Congress spent the first week of the lame-duck session electing leadership and planning for their post-Thanksgiving return.  A hefty agenda awaits them prior to adjournment which will likely be close to Christmas.  Issues that are pending include: the 2001 and 2003 tax cuts and the improvements to the refundable tax credits passed in the American Recovery and Reinvestment Act (ARRA), the 2011 appropriations spending bills, immigration legislation, reauthorization of child nutrition programs, and extension of expiring disabilities and health care programs for vulnerable and low-income populations.  Addressed elsewhere in this Human Needs Report are actions needed to extend federal unemployment insurance, the TANF Emergency Fund and child support enforcement programs.
Taxes
The stakes will be high as Congress decides which provisions in the 2001 and 2003 Bush tax cuts will be allowed to expire on December 31, which will be extended, and whether the extensions will be permanent or temporary.  There is broad agreement among Democrats, Republicans and the Administration that the tax cuts for the bottom 98 percent of taxpayers should be extended. At issue are the tax breaks for the wealthiest two percent. Most Democrats believe those should be allowed to expire.  Republicans under the leadership of Senate Minority Leader Mitch McConnell (R-KY) want to extend all of the Bush tax cuts.  Allowing the top marginal income tax rates for wealthy taxpayers, currently set at 33 and 35 percent, to remain in place – for income above approximately $210,000 and $375,000 – rather than reverting to 36 and 39.6 percent rates, and retaining the 15 percent rate on capital gains and dividends rather than the pre-2001 rate of 20 percent, carries a $700 billion price tag over 10 years.  If the two top rates are not extended, those same taxpayers would still benefit from retaining the lower 10, 15, 25, and 28 rates on their initial income.  Proponents of extending tax breaks for the wealthiest argue that this will lead to job creation and economic growth, but there is little evidence to support their position.  There is considerable evidence that spending a small fraction of that amount on unemployment benefits, for example, would provide a far more effective boost to the economy.

Advocates will be working to ensure that the improvements to the refundable Child Tax Credit and the Earned Income Tax Credit included in ARRA passed in 2009 are linked with the extension or permanency of the middle-class tax cuts.  For low-income families who receive the refundable credits the national average per-family benefit of retaining the improvements is $1,330, according to a Citizen for Tax Justice report.   President Obama’s plan, supported by most Democrats, extends all of the Bush tax cuts for individuals making up to $200,000 and couples up to $250,000, including the improvements in the refundable credits.  The Republican plan forwarded by Senator McConnell does not call for extending the refundable credits and extends all tax cuts for the wealthiest.  Under the Republican plan, the bottom 60 percent of U.S. taxpayers would pay $124 more and the richest one percent would pay $45,893 less in 2011, on average, then they would under President Obama’s plan, according to a Citizens for Tax Justice report.

Prior to Thanksgiving break Senate Majority Leader Harry Reid (D-NV) indicated that he would schedule a vote on extending tax cuts for the bottom 98 percent and hoped that Minority Leader McConnell would agree not to block the vote if there is also a vote on his plan to extend all of the tax cuts.  Currently there are not 60 votes to pass either plan.  The majority of Democrats oppose extending the tax breaks for the upper two percent and Republicans, emboldened by election gains, are pressing for full extension.  It is unclear how this will get resolved, but if they do not act by January all taxpayers will face an increase in their taxes that will show up immediately in lower take-home pay.

Appropriations for FY 2011
After failing to pass any of the 12 appropriations bills that fund discretionary (annually appropriated) programs by October 1 when Fiscal Year 2011 began, Congress has passed two stopgap continuing resolutions (CR’s) to continue funding programs.  The current CR is set to expire on December 3.  The CR funds most appropriated programs at their FY 2010 levels.  Democrats on the House and Senate Appropriations subcommittees along with Senate Republicans have been working to come to agreement on funding levels for each of the twelve FY 2011 spending bills that would then be bundled into an omnibus package.  Initially Senator McConnell (R-KY) agreed to the plan that would provide overall funding for discretionary programs at $16 billion below the President’s FY 2011 budget which itself calls for freezing non-military, non-homeland security spending.  The agreed-upon level is consistent with an amendment sponsored by Senators Jeff Sessions (R-AL) and Claire McCaskill (D-MO) that narrowly failed earlier this year.  However, under pressure from House Republicans who want even steeper cuts in non-security spending and who will be in charge in the House in the next Congress, Senator McConnell is backing away from his agreement.

The House Republican’s “Pledge to America” campaign document calls for funding non-security discretionary programs in FY 2011 at $105 billion, or 21.7 percent, less than the $483 billion in the President’s budget.  This level is $101 billion less than what was provided in 2010 when adjusted for inflation.  If those austere cuts are passed, well-funded lobbyists will press for less aggressive cuts to politically well-connected programs like roads or medical research, which will result in even deeper cuts for programs that address the needs of low- and moderate-income people.  These cuts would fall hard on state and local governments already facing the largest deficits in recent history.  Programs affected may include K-12 education, low-income housing, job training and employment services, nutrition, and services for the elderly and disabled – all critical for vulnerable populations.  (See Center on Budget and Policy report including state-by-state cuts that could result if the Republican plan is adopted.)  Most economists have warned against cutting domestic spending for at least another year, since the job and business income losses sure to result will threaten the very fragile economic recovery.

Advocates are working for passage of an omnibus bill in the lame-duck session. Reaching final agreement on funding for discretionary programs will be difficult as newly elected Republicans are anxious to demonstrate their desire to cut spending regardless of economists’ warnings.

Dream Act
Senate Majority Leader Harry Reid (D-NV) has pledged to bring the Development, Relief, and Education for Alien Minors (DREAM) Act for a vote in the Senate during the lame duck session. The DREAM Act is bipartisan legislation that would provide certain immigrant students who grew up in the U.S. an opportunity to obtain legal status if they go to college or serve in the U.S. military. Multiple versions of the DREAM Act have been introduced in Congress since 2001. Senate Majority Whip Richard Durbin (D-IL,) a longstanding champion of the bill, along with Senator Richard Lugar (R-IN) introduced the DREAM Act in the Senate, S. 729, in this Congress. Representatives Howard Berman (D-CA), Lincoln Diaz-Balart (R-FL) and Lucille Roybal-Allard (D-CA) introduced a House companion bill, H.R. 1751.

In preparation for a vote on the bill in the Senate, Senator Durbin introduced two new versions of the bill, S. 3962 and S. 3963, before the Thanksgiving break. The difference between both bills has to do with the qualifying age of individuals. In S. 3962 individuals have to be less than 35 years old when the bill is enacted to qualify for adjustment of status. In S. 3963 the cut-off age is 30. Both bills eliminate a provision that was in earlier versions giving states the option to provide in-state tuition without regard to immigration status. These changes were made in an effort to build greater support for the legislation. House Speaker Nancy Pelosi (D-CA) has also indicated that she would like to bring the DREAM Act for a vote in the House during the lame duck session.

Child Nutrition Reauthorization 
House leaders may bring the Senate-approved Child Nutrition Reauthorization bill, S. 3307, for a vote on the floor when they return from the Thanksgiving break. Passage of a Child Nutrition Reauthorization bill stalled in Congress after some House members raised concerns over parts of the Senate bill. S. 3307 provides $4.5 billion over 10 years for better child nutrition through more afterschool and summer meals, higher reimbursements to school lunch providers, improved administration of WIC and meals programs, including easier enrollment of children, and more funding for WIC program improvements.  House members have supported legislation with more funding and greater expansion of summer food and school breakfast programs and more streamlined access provisions. But the biggest sticking point for some House members has been the Senate’s use of future SNAP/food stamp cuts to pay for provisions in the Senate bill.  In August, 106 Representatives sent a letter to Speaker Pelosi opposing SNAP cuts.  (To learn more about the House members objections see the October 5 Human Needs Report.) House proponents are working with the Administration to identify ways during the lame duck session to prevent SNAP cuts from taking effect.  Child nutrition programs are set to expire on December 3.

According to new data released by the U.S. Department of Agriculture, 17.2 million children, or almost a quarter of all children in the U.S., struggled against hunger in 2009. The U.S. continues to experience high rates of food insecurity with 50 million Americans living in households struggling against hunger last year. However, worth noting is that while food insecurity grew significantly from 2007 to 2008, during the first year of the recession, in 2009 there was only a slight increase. This trend continued into 2010. An analysis by the Food Research and Action Center of data from the Gallup-Healthways Well-Being Index shows that food hardship actually declined slightly this year. It is significant that food hardship and insecurity did not rise significantly in 2009 and 2010 given the high rates of unemployment during these time periods. The leveling off of food insecurity rates coincides with the increase in SNAP benefits that were enacted as part of the American Recovery and Reinvestment Act.  This indicates the effectiveness of SNAP in ameliorating hunger and stresses the importance of maintaining a strong SNAP program, especially given the slow pace of recovery.

SSI Benefits
On October 1, up to 5,600 impoverished refugees and other immigrants in the U.S. on humanitarian grounds were cut off from their Supplemental Security Income (SSI) benefits. The Center on Budget and Policy Priorities estimates that another 5,600 could be cut off over the next 13 months unless Congress acts. Advocates are pushing Congress for a one-year extension of SSI eligibility and are also working with the Administration to determine a long-term solution for this population.

In 1996, a seven-year time limit for SSI benefits was imposed on humanitarian immigrants. It was assumed that seven years would give individuals sufficient time to obtain citizenship, and thereby maintain their benefits. However, processing delays and other obstacles in the immigration system made it nearly impossible for people to naturalize within the seven-year time period. Two years ago Congress overwhelmingly approved a two-year extension of SSI benefits for refugees, lengthening the eligibility level from seven years to nine.

Qualified Individual Program
Unless Congress acts in the lame-duck session, two programs critical to low-income Medicare beneficiaries will be terminated, the Qualified Individual (QI) Program and the therapy caps exception process.  The QI program is a federal grant to states that pays the Medicare Part B premium (covering doctors’ services and outpatient care) for individuals with income between 120 and 135 percent of the federal poverty level (about $13,000 to $14,600 in 2010) who are not otherwise eligible for Medicaid.  The program, currently serving 1.5 million low-income Medicare recipients, was created in 1997 and has been extended on a year-to-year basis since 2002.  If the QI program lapses these beneficiaries will lose approximately $1,100, the yearly cost of Part B premiums, forcing them to pay the premium out-of-pocket or drop coverage.

Also at risk is the therapy caps exception process, protecting low-income Medicare beneficiaries from being denied medically necessary services when they exceed limits on outpatient physical therapy, occupational therapy and speech-language services.  Treatment limitations include a combined $1,860 cap for speech and physical therapy services, and a separate $1,860 cap for occupational therapy.  Advocates are counting on Congress to extend these programs vital to low-income seniors.

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