AFSCME Legislative Report
AFSCME LEGISLATIVE REPORT
March 7, 2008
In this issue:
Budget Resolutions Pass House and Senate Budget
Committees
This week, the House and Senate Budget
Committees both approved their respective Budget Resolutions, which
should advance to House and Senate floor votes. Both plans reject
President Bush's budget plan domestic program budget cuts. Moreover,
compared to President Bush's proposed budget for domestic,
annually-appropriated programs, the House plan adds $22 billion and
the Senate adds $18 billion. Although the plans share similarities
on spending and both project surpluses by 2012, there are
differences on taxes, offsets for new spending or tax cuts (PAYGO),
and additional economic stimulus.
On spending, compared to President Bush's proposed discretionary
budget, the Senate plan adds $8.8 billion for education and
training, $4.4 billion for health, and $3.9 billion for
transportation. The Senate also adds $441 million to the Child Care
Development Block Grant (CCDBG) and $300 million to Head Start. The
Senate rejects the President's proposed cuts of $932 million to the
Community Development Block Grant (CDBG), $599 million to Community
Oriented Policing Services (COPS), and $705 million to Homeland
Security state formula grants.
Neither plan raises taxes. The House plan allows Congress to pass
a one-year "patch" to the Alternative Minimum Tax (AMT) and calls
for full offsets to pay for it through budget reconciliation, which
requires only a majority of Senate votes rather than the 60 votes
needed to overcome a filibuster. In contrast, the Senate plan
assumes Congress will pass a one-year $62 billion AMT patch without
offsets. The House supports offsets for extending some of the 2001
and 2003 tax cuts, including the lowest income tax bracket, the
so-called "marriage penalty", and the child tax credit. In contrast,
although Senate Budget Chairman Kent Conrad (D-ND) says he supports
these goals, he intends to offer a floor amendment to use the
projected surplus to extend $300 billion of these tax cuts. The
House and Senate plans both assume the tax cuts expiring in 2010
will not be renewed and incorporate these post-2010 revenues. In
fact, the House Budget Committee voted 21-16 to reject Ranking
Republican Paul Ryan's (R-WI) amendment to reduce revenues by $683
billion over five years to cover extending the expiring tax cuts.
Although the House plan does not address additional stimulus, the
Senate plan recommends $35 billion for a stimulus bill without
offsets, including state fiscal relief. The Senate's plan also
includes the costs of extending the moratoria on several key
Medicaid regulations and the State Children's Health Insurance
Program (SCHIP) directive of August 17, 2007. It also provides
$1.325 billion in Medicare savings achieved from reducing current
subsides for insurance companies to offer a private alternative to
Medicare, which is more costly and erodes traditional Medicare. The
combination of additional spending on stimulus, health care
administrative provisions, and Medicare improvements are mutually
reinforcing and could provide states and localities with some fiscal
relief.
The House and Senate Budget Resolutions both create several
"reserve funds" related to specific programs, which enable Congress
later in the process to increase funding if the increases are fully
paid for. For example, both the House and Senate created a deficit
neutral $50 billion reserve fund for SCHIP. The House created 17 of
these deficit-neutral funds, including Child Support Enforcement,
County Payments Legislation (this timber-related funding is
important to northwestern states), Trade Adjustment Assistance (TAA)
and Unemployment Insurance (UI) Modernization, Medicaid (focused on
Medicaid regulations and transitional medical assistance), Medicare,
and infrastructure investment. The Senate created many similar
funds.
(Marc Granowitter- mgranowitter@afscme.org)
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House Passes Mental Health Insurance and Genetics
Non-Discrimination Bill
By a vote of 268-148, the House
passed the Paul Wellstone Mental Health and Addiction Equity Act of
2007 (H.R. 1424), which would require most group health insurance
plans to provide comparable coverage, or parity, for mental and
physical illnesses. The bill would not require plans to cover mental
health care, but those that already do would not be allowed to set
higher co-payments or limits on the number of visits to doctors than
are applicable to medical care for physical conditions. The
estimated cost to the federal government is $4.3 billion over 10
years. This cost is offset by increasing the rebates that
pharmaceutical companies must provide to state Medicaid programs to
20.1 percent from December 31, 2008 through January 1, 2015. The
Senate passed its version of mental health parity legislation (S.
558) in September 2007. The Senate bill would allow insurers and
plans to charge higher co-payments and limit visits for some mental
health conditions. Both the Senate and the House bills maintain
current law that allows state and local self-insured health plans
for their employees to opt out of these requirements. The Bush
Administration strongly opposed the House bill and supported the
Senate-passed mental health parity bill.
Language from the Genetic Information Non-Discrimination Act of
2008 (H.R. 493), was attached to the House bill, which would
prohibit companies, unions or insurers from discriminating or making
business decisions using data from genetic tests.
A conference to hammer out differences between the Senate and
House mental health bills faces significant obstacles, as Senate
lawmakers are threatening to block a conference.
(Linda Bennett-
lbennett@afscme.org)
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