Addiction Parity Update

Great news from Tuesday, but we're not done yet.

Short version:

The House and Senate both voted to pass parity legislation, however they packaged the legislation in different ways and have divergent philosophies on paying for it. These two issues have to be resolved before it can be signed into law.

Long version:

The House of Representatives passed HR 6983, the Paul Wellstone and Peter Domenici Mental Health Parity and Addiction Equity Act. They voted on it under a "suspension of the rules," which means that the ability to offer amendments is limited but a two-thirds majority is needed for passage (in order to speed up the process). The bill passed 376-47. Critically, the bill included an "offset" to pay for the $3.4 billion over ten years expected for parity. This is important because the House has a self-imposed policy of not passing any new spending without either raising new revenue to pay for it or cutting spending somewhere else to offset the new costs. The offset comes from a delay of the "worldwide interest allocation" rule, which affects how businesses that operate overseas calculate their taxes

The Senate voted yesterday afternoon on a large "tax extenders" (HR 6049 [as amended]) bill that included the compromise parity legislation. This bill also includes lots of tax provisions (most significantly an Alternative Minimum Tax fix), disaster relief funding, and renewable energy tax credits. The bill passed 93-2 (neither Senator Obama nor McCain were present to vote). The Senate's package bill is not completely paid-for, and there is no way it could be paid for in a way that met the House's satisfaction.

So now the House's stand-alone bill is sent to the Senate, and the Senate's tax extenders package is sent to the House. Either could pass the other's bills, at which point parity would be sent to the president's desk for signature. The challenges are that (1) the House (particularly conservative Democrats, known as "Blue Dogs") doesn't want to pass the Senate's unpaid-for parity bill (although last year, the House passed a one year unpaid-for Alternative Minimum Tax patch on the very last day of the session, so you never know), (2) the Senate doesn't want to take parity out of the tax extenders bill because they want to pressure the House to vote for it, (3) time is running short, and the financial crisis is a major distraction.

P.S.: How do you like the new name--the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act. So mental health gets "parity" and addiction gets "equity"? (It used to be the Paul Wellstone Mental Health and Addiction Equity Act.)

Paul Wellstone was a Democratic senator from Minnesota who died in a plane crash six years ago, and was an early champion of federal parity. Pete Domenici is a sitting Republican senator from New Mexico who has also been a long-time supporter of parity. He's retiring this year. There was an amendment proposed earlier in the process to add Jim Ramstad's (Republican representative from Minnesota) name to the bill as well, but he requested not to be named in the bill.