AFSCME Legislative Report
 AFSCME LEGISLATIVE REPORT
Legislation Department
Congress — Week ending October 21
AFSCME forms the Emergency Campaign for America's Priorities (ECAP) to oppose federal budget cut. Senate Finance Committee Chairman announces Medicare and Medicaid cuts. House forced to postpone vote on increased budget cuts.
In this issue:
Emergency Campaign for America's Priorities Launched
AFSCME took the lead in organizing an important coalition to fight the budget and tax cuts moving through Congress. The coalition, called the Emergency Campaign for America's Priorities (ECAP), is committed to an aggressive, grassroots, grasstops, public relations and lobbying campaign to stop the plan to sacrifice programs that primarily benefit working Americans and the poor for tax cuts that benefit the wealthy.
This week alone, ECAP targeted 13 moderate members of the House Republican caucus, urging them to vote for a bill that would have increased the size of mandatory cuts from $35 billion to $50 billion. The House GOP leadership ultimately withdrew that bill, because of opposition from the moderate flank of their party.
Next week ECAP will have a national roll-out, with events in as many as 31 states and a national event in D.C., where some of AFSCME's Katrina and Rita evacuees will appear with Senate Minority Leader Harry Reid (D-NV) and House Minority Leader Nancy Pelosi (D-CA).
ECAP has also launched, under AFSCME's sponsorship, a virtual protest against the budget and tax cuts. AFSCME leaders and activists are urged to go to www.actnow.org to plant a protest sign in their neighborhood.
STOP THE BUDGET AND TAX CUTS!
JOIN THE VIRTUAL PROTEST AND PLANT A SIGN IN YOUR NEIGHBORHOOD! Please go to www.actnow.org.
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Senate Finance Panel Chairman Unveils Plan to Cut $10 Billion from Medicare, Medicaid
After weeks of negotiations, Senate Finance Committee Republicans agreed to a package of Medicare and Medicaid cuts that would shave the programs by $10 billion over five years. However, Sen. Jim Bunning (R-KY) announced that he would vote against the package, making approval of the deal questionable. The package went a long way in targeting the cuts in ways that don't harm low-income beneficiaries. The major Medicare cut includes eliminating a so-called "slush" fund created by the Medicare drug law to provide financial incentives to private health plans to offer coverage to Medicare beneficiaries. The bill would also make a series of changes in the way Medicaid pays for drugs.
The package also contains a much scaled-back package of Medicaid relief for Katrina survivors. Now at $1.8 billion over five years, the proposal was reduced from an original $8 billion because of opposition from conservative members on the committee.
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House Republican Leaders Postpone Vote on Budget Cuts: GOP Proposes Bigger Cuts
Facing a small but strong internal GOP revolt and unified Democratic opposition, the House Republican leadership postponed — until next week — the House's scheduled vote to cut the federal budget. The GOP had planned to increase the cuts on mandatory federal programs (e.g. Medicaid and Food Stamps) from $35 billion to $50 billion. However, even in the face of dissent within the House GOP caucus, Republican House Speaker Dennis Hastert (R-IL) announced the GOP's four part plan for additional cuts: $15 billion cut in mandatory spending; 1%-2% across-the-board cut to discretionary spending; cuts (rescissions) to prior year programs; and terminate 98 other federal programs. Regardless of House action, it is unlikely that the Senate will support more cuts due to opposition from moderate GOP senators. ECAP and its coalition partners sent over 250,000 emails to Congress opposing the budget cuts over a week-long period.
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House of Representatives Narrowly Rejects Motion to Stop Privatization of Food Stamp Program
The House of Representatives voted 209-216 on a motion by Rep. Rosa DeLauro (D-CT) to instruct House Appropriations Committee members to accept a provision in the Senate Agriculture Appropriations bill barring states from hiring private contractors to administer the food stamp program. House and Senate Appropriations Committee members are expected to meet next week to resolve differences between their versions of the 2006 agriculture spending bill. Twelve Republicans voted right by supporting the motion to instruct: Dave Camp (MI), Randy Cunningham (CA), Nancy Johnson (CT), Tim Johnson (IL), Walter Jones (NC), Jim Leach (IA), Ron Lewis (KY), Deborah Pryce (OH), Christopher Shays (CT), Robert Simmons (CT), John Sullivan (OK), and Edward Whitfield (KY). Only one Democrat, Rep. Adam Smith (WA) voted against the motion, which AFSCME strongly supported.
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Bush Tax Panel Proposals to Eliminate Federal Deductions of State and Local Taxes
The President's Advisory Panel on Federal Tax Reform will recommend two overlapping federal tax reform options to President Bush and these would harm AFSCME and AFSCME's rank and file members. Both proposals limit or eliminate many significant current tax deductions, including the important deduction for state and local income and property taxes. Both proposals also eliminate the federal Alternative Minimum Tax and reduce the federal corporate tax rate from 35 percent to 32 percent. They also "tax as income" employer-paid health insurance premiums above $5,000 per year per individual ($11,500 per family). The panel also proposed either eliminating taxes on corporate dividends or cutting the tax rate on dividends, interest, and capital gains to 15 percent.
Cumulatively, these recommendations would reduce federal tax subsidies to states and localities, lower their revenues, and reduce their ability to employ AFSCME members and deliver vital services. They also increase taxpayers' tax burdens, focus attention on state & local taxes, and disproportionately hurt states with large AFSCME membership - especially urban and states with higher tax rates. The deduction for state and local taxes has been part of the federal income tax system since its inception in 1861 and it has been continued in every subsequent federal income tax law.
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Miers Nomination Under Fire
President Bush's choice of Harriet Miers to replace Justice Sandra Day O'Connor on the Supreme Court has ignited sharp criticism, mostly from some Republican Senators and activists who are worried that she is not conservative enough. Many have called for President Bush to withdraw her nomination and pick someone else. In addition to the constant criticism Miers has endured for the past two weeks, the two people in the Senate charged with conducting Judiciary Committee hearings this week added fuel to the controversy. Senate Judiciary Committee Chairman Arlen Specter (R-PA) and ranking Democratic Sen. Patrick Leahy (D-VT) have written Miers a formal letter saying that her answers to the customary questionnaire that is required of all Supreme Court nominees are incomplete. According to Specter and Leahy, Miers' answers do not help the Senate in making an informed decision about her ability to hold such an important position. The Senators said that the Senate needs more information about her experience, her judgment, her views on the Constitution, and her independence.
AFSCME has not yet taken a position on the nomination. Since so little is known about her judicial philosophy and her view on issues that are important to the American people, Miers must come to the hearings prepared to share with the committee her views on a host of issues, including worker rights, civil rights, civil liberties and privacy issues. Sen. Specter and other Senators have made formal requests for the release of White House documents on Miers. Those documents have not yet been released. Hearings on the nomination are still expected to begin on November 7th.
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Senate Agriculture Committee Backs Away from Food Stamp Cuts
The Senate Agriculture Committee this week backed away from previous plans to make a $574 million cut in the Food Stamp program as part of its budget reconciliation package of spending cuts. The retreat on the food stamp cut reflects greater awareness of the importance of the program as a result of hurricane Katrina and the pressure generated by AFSCME and our allies through the ECAP campaign.
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Congress Approves Some Help for Gulf State Unemployment Trust Funds but Benefit Improvements Remain Stalled
The House and Senate have sent to the President legislation that provides $500 million from the Federal Unemployment Trust Fund to the three Gulf States hit by Hurricane Katrina. The funds will be deposited into the state trust funds, which are experiencing record payouts for unemployment benefits, and should prevent a combination of automatic benefit cuts and employer tax increases triggered by reductions in the state trust fund balances below certain levels.
Direct assistance for workers displaced from their jobs by Hurricane Katrina continues to languish in Congress. In fact, the just announced package of budget spending cuts announced by Sen. Charles Grassley (R-IA), Chairman of the Senate Finance Committee, fails to include the 13-week federal extended benefits included in his original relief package.
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Senate and House Committee Both Reject Minimum Wage Increase
Senate proposals to raise the minimum wage were rejected, making it unlikely that the lowest allowable wage, $5.15 an hour since 1997, will rise in the foreseeable future. Sen. Edward M. Kennedy (D-MA) had originally planned to offer an amendment to the Transportation-Treasury spending bill that would have raised the minimum wage to $7.25 in three steps. However in a last minute effort to reach across the aisle and in the interests of getting something enacted into law, Sen. Kennedy scaled back the original level of his increase to the level proposed by the Republicans in March - $6.25/hour. However, Sen. Michael Enzi (R-WY) offered a GOP alternative that proposed the same $1.10 increase but coupled it with major giveaways to the business lobby that included a major reduction in the number of workers who would be covered by the minimum wage and overtime provisions of the Fair Labor Standards Act (FLSA). Both proposals went down to defeat on procedural votes that required 60 votes to pass. The Kennedy amendment failed 47-51 and the Enzi amendment failed by a wider margin, 42-54.
At a meeting of the House Education and the Workforce Committee, Rep. George Miller (D-CA) offered an amendment to raise the minimum wage from $5.15 per hour to $7.25 per hour in three increments. However, Chairman John Boehner (R-OH) ruled that the amendment was in violation of committee rules because it was unrelated to the bill under consideration and moved to table it. The committee then voted on a straight party-line vote of 19-17 to sustain Boehner's motion to kill the amendment.
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Senate GOP Leaders Remove Biased Campaign Finance Provision from Spending Bill
This week, prior to debate on the spending bill for the Transportation and Treasury Departments (H.R. 3058), Senate GOP leadership removed a one-sided and controversial campaign finance provision that had drawn opposition from Democrats and moderate Republicans. The provision would have allowed leadership political action committees (PACs) to make unlimited transfers of funds to national party committees, such as the Republican National Committee or the Democratic Congressional Campaign Committee.
AFSCME opposed the leadership PAC provision in H.R. 3058 because it would have circumvented the current limits on the amount that wealthy individuals and PACs can give in support of a federal officeholder's campaign. Under the provision, contributions to a lawmaker's leadership PAC could be transferred to a party committee to be used for the lawmaker's own campaign. Currently, a lawmaker cannot use funds raised by his leadership PAC for his/her own election. The ultimate result of the provision would have been to allow wealthy contributors to play an even greater role in elections and to further dominate the policy making process at the expense of the needs and concerns of ordinary Americans. In addition, because the party that controls Congress is able to raise more money for leadership PACs, the provision would have created a fundraising advantage for the party in power.
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Privatizing Social Security Would Harm Those Most in Need According to New Study
Privatization would have dangerous implications for African Americans, Latinos, women, children, people with disabilities, and low income workers, according to a new report from the Leadership Conference on Civil Rights (LCCR), "Social Security: The Civil Rights Program for All Americans." LCCR's report includes data showing that without Social Security's guaranteed benefits, millions more Americans would be driven into poverty. According to LCCR's report, private accounts would amplify the effects of discrimination in the job market and pay inequities.
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Senate HELP Committee Moves Inadequate Bioshield Bill
On Tuesday, with little public notice, the Senate Health, Education, Labor and Pensions (HELP) Committee considered and approved the Biodefense and Pandemic Vaccine and Drug Development Act of 2005 (S. 1873) a bill designed to encourage drug makers to develop countermeasures to use to fight biological, nuclear and chemical attacks as well as naturally occurring threats such as pandemic flu. The bill is sponsored by Rep. Richard Burr (R-NC) and other GOP members on the HELP Committee. While granting unprecedented immunity to drug makers in the event that their products cause harm to patients, it fails to provide an adequate alternative compensation program to address the likelihood that a small number of patients, health care workers and first responders will be seriously injured as a result of taking countermeasures.
Under other circumstances, when manufacturers have been given protections against liability, no-fault compensation funds have been established to provide health care coverage and some wage replacement for injured individuals and their families. Originally, the bill did not include any compensation fund. At the last minute, a provision was added providing protections to health care workers and first responders, but only under very narrow circumstances. AFSCME is working with Sens. Edward M. Kennedy (D-MA) and Christopher Dodd (D-CT) to push for improvements in the compensation program before it goes to the Senate floor.
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Anti Contracting-Out Language Included in Transportation-Treasury-Judiciary-HUD Spending Bill
The Senate passed a $141.6 billion spending bill on Thursday that would fund transportation, housing programs and a range of other government operations. The conferees to the FY '06 Transportation-Treasury-Judiciary-Housing and Urban Development (HUD) appropriations bill (H.R. 3058) will negotiate over final language to address contracting out in the federal sector. Language in both the House and Senate bills would hamper the implementation of a 2003 Office of Management and Budget (OMB) rule allowing outsourcing of hundreds of thousands of federal jobs. The House bill would block the agency from implementing the rule, while the Senate bill would require contractors represent at least $10 million or 10 percent savings.
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House Democrats Plan to Force Vote on Restoring Prevailing Wage Requirements That Bush Suspended
Rep. George Miller (D-CA) and other House Democrats employed an unprecedented parliamentary procedure that will force the House to vote by November 4th on whether or not to overturn President Bush's Gulf Coast wage cut. In September, Bush issued a proclamation suspending the 1931 Davis-Bacon Act for workers in areas affected by Hurricane Katrina. The Davis-Bacon law requires federal contractors to pay construction workers the locally prevailing wage for their job function. Suspending the law, as Bush has done, means that federal contractors can pay workers less than they would usually have to pay for the same work and with no obligation to pass any savings on to federal taxpayers. Miller introduced a Joint Resolution under the 1976 National Emergencies Act (H.J.Res. 69) which provides for fast track action by Congress when the President unilaterally suspends a law, as he did with Davis-Bacon. Although the National Emergencies Act is nearly 30 years old, this is the first time that a lawmaker has ever invoked its fast track procedures. By law, Congress must act on Miller's Joint Resolution within 15 calendar days — in this case, by November 4.
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Intergovernmental Relations — Update
The following is a periodic report on the activities of state and local government interest groups and other advocacy organizations.
- Governors Reiterate Need for Full Federal Financial Support for Medicaid — In the wake of Hurricane Katrina and congressional attention to the Medicaid program more broadly, the National Governors Association (NGA) reiterated its positions on the federal role in financing. In an October 18th letter to the Senate Finance Committee and Senate leadership, the NGA urged full funding of federal commitments to reimburse all states for costs incurred in providing Medicaid services for the survivors of Hurricane Katrina. And, the NGA made clear its opposition to any Medicaid reform proposals that would result in cost-shifting from the federal government to the states. The letter also referenced previously-released NGA Medicaid reform recommendations, some of which could result in positive changes by, for example, reducing prescription drug costs, but others risk diminishing access to needed care by allowing increased co-payments and reduced benefit packages.
- Gap Between Medicaid Spending Growth and State Tax Revenue Lowest Since 1999 — State revenues have increased as Medicaid spending and enrollment has slowed, resulting in the lowest gap in six years, according to three surveys released this week by the Kaiser Family Foundation. The surveys show, however, that states continue to confront rising health care costs, less employer-sponsored coverage, and an aging population. The authors cautioned that possible federal cuts to the Medicaid program could impose more costs on the states and present difficult challenges to providing coverage in the future. The surveys can be found at www.kff.org.
- Bush Administration Allows Florida to Privatize and Limit Medicaid Coverage — In a precedent that could have far-reaching implications for the Medicaid programs in all 50 states, the U.S. Department of Health and Human Services (HHS) approved a plan this week that limits spending for many of the 2.2 million Medicaid beneficiaries in Florida and allows private health plans to limit benefits when a ceiling on spending for a recipient's health care has been reached. It took the Bush Administration only 16 days to approve Gov. Jeb Bush's proposal, one that strongly resembles proposed changes at the federal level that the President has proposed but has failed to gain widespread support in Congress. Joan C. Alker, a senior researcher at the Health Policy Institute of Georgetown University, said: "Florida's proposal is one of the most far-reaching and radical proposals we've seen to restructure Medicaid. The federal government and the states now decide which benefits people get. Under the Florida plan, many of those decisions will be made by private health plans, out of public view."
- Governors to the Feds: We're in Charge of Disasters — Several governors went to Capital Hill this week, carrying the message that they oppose any efforts to transfer states' authority to federal agencies in emergencies. In testimony to the House Committee on Homeland Security, several governors noted that states already have the specialized resources they need to deal with emergencies, and instead wanted to examine ways the federal government could help deal with a disaster short of preempting state authority.
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