The Senate won’t consider a small-scale bill to avoid an expansion of the alternative minimum tax or a cut in Medicare reimbursements to physicians if no broader budget deal is reached, Senate Majority Leader Harry Reid says.
Reid, a Nevada Democrat, today said the Senate won’t address any tax or spending provisions that expire at year’s end unless Republicans agree to let tax rates rise for the top 2 percent of earners, as Democrats are demanding.
“As long as they do something on rates, I am happy to talk to them about anything,” Reid said in an interview. Pressed on whether he would refuse to move a smaller scale bill if Republicans refuse to budge on rates, Reid said, “That’s right.”
President Barack Obama and House Speaker John Boehner are at an impasse in talks over how to avert more than $600 billion in spending cuts and tax increases scheduled to start taking effect in January. Obama and congressional Democrats have said they won’t discuss spending cuts unless Republicans agree to higher tax rates for top earners.
The alternative minimum tax, a parallel tax system created to ensure that wealthy individuals couldn’t avoid all taxes, is scheduled to affect about 28 additional million households for tax year 2012, up from about 4 million otherwise.
Without legislation to prevent that, the Internal Revenue Service has said it would delay tax filing scheduled to start in January until at least late March for more than 60 million filers. Action isn’t required, though the consequences of inaction would be quick and severe.
If Congress doesn’t act by Jan. 1, Medicare payments to physicians will drop by 26.5 percent. Lawmakers usually act to prevent the cut or restore it retroactively in what has become known as the “doc fix.”
Senator Richard Durbin of Illinois, the chamber’s second-ranking Democrat, told reporters that Democratic leaders met today with doctors who were concerned about the cut in reimbursement rates.
“Is he waiting for that to happen?” Durbin said of Boehner.
Representative Dave Camp, chairman of the House Ways and Means Committee, said today in an interview that he was continuing to explore alternatives, noting that Congress is running out of time to address the AMT and physician reimbursement rates.
“Many of us were looking at the possibility of a larger package, and it doesn’t look like that’s coming together,” said Camp, a Michigan Republican who is part of Boehner’s negotiating team. “I think those others, it’s uncertain how they’re going to be addressed.”