House Republican Leaders Offer $25B in Aid to Unemployed Under Stimulus Bill

In Dec. 5 negotiations on economic stimulus legislation, House Republican leaders offered a provision that would spend $25 billion to extend benefits for unemployed workers and provide tax credits to help those workers purchase health insurance, a move that may "help bridge the gap" between Republicans and Democrats, the New York Times reports (Kahn, New York Times, 12/6). The proposal "roughly tripl[es]" the amount of money offered for displaced workers in the stimulus bill passed by the House in October. The new plan, proposed by House Ways and Means Committee Chair Bill Thomas (R-Calif.), would extend benefits for unemployed workers by 13 weeks and provide $8 billion to $10 billion in tax credits to help unemployed workers purchase health coverage either from private insurers or through COBRA. COBRA, the 1986 Consolidated Omnibus Budget Reconciliation Act, allows unemployed workers to retain health coverage under their former employers' insurance plans by paying 102% of the premiums (Norton/Steel, CongressDaily, 12/5). The tax credits would cover 50% of the cost of health insurance for unemployed workers (Anderson, AP/Nando Times, 12/5). The credits would come as a "type of voucher" that workers would be able to use before they paid their taxes. Thomas said that this arrangement "would be a more effective way to get money to people than tax credits that assume individuals already had the money on hand for health insurance" (CongressDaily, 12/5). The Wall Street Journal reports that Thomas announced the proposal in order to help win votes from Democrats on a separate trade bill (Murray/VandeHei, Wall Street Journal, 12/6).

'Sticking Point' Resolved?
Proposals to provide health insurance for unemployed workers have been a major "sticking point" in the debate over an economic stimulus bill, the AP/Nando Times reports (AP/Nando Times, 12/6). The House-approved bill, sponsored by Republicans and supported by President Bush, would increase by $3 billion funding for the Social Services Block Grant program to allow states to provide health insurance to unemployed workers and their families (Kaiser Daily Health Policy Report, 10/29). Senate Democrats' rival bill, which was blocked last month by Senate Republicans, would have provided $14.3 billion to extend benefits for unemployed workers by 13 weeks and $12.3 billion to help unemployed workers purchase health coverage through COBRA. In addition, the legislation would have allowed states to extend Medicaid coverage to unemployed workers who do not qualify for COBRA and would have provided $1.4 billion to boost the federal match to states for Medicaid (Kaiser Daily Health Policy Report, 11/15).

Democrats' Mixed Response
Several Democrats "praised" the new GOP proposal. Senate Finance Committee Chair Max Baucus (D-Mont.) said, "This is a good development. That means it's more likely there will be a significant health insurance component in the stimulus package" (AP/Nando Times, 12/5). Baucus predicted that Senate Majority Leader Tom Daschle (D-S.D.) would support the plan (Norton, CongressDaily/AM, 12/6). However, some Democrats remained "skeptical" about the proposal. Alixandria Wade, chief of staff for Rep. Adam Smith (D-Wash.), said that Smith questions whether the health insurance provisions in the plan "really make a huge difference" (Wall Street Journal, 12/6). Thomas said that lawmakers would extend House-Senate negotiations on economic stimulus legislation, which began this week, into the weekend (Norton, CongressDaily/AM, 12/6).