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Senate Passes Pension Rule Provisions (Update)

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The Senate agreed unanimously today to pass a version of H.R. 3962 that would ease pension funding rule changes sought by employer groups and reverse a 21% cut in Medicare and military health plan physician reimbursement rates.

The relatively short, 78-page bill, a substitute version of H.R. 3962 offered by Sen. Max Baucus, D- Mont., helped the Senate get the pension funding provisions and the Medicare reimbursement provisions past budget deficit concerns that have slowed the progress of a broader bill, H.R. 4213.

The H.R. 3962 pension funding provisions would give pension plan sponsors more time than they now have to make up funding shortfalls, but sponsors that paid any employee more than $1 million, paid extraordinary dividends, or engaged in extraordinary stock buybacks would have to make extra plan contributions.

The Medicare provisions would put off the reimbursement rate cuts for 6 months. The cuts were set to take effect today.

Versions of H.R. 4213 being debated on the Senate floor this week included the pension and Medicare reimbursement provisions, along with many other provisions. Lawmakers have seen H.R. 4213 as a vehicle for renewing an unemployment benefits extension program, extending many popular tax breaks, and, possibly, extending the 65% federal COBRA health benefits continuation subsidy and updating the estate tax rules.

A day before the Senate passed H.R. 3962, Republicans and some Democrats were saying H.R. 4213 was too expensive.

Members of the Senate voted 45-52 Wednesday to keep one version off the Senate floor, and 56-40 Thursday to block an effort to get a revised bill to the floor by passing a cloture motion, or limit on debate, which needed 60 votes to pass.

Senate Majority Leader Harry Reid, D-Nev., rose Friday morning to blast Republicans’ decision to reject the H.R. 4213 cloture motion. “Our agenda has been so difficult because everything, with no exception, that we have tried to do has been stalled,” Reid said.

Sen. Jeff Sessions, R-Ala., said some Democrats joined Republicans in voting against cloture on the broader bill because they believe the revised version of H.R. 4213 is still too expensive. The revised version is supposed to add just $55 billion to the federal budget deficit over 10 years, down from $78 billion, but “the number is a distortion,” Sessions said.

The apparent change in the amount added to the deficit is the “result of double counting certain funds and simply shortening the time some of the provisions would take effect,” Sessions said.

A few hours later, after H.R. 3962 passed, Reid said he was happy he and Senate Minority Leader Mitch McConnell, R-Ky., were able to work out a compromise on that bill.

“This is a good example of bipartisanship here,” Reid said. “I think we’ve come up with a proposal that achieves a goal that both sides wanted to achieve, which was to get a doctor fix for at least a 6-month period of time.”


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