AFSCME Legislative Report

July 29, 2005

AFSCME LEGISLATIVE REPORT

The Congress now begins their August recess, and will reconvene after Labor Day. The next issue of the AFSCME Weekly Report will be Friday, September 9th.

In this issue:

• House Approves CAFTA After Deals Are Promised and Arms Are Broken
• No Action on Social Security Privatization But Votes Promised in September After Members Hear From Constituents Over August Congressional Recess
• Negotiations Approve Massive Surface Transportation Bill 
• Supreme Court Hearings Delayed 
• Estate Tax Vote Expected in Fall 
• Senate and House Approve Medical Errors Bill
• House Passes Harmful Health Care Bill
• Skewed Campaign Finance Provision Attached to Appropriations Bill
• Democrats Propose New Retirement Security Plan
• Democrats Warn Repeal of State & Local Tax Deductions Would Harm States & Localities
• Corporate Ally Approved by Senate Banking Committee to lead SEC
• Justice Department Programs Reauthorized
• Energy Bill Drops Liability Protections for MTBE Manufacturers

House Approves CAFTA After Deals Are Promised and Arms Are Broken
The Central American Free Trade Agreement (CAFTA) passed the House of Representatives, 217-215, at one o'clock in the morning as Rep. Jim Kolbe (R-AZ) publicly promised it would - after the GOP leaders "twisted some Republican arms until they broke in a thousand pieces." After losing the debate on the merits months ago, passing CAFTA required weeks of personal pleadings by the President, a rare visit by both President Bush and Vice-President Cheney to Capitol Hill on the afternoon before the vote, months of GOP leadership threats alternating with offers of goodies and an army of corporate lobbyists promising campaign dollars. And even with all of this, the expansion of NAFTA to six Central American countries and the Dominican Republic squeaked through on two votes. Fifteen Democrats voted for the agreement, which benefits corporations but will hurt workers and damage the environment in the U.S. and in each of the signatory countries, and 27 Republicans bucked their leaders and opposed this bad deal. (Click here for vote.)
(Marge Allen - mallen@afscme.org)

No Action on Social Security Privatization But Votes Promised in September After Members Hear From Constituents Over August Congressional Recess
President Bush has let members of Congress know that he expects them to act on a plan to privatize Social Security when they return from their August recess. Action is expected to begin first in the House Ways and Means Committee on the privatization plan that Rep. Jim McCrery (R-LA) introduced (H.R. 3304), and then could move to the House and Senate floors. The McCrery plan privatizes Social Security by dedicating the annual Social Security surplus to private accounts. The private accounts would replace guaranteed benefits and be funded from each year's Social Security surplus rather than from a percentage of payroll taxes as in the Bush plan. Just like the Bush plan, it includes a privatization tax that would cut guaranteed benefits for people who open an account and these benefit cuts would also apply to spouses and widows, even if they chose not to have an account. The benefit cut could be as large as - or even larger than - the funds that accumulate in the private account. The bill would dramatically increase our national debt, by about $1 trillion in the first decade alone. Under the bill, the national debt would be higher for more than 75 years, even if the accounts stop receiving contributions in little more than a decade. And, despite the claims of its supporters, H.R. 3304 would not prevent the government from raiding the Social Security Trust Fund and using the surplus for other programs. Finally, the House bill does nothing to address the solvency gap that the Social Security program is expected to experience 40 to 50 years from now.
(Marge Allen - mallen@afscme.org)

Negotiations Approve Massive Surface Transportation Bill
House and Senate negotiators came to an agreement on the highway and mass transit bill on July 27th  and the House immediately passed the bill. The Senate is expected to approve the bill over the weekend before adjourning for the summer recess. The bill (H.R. 3) is expected to provide about $286.5 billion for FYs 2004-2009 for highways, public transportation, and safety programs. In addition, both the House and the Senate passed an 11th temporary extension of the current bill, to expire on Saturday, July 30th.

A final version of the bill was not yet available at the time of this report, however our friends who were part of the negotiations have said that we were successful in keeping pro labor language in the bill and removing language that would have been harmful to workers and to public employees in particular.
(Cynthia Bradley - cbradley@afscme.org)

Supreme Court Hearings Delayed
The Senate will not hold hearings on the nomination of John Roberts to the U.S. Supreme Court until September 6th, according to reports from the Senate Judiciary Committee. Roberts was nominated to the Supreme Court by President Bush on July 19th to replace Justice Sandra Day O'Connor who recently announced her retirement.

AFSCME is working with a coalition of organizations in an effort to flush out Roberts' record in a variety of areas including workers' rights, civil rights and individual and constitutional rights. Roberts has only served on the U.S. Court of Appeals for the District of Columbia for two years, making his paper trail on the bench rather limited. He does however have an extensive record as a litigator and has worked as a political appointee for two Republican Administrations. AFSCME is urging the Senate Judiciary Committee to do a thorough review of Roberts' background to determine his suitability to serve a lifetime appointment on the highest court in the land. The Supreme Court hears and decides cases involving crucially important rights and protections - from the right to a safe workplace to minimum wages and overtime compensation, from a workplace free of discrimination to the right to form and join a union.
(Cynthia Bradley - cbradley@afscme.org)

Estate Tax Vote Expected in Fall
Senate Majority Leader Bill Frist (R-TN) said he will force a vote on legislation (H.R. 8) to repeal the estate tax when the Senate reconvenes after Labor Day. The House passed the bill in April by an overwhelming vote of 272-162. Frist has originally said the vote would occur before the August recess, but apparently put the vote off until September to give pro repeal opponents time to round up the 60 votes needed to end an expected filibuster. At the same time, Sen. Jon Kyl (R-AZ) continues to work on a compromise that would not fully eliminate the estate tax, but might cost nearly as much as total repeal which would add nearly $1 trillion to the federal budget deficit. AFSCME members should continue calling their senators asking them to oppose repeal of the estate tax or any compromise that costs nearly as much as repeal.
(Ed Jayne - ejayne@afscme.org)

Senate and House Approve Medical Errors Bill
Over the last week, both the House and Senate approved the Patient Safety and Quality Improvement Act (H.R. 3205), a bill that establishes a voluntary, confidential system for reporting medical errors. The bill establishes organizations that collect voluntary reports of errors, analyzes data for work processes that lead to errors and then makes recommendations for changes to reduce errors. AFSCME succeeded in achieving strong whistleblower protections in the bill for health care workers who report errors.
(Barbara Coufal - bcoufal@afscme.org)

House Passes Harmful Health Care Bill
On Wednesday, the House of Representatives approved legislation (H.R. 525) that would exempt association health plans (AHPs) from state insurance regulations, including patient protections and state solvency rules. The bill was heavily lobbied by the National Federation of Independent Business and other business associations that seek to market skimpy health plans free of government regulation. The bill was approved by a vote of 263 to 165 with 36 Democrats voting for the bill.

The bill is opposed by much of the labor movement because it would drive up costs for 80 percent of small businesses and their workers. The absence of state regulations would also leave small businesses and workers at greater risk of scams in which fraudulent plans would collect premiums but fail to pay claims.
(Barbara Coufal - bcoufal@afscme.org)

Skewed Campaign Finance Provision Attached to Appropriations Bill
Late last week, Senate GOP leaders tacked a change in campaign finance law to the appropriations bill that provides funding for the Federal Election Commission (FEC). The provision would expand the ability of congressional leaders to transfer campaign money to national party committees. Because the GOP controls both houses of Congress, Republican leaders raise more funds for their "leadership" political action committees than do Democratic leaders. As a result, the provision added to the appropriations bill would give the Republican party committees a fundraising advantage over the Democratic party committees.
(Barbara Coufal - bcoufal@afscme.org)

Democrats Propose New Retirement Security Plan
House Democrats' new retirement plan, "Amerisave," builds retirement security, expands opportunities to save, and ensures pension fairness. House Democratic Leader Nancy Pelosi (CA) said, "this isn't about the solvency of Social Security ... It's about security and retirement." The plan invests $75 billion over 10 years and pays for it by repealing $110 billion of "tax incentives for shipping jobs overseas." The plan does not affect Social Security and is the Democrats' alternative to House Ways and Means Committee Republicans' retirement legislation.

The Democrats' plan provides a federal 100 percent match for the first $1,000 contribution to an IRA, 401(k), or similar retirement plan. The plan helps small business by creating new federal tax credits to offset firms' administrative costs related to offering an employee retirement plan and an option to convert employee retirement plans into annuities. The plan encourages employers to automatically enroll employees in 401(k) plans and to offer earlier employer 401(k) matching and vesting. The plan proposes bankruptcy and pension reforms to prevent firms from breaking pension promises and terminating pension plans and ends incentives for corporations to use bankruptcy proceedings to eliminate pension plans. It requires firms to treat CEO's pensions similar to other employees and to enable employees to choose between their traditional pension or a new cash balance plan.
(Marc Granowitter - mgranowitter@afscme.org)

Democrats Warn Repeal of State & Local Tax Deductions Would Harm States & Localities
House Democrats issued a report warning that Republican-supported proposals to eliminate the federal deductions for state and local taxes would "make it more difficult for states to finance government services, such as education, law enforcement, and transportation. It would create pressure to reduce government spending at the state and local level." President Bush is pushing strongly this year for more tax giveaways for the rich and large corporations and may try to repeal the state and local deductions to pay for his giveaways. In the next few months, the President's Tax Reform Panel is expected to recommend repealing these deductions.
(Marc Granowitter - mgranowitter@afscme.org)

Corporate Ally Approved by Senate Banking Committee to lead SEC
The Senate Banking Committee this week approved the nomination of Rep. Christopher Cox (R-CA) to be Chairman of the Security and Exchange Commission (SEC). The SEC regulates businesses and their financial practices in order to protect the public from the consequences of misconduct on the part of those who manage major companies and the private markets. A business failure such as the collapse of Enron and Worldcom can mean a significant loss for individual and organizational investors, including union pension plans.

AFSCME had raised major concerns about the Cox nomination because of his consistent record of siding with corporate interests against the interests of investors during his time in Congress. However, his nomination was packaged with the nomination of two Democratic members to the SEC, and he was approved by voice vote. It is possible that the full Senate could confirm him before the August recess begins.
(Nanine Meiklejohn - nmeiklejohn@afscme.org)

Justice Department Programs Reauthorized
On July 27th, the House Judiciary Committee voted to reauthorize Justice Department programs under its jurisdiction that deal with crime, prisons, sentencing and drug enforcement. Also included in the bill were the Violence Against Women program, the Edward Byrne Memorial Block Grant and Local Law Enforcement Block Grant programs which will now be merged into one grant program called Justice Assistance.
(Jayne Clancy - jclancy@afscme.org)

Energy Bill Drops Liability Protections for MTBE Manufacturers
The House-Senate negotiators on the Energy bill dropped liability protections for the manufacturers of MTBE (methyl tertiary butyl ether), a common fuel additive, which is the source of many lawsuits around the country concerning contaminated water. The National League of Cities (NLC) and the U.S. Conference of Mayors (USCM) strongly opposed limited liability because it shifts clean up costs from the private sector manufacturers to the public sector - states and localities. Although House Republicans strongly supported liability protections and their bill had language to invalidate lawsuits filed by local governments, the Senate's opposition doomed these provisions. Unfortunately, compromise language allows MTBE lawsuits to be transferred from state courts to federal courts, which likely favor manufacturers. On behalf of NLC and USCM, Mayor Brian Wahler of Piscataway, NJ, said the House's MTBE provisions are "an unprecedented cost shift to taxpayers at a time when cities and counties are already challenged to defend the homeland, provide other critical services and keep America strong." Experts estimate the cost to clean up contaminated MTBE sites is $25 billion-$85 billion.
(Marc Granowitter - mgranowitter@afscme.org)

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