to fester, it could undermine key goals of President Barack Obama's health care overhaul, which envisions using Medicare to test ideas for improving the quality of care for all Americans. Doubts about Medicare's stability can also create political problems for Democrats in the fall elections, since polls show seniors are worried about the impact of the remake on their own care." Democrats at first seemed to favor a a five-year fix, and then reduced that approach to a three-year plan. "Now leaders are proposing postponement through the end of 2011. Doing away with the cuts altogether would be expensive, an estimated $200 billion or more over 10 years. That's what the American Medical Association wants" (Alonso-Zaldivar, 5/27).

CongressDaily: "Meanwhile, physicians' groups and senior lawmakers like House Energy and Commerce Chairman Henry Waxman are upset about the scaled-back physician payments. 'I must say, I'm just very disappointed in the direction this has taken,' Waxman said" (Cohn, 5/27).

Bloomberg Businessweek: "The decision [to scale the 'doc fix' back] came after the AARP, the American College of Physicians and the American Osteopathic Association urged lawmakers yesterday to stick to their plans for a 3½-year postponement. [AMA] President J. James Rohack said in a statement, 'It is disappointing that Congress is considering an even shorter temporary action at the 11th hour. Everyone agrees that the current payment system is fatally flawed and delaying solving the problem will make the problem bigger'" (Faler and Donmoyer, 5/27).

Roll Call: Democrats also are uneasy about the amount of time it is taking lawmakers to hash out differences between the House and Senate on the bill. "House Democrats already feel burned that they have voted for scores of bills that are languishing in the Senate, and they don't want to get burned again." Reid tried to address these worries, but "stopped short of saying he had the votes." ... Senate aides said they appeared to be in better shape to get the votes for the package than the House was" (Dennis, 5/26).

Reuters: "Senate Democratic Leader Harry Reid has threatened to keep the chamber in session through the weekend to get the bill passed before June, when unemployment benefits and other safety net provisions expire" (Sullivan and Dixon, 5/26).