AFSCME Legislative Report
 AFSCME LEGISLATIVE REPORT
Congress — Week ending December 9
House passes tax cut with lion's share of benefits going to the super wealthy. GOP leaders push to complete work on budget cut bill but major obstacles remain.
In this issue:
House Clears Major Tax Cut Bill
Christmas came early if you're super wealthy, as the House followed the script laid out by President Bush and the GOP leadership and passed another large tax cut bill directly on the heels of the vote the House took in November to cut $50 billion from vital social spending programs. The new tax plan, which calls for $56 billion in tax cuts over a five-year period, was passed by a vote of 234 to 197. Three Republican members voted against the plan — Reps. Sherwood Boehlert (NY), Jim Leach (IA), and Fred Upton (MI), while nine Democrats crossed party lines and voted for it — Reps. John Barrow (GA), Melissa Bean (IL), Dan Boren (OK), Bud Cramer (AL), Henry Cuellar (TX), Lincoln Davis (TN), Bart Gordon (TN), Jim Marshall (GA), and Mike McIntyre (NC).
The centerpiece of the GOP's tax reconciliation package (H.R. 4297) extends through 2010 the reduced tax rate that wealthy investors pay on their capital gains and dividend investments at an estimated five-year cost of $20.55 billion. Fully 80 percent of the capital gains tax cut goes to those with incomes of more than $200,000 a year, and more than 50 percent goes to those with incomes over $1 million. Other major provisions include a business research tax credit at a cost of $9.87 billion, modification of the method for calculating the credit, extension of the state and local sales tax deduction at a cost of $2.1 billion, and increased small business expensing at a cost of $7.27 billion.
The vote followed the overwhelming bipartisan vote a day earlier on modifications to the alternative minimum tax (AMT) that was agreed to by a vote 414-4. The AMT was enacted in 1969 and aimed to ensure that high-income taxpayers paid their "fair share" of federal income taxes by preventing them from erasing their tax liability via credits and deductions. Since it is not indexed for inflation, the AMT captures more and more middle income taxpayers and will impact 19 million next year, up from 4 million this year, without changes. The House also passed a separate tax bill for victims of the hurricanes.
There are wide disparities between the Senate-passed tax reconciliation legislation (S. 2020) and the newly passed House version. Most notably, the Senate bill does not contain an extension of reduced capital gains and dividends tax rates. That provision was dropped from the bill at the insistence of Senate GOP moderates. However, as soon as it passed, Senate leaders announced they would seek to reinstate the capital gains and dividends tax cut during conference negotiations with the House. When the total cost of the new tax cuts are added up, the cost will likely exceed $100 billion, further swelling the federal budget deficit.
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GOP Leaders Push to Complete Work on Massive Budget Cut Bill
GOP congressional leaders are pushing to complete work on a massive budget cut bill before Congress recesses for the holidays. However, major obstacles remain, including the size of proposed Medicaid and Medicare cuts to be included in the package, as well as whether drilling will be permitted in the Arctic National Wildlife Refuge.
Next Monday, President McEntee kicks off a National Week of Action on the budget and tax cut bills. AFSCME and the Emergency Campaign for America's Priorities (ECAP) are launching a week-long media offensive on Monday featuring new television ads opposing the Republican congressional leadership's efforts to make huge cuts in vital public service programs so that they can give new tax cuts to the wealthy. The week of action, dubbed the National Week of Prayer and Action for Compassionate Priorities, will include, in addition to the TV ads, over 100 events, with prayer vigils across the country urging members of the House and Senate to oppose the budget cuts, a prayer vigil at the U.S. Capitol building, newspaper ads in targeted House districts, billboards and a continuation of the online protest at www.actnow.org.
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Senate Approves Legislation to Encourage National Health Information System
Just prior to the Thanksgiving recess, the Senate approved the "Wired for Health Care Quality Act" (S 1418), which is aimed at encouraging the development of a national interoperable health information technology system. In large part, the legislation mirrors an effort already underway at the U.S. Department of Health and Human Services (HHS) to develop criteria for a technological system that would allow patient care records to be shared electronically among health care providers. In addition to facilitating the coordination of patient care, the system would provide a method for sharing best practices among providers.
While a health information technology system has the potential to improve patient care and reduce health care costs, it also has the potential to substantially impact the way health care workers do their work. Not only would nurses, doctors and others involved in direct patient care be required to use the new technology, it will also lead to a significant reduction in the number of employees involved in medical record keeping in the future. An interoperable system also raises concerns about the privacy of patient care records.
AFSCME has been monitoring the process at HHS and has worked with Sen. Edward M. Kennedy (D-MA), Ranking Democrat on the Senate Health, Education, Labor and Pensions Committee, to incorporate language into S. 1418 that creates an opportunity for health care workers and their unions to push for involvement in the planning and development of health care information technology systems at the work site. But these improvements do not require employers to involve health care workers. The House of Representatives has not moved legislation on this matter.
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House GOP Leadership Finally Agrees to Restore Funding for Injured 9/11 Workers
After months of pressure from New York Members of Congress and lobbying led by AFSCME District Council 37, the House GOP leadership has finally agreed to restore funding to New York State for workers injured during the rescue and cleanup of the 9/11 attack. President Bush's budget had called for rescinding $125 million that had been promised to New York. The House Republican spending bill for the Department of Labor included the take away, despite growing needs to compensate disabled workers, provide health care for the injured and sick and monitor the health of Ground Zero workers. In a letter to Rep. Vito Fossella (R-NY), House Speaker Dennis Hastert (R-IL) agreed to add the funding to legislation to be enacted before the Congress recesses this month.
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House and Senate GOP Leaders Push for Legal Shield for Pandemic Flu Makers
Senate and House GOP leaders are planning to insert language granting legal immunity to pandemic flu vaccine makers on a must-pass Defense Department spending bill that could come up next week. While there is precedent for shielding vaccine makers from lawsuits, the Congress has previously coupled such protections with programs to compensate individuals who are seriously injured as a result of receiving a vaccine. However, in this case, while GOP leaders are maneuvering to protect drug makers, they are adamantly opposed to providing a program that would pay for health care needs and replace lost wages of those injured by a vaccine or countermeasure.
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Federal Employees to Receive a 3.1% Pay Increase in 2006
It's official! Federal employees will get an average pay increase of 3.1 percent next year. The President locked in that figure November 30th when he signed into law the legislation that provides the raise — the $137.6 billion spending bill for the departments of Transportation, the Treasury, and Housing and Urban Development for fiscal 2006. President Bush had proposed a two-tiered pay proposal calling for a 2.3 percent raise for federal civilian employees and a 3.1 percent increase for the military, but Congress at the urging of AFSCME and other unions representing federal workers decided to award both groups the higher amount. Return to Index
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