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U.S. News Archive
December 01 - December 05, 1999





This page contains news for the period Wednesday, December 01, 1999 through Sunday, December 05, 1999.





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Saturday, December 04, 1999

Xerox planning to eliminate marital status bias from its health benefits program

A story published today in the Los Angeles Times reports that officials at Xerox Corporation are frustrated by the cost and hassle of administering the company's employee health insurance program. They are making plans to simply matters by dropping the group program and instead would pay workers to buy the insurance of their choice.

The change could happen within five years. According to the story, other companies large and small are expected to keep a close eye on what happens at Xerox, long a corporate innovator in health benefits.

Xerox plans to give all workers $5,000 to $6,000 a year to buy health insurance on the open market. Company officials believe the new plan could save Xerox money on administering health care benefits and would limit its exposure to lawsuits from patients injured by a health plan's denial of care.

The story says that employees potentially would get a wide choice of plans and the prospect of pocketing extra cash if they choose cheaper plans or using the saved money to purchase other benefits.

"We would free up the amount we now spend on benefits enrollment, benefits administration, negotiating with HMOs and quality monitoring," an official in Xerox's human resources division told the Times. "We would take that money and . . . give [it] to our employees. From the employee standpoint, they get more mobility and flexibility and choice to buy the plan that's best for them."

Patricia Nazemetz, Xerox's vice president for human resources, first discussed the proposal last month at a Washington conference sponsored by the Robert Wood Johnson Foundation and the Alpha Center for private and public sector health policy experts.

The plan is tentatively based on giving all workers, whether they have dependents or are single, up to $6,000 a year to buy coverage. They could buy any plan--comprehensive coverage, an HMO, a catastrophic plan or some other type of plan--but for the foreseeable future would have to spend at least some of the money on health care coverage.

The amount they spent on health care would be tax exempt, and any remaining money they could take as taxable cash compensation.

New rules on bonuses for states reducing welfare rolls include contest to promote more marriages

A story released today by the Associated Press reports that President Clinton announced new rules for the annual"welfare bonus contest" established by Congress in 1996.

Next year's competition among the states for federal bonuses will be a goal to get more welfare recipients to get married.

Since 1996, the welfare bonus contest has gives large cash prizes to states that moved the most welfare recipients into jobs, whether or not they left the the welfare rolls. States were also rewarded when clients kept jobs for at least three months and increased their wages.

Clinton said that next year a new aspect of the contest will be added. States will also be rewarded if they increase the portion of low-income children living in married-couple households.

The story says that winners will share the $200 million, with each state's piece determined by the size of its annual welfare appropriation from Washington. The money is added to other welfare funds, and it is subject to the same restrictions. None of the bonus money may be used to cut taxes or build stadiums, for example. It could be used to increase welfare benefits or provide more child care.


Wednesday, December 01, 1999

Bush's plan would have benefits for both married and unmarried taxpayers

An Associated Press story published today in the Washington Post reports that Republican presidential candidate George W. Bush is proposing a five-year, $483 billion economic package that would slash income tax rates at all levels – from the working poor to the very rich – and change the tax code to appeal to married and unmarried taxpayers as well as parents, the elderly and businesses.

The plan would cut taxes somewhat more than a similar Republican congressional package vetoed this year by President Clinton, but is not nearly as ambitious as the flat-tax overhaul championed by presidential rival Steve Forbes and other conservatives.

Under his plan, Bush would seek to:

–Simplify and reduce marginal tax rates. Incomes are now taxed at five levels – 15 percent, 28 percent, 31 percent, 36 percent and 39.6 percent. Bush would propose four rates, with the poorest paying 10 percent and the wealthiest paying a top rate of 33 percent.

–Double the $500 child tax credit, a benefit to the middle class. Bush would open the credit to people earning up to $200,000; the current cap is $100,000.

–Reduce the penalty paid by couples who get married by restoring a deduction that ended in 1986.

–Eliminate all estate taxes, which would eliminate a huge tax bite which sometimes takes as much as 60% of the estate of an unmarried person who dies, whereas a married person pays no estate taxes when assets are transferred to a spouse.

–Raise from $500 to $5,000 the amount of money a person can put in tax-free education savings accounts. Current law limits the accounts to college expenses; Bush would expand it to kindergarten through 12th grade.

–Eliminate the so-called "earnings limit" for Social Security. Recipients between the ages of 65-69 currently lose Social Security benefits for every dollar they earn if they choose to work.

Congress proposed a 10-year, $792 billion package that would have reduced all five marginal income rates by 1 percentage point, eased the so-called "marriage penalty," phased out estate taxes and expanded the IRA-like education savings accounts to $2,000.

Clinton vetoed the bill, saying it would have run the nation deeper into debt.

The Bush aide said budget surpluses would create enough money to finance the tax package and his education and defense spending plans without tapping into Social Security funds, assuming the economy grows at a rate of 2.7 percent a year.


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