AFSCME Legislative Report
July 15, 2005
AFSCME LEGISLATIVE REPORT
Congress — Week ending July 15
Congress continued action on federal department spending bills, while the
Senate passed funding for Homeland Security. House GOP leaders introduced new
Social Security privatization legislation and approved a bill to reduce medical
errors.
In this issue:
Rehnquist Says He's Staying on Court
In a surprise announcement, Chief Justice William Rehnquist announced that he
does not plan to retire at this time. Rehnquist, in a personal statement
released hours after he was released from the hospital after treatment for a
fever, said "I will continue to perform my duties as chief justice as long as my
health permits." Rehnquist continues to be treated for thyroid cancer, but
wanted to end speculation that he will soon announce his retirement giving
President Bush another Supreme Court vacancy to fill. Thus far, Bush has delayed
announcing a nominee to replace retiring justice, Sandra Day O'Connor.
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Social Security Reform Put Off Till September
House and Senate Republican leaders said neither chamber will consider Social
Security Reform legislation before September. House leaders said they are too
busy working on trade legislation and Senate counterparts cannot agree on how to
change the popular program.
House Ways and Means Social Security Subcommittee Chairman, Rep. Jim McCrery
(LA), introduced legislation that will use Social Security's surplus to fund
individual private accounts and will specify benefit cuts and may raise the
retirement age. Using Social Security's surplus to fund private accounts will
mean that the surplus, which is currently invested in Treasury bonds that pay 3
percent interest and must be repaid to the Social Security program, will no
longer be available to pay the guaranteed benefits that retirees, survivors and
the disabled receive. McCrery's proposal will place Social Security in massive
debt for the next 75 years.
Meanwhile, the Senate Finance Committee's Republicans have been deadlocked
over a Social Security overhaul, unable to agree on creating individual accounts
in the program or on changes that would reduce its future costs, such as raising
the retirement age. As a result, Senate Republicans are discussing alternative
ways to proceed, including waiting to take up a House-passed bill.
Republicans are specifically targeting senators, such as Sen. Ben Nelson
(NE), who represent states that supported Bush in the 2004 election. GOP aides
privately acknowledge that without the support of these senators, Bush's goal of
overhauling the Social Security system will fall short.
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Labor, Health, Social Services and Education Programs All Take Hits
On July 14, the full Senate Appropriations Committee unanimously passed its
bill to fund Labor, HHS and Education programs for fiscal year (FY) 2006. Some
specific actions taken in the Senate Appropriations Committee bill include:
- Cuts funding for the Employment Service State Grants by $34 million.
- Provides flat funding for Unemployment Insurance State Grants — a cut
when adjusted for inflation.
- Rejects the House's funding cuts for Dislocated Workers' programs and
instead flat funds the program and eliminates most cuts for Adult Training
grants.
- Allows OSHA to continue to enforce the annual fit testing of respirator
masks that employers are required to provide workers who are at risk of
exposure to tuberculosis (the House bill prohibits OSHA from enforcing its
standard).
- Fails to retain $125 million in workers compensation funds for State of
New York 9/11 workers and volunteers (The House bill took back these funds
as well.)
- Cuts grants to health departments for emergency preparedness against
bioterrorism and other public health emergencies by $130 million and grants
for bioterrorism hospital preparedness by $4 million.
- Increases funding for Community Health Centers by $105 million.
- Decreases funding for No Child Left Behind (NCLB) programs by $750
million, an improvement over the House's $13.2 billion in cuts, but still
places an unfair financial burden on states and local school districts that
must meet NCLB requirements. While the bill adds $100 million to Title I for
schools serving disadvantaged children, this is the smallest increase in
eight years and $9.9 billion less than the NCLB authorization level.
- Reduces the federal share of special education costs from 18.6 percent
to 18 percent, the first time in 10 years that the federal government would
slide backwards on its commitment to students with disabilities.
- Underfunds Head Start by adding only $31 million over last year, less
than the House increase of $56 million and a significant cut when adjusted
for inflation.
- Freezes funding for the Child Care and Development Block Grant (CCDBG),
marking the fourth year in a row in which this funding stream, that is used
by states to assist with child care expenses for low-income families, has
been either frozen or cut.
- Restores funding for the Community Services Block Grant to FY 2005
level, which President Bush proposed for elimination and that the House
slashed funding for by half.
- Increases funding for the Compassion Capital Fund by $40 million, which
steers federal funds to private, faith-based service providers.
The Labor-HHS-Education appropriations bill is not expected to come to the
Senate floor before the August recess. In the fall, the bill will either be
voted on individually, or will be folded into a combined, or "omnibus,"
appropriations bill.
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Effort to Increase First Responder Grants Fails
The Senate did pass the Homeland Security Funding bill, including $1.5
billion in grants for state and local preparedness and $400 million for the Law
Enforcement Terrorism Prevention Program. During Senate debate on the spending
bill for the Homeland Security Department on Thursday, Sen. Daniel K. Akaka
(D-HI) offered an amendment to increase the FY 2006 appropriation for grants to
state and local governments for first responders. The amendment failed on a
near-party line vote of 42 to 55, with every Republican opposing and all but one
Democrat supporting the amendment. The Akaka provision would have added $587
million to first responder grants, bringing the total up to the level of
spending in the current fiscal year.
The Senate also rejected an amendment to the Homeland Security Appropriations
bill that would have increased spending for rail and transit security by $1.2
billion. The amendment was offered by Sens. Richard Shelby (R-AL) and Paul S.
Sarbanes (D-MD), but failed by a vote of 53 to 45. Since the amendment required
60 votes to pass. The amendment was offered on the heels of the bombings of the
transit system in London, which demonstrated the vulnerability of transit
systems to terrorist attack.
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Battle Looming in the House on CAFTA Before August Recess
President Bush and his advisers are beginning a three-week effort to round up
House votes for the Central America Free Trade Agreement (CAFTA), culminating in
an anticipated floor vote the last week of July. The CAFTA vote is likely be one
of the last before the August recess.
House GOP leaders and Bush officials cannot afford to leave any stone
unturned as they hunt votes for the agreement, which is opposed by all but a
handful of House Democrats and faces greater Republican opposition than any
trade agreement in years. Deals are being offered on agricultural subsidies —
especially sugar beets, on national security, on China currency, on textiles —
on just about anything a member wants except labor rights for workers.
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House Approves Legislation that Threatens Worker Safety and Health
The Republican leadership in the House of Representatives pushed through a
package of bills that threaten the health and safety of America's workers. The
same bills were approved by the House last year, but the Senate failed to take
up the measures.
Collectively, the four bills would erode important Occupational Safety and
Health Administration (OSHA) policies that have served to protect workers all
across this country. H.R. 739 would allow employers to avoid the current law's
15-day deadline to contest OSHA citations, resulting in a delay in correcting
dangerous workplace hazards. H.R. 740 would stack the Review Commission with new
members while requiring that they have legal training. H.R. 741 would remove
policymaking and the interpretation of OSHA's policies from the Secretary of
Labor and give that responsibility to the OSHA Review Commission, thus making it
difficult for the Secretary of Labor to enforce and implement the Act. Finally,
H.R. 742 would require OSHA to pay attorneys' fees for small employers when they
prevail in administrative or enforcement proceedings, placing yet another
financial burden on an already underfunded agency.
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House Panel Approves Bill to Reduce Medical Errors
The House Energy and Commerce Committee's Health Subcommittee considered the
"Patient Safety and Quality Improvement Act," a bill that would establish a
national, voluntary, confidential system for reporting medical errors in all
health care workplaces. Importantly, the bill includes strong protections for
health care workers who report errors. The full Energy and Commerce Committee is
expected to consider the bill later this month. A Senate committee approved a
version of the legislation in March and also included strong whistleblower
protections. The bills are aimed at identifying and rooting out practices that
create the opportunity for medical errors.
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House Refuses to Raise the Minimum Wage
On a mostly party-line vote, the House of Representatives rejected an effort
by Reps. George Miller (D-CA) and Major Owens (D-NY) to raise the minimum wage
to $7.25 over a two-year period. Miller and Owens offered their amendment during
House consideration of four Republican bills that would threaten workers' safety
by undermining the Occupational Safety and Health Act. The House voted 223 to
191 to refuse to consider the amendment, which is identical to legislation
introduced by Miller in May, the Fair Minimum Wage Act of 2005. That legislation
would raise the national minimum wage to $7.25 from $5.15 in three steps: to
$5.85 two months after enactment; to $6.55 one year later; and to $7.25 one year
after that. The inflation-adjusted value of the minimum wage has declined 20
percent since 1997. The legislation is identical to legislation introduced in
the Senate by Sen. Edward Kennedy (D-MA).
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New Congressional Report Demonstrates Estate Tax Has Minimal Impact
on America's Farms
The non-partisan Congressional Budget Office (CBO) released a new paper,
"Effects of the Federal Estate Tax on Farms and Small Businesses," which
undermines the myth that the estate tax plagues America's farms. CBO reported
that under today's exemption level, only 300 American farm estates would owe
estate taxes. If next year's exemption level of $2 million had applied in 2000,
only 123 farm estates in all of America would owe estate taxes. CBO also
reported nearly of all these taxed farms could pay the estate tax without
affecting the farms' ongoing operations. The House has already voted to repeal
the estate tax and a Senate vote is expected soon. For more info on the report,
go to:
http://www.cbo.gov/ftpdocs/65xx/doc6512/07-06-EstateTax.pdf
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White House Projects $333 Billion Deficit
The White House mid-session budget review projects a slight improvement for
this fiscal year's deficit to $333 billion, but continues to project deficits
far into the future. While this report improves on last year's projection, the
forecast remains significantly worse than projections from 2001, before Bush
took office. Experts attribute much of the reduced revenue to Bush's misguided
2001 and 2003 tax breaks. Looking at this year's data, the House Budget
Committee's Ranking Democrat, Rep. John Spratt (SC), said, "as bad as the
projected deficits seem, the true picture is worse" because the projection lacks
full costs for future military operations in Iraq and Afghanistan.
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Intergovernmental Relations — Update
The following is a periodic report on the activities of state and local
government interest groups.
- Governors' New June 2005 Fiscal Survey of States — The National
Governors Association (NGA) new survey,
The Fiscal Survey of
States, reported that most state budgets remain challenged by backlogged
spending demands and rising health care costs, especially Medicaid, despite
increased revenue collections. In the survey, 42 states reported they took
in more revenues during FY 2005 than expected. To balance their budgets in
FY 2004, states used a combination of layoffs, furloughs, early retirement,
reductions to local aid, reorganization of programs and other methods. Five
states already reduced their fiscal enacted 2005 budgets and 10 governors
expect to cut spending in 2006.
- State Children's Health Insurance Program (SCHIP) Funds Projected to
Run Out in Several States — A new
report by the
Congressional Research Service projects that from seven to 14 states will
use up their federal allotments of funds under the SCHIP program by FY 2007.
The reasons for this projected shortfall include: the pool of unspent SCHIP
funds is shrinking; health care costs are increasing; enrollment in private
insurance is falling; and more is being spent on finding and enrolling
uninsured kids. One option the report lists to ensure that states never
exhaust their federal balances of SCHIP funds is to turn the program into an
open-ended entitlement.
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