AFSCME Legislative Report
June 17, 2005
AFSCME LEGISLATIVE REPORT
Governors testify on Medicaid Reform. Social Security privatization plan
stalled for now. Spending bills move forward in House and Senate.
In this issue:
Governors Present Their Medicaid Reform Plan to Capitol Hill
On behalf of the National Governors Association (NGA), Governors Mark Warner
(D-VA) and Mike Huckabee (R-AR) testified before two key congressional
committees, outlining the framework of a bipartisan agreement of the NGA on
Medicaid reform. The governors seek higher rebates from drug manufacturers and
increased use of generics. They also want to institute new tiered co-payments
from beneficiaries. The NGA plan would make it more difficult for individuals to
transfer assets to avoid paying for long-term care services and proposed that
the federal waiver process be simplified.
Democrats on both committees expressed serious reservations about the
cost-sharing proposal because it would result in many not receiving the care
they need. The Governors declined to attach a dollar figure to any of their
proposals. The committees need to come up with at least $10 billion in Medicaid
cuts in September.
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GOP Congressional Leaders Increasingly Concerned About Prospects of
Passing Bush Social Security Privatization Plan
GOP House and Senate leaders urged Bush to think about an exit strategy if
his plan to privatize Social Security fails to gain more support soon. Citing an
impasse with the Democrats in both chambers as well as dissention within their
own ranks, Republican congressional leaders told the White House that it may
soon be time for Bush to rethink his strategy and may even have to look for an
escape route.
Democrats remain united in their opposition, and the Senate Finance Committee
even lacks the necessary Republican votes to approve a Social Security plan that
would divert some payroll taxes to private investment accounts because Sen.
Olympia Snowe (R-ME) has remained steadfastly opposed.
While House Speaker J. Dennis Hastert (R-IL) has told his members that he
remains averse to a floor vote on such a plan if the Senate cannot act, House
Ways and Means Committee Chairman Bill Thomas (R-CA) is continuing to hold
hearings on various aspects of privatizing Social Security. Thomas claims that
he has the votes in his committee to approve broad retirement legislation that
would include private accounts. Thomas held two hearings this week, the first on
raising the retirement age.
Some White House officials are said to understand that the Congress may not
be able to pass a plan with private accounts, but they are also concerned that
pulling back from private accounts now would undermine Bush's congressional
allies — such as Sen. Rick Santorum (R-PA) — with no guarantee that there is any
compromise that could be reached. There is a significant block of members within
GOP ranks who will not support any compromise if it lacks private accounts while
the Democrats are united around their position that no compromise discussions
are possible so long as private accounts remain "on the table."
White House aides are reported to be debating whether Bush could claim a
victory if he settled for a Social Security deal without private accounts. Some
White House advisors have argued that Bush could give up on private accounts and
take credit instead for solving the long-term financial problems.
But political advisor Karl Rove has flatly rejected abandoning private
accounts. While his staff debates among themselves whether he should pull back
on promoting his privatization plan, President Bush seems adamant in sticking to
it. Speaking at a $2,500 plate fundraiser, Bush took the "high road" by blaming
the Democrats for being obstructionists, asserting that Democrats "stand for
nothing but obstruction" on Social Security and other issues on his agenda.
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Bush Trade Deal Clears Key Committee
The Central American Free Trade Agreement (CAFTA) was approved by the House
Ways and Means Committee and the Senate Finance Committee. CAFTA binds the
United States with Costa Rica, El Salvador, Honduras, Guatemala, and Nicaragua,
along with a sister agreement with the Dominican Republic, in an agreement that
extends the NAFTA model and lacks provision to protect labor rights. Ranking
member Rep. Charles Rangel (D-NY) offered a proposal to delay CAFTA from going
into effect until CAFTA countries have brought their labor standards into line
with international standards. It was rejected on a party-line vote, 17-24. The
Senate Finance Committee approved by voice vote an amendment offered by Sen. Ron
Wyden (D-OR) that would expand trade adjustment assistance to workers in service
industries.
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House Appropriations Committee Approves Labor-HHS-Education Funding
Bill
The House Appropriations Committee approved an FY 2006 spending bill for the
departments of Labor, Health and Human Services (HHS), and Education as we go to
press. The $602 billion bill provides $143 billion in discretionary spending,
which is $164 million lower than FY 2005, and an increase of $924 million over
President Bush's budget proposal. We will include details for key AFSCME funding
areas in next week's report. The entire House is expected to vote on the bill
next week. The Senate has not yet acted on its companion funding bill.
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House Approves Justice-Commerce Spending Bill
The House of Representatives voted to approve the Justice-Commerce spending
bill. The bill cuts funding for state and local law enforcement significantly by
$400 million. In an important victory for AFSCME, the bill rejects President
Bush's proposal to move the Community Development Block Grant (CDBG) program
from the Department of Housing and Urban Development (HUD) to the Commerce
Department and merge it with other economic development programs. The Senate
Appropriations Subcommittee has not yet scheduled action on this bill.
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Senate Appropriations Committee Cuts First Responder Funds
On Thursday, the Senate Appropriations Committee considered the FY 2006
Homeland Security Department spending bill. The bill approved by the committee
calls for cuts of over $400 million in first responder grants to state and local
governments, compared with spending in this year. The bill would also reduce
grants to firefighter departments by $100 million.
The bill provides $40 million to states to help pay for the cost of new
drivers' license standards required by the recent enactment of REAL ID. The
standards would be set by the Homeland Security Department and are essentially
aimed at creating a national identity card that would be harder for terrorists
to acquire. The $40 million allotment is many times less than the amount the
requirement is expected to cost. One state, Virginia, has stated that it will
cost the state $237 million to make the transition to federal standards.
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House Appropriations Subcommittee Votes to Preserve the Community
Development Block Grant
The House Appropriations Subcommittee on Transportation-Treasury-Housing &
Urban Development (HUD)-Judiciary-DC approved its version of the FY 2006
spending bill by voice vote. The bill rejected President Bush's proposal to move
the popular Community Development Block Grant (CDBG) program from HUD to
Commerce and merge it with 17 other economic development programs. Although the
bill retains CDBG at HUD, it cut HUD funding 6 percent from last year and
provided a total of only $4.2 billion of which $3.86 billion was for the
program's formula funding, which was $250 million less than last year's formula
funding. The bill funds highway programs at $37 billion to match the level in
the House's surface transportation reauthorization bill (H.R. 3). The full House
Appropriations Committee is scheduled to vote on this bill in the near future
and the Senate Appropriations Subcommittee has not yet scheduled action on this
bill.
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District Council 37 Participates in Congressional Press Conference
About 9/11 Funds for New York
On Thursday, District Council 37 Health and Safety Director Lee Clarke spoke
at and helped emcee a press conference with Sens. Charles Schumer (D), Hillary
Rodham Clinton (D), Rep. Carolyn Maloney (D) and several other members of the
New York congressional delegation to urge the President and the House GOP
leadership to make good on funds promised to the City of New York for 9/11
rescue and recovery workers. Following the 9/11 attack, President Bush and
congressional leaders promised $175 million for health care treatment and
monitoring of Ground Zero workers and volunteers. However, President Bush is now
urging the Congress to take back $125 million of the funding.
First responders, and recovery workers who later assisted in the Ground Zero
clean up, were exposed to airborne toxic substances that included asbestos,
lead, polychlorinated biphenyls (PCBs), mercury, dioxin, fiberglass, caustic
dust, and gases with potential serious and long term health effects. As a
result, many Ground Zero workers have been afflicted by asthma and other chronic
and disabling diseases. While it is too early to know whether there will be an
increase in cancers, it is likely given the exposure to carcinogens. Therefore,
it will be necessary to monitor for cancers and treat those related to Ground
Zero exposure far into the future.
Despite the outcry against the $125 million take back, the House
Appropriations Committee voted on Thursday against an amendment offered by Rep.
James Walsh (R-NY) that would have restored the funding.
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Mayors Elect New Leader
The United States Conference of Mayors (USCM) elected Beverly O'Neill, the
Mayor of Long Beach, California, to serve as its new President during its annual
meeting in Chicago, IL. O'Neil takes over for Akron, Ohio mayor Donald L.
Plusquellic. O'Neill wants to focus attention on 10 key areas; the Community
Development Block Grant (CDBG), gang violence, homeland security, transportation
and infrastructure investment, jobs and education, housing and homeownership,
tax reform, military base closings, international affairs, and metro economies.
More than 200 of the nation's mayors attended the meeting which featured
meetings with several Administration officials and congressional leaders. A
number of resolutions were adopted, including a strongly worded rebuke to the
Bush Administration efforts to restructure and reduce funding for Community
Development Block Grants. A resolution opposing the President's plan to
privatize Social Security was defeated by one vote in a preliminary committee
proceeding.
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States Beware: Risk Losing Millions in Unspent Federal Education
Funds
The U.S. Department of Education (DOE) recently warned states that if their
FY 2003 balances are not obligated or drawn down by September 30, 2005, the
unspent money will no longer be available to spend on their education programs
and will revert to the U.S. Treasury. (States have an additional 90 days to draw
down any obligated funds, and may request an extension.) For example, California
needs to either obligate or draw down $216 million for DOE-funded programs by
the September 30th deadline; New York needs to spend $208 million; Michigan $101
million; New Jersey $70 million; Ohio $62 million, according to a state-by-state
analysis from Federal Funds Information for States (FFIS). Each year, states
have 27 months to obligate or draw down that fiscal year's DOE funds. And each
year, millions of dollars revert back to the Treasury.
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Health Care for Uninsured Will Add $922 to Family Insurance Premiums
in 2005
Premiums for employer-provided family health insurance will cost, on average,
an extra $922 in 2005 to cover the unpaid expenses of health care for the
uninsured, according to a
report released by the health consumer organization Families USA. The report
found that approximately one-third of the health care costs incurred by the
uninsured are paid by uninsured people themselves. Of the remaining costs,
generally considered "uncompensated care," some is picked up by federal, state
and local government sources and the remaining costs are shifted and added on to
the insurance premiums for people who have health coverage. It is the cost of
the latter that this report quantifies for the first time. By 2010, the authors
project that these added premium costs will rise to an average of $1,502. "This
report underscores the importance of strengthening and protecting public
programs such as Medicaid . . . Cuts would only force more and more families
into the ranks of the uninsured, thereby increasing insurance premiums for
everyone who has health coverage," said Ron Pollack, executive director of
Families USA.
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