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Saturday October 25, 2014

Washington News

Washington Hotline

Budget Committee Cordial But Direct

On October 31 the official first meeting occurred for the House and Senate Budget Conference Committee. The 29 members of the committee were each given five minutes to make opening statements.

The key statements of the four Republican and Democratic leaders of the two committees outlined their initial positions.

Sen. Patty Murray (D-WA) is Chair of the Senate Budget Committee. She expressed willingness to compromise but emphasized a need for fairness. Murray stated, "I am going into this budget conference ready to agree to some tough spending cuts that, unlike the sequester caps that disappear in 2022, would be permanently locked into law. I know there are many Republicans who would be very interested in swapping some of the inefficient and damaging sequester cuts with structural changes to programs that would save many multiples of the cuts they replace over the coming decades. I am ready to listen to their ideas and, as long as they are fair for seniors and families -- I'm ready to make some tough concessions to get a deal."

Paul Ryan (R-WI) is the Chairman of the House Budget Committee. He also expressed a hope for agreement, but emphasized his perspective on the need to control spending. Ryan noted, "From my perspective, taking more from hard working families just isn't the answer. I know my Republican colleagues feel the same way. So I want to say this from the get-go: If this conference becomes an argument about taxes, we're not going to get anywhere. The way to raise revenue is to grow the economy. We need to write a tax code that encourages economic growth."

Sen. Jeff Sessions (R-AL) is the ranking member of the Senate Budget Committee. He focused on the importance of maintaining the sequestration budget limits. Sessions continued, "The budget control act reduced the growth in federal spending by $2.1 trillion. This is an important first step. That bipartisan agreement is in law and must be maintained. Congress and the White House must keep their promises to the American people."

Finally, Rep. Chris Van Hollen (D-MD) is the Ranking Member of the House Budget Committee. He noted that an agreement will be difficult. Hollen stated, "The House Republican and Senate Democratic budgets before us today represent dramatically different visions for America. We will not bridge all the differences, but I hope we can make some progress. That will require some tough compromises."

Editor's Note: The four leaders of the House and Senate Budget Committees were very frank in explaining their differences, yet the exchange was reasonably cordial, even though it recognized quite different values. All four leaders expressed a desire to find a budget solution. The deadline for Congress to act to avoid another government shutdown is January 15, 2014.

FSA Flexibility

Many businesses provide a flexible spending account (FSA) plan for their employees. The employee or the business is permitted to set aside tax-free up to $2,500 per year. Most FSA accounts are used as health reimbursement plans. The pre-tax dollars may be allocated for qualified healthcare expenses.

Under previous rules, the amount that the employee voluntarily set aside into the FSA must be used each year. Any remaining balance at the end of the year is returned to the ownership of the employer. Because there is a "use it or lose it" rule, many employees with FSA accounts were spending sums on various medical treatments in December each year.

In order to provide more flexibility for the accounts, the Department of Treasury determined that an employee would be able to carry forward up to $500 to the next year. Treasury Secretary Jacob Lew stated, "Across the administration, we are always looking for ways to provide added flexibility and common sense solutions to how people pay for their healthcare. Today's announcement is a step forward for hardworking Americans who wisely plan for healthcare expenses for the coming year."

Sen. Orrin Hatch (R-UT) is ranking member of the Senate Finance Committee. He expressed approval of the decision. Hatch noted, "Allowing Americans who have one of these accounts to roll $500 over to the following year just makes sense and will give people more help to pay for out-of-pocket healthcare costs."

Published November 1, 2013

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