Like rubbing salt into a wound, President Bush concluded his 60-Day Social Security tour by calling for huge cuts in the guaranteed benefits for future retirees. Bush embraced the so-called "progressive indexing" plan that seemed to be the flavor of the week on Capitol Hill. Bush's plan would reduce benefits for all future retirees with the sole exception of the lowest-wage workers. These cuts would result from a change in the formula from one that, for 70 years, has been based on wages to a stingier formula based on price growth. Over the long term wages have always grown faster than prices. If the price formula were in place today, an additional seven million elderly would currently be living in poverty, bringing the total to 10.5 million, or 30.4 percent of the elderly. Under the current wage indexation, the Social Security benefit for a person with average earnings over one's lifetime and retiring in 2005 would be $15,336 per year, replacing 42 percent of the average worker's income. If, however, price indexing had been used instead of wage indexing, that same 2005 retiree would receive only $6,180 per year, replacing just 17 percent of income. In other words, a change from wage indexation to price indexation would have meant a 60 percent cut in Social Security benefits for today's retirees.

Two days before Bush's stunning announcement of major cuts in future benefits, the Senate Finance Committee held its first hearing on President Bush's efforts to restructure Social Security. The Democratic members of the committee remained united in their opposition to the Bush privatization plan and there were even signs of cracks in the Republicans' support for the President. One GOP witness and two Republican Senators expressed reservations about the White House's approach to Social Security changes. Sen. Craig Thomas (R-WY) questioned the wisdom of adding trillions of dollars in federal debt in the coming decades to finance the President's plan. And Sen. Olympia J. Snowe (R-ME) seemed to signal intractable opposition to converting part of the defined Social Security benefit to variable returns from stock and bond investments. Senate Finance Committee Chairman Charles E. Grassley (R-IA) said that he is determined to press forward with Social Security legislation, even if it passes out of his traditionally bipartisan committee with only GOP votes. Republicans on the panel will meet in two weeks to begin hashing out legislation that Grassley hopes could eventually bring some Democrats on board.

A Massachusetts investment executive and member of Bush's 2001 Social Security Commission, Robert Pozen, testified in favor of his "progressive indexing" plan. Under the Pozen plan, low-income workers would continue to have their initial retirement benefits based on wages, but the retirement benefits of middle- and upper-income workers would be based on price inflation. Pozen would also allow workers to divert two percent of their wages, to a maximum of $3,000 a year, into investment accounts.

In a dangerous development, Sen. Joe Lieberman (D-CT) said that he was interested in Pozen's plan. Sen. Grassley immediately seized on the favorable comments expressed by Sen. Lieberman to say that this "gives credibility to the Pozen plan as the basis for a compromise."

While the Senate was holding its hearing, opponents of Bush's scheme, led by AFSCME and the Americans United to Protect Social Security coalition, held a rally outside on the Senate lawn that was attended by over 150 Democratic Senators and House members who signed a pledge not to privatize Social Security.

Also, House Ways and Means Chairman Bill Thomas (R-FL) and Ways and Means Social Security Subcommittee Chairman Jim McCrery (R-LA) announced that the House Ways and Means Committee plans to move quickly to outline a process for considering Social Security options, including President Bush's proposals.

After several weeks of inaction, Congress approved the Republican leadership budget agreement for FY 2006 by the narrowest of margins. The plan passed the House 214-211 and the Senate by a vote of 52-47 after a deal was reached to restore one half of the Medicaid cuts originally dropped by the Senate. The final agreement closely follows the outline of the budget submitted by President Bush. It forces deep cuts in both mandatory spending programs set by statute as well as annually appropriated or discretionary spending programs over the next five years. The cuts would be used to pay for substantial new tax cuts and increases in funding for defense and international programs. It also includes language opening the Arctic National Wildlife Refuge to oil drilling. The budget resolution would increase deficits over the next five years by $168 billion.

Highlights of the budget agreement includes:

• Cuts in Medicaid and Low-Income Programs - $34.7 billion is included in mandatory cuts in programs that fund vital public services, including $10 billion in Medicaid.
• More Tax Cuts for High-Income Individuals - Tax cuts totaling $106 billion over five years are included, with $70 billion to be achieved through the fast-track reconciliation process, which prevents filibusters. These tax cuts are expected to include extension of the capital gains and dividend tax cuts, which primarily benefit people at high-income levels.
• Domestic Spending Slashed - $212 billion in cuts over five years would be made in domestic programs, including those that fund education, veterans' health care, environmental protection, housing, and many other program areas.
• Defense and International Increases - Funding for defense and international discretionary programs would be increased by $186 billion over five years, with most of the increase going to defense to pay for operations in Iraq and Afghanistan.

On Wednesday, the Senate Rules and Administration Committee debated the "527 Reform Act of 2005," a campaign finance bill authored by Sens. John McCain (R-AZ) and Russell Feingold (D-WI). AFSCME opposes the bill for a number of reasons, including the fact that it would prohibit the national union from funding many of the grassroots political activities that AFSCME councils and locals conduct in support of state and local candidates. In addition, the bill would also lead to the elimination of progressive organizations such as America Coming Together and America Votes that conduct grassroots work to advance labor-endorsed candidates.

During the panel's debate, it also became quite clear that GOP leaders intend to worsen the bill when it goes to the Senate floor. Sen. Ted Stevens (R-AK) stated that he would offer an amendment that would prohibit advocacy organizations, including unions, from sponsoring ads that urge the public to contact Members of Congress about issues. It is also expected that GOP leaders will push for changes to allow corporate trade associations to raise more political funds and for wealthy individuals to increase their contributions to candidates and parties.

Several amendments were made to the bill during the committee's debate. However, Senate GOP leaders intend to strip the committee amendments from the bill before putting it on the Senate floor for consideration. In particular, GOP leaders will seek to remove a helpful amendment offered by Sen. Charles Schumer (D-NY) that would have exempted from the bill the grassroots activities of unions and other advocacy organizations and 527 groups that engage only in grassroots voter mobilization. The bill could be taken up by the full Senate as early as June.

AFSCME members in several states flooded the offices of U.S. Senators with calls expressing their opposition to the so-called "nuclear option" this week. About a thousand AFSCME members called their Senators to say that they are opposed to plans to eliminate the filibuster in the U.S. Senate. The proposal to eliminate the filibuster, termed the "nuclear option," is the brain child of Senate Majority Leader Bill Frist (R-TN) and his allies who want to change the rules and allow a 51 majority vote to approve judicial nominees as opposed to the current 60 votes that are needed to end debate and move on to a final vote. AFSCME's message continues to be that taking away the filibuster is an abuse of power that will not be limited to judicial nominations. Once the nuclear option has been used to push through judicial nominations, it inevitably will be used to enact legislation that will weaken or eliminate important worker protections and civil rights.

On Thursday, the Senate Judiciary Committee began debate on an asbestos compensation bill (S. 852) introduced by Sens. Arlen Specter (R-PA) and Patrick Leahy (D-VT) and opposed by AFSCME. The bill would establish a trust fund to compensate victims of work-related asbestos exposure, as an alternative to the litigation system. However, S. 852 has a number of significant flaws, including the fact that its funding would be inadequate to provide payout for all expected claims. After debating 16 amendments, the committee postponed further consideration for two weeks. It is expected that over 80 additional amendments will be offered when consideration resumes.

More than 170 Representatives have signed a bipartisan letter to fully fund the Section 8 Housing Choice Voucher Program and oppose the Administration's proposed cuts in this area. The bipartisan letter, led by Reps. Jerry Nadler (D-NY), Nydia Velázquez (D-NY), Christopher Shays (R-CT), and Patrick Tiberi (R-OH), emphasizes that housing vouchers are critically important to secure safe, affordable housing for low-income families, seniors and people with disabilities. At the same time, a similar letter was sent by over 40 Senators to the Senate Appropriations Committee.

The Senate began debate of the massive $284 billion highway and transit bill on April 28th. The bill would provide spending and policy direction for the nation's highway, highway safety and transit programs. Consideration of the bill will resume when the Senate returns from its recess in May.

The House Education and the Workforce Committee recently approved four bills that threaten workplace health and safety. Rep. Charlie Norwood (R-GA), who introduced the four bills, maintains that they are common sense fixes that would alleviate some regulatory burdens faced by employers. These bills, however, are dangerous measures that represent enormous favors for big business and also threaten worker safety and health by weakening enforcement of the Occupational Safety and Health Act (OSHA). Collectively, these bills (H.R. 742, H.R. 741, H.R. 740 and H.R. 739) would weaken important OSHA policies that have served to protect the health and safety of workers all across this country.