After intense negotiations, Congress has passed and the President signed into law a bill that averts the so-called “fiscal cliff.” The fiscal cliff was a drastic convergence of increased taxes and reduced spending that could have propelled the country into another recession. Vice President Joe Biden and Senate Minority Leader Mitch McConnell (KY) led the final conversations and the deal includes compromises on both sides of the aisle.
The package contains several tax provisions including an extension of the Bush-era tax rates for individuals making $400,000 and less in annual income and families making $450,000 and less, as well as a five-year extension of the American Opportunity Tax Credit, Child Tax Credit and Earned Income Tax Credit. The law also contains health and other provisions that impact the MS and disability communities. These include:
- Physician Reimbursement: Avoiding a scheduled 26.5% cut to Medicare physicians (through December 31, 2013);
- Therapy Caps: Extending a Medicare therapy cap exceptions process so that patients can continue to access needed outpatient physical, speech, and occupational therapy services (through December 31, 2013);
- CLASS Program Repealed: Repealing the Community Living Assistance Services and Supports (CLASS) Program, a voluntary long-term insurance program that would have provided a cash benefit to people who become functionally or cognitively impaired to help maintain community residence and independence;
- Sequestration Delay: Delaying for two months scheduled across-the-board cuts (the “sequester”) to defense and non-defense programs including medical research; and
- Limit on Itemized Deductions: Limiting itemized deductions for individuals making over $250,000 a year and families earning over $300,000 per year, but does not limit or cap the charitable deduction.
The 113th Congress was sworn in and commenced yesterday. With the across-the-board cuts only delayed for two months and the debt limit not increased, members will hit the ground running. Stay tuned for opportunities to weigh in with your members of Congress over the next several weeks. We will have to educate the new Congress about the importance of protecting medical research and programs like Medicaid and Social Security.