WASHINGTON (MNI) – The following are excerpts from agreements reached on
Capitol Hill to extend the payroll tax cut and unemployment benefits:
The Middle Class Tax Relief and Job Creation Act of 2012
The conference report extends the payroll tax cut through the end
of the year – putting a full $1,000 in the pockets of the typical
American family over the course of 2012, ensures seniors have access to
their doctors, and provides as much as 99 weeks of Unemployment
Insurance (UI) benefits, depending on the state. The conference report
specifically helps unemployed folks in the hardest-hit states. It
preserves Americans’ access to health care and does not include a single
cut to Medicare beneficiaries.
The conference report guarantees: up to 89 or 99 weeks of UI
through May, depending on the state; up to 79 weeks through August; and
up to 73 weeks through December. It ensures the economically hardest-hit
areas get the help families need to cover their bills and exceeds the
President’s UI proposal, giving more support to the states and
communities in the greatest need and helping to prevent layoffs.
Title I-Extension of Payroll Tax Reduction
Sec. 1001 – Extension of Payroll Tax Reduction. This provision
puts a full $1,000 in the pockets of the typical American family over
the course of 2012. Under current law, the employee-side Social
Security tax equals 6.2 percent of the first $110,100 of wages and the
self-employment equals 12.4 percent of such self-employment income. In
December 2010, Congress reduced these tax rates by two percentage points
during 2011. This meant that employees paid only 4.2 percent on wages
and self-employed individuals paid only 10.4 percent on self-employment
income. The recently enacted Temporary Payroll Tax Cut Continuation Act
of 2011 extended this holiday through February 2012. It capped the
amount of compensation eligible for the holiday at $18,350 so that
high-income workers were not able to claim the tax cut on all of their
taxable wages, while other workers were not. This cap is not necessary
if the payroll tax holiday is extended through the entire year. The
Conference Agreement extends the payroll tax holiday through the end of
2012 and repeals the $18,350 cap. The estimated cost of this provision
is $93.219 billion over eleven years.
Title II-Unemployment Benefit Continuation and Program Improvement
Subtitle A – Reforms of Unemployment Compensation to Promote Work
and Job Creation
Sec. 2101 – Consistent Job Search Requirements. This provision
requires an unemployment insurance beneficiary to be able to work,
available to work and actively seeking work.
Sec. 2102 – State Flexibility to Promote the Reemployment of
Unemployed Workers. This provision sets forth that the Secretary of
Labor may enter into agreements with up to ten states for Demonstration
Projects which are designed to assist and expedite the reemployment of
the long-term unemployed. The waivers are restricted to only two uses
for wage subsides or for dispersments to employers up to the individuals
benefit amount. The employer must pay wages above the individuals
benefit amount. States are required to submit an application to the
Secretary of Labor generally describing the Demonstration Project and
its duration. All demonstration projects must be completed within three
years. This program is voluntary
Sec. 2103 – Improving Program Integrity by Better Recovery of
Overpayments. This provision changes statutory language from “may” to
“shall” in the collection of state and federal overpayments. This helps
save valuable UI dollars by directing states to collect overpayments.
It also maintains the hardship exemptions in states.
Sec. 2104 – Data Exchange Standardization for Improved
Interoperability. This provision outlines the need for consistent and
widely-accepted reporting standards and outlines how a data exchange
system will be developed and what reporting standards will be required.
Sec. 2105 – Drug Testing of Applicants. Consistent with current
law that eligibility for benefits be based on the “fact or cause” of
unemployment, this provision sets forth that states may enact
legislation to require an applicant to submit to and pass a drug test
for the unlawful use of controlled substances only under the following
conditions: 1) the individual has been terminated from their most recent
employment because of the unlawful use of controlled substances, or 2)
the individual’s only suitable work involves employment in an
occupation, as determined by regulations issued by the Secretary of
Labor, that regularly conducts drug testing. This provision is
consistent with the Federal law requirement that eligibility be based on
the “fact or cause” of unemployment, since the only circumstances under
which drug testing would be permitted are related to the “fact or cause”
or unemployment.
Subtitle B-Provisions Relating To Extended Benefits
Sec. 2122 – Extension and Modification of Emergency Employment
Compensation Program and Sec. 2123 Temporary Extension of Extended
Benefit Provisions. These provisions reauthorize the Unemployment
Insurance program and provide benefits up to 99 weeks, ensuring the
economically hardest-hit areas get the help families need. These two
provisions modify the current level for eligibility for extended
benefits to track economic forecasts, which predict unemployment will be
lower at the end of the year. The authorization of the Emergency
Unemployment Compensation (EUC) program is extended through January 2,
2013 at:
– Up to 89 or 99 weeks through May, depending on the state.
– Up to 79 weeks through August.
– Up to 73 weeks through December.
The estimated cost of this provision is $30 billion.
Sec. 2124 – Additional Extended Unemployment Benefits Under The
Railroad Unemployment Insurance Act. This provision provides that funds
appropriated, under either of two different sections of The Railroad
Unemployment Insurance Act, shall be available to cover the cost of
additional extended unemployment benefits, and provides $500,000 for
administrative expenses associated with the payment of the additional UI
benefits.
** Market News International Washington Bureau: 202-371-2121 **
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