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BUDGET RECONCILIATION CONFERENCE COULD BEGIN AS EARLY AS JUNE 29

This article was originally published in The Gray Sheet

Executive Summary

BUDGET RECONCILIATION CONFERENCE COULD BEGIN AS EARLY AS JUNE 29 following Senate passage of legislation on June 25. The Senate adopted the budget bill by a 50-49 margin, with Vice President Gore supplying the deciding one- vote margin at 2:58 a.m. All 43 voting Republicans rejected the package, as did six Democrats: Sens. Richard Bryan (Nev.), Dennis DeConcini (Ariz.), J. Bennett Johnston (La.), Frank Lautenberg (N.J.), Sam Nunn (Ga.) and Richard Shelby (Ala.). Sens. Patty Murray (D-Wash.) and Arlen Specter (R-Pa.), who are recovering from surgery, did not vote. Senate conferees are Finance Committee Chairman Patrick Moynihan (D-N.Y.); Democratic Sens. George Mitchell (Maine), John Rockefeller (W. Va.), Max Baucus (Mont.), Bill Bradley (N.J.) and Donald Riegle (Mich.); and Republican Sens. Bob Dole (Kan.), Bob Packwood (Ore.), John Chafee (R.I.), John Danforth (Mo.) and William Roth (Del.). House managers were expected to be selected as early as June 28. The Senate package includes $58.4 bil. in Medicare cuts. A Senate floor amendment adopted by unanimous consent trimmed Medicare reductions by $9 bil. from the $67.3 bil. approved by the Senate Finance Committee on June 18 ("The Gray Sheet" June 21, p. 12). Medicare provisions covering durable medical equipment adopted by the Senate, however, were the same as those proposed by the Finance Committee. The only revision to Medicare Part B provisions made on the Senate floor was the elimination of a reduction in payment updates for some Part B providers, which restores $1.9 bil. to the Medicare budget. The Finance Committee measure also proposed basing the DME payment schedule on a national median average instead of a weighted mean average, and would remove nebulizers from the "frequent servicing" category. In addition, the committee package called for a 30% reduction in payments for transcutaneous electrical nerve stimulation devices and for the elimination of payment updates for parenteral and enteral equipment in 1994. Also unchanged from the Finance Committee bill is the one-year extension of research and experimentation tax credits. The delay in effective dates of the provision means that expenses for research that occurred in the period July 1, 1992-June 30, 1993 cannot be credited. However, Sen. Dianne Feinstein (D-Calif.) successfully sponsored a resolution expressing Senate support for a permanent extension of the R&E credit. Because the House bill provides a permanent extension, the Senate resolution improves prospects for the House-Senate conference doing so. The Senate bill incorporates the Finance Committee provision that preserves but restricts Sec. 936 tax credits for U.S. companies operating subsidiaries in Puerto Rico. The legislation excluded, however, a credit for capital gains resulting from long- term investments in startup companies. Sen. Dale Bumpers (D-Ark.), sponsor of venture capital gains legislation, bemoaned deletion of the credit, stating that "banks in this country are not loaning money to small business," and "venture capitalists have a very difficult time trusting small business." Bumpers noted that a version of his credit plan, sponsored by Rep. Robert Matsui (D-Calif.), was incorporated in the House budget bill, and "it has passed the Senate twice."
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