After 25 years at the American Benefits Council in Washington, Jim Klein has had plenty of time to observe Congress and politicians.
By DIANE STAFFORD
The Kansas City Star
So it’s from experience that he told members of the Kansas City Compensation and Benefits Association: “Hold on to your wallets. Health care and retirement are the two largest expenditures in the federal budget, and there’s a lot of money to be had by limiting tax-favored treatment of employee benefits.”
About 120 professionals who deal with the nitty gritty of health and retirement programs heard Klein, council president, speak at a breakfast meeting Wednesday.
“Lawmakers are very good at self preservation, but I think they’ve finally reached the point where they understand they’ll pay the price if they don’t deal with the problems,” he said, referring to the looming fiscal cliff.
The year-end combination of business and personal tax cuts that are due to sunset and cuts in federal spending that are mandated to begin should spur Congress to act, Klein said.
“It will be tough. It will be messy. Deficit reduction won’t happen on its own,” Klein said. “It will only happen with overall tax reform.”
He doesn’t expect a “grand bargain” but rather several small steps to buy time and keep the U.S. from suffering a $560 billion economic hit by plunging over the cliff.
He suggested that one way around the no-tax-increase pledge taken by many Republicans is to let all the tax breaks expire Jan. 1 so that reinstating some of the breaks will be called a tax cut and not a tax increase.
He also forecast partial rewrites of the Affordable Care Act. In particular, he expects some implementation deadlines to be extended, including time frames for getting state insurance exchanges up and running.
He said he expected survival of the individual mandate for health care coverage, as affirmed by the U.S. Supreme Court, and the play-or-pay mandate for employers to offer affordable health insurance options to employees covered by the act or pay a penalty.
Officers with the Kansas City association said the budget deficit and health reform topics drew its largest breakfast meeting ever.
“Our members are looking at next year as business as usual, with no drastic changes for 2013,” said Bret Bonge, the chapter’s 2012 president. “But the next five years may be a ‘new normal,’ and we’re trying to figure out how to deal with it.”