On December 23, both the House and Senate approved a two-month extension of the expiring payroll tax provisions, extended unemployment benefits, the Temporary Assistance for Needy Families program, and avoided a scheduled 27.4 percent reduction in Medicare reimbursement rates. To offset the nearly $33 billion cost of the two month extension, the bill would increase the fees that Fannie Mae and Freddie Mac charge for guaranteeing loans. The bill is very similar to the two-month extension passed by the Senate earlier this month, although this version includes an agreement for the Senate to appoint conferees for a conference between the House and Senate to negotiate a one year extension once Congress returns from recess.

Specifically, the law temporarily extends unemployment insurance (UI) benefits, Temporary Assistance for Needy Families (TANF) and related programs, and Qualified Individual (QI) and Transitional Medical Assistance (TMA). The new law extended the Emergency Unemployment Compensation (EUC) program until January 3, 2012, and 100 percent federal financing of the Extended Benefits (EB) program until January 4, 2012. In addition, the law provided a temporary authorization through December 31, 2011, for states to use three-year look-backs with their extended benefit triggers. The new law defers the deadline for individuals to qualify for unemployment benefits from January 3, 2012 to March 6, 2012. It adjusts the phase-out date of these EUC benefits from June 9, 2012 to August 15, 2012. It defers the last day for individuals to apply for extended benefits under the current 100 percent federal financing structure from January 4, 2012 to March 7, 2012. It moves the phase-out date for extended benefits from June 10, 2012 to August 15, 2012, and extends the EB look-back provisions included to February 29, 2012. Overall, the legislation resolved few of the outstanding issues, but rather provided additional time to negotiate. Republicans and Democrats have yet to reach an agreement about how to offset the additional cost of extending these provisions for the other 10 months of 2012.

Link: H.R.3060, CBO Report