Amid last-minute, high-stakes dramatics, the 112th Congress passed a bill to avert the fiscal cliff – a series of expiring tax breaks and looming spending cuts known as “sequestration” that the Congressional Budget Office and other experts predicted would plunge our nation back into recession. The bipartisan, American Taxpayer Relief Act of 2012 (H.R. 8) passed the Senate in the early hours of January 1 by a vote of 89 – 8, and passed the House later that evening by a vote of 257-167. The bill—headed to the president for his signature today—permanently extends the 2001 and 2003 tax rates for ordinary income, capital gains and dividends for individuals with annual incomes below $400,000 and couples with incomes below $450,000. It preserves the current estate tax exemption, permanently fixes the alternative minimum tax, and continues unemployment insurance. The measure also blocks the scheduled 30 percent cut in Medicare physician reimbursements for one year and delays sequestration until March 1. The deal comes at a price. The “doc fix” is paid for through $25 billion in adjustments to other provider payments, including coding, End Stage Renal Disease, radiology, multiple procedures, advanced imaging. The bill also repeals the Community Living Assistance Services and Supports (CLASS) program established by the Affordable Care Act (ACA) and eliminates funding for ACA co-ops. The bill provides a brief reprieve for the research and public health communities, by postponing the sequester’s scheduled 8.2 percent across-the-board cut to discretionary programs. (See the Washington Post’s summary of health policy impacts here.) To pay for the $24 billion cost of delayed sequestration, the bill relies on $12 billion in new revenue and $12 billion in spending cuts to discretionary programs in FY 2013 and FY 2014, which are divided equally between “security” and “nonsecurity” spending. According to the White House, “this will give Congress time to work on a balanced plan to end the sequester permanently through a combination of additional revenue and spending cuts in a balanced manner.” So we are left to face another fiscal cliff in March—the delayed sequester, the FY 2013 continuing resolution, and the debt ceiling. Advocates for research and public health must remain vigilant in these critical months and continue to urge policymakers to avoid more cuts to research. We need more of this research, not less, if we are to solve the problems facing our health system and stabilize the debt.  

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