Details of the $143 billion economic package
By Paul Kane,
Details of the $143 billion economic package include several key extensions of current law as well as almost $50 billion worth of offsetting savings from spending cuts and new revenue. Here are the key details of the provision, provided by congressional committees and the budget office:
Extensions of economic provisions: $142.6 billion
●Payroll tax holiday: For the rest of this year, workers will have just 4.2 percent of their earnings withheld from their paychecks as opposed to 6.2 percent. This holiday was first established at the start of 2011; in September, President Obama proposed dropping that rate to 3.1 percent for both workers and their employers. Instead, Congress voted to maintain the existing holiday, providing $94.5 billion in extra cash for workers — more than $80 a month for the average worker earning $50,000.
●Unemployment benefits: The bill continues the insurance program for the jobless, at a cost of $30.1 billion. New reforms will bring the maximum tenure on unemployment down from its current length of 99 weeks in the hardest-hit states to 63 weeks in most and 73 weeks in states with the highest unemployment rates.
●Doctor fix: Under current law, the reimbursement rates for doctors providing Medicare was set to drop 27 percent after Feb. 29, based on a 1990s funding formula that is regularly tweaked to avoid the drop in fees. This extends existing payment rates through December, at a cost of $18 billion.
Offsetting savings: $48.9 billion
●Spectrum auction: The federal government would raise a net total of $15.2 billion by selling public frequency channels to telecommunications corporations. This includes funds that would be diverted into maintaining a special channel for emergency first responders to communicate during disasters.
●Federal pensions: New federal employees would have to contribute 2.3 percent more to their pensions than current employees, raising $15.5 billion. Negotiators had sought to spread the pension increase among all federal employees, but key Maryland lawmakers objected and limited the increase to new federal workers.
●Health-care cuts: More than $18 billion in savings come from cuts to Medicare providers and some portions of Obama’s 2010 health-care law. Those include slashing $5 billion from a prevention fund that is designed to help primary-care doctors prevent illness; reducing extra Medicaid payments to Louisiana that began after Hurricane Katrina; and nearly $10 billion in savings from reduced payments to hospitals and nursing homes who provide laboratory services to patients who do not fully pay for their care.
— Paul Kane