AFSCME Legislative Report
March 11, 2005
AFSCME LEGISLATIVE REPORT
Congress — Week ending March 11
House and Senate Budget Committees approve huge spending cuts for state and
local governments and vital services. Transportation bill passes House and
bankruptcy bill clears Senate.
In this issue:
House and Senate Budget Committees Approve Budget Cuts
For State and Local Governments and Vital Services
The House and Senate Budget committees both approved along party lines
somewhat similar budget resolutions for 2006 that generally follow President
Bush's proposed budget, making deep cuts in most domestic programs, including
education, veterans, Medicaid and most other vital public programs. The
five-year budget plans, which now must be approved by the full House and Senate,
also call for new large, expensive tax cuts for the wealthy.
The House Budget Committee resolution calls for cuts in so-called "mandatory
spending" that is spent according to already agreed to funding formulas and need
totaling $69 billion over five years. This includes programs such as Food Stamps
and Medicaid. The House resolution calls for cuts as high as $20 billion in
Medicaid, more than double the Bush budget. The House would allow $843 billion
in most other spending programs spending, essentially matching the President's
request, with $419.5 billion of that allocated for defense, a 4.8 percent
increase over current levels. Another $32.5 billion would go to homeland
security, a 2.3 percent increase. The total for all other domestic spending
would be $391.1 billion, a decrease of 0.8 percent, which compounds in future
years creating average cuts of more than 14 percent over 10 years. The House
also calls tax cuts costing over $106 billion over a five-year period.
The Senate budget plan would force cuts in mandatory spending that would
create $32 billion in savings over five years, with the Senate Finance Committee
required to produce $15 billion in savings, the majority of which is expected to
come from Medicaid. The Committee did approve a non-binding amendment opposing
reconciliation instructions that would undermine or cap Medicaid. The resolution
calls for tax cuts totaling $70.2 billion, and it calls for caps and other
procedures restrictions on domestic spending over a three-year period.
Both the House and Senate GOP leadership say they want to approve the budget
plans by the end of next week before they take a two-week Easter Break, which
starts on March 21, so that they can resolve any differences in the two plans
and approve a final version when they return from recess on April 4th. Intense
and probably lengthy debate is expected in both the House and Senate. Both the
House and Senate will consider alternative less-draconian budgets as well as
specific amendments, including to reduce the size of the tax cuts, to increase
spending for many targeted programs and to specifically reduce the size of the
Medicaid cuts. This will be an especially important debate in the Senate.
AFSCME members are urged to call their Senators and Representatives and
urge them to vote again the budget resolutions because of the deep cuts they
make in public services and the harm they will cause state and local programs
and services especially for kids, the elderly and working Americans.
AFSCME strongly supports Senate amendments by Sen. Russ Feingold (D-WI) that
will make it harder to enact new tax cuts; and by Sens. Gordon Smith (R-OR) and
Jeff Bingaman (D-NM) striking the proposed Medicaid cuts.
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Social Security Privatization: Theme and Variations
Congressional GOP leaders and key GOP senators continue to back President
Bush's call for privatizing Social Security, but they are floating variations on
the President's plan in the hopes of wooing Senate Democrats to join them and in
an attempt to bring nervous members of their own party on board.
Sen. Chuck Hagel (R-NE) introduced his Social Security plan at the beginning
of the week. Just like the President's plan, Hagel's plan includes privatization
that will drive up the federal debt. But Hagel's plan goes one step further by
increasing the normal retirement age to a staggering 72 years old!
Sen. Lindsay Graham (R-SC) is trying to win support for a plan that would
finance private accounts by cutting the benefits of higher income retirees more
sharply than lower wage workers and would raise the wage cap from its current
$90,000 to about $200,000. And, Sen. Robert Bennett (R-UT) has a proposal that
has a sliding scale of benefits based on the retiree's income level. The Graham
and Bennett plans have not been formally introduced yet.
At a House Ways and Means Committee hearing, the head of the nonpartisan
Government Accountability Office (GAO), Donald Walker, said that "Social
Security does not face an immediate crisis, but it does face a long-term
financing problem." Furthermore, Walker criticized President Bush for
undertaking an aggressive two-month tour to try to sell his plan for allowing
younger workers to divert a portion of their Social Security payroll taxes into
private investment accounts. Walker suggested that Bush and members of Congress
focus instead on improving financing for the program, which would only be made
worse by the establishment of personal accounts.
The Associated Press reported that a Republican memo describing new
Republican polling data show "there is a rejection of the term 'crisis' as an
accurate description of the state of the Social Security system, and this
rejection increases in intensity as the respondents get older".
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Senate Defeats Effort to Raise the Minimum Wage to
$7.25 an Hour
The Senate turned back two proposals, one Democratic and one Republican, to
raise the minimum wage. Each proposal failed to garner the 60 votes needed to be
included as an amendment to an unrelated bankruptcy bill (S. 256). A proposal
offered by Sen. Edward Kennedy (D-MA) was defeated in a 49-46 vote. Kennedy's
amendment would have raised the minimum wage from $5.15 per hour to $7.25 per
hour in three 70-cent increments. AFSCME supported the Kennedy amendment.
AFSCME opposed Sen. Rick Santorum's (R-PA) "alternative" to Kennedy's
amendment, which was defeated by a 61-38 vote, because the minimum wage increase
was meager and it came coupled with so-called "poison pills." Santorum's
proposed minimum wage increase was to $6.25 an hour, and it would have benefited
far fewer workers — only 1.8 million workers, 5.5 million fewer than the Kennedy
amendment. Santorum's amendment would have also abolished the 40-hour work week
by allowing employers to deny workers overtime pay unless they work more than 50
hours in a week, or more than 80 hours over a two-week period. And, in the
ultimate poison pill, Santorum's amendment would have denied coverage — minimum
wage, overtime pay and equal pay protections — under the Fair Labor Standards
Act (FLSA) to over 10 million more workers by eliminating their FLSA coverage
entirely.
Senate Democrats were united in their support for Kennedy's amendment and
their opposition to Santorum's amendment. Only one Republican, Sen. Lincoln
Chafee (RI), voted for Kennedy and against Santorum's amendment. The last time
Congress raised the minimum wage was in 1996.
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Bipartisan House and Senate Opposition to Bush's plan
to Cut Community Development Block Grant
Fifty-four Senators signed onto a bipartisan Senate letter and more than 170
House Representatives signed onto a bipartisan House letter in support of full
funding for the Community Development Block Grant (CDBG) and in opposition to
President Bush's proposal to cut CDBG funding, consolidate it with 17 other
programs into a new underfunded block grant, and transfer CDBG from HUD to the
Commerce Department.
The Bush proposal would cut more than $1 billion from CDBG and threaten the
budgets of states and local governments. The Senate letter was organized by Sens.
Patrick Leahy (D-VT) and Norm Coleman (R-MN) and the House letter by Reps.
Barney Frank (D-MA) and Christopher Shays (R-CT). The U.S. Conference of Mayors
(USCM) and the National League of Cities (NLC) both strongly oppose Bush's
proposed CDBG cuts. These letters document the importance of CDBG for local
communities and demonstrate the breadth and depth of support for this vital
investment in community development.
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House Overwhelmingly Approves Major Transportation Bill
— Yet Again
By an overwhelming vote of 417-9, the House of Representatives approved the
Transportation Equity Act: A Legacy for Users (TEA-LU) (H.R. 3) on March 10th.
This landmark legislation provides funding for the nation's highway, highway
safety and transit programs. An almost identical bill was approved last year but
did not become law because of veto threats by President Bush over the funding
level in the bill. This year's bill has been scaled down significantly, but
still the President has threatened a veto because of language that would allow
additional spending at a later date. H.R. 3 would provide $284 billion for
highway and transit programs and contains policy initiatives that govern the
nation's surface transportation programs.
AFSCME, working with affiliated AFL-CIO unions, successfully opposed an
amendment proposed by Rep. Tom Davis (R-VA) that would have repealed the
important 13c labor protections for transportation workers and Rep. Davis
ultimately did not offer his amendment. In addition, since last year, AFSCME has
strongly opposed efforts by Rep. Thomas Petri (R-WI) to change current law to
require state Departments of Transportation to privatize mapping and surveying
transportation services. Opposition headed by AFSCME resulted in Rep. Petri not
moving forward with his amendment.
The Senate has yet to introduce its bill.
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Bankruptcy Overhaul Passes
The Senate passed the bankruptcy overhaul bill (S. 256), and House GOP
leaders say they plan to move it quickly, and President Bush has said he would
sign it into law. Business interests that have long pushed for bankruptcy law
changes to make it more difficult for consumers to escape their debts have a
major win. A barrage of Democratic amendments failed because of intense lobbying
by financial institutions and credit card firms.
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Action on New TANF Bill Begins
The Senate Finance Committee this week took the lead on a five-year
reauthorization of the Temporary Assistance for Needy Families (TANF) program.
In a bipartisan voice vote, the Committee approved a measure which is very
similar to the bill briefly considered on the Senate floor last year.
The bill would increase the number of work hours per week a TANF recipient
must work and the percentage of TANF participants that must be in work
activities. It also increases child care funding by $6 billion, and includes
limited waiver demonstration authority affecting TANF and the social services
and childcare block grants. As part of the bipartisan negotiations, committee
Democrats and Republicans agreed to expand the range of activities that would
meet the weekly work requirement to include some higher education, substance
abuse counseling or treatment and participation in financial literacy training,
among other activities.
No date has been set for Senate floor consideration yet. A House Ways and
Means subcommittee is planning to consider its TANF reauthorization bill next
week.
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Senate and House Panels Defy Bush, Vote To Keep
Vocational Education Initiatives Alive
Committees in the Senate and House approved bills that would keep alive a
$1.3 billion vocational and technical education program that President Bush
wants to eliminate. The House Education and the Workforce Committee approved by
voice vote a measure (H.R. 366) that would reauthorize the Carl D. Perkins
Vocational Education Act of 1998 (PL 105-332) through 2011. The Senate Health,
Education, Labor and Pensions (HELP) Committee also approved its bill (S. 250)
by voice vote.
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Senate Panel Approves Medical Errors Legislation
The Senate Health, Education, Labor and Pensions (HELP) Committee approved a
bill (S. 544) that would establish a system for the voluntary and confidential
reporting of medical errors. Patient safety organizations collecting the data
would then analyze it in order to recommend changes that would reduce medical
errors in the future. The bill includes a provision that prohibits employers
from retaliating against health care workers who submit reports.
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Intergovernmental Relations — Update
The following is a periodic report on the activities of state and local
government interest groups.
State Legislatures Oppose Export of the Federal Deficit to States
- As Congress and the Bush Administration try to reign in the growing
federal deficit by slashing spending on domestic programs, states are
increasingly being forced to cover the costs, according to
a new report
from the National Conference of State Legislatures (NCSL). NCSL has
identified at least $30 billion in numerous mandates on states that the
federal government is failing to pay for and other cost shifts. This is in
addition to $51 billion in unfunded mandates and cost shifts from the
previous two fiscal years. "Many programs that began as state-federal
partnerships have become a one-sided relationship and are eroding state
lawmakers' control of their own state budgets," declared Maryland Delegate
John Hurson, NCSL's president. Over the next decade, states would have to
pick up at least $300 billion in costs for federal programs, including $45
billion if Congress approves Bush's proposal to cut federal contributions to
Medicaid. Nearly two-thirds of the additional costs to states would be in
K-12 education. NCSL estimates states will spend $6.6 billion to help cover
Medicare drug costs in 2006 alone for those who are dually eligible for
Medicaid and Medicare.
County Budgets Suffering From Federal Budget Choices
- The National Association of Counties (NACo) released a
snapshot survey this week that showed the devastating effect
unreimbursed federal costs are having on county government budgets. The
survey found that for only 30 counties, the three-year total cost of an
average of six federal mandates is $1.5 billion (among them are the Clean
Air Act, the Clean Water Act, HIPAA, HAVA and uncompensated health care). If
all federal mandates were included, the nationwide unfunded mandate figure
could reach in the hundreds of billions of dollars.
Bush Budget Will Eliminate Education Programs Important to Latinos
- President Bush is attempting to eliminate at least six programs integral
to Latino education in America, as reported in this week's issue of
Latino Leadership Link, issued by the House Democratic Caucus. The
programs slated for elimination that would particularly harm Latinos include
dropout prevention, Even Start, Gaining Early Awareness and Readiness for
Undergraduate Programs (GEAR-UP), Parent Assistance Program, Safe and
Drug-Free Schools, Talent Search and Upward Bound.
Federal Investigators Find Medicaid Overpays for Drugs
- At the same time as the Administration and its congressional allies have
proposed massive cuts to the Medicaid program, investigators from the
Government Accountability Office (GAO) have found that Bush Administration
health officials are not enforcing a law that requires drug companies to
reduce their prices on drugs bought for Medicaid recipients. The
report found that the
Medicaid agency rarely verified the accuracy of price information reported
by drug companies, and did not require these companies to reimburse Medicaid
when they did detect errors. Medicaid is entitled to the "best price"
charged to any buyer, but the GAO found that drug manufacturers sometimes
concealed the best prices so they would not have to give discounts to
Medicaid. While the GAO could not determine the amount of federal
overpayments, in the case of one manufacturer, auditors found that proper
accounting would have increased savings to Medicaid by 16 percent.
Return to Index
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