How Congress Changed Your Life in 2010

As members of the 111th Congress look back on 2010, they will see anything but a do-nothing session. From banning drop-side cribs, to freezing their own salaries for the second year in a row, to overhauling the food inspection system, to telling airlines not to charge fees for carry-on luggage, the Democratically controlled House and Senate passed bills at a feverish pace in the past year.

But several developments stand out for the breadth of their impact. They may not all be popular, as evidenced by the November "shellacking" that Democrats took in the midterm elections, but the following congressional actions in 2010 -- and in one case inaction -- will affect hundreds millions of Americans in the next year and beyond.

1. Extending the Bush Tax Cuts. The compromise brokered between President Barack Obama and Senate Minority Leader Mitch McConnell in December will impact every American with a job and most Americans without one.

The new law will continue the expiring Bush tax rates for all income levels for the next two years; continue current tax rates on capital gains and dividends; set the estate tax at 35 percent for estates valued at more than $5 million, and continue dozens of tax breaks and credits for people from the bottom of the income spectrum to the top.

The most immediate difference will come in your first paycheck next year. Starting Jan. 1, the 6.2 percent payroll tax will drop to 4.2 percent for the next year, putting hundreds of dollars back in most workers' pockets. And for people without a job, the new law extends unemployment benefits until 2012, if they've been out of work for less than 99 weeks.

2. Reforming the Health Insurance System. No single piece of legislation was more controversial in 2010 than the Democratically sponsored overhaul of the health insurance industry.

Although the majority of Americans will continue to have insurance through their employers in the future, and most will still be covered by private insurers, the new law gives the federal government a much larger role in determining what kind of health care Americans get and how much insurance will cost. It also mandates that all Americans carry health insurance by 2014, a requirement that is being challenged in federal court.

Already this year, the law has allowed young adults to remain on their parents' policies until they are 26 years old; given tax credits to small businesses to cover employees' insurance, and will soon end insurance companies' ability to cut off coverage for customers who reach lifetime coverage caps.

Within the next three years, individuals will be able to shop for insurance through new health care exchanges, and will get government subsidies if they need help paying for it. About 15 million low-income Americans will be added to Medicaid, a development that governors have vocally opposed because of the unfunded mandates associated with it.

To pay for the multibillion dollar cost of the reforms, the bill expanded the Medicare payroll tax to investment income; will impose a 40 percent excise tax on expensive insurance policies by 2018; will add fees on pharmaceuticals and medical devices, and will collect penalties from individuals and large business that do not buy the coverage required by the new law.

3. Overhauling Federal Student Loans. Provisions tacked onto the health care reform bill eliminated the role of private lenders in originating federal student loans. The Congressional Budget Office estimates that will save the federal government, which paid lenders to oversee the program, between $6 billion and $7 billion per year.

The people who will notice the biggest difference will be financial aid officers, who used to decide which private lenders they would use to originate federal loans for their students. Those loans will now all be originated by the U.S. Department of Education and will have the same federal terms and conditions that have been in effect for years.

But the changes will eventually impact every student who applies for and receives federal loans to attend college or graduate school. Although students will still seek loans through the financial aid office at their college or university, the loans cannot be resold to other loan servicers and will not be affected by private bank failures, which could disrupt payments.

Because of a spike in demand for Pell grants, that program was on course to run out of money in 2010. The Pell grant program will now remain solvent until at least 2017, with the maximum Pell grant award rising from $5,550 this year to $5,975 five years from now.

4. Failing to pass the $1.1 trillion omnibus spending bill. In the last days of the 111th Congress, Senate Majority Leader Harry Reid spiked an omnibus spending bill that was made up of all 12 annual spending bills that Congress usually passes individually.

In the short term, that means the federal government will continue operating at current spending levels until March 5. But in the longer-term, it guarantees the first of many showdowns over spending between the Republican-led House and the Democratic Senate. With government spending at the top of most incoming Republicans' target lists, compromise between the two chambers could be almost impossible.

The impasse also puts the future of earmarking in doubt. Although Republicans had sponsored thousands of the 6,600 earmarks in the bill, they backed away from the legislation when tea party activists made it clear they would challenge GOP lawmakers in the future who voted for pork projects now.

5. Overseeing a $1.29 Trillion Increase in the Deficit. New federal programs cost money, and the 111th Congress oversaw the second-highest deficit in history and an increase in the national debt to $14 trillion.

David Walker, the onetime Comptroller General of the United States, says runaway spending in Washington will have a crippling effect on Americans one and two generations from now. "We're mortgaging the future of the country, and their children and grandchildren," Walker told Politics Daily. "At the same time, because of the growth of spending, we're reducing the role of investments in our future because the budget on the discretionary side is getting squeezed at a time when America is facing growing competition in a global economy."

If Congress does not change its spending habits now, Walker said, everyone's tax bills will be higher in the future. "If we don't end up reforming our ways, federal taxes will have to double within the next 20 to 30 years, just to stop the bleeding."