AFSCME Legislative Report
October 7, 2005
AFSCME LEGISLATIVE REPORT
Bush nominates Harriet Miers to the Supreme Court. Medicaid relief for Katrina victims still stalled due to opposition from Bush Administration. Deeper cuts in domestic spending proposed.
In this issue:
President Bush Nominates Longtime Friend and Aide to the Supreme Court
President Bush has nominated a virtually unknown friend of his to replace Justice Sandra Day O'Connor on the Supreme Court. On October 3rd, President Bush nominated Harriet Miers to replace O'Connor, who announced several months ago that she will be retiring from the Court.
Miers is a longtime friend and confidant to President Bush who has never served as a judge. In 1998, Miers served as Bush's personal lawyer during his second gubernatorial race. She was responsible for downplaying the scandal on Bush's National Guard service. Governor Bush then named Miers to the Texas Lottery Commission, an agency that was known for its scandals. And, Miers later joined Bush in the White House after his election and now serves as the White House Counsel.
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Bush Calls for More Spending Cuts to Pay for Katrina Relief
President Bush called upon Congress to find more spending cuts to pay for hurricane-related spending in programs other than defense or homeland security. Bush said, "I will ask them to make even deeper reductions in the mandatory spending programs…than are already planned." House Budget Committee Chairman Jim Nussle (R-IA) also announced he wants to amend the FY 2006 budget resolution "calling for additional savings — in both mandatory and discretionary spending — to make a down payment on disaster relief." Not to be outdone, House Speaker Dennis Hastert (D-IL) has now wants “tens of billions in additional cuts.” Hastert would slash $50 billion from mandatory spending programs and cut all other non-defense and security spending with an across-the-board cut.
The Budget Resolution already calls for non-defense cuts of $35 billion, and Nussle wants to add $20 billion in additional cuts to pay for hurricane relief, $3.5 billion of that would come from mandatory spending programs like Medicaid and Food Stamps. Senate leaders are already working on additional cuts that they would want to see added to the omnibus budget reconciliation legislation, which is expected to be considered later in October and early in November.
The budget bill also calls for $70 billion in additional tax cuts that would benefit the wealthy and business, and GOP leaders are also talking about additional tax cuts that they argue are needed. Senate Finance Chairman Charles Grassley (R-IA) has convened a meeting of Senate Republicans to push more tax cuts, despite the unfairness of asking for more tax cuts when the cost of post-Katrina rebuilding is skyrocketing. One thing Grassley wants done is to extend the tax break for dividends and capital gains for wealthy investors for two additional years even though the current provision doesn’t expire until 2008. The cost of a two-year extension alone would be approximately $21 billion.
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Senate Agriculture Committee Postpones Scheduled Meeting on Food Stamp Program Cuts
The Senate Agriculture Committee cancelled its plan to approve $3 billion in cuts in programs under its jurisdiction at the very last minute because of a dispute over the treatment of the dairy support program. In a sign of how difficult the funding constraints have become, food stamp advocates were relieved that the committee adopted the President's proposals for $574 million in cuts instead of more radical measures. The House Agriculture Committee is considering plans to approve a food stamp block grant and broader waiver authority. AFSCME strongly opposes the food stamp cut which will deny approximately 300,000 working poor families of the crucial assistance under the program.
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Katrina Medicaid Relief Still Stalled While Senate Finance Committee Looks at Deeper Cuts in Medicaid and Medicare
Senate Finance Committee Republicans met this week to gauge support for a package of Medicaid and Medicare cuts said to total as much as $17 billion, in an effort to pass bipartisan legislation expanding the Medicaid program for Katrina victims. The Katrina Medicaid bill, totaling about $9 billion, is opposed by the White House which believes that it is too expensive and needs to be paid for by deeper cuts in the overall program. Sen. Max Baucus (D-MT), the Democratic sponsor of the relief bill, has stated that he will not continue to work on the budget-cutting bill if the controversy surrounding the Katrina relief bill is not resolved.
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Bush Concedes Failure to Privatize Social Security
President Bush, speaking at a rare press conference, acknowledged that his proposed Social Security overhaul is going nowhere for now but he also promised to continue to remind people that there is a long-term issue that needs to be solved. And although Bush refused to say that Social Security was off his agenda entirely, he did not put it on the list of priorities that he rattled off. Bush went on to accuse members of Congress of failing to "show some political courage" in order to address the long-term problem faced by Social Security.
Rep. Clay Shaw (R-FL), a member of the House Ways and Means Social Security Subcommittee, immediately responded to Bush's charge that Congress was to blame for failing to privatize Social Security by placing part of the blame on Bush, who Shaw said never offered his own bill and was unable to unite congressional Republicans behind a single plan. Other Republicans, including Senate Finance members Gordon H. Smith (R-OR) and Olympia J. Snowe (R-ME), said Bush should have sought Democratic participation before outlining a plan to create individual investment accounts using part of Social Security's payroll tax. Democrats have been solidly united against individual accounts.
However, Ways and Means Chairman Bill Thomas (R-CA) signaled that he was not conceding the fight. Thomas told Republican senators at a meeting last week that he still hopes to advance a Social Security overhaul although he did not say how he was going to achieve this. In the past, Thomas talked of turning a pension overhaul bill (H.R. 2830) into a "retirement bill" that would include individual Social Security accounts, measures to shore up the program's finances and incentives for private saving.
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House Approves Reduced Funding for First Responders
On Thursday, the House passed the final version of the FY 2006 spending bill for the Homeland Security Department and its programs. The recent hurricanes in the Gulf Coast illustrated the need for increased funding for state and local first responders to deal with disasters. For example, as in the 9/11 attack, local first responder agencies in New Orleans were unable to communicate with each other during Hurricane Katrina because of deficiencies in communications equipment. However, the bill ignores this experience and follows through on a push by the Administration to reduce funding levels for first responders. Programs that sustained cuts include Urban Area Grants which are directed to communities more likely to be terrorist targets; basic emergency preparedness grants for states; and firefighter grants. Terrorism grants for local law enforcement agencies were maintained at FY 2005 levels.
The bill also failed to make substantial increases in transit security, a vulnerability that has not been adequately addressed, even in the aftermath of the London bombings last spring. The Senate is expected to act on the final bill later this month.
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DOL Submits "Katrina" Proposal to Allow States to Transfer Funds Between State Employment Service Grants and WIA Programs
The Department of Labor (DOL) has proposed legislation to increase "flexibility" to transfer workforce funds in states affected by hurricane Katrina. Because of the way the legislation is drafted, virtually every state except Alaska and Hawaii would be able to transfer all of their Workforce Investment Act (WIA) and Employment Service grant money between the two programs. The legislation is expected to be introduced in the House before the Columbus Day recess. The DOL proposal is a crass effort to end run the normal legislative process to achieve its block grant objectives and end the state employment service.
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New Report Shows Bush Gulf Coast Wage Cut: Could Slow Rebuilding and Raise Costs to Taxpayers
A report issued by the Economic Policy Institute (EPI) shows that President Bush's decision to cut wages for construction workers on federal projects in the areas affected by Hurricane Katrina could actually slow reconstruction, increase rebuilding costs, and speed the flow of much-needed dollars out of the Gulf region. Last month, the President suspended the wage protections of the 1931 Davis-Bacon Act, which requires federal contractors to pay "prevailing wages" on construction projects. The EPI study examines federal highway reconstruction efforts in the aftermath of the 1994 Northridge earthquake in California and finds that prevailing wage standards helped to ensure that rebuilding was accomplished by highly productive workers over an unexpectedly brief time period, and that the finished work was of a high quality. Because the work was completed quickly and efficiently, wage standards likely led to lower, not higher, construction costs. The study also finds that federal prevailing wage standards, by keeping money in the devastated area, were helpful in Southern California's overall economic revitalization.
Legislation to restore the Gulf Coast wage cut, introduced several weeks ago by Rep. George Miller (D-CA), now has 205 cosponsors in the House, including every single Democratic member.
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Unemployment Insurance Benefits Extension Still Stalled
The refusal of several key Senators to allow legislation providing for Medicaid benefits for Katrina evacuees to move forward also has held up a Senate proposal to provide 13 weeks of extended unemployment benefits to workers who have lost their jobs because of hurricane Katrina, which is in the same bill. Meanwhile, the House has approved a special $500 million distribution to disaster states' unemployment trust funds ($400 million to LA, $85 million to MS, and $15 million to AL), without addressing the need for additional assistance to displaced workers from those states. The distribution of funds will prevent automatic increases in employer taxes and/or cuts in unemployment benefit payments, which already are the lowest in the country.
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Education Proposals Moving
After providing more than $62 billion in relief funds for areas devastated by hurricanes Katrina and Rita, lawmakers are beginning to consider the bigger economic effect of the storms, surrounding the outlook for K-12 funding. While Congress has enacted several post-Katrina bills, most of the aid was directed to higher education programs. Members have not yet decided how to help K-12 schools affected by the hurricanes. The House Education and the Workforce Committee is working with the Bush Administration and committee members from Louisiana to assist schools.
The Department of Education has proposed a one-year fix worth up to $2.6 billion for K-12 and postsecondary students, families and schools. Most of the money would go directly to school districts and charter schools that enroll at least 10 displaced students, but $488 million would go to families that enroll displaced children in private schools. The Education Department has not released details about its spending plan, leaving most decisions to Congress.
Several other proposals are floating around Congress but Sens. Michael Enzi (R-WY) and Edward Kennedy's (D-MA) $3.7 billion Hurricane Katrina Elementary and Secondary Education Recovery Act may be offered for unanimous consent today. While it would provide much of the same assistance proposed by the Education Department, it would be much more restrictive in where the money went, to make sure hurricane relief didn't expand existing voucher programs. AFSCME opposes the use of vouchers and we will continue to monitor the situation closely.
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House Acts on TANF Provisions
Following Senate action last week, the House has approved legislation providing for a three-month extension of the Transitional Medical Assistance (TMA) Program, which provides up to one year of continued Medicaid for individuals leaving welfare for work, and state abstinence-only education grants, both of which expired on September 30th. The House also approved a provision allowing the three Gulf states hit by hurricane Katrina to use Temporary Assistance for Needy Families (TANF) contingency funds for short-term assistance for Katrina evacuees.
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DOL Resurrecting Personal Reemployment Accounts Disguised as "Katrina" Aid
House Republicans are introducing legislation proposed by DOL that would provide up to $5,000 in vouchers for unemployed workers who are not eligible for or who have exhausted unemployment benefits. These accounts could be used for job search, job training, child care, transportation and cash assistance. Workers unemployed as a result of hurricane Katrina who chose to use these "Worker Recovery Accounts" would have to purchase WIA job training services, which they now can receive without charge, and they would be banned from receiving any WIA training services for a year if they decide to use the accounts. AFSCME has opposed legislation to create these accounts since they were first proposed by the Administration, and Congress has never approved their use.
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Stop Gap Funding Law Threatens Funding Levels for Key Programs
The Continuing Resolution approved by Congress to keep government programs operating until November 18th, has set funding levels at the lowest of FY 2005 amounts or the level approved by the House or Senate Appropriations Committee. Unless the regular spending bills are approved by the November deadline, these levels could continue for the entire FY 2006.
The bill most affected by this policy is the Labor, Health and Human Services and Education appropriation which has not yet cleared the Senate and has the least chance of being enacted into law in the next few months.
Key Labor Department programs would suffer the most cuts. The cuts include $85 million for the Employment Service (ES), $35 million for ES reemployment services for unemployment insurance (UI) claimants, $71 million for dislocated worker programs, $40 million for state UI operations, and $131 million for Trade Adjustment Assistance (TAA).
Other programs that would run at reduced levels include the Maternal and Child Health Block Grant (down $24 million), community service state grants (cut 50 percent by $316.6 million) rural health programs (cut over 50 percent by $84.6 million). Although the Low Income Home Energy Assistance Program (LIHEAP) would be reduced by $175.6 million with no authority for emergency funding, the 50 Senators voted separately this week to provide an additional $3 billion for this program, indicating that Congress will certainly make more money available for low income families facing substantially higher heating costs this winter.
The Transportation, Treasury, Judiciary, and Housing and Urban Development appropriations bill has also not yet cleared the Senate and these programs are facing cuts in the interim as well. The Continuing Resolution reduces the Community Development Block Grant (CDGB) (cut $428 million) and the Public Housing Capital Fund (cut $252 million).
Members from the House and Senate are meeting to resolve differences in other bills that provide funding for key domestic programs. In the meantime, however, some key programs have authority to run only at reduced levels. They include within Commerce, Justice, Science appropriations Justice Assistance Grants (cut $276.5 million), State Criminal Alien Assistance program (cut $101 million), and Community Oriented Policing Services (COPS) (cut $81 million).
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Violence Against Women Act Passes the Senate
The Senate passed its version of the Violence Against Women Act (VAWA) 2005 (S. 1197). A less comprehensive version of VAWA 2005 passed the House of Representatives on September 28th as H.R. 3402, the Department of Justice's yearly authorizing and funding bill.
While the House version included reauthorization of crucial VAWA programs, it does not achieve all that is needed. At the last minute just before the vote, the Republican leadership dropped important provisions dealing with immigrants and women of color.
The Senate bill includes many of these House-dropped provisions, but faced its own trimming as a key program was dropped that would have extended coverage for unemployment insurance to domestic violence survivors who lose their jobs as they hide or flee from violence.
Whenever there are differences between similar bills that are passed in the House and Senate, a "conference committee" with representatives from both houses must meet to work out the differences between the two bills and come up with one final bill before the President can sign it.
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