The U.S. House of Representatives is expected this week to approve a bill that will send states extra money for Medicaid assistance and education.
It contains $26.1 billion – $16.1 billion for FMAP (Medicaid) and $10 billion for public schools.
The Senate finally passed it last week after days of negotiations on how to reduce spending by $26.1 billion elsewhere.
How did they do it?
Nearly half – $12 billion — comes from not spending stimulus money on the food stamp program in future years. There’s also $9.6 billion coming in from ending a tax break for companies doing business in other countries.
Here’s a story on the food stamp item and below is an excerpt of a congressional memo summarizing the $26.1 billion in “offsets.”
Summary of the Murray-Harkin-Reid-Schumer Amendment to H.R. 1586
Addition of Treatment of Certain Drugs for Computation of Medicaid AMP – Under current law, the calculation of the Medicaid average manufacturer price (AMP) excludes certain payments and rebates if received from or provided to entities other than retail community pharmacies. The amendment would provide an exception to that exclusion for inhalation, infusion, instilled, implanted or injectable drugs that are not generally dispensed through retail community pharmacies. This will ensure accurate calculation of AMP for these types of drugs. The provision is estimated to save $2 billion over ten years.
Food Stamps. Effective March 31, 2014, food stamp benefits will return to the levels that individuals would have received under pre-Recovery Act law. This modification is estimated to save $11.9 billion over ten years.
Other Spending Reductions. The amendment includes over $7.5 billion in rescissions from programs that no longer require funding, have sufficient funding, or have funding that probably cannot be spent before the authority to do so expires. Rescissions include nearly $2.4 billion from Recovery Act programs, over $2.3 billion in Department of Defense funds unrelated to current military efforts, and about $2.8 billion from other agencies. The Department of Education’s Race to the Top, charter school fund, and the Teacher Incentive Fund are not included among these programs. Rescissions include:
-$122 million in funding provided to the Department of Agriculture for past emergencies.
– $302 million in Recovery Act funding provided to the Department of Commerce for broadband grants.
-$260.5 million in Recovery Act funding provided to the Department of Defense.
-$1.8 billion in funds appropriated to the Department of Defense for programs that have been terminated or for systems no longer needed.
-$2.2 billion in highway contract authority.
-$18 million in funding appropriated to the Nuclear Regulatory Commission.
-$20 million from the Department of Energy for nuclear energy
-$1.5 billion from Recovery Act funding for the Department of Energy
-$100 million in funding appropriated to the General Services Administration.
-$28.6 million in Recovery Act funding appropriated to the Department of Interior and the EPA.
-$14.2 million in funding provided in as early as 2004 to the National Park Service and the Fish &Wildlife Service.
-$500 million in funds appropriated to the Department of Defense for military construction projects that achieved bid savings.
-$6 million in funds appropriated in 1995 to the Department of Health and Human Services.
-$47 million in Recovery Act funding to the Commissioner of Social Security.
-$82 million from the Department of Education Student Aid Administration.
-$50 million in funding from the Department of Education for literacy.
-$10.7 million in other Department of Education rescissions
-$6.1 million in Recovery Act funding provided to the Department of Veterans Affairs for which the purpose has been completed.
-$50 million in funding appropriated for the Millennium Challenge Corporation.
-$70 million in funding appropriated to the Department of State and USAID for the Civilian Stabilization Initiative.
-$7.9 million in funds appropriated in 2004 and 2006 to the Federal Aviation Administration.
-$115 million in other Recovery Act rescissions.
FOREIGN TAX CREDIT LOOPHOLES
Summary. The amendment includes changes developed jointly by the Treasury Department, the Committee on Ways and Means and the Senate Finance Committee to curtail abuses of the U.S. foreign tax credit system and other targeted abuses. Foreign tax credits are intended to ensure that U.S.-based multinational companies are not subject to double taxation. However, taxpayers have taken advantage of the U.S. foreign tax credit system to reduce the U.S. tax due on completely unrelated foreign income in a manner that has nothing to do with eliminating double taxation. The amendment would eliminate $9.6 billion of foreign tax credit loopholes.