In a vote of 60 to 36, the Senate passed a $150 billion economic package to extend the payroll tax holiday, unemployment compensation, Medicare physician payment, provide for the consideration of the Keystone XL pipeline, and for other purposes. The package will extend a payroll tax holiday for 160 million workers and unemployment benefits for the rest of the year. The bill passed in the House earlier today. The legislation will now go to President Obama, awarding him a victory on a portion of the jobs bill he presented to Congress in the fall.

The package will take the first significant bite out of the Affordable Care Act. The savings would be used to pay for a “doc fix” that would eliminate a scheduled 27.4% reduction in Medicare physician payment rates for 10 months. The package also cuts $11.6 billion in funding from the Affordable Care Act. $5 billion will come indirectly from the law’s prevention fund. The fund was supposed to reach $2 billion in fiscal years 2015 under current law, but now will not hit the $2 billion mark until fiscal year 2022. Additional savings include 1) the elimination of $2.5 billion in enhanced Medicaid payments to Louisiana in the wake of Hurricane Katrina; 2) a $4 billion reduction in so-called Medicaid Disproportionate Share Hospital (DSH) payments to hospitals that take care of people without insurance; 3) a $6.8 billion reduction in federal payments to hospitals that collect “bad debt” from insolvent patients, down to 60 percent; and 4) cuts to how much Medicare pays for clinical laboratory tests.