Issues / Legislation » Legislative Weekly Reports

Week Ending October 28, 2011

Dueling Debt Reduction Plans

Democrats and Republicans on the super committee charged with coming up with at least $1.2 trillion in deficit reduction before the end of the year disclosed competing deficit reduction plans, indicating they are still pretty far apart on any agreement. The committee has until November 23 to reach agreement in order to avoid across-the-board cuts that would take place in 2013 if no agreement is reached.

While few specific details of either plan are available, based on news reports there are some disturbing similarities – both call for significant cuts in Medicare, Medicaid and changes to Social Security benefits. In general terms, the Democratic plan calls for $3 trillion in savings, split evenly between new revenues and savings, while the $2.2 trillion Republican plan would rely principally on spending cuts, although it would create a process for future revenue-neutral tax reform. Republicans dismissed the Democratic plan saying new tax increases are a non-starter. The Democrats’ plan included $500 billion in controversial savings from Medicare and Medicaid combined; $400 billion from Medicare, and $100 billion from Medicaid, and the Republican plan calls for even deeper cuts, especially in Medicaid. Both plans also call for changes to the calculation of the Consumer Price Index to slow the inflationary increase in future Social Security benefits. The Democratic plan would include $450 billion in new job creation similar to the Obama-proposed American Jobs Act. 

Many members of Congress as well as many outside groups, including AFSCME and the AFL-CIO, indicated they would be strongly opposed to any deficit plan that weakens the safety net and compromises Medicare, Medicaid and Social Security beneficiary benefits.

Senate to Vote on Infrastructure Provisions of Jobs Bill

 Despite the defeat in the Senate of the overall American Jobs Act (S. 1660), Senate Majority Leader Harry Reid (D-NV) wants the Senate to vote next on the infrastructure jobs piece of the overall bill called the Rebuild America Jobs Act. The Senate bill provides $50 billion in immediate investments for highways, transit, rail and aviation. The bill is aimed at putting people back to work while upgrading roads, laying and maintaining train tracks, restoring runways and putting in place a next generation air transportation system (NextGen). The plan includes $27 billion to rebuild roads and bridges, $9 billion to repair transit systems, $5 billion for projects selected in a competitive grant program, $4 billion for construction of the high speed rail network, $2 billion to improve airport facilities and $1 billion for NextGen. In addition, the plan would provide $10 billion to establish a National Infrastructure Bank to help fund a broad range of infrastructure projects. The plan imposes a 0.7% surtax on adjusted gross income in excess of $1 million for both single filers and married couples filing jointly.

Report Shows Disparities in Income Increases Between Classes

 The Congressional Budget Office (CBO) released a new report confirming the growing disparity between the wealthy and other Americans. The new CBO report shows that between 1979 and 2007, incomes grew by 275% for the top 1% of U.S. households while the bottom 90% saw incomes grow just under 5%.

House Republican Chairman of Tax Committee Proposes New Corporate Tax Plan

 Rep. Dave Camp (R-MI), Chair of the House Ways and Means Committee, introduced a new plan to reform America’s international and corporate tax policy. His plan would reduce the top federal tax rate on corporations to 25% and reduce the federal tax rate on the overseas income of large profitable corporations from 35% to 1.25%. Rep. Camp wants to change America’s federal tax policy to a “territorial” tax system, in which the federal government would not tax the overseas profits of U.S. corporations. He also wants to reduce the top tax rate on individuals to 25% and maintain current overall federal tax revenues. Although his new plan proposes reduced federal tax rates which would significantly reduce federal revenue, it does not specify how it would offset these losses by raising revenues. AFSCME joined with other labor unions, and progressive organizations in sending a letter to Congress opposing any proposal to temporarily or permanently exempt U.S. corporations’ offshore profits from U.S. federal taxes. The letter can be downloaded here.

Home Care Consumer Bill of Rights Introduced

 Sen. Al Franken (D-MN), along with  Sens. Robert Casey (D-PA) and Sheldon Whitehouse (D-RI), have introduced the Home Care Consumer Bill of Rights Act (S. 1750), which would direct states to develop a bill of rights to address home care consumer safety and guarantee consumers’  ability to redress grievances. The bill also authorizes federal funds to help states operate Home Care Ombudsman Programs to provide home and community-based services. These ombudsmen programs are authorized to advocate in support of issues related to the sufficiency of the home care workforce. The bill also calls for the federal Administration on Aging to develop quality assurance standards and let consumers know which services and providers meet these standards.

House Panel Focuses on CLASS Insurance Program for Long-Term Care Services

A House committee held a hearing on the recent decision of the Secretary of Health and Human Services (HHS) to suspend implementation of the Community Living Assistance Services and Supports (CLASS) program. HHS suspended the new national insurance program, which was created as part of the Affordable Care Act, because it was not able to make the required benefit package sustainable, legal and attractive to potential buyers at this time. The program – championed by the late Sen. Edward Kennedy (D-MA) – was designed to address the growing need for long-term care, which is expensive, and can quickly wipe out families’ savings. Former Rep. Patrick Kennedy (D-RI), testified about the need for a program to help families afford long-term care and services and objected to the administration’s decision to suspend the program. He called for finding a path forward; “Let’s keep the policy on the books and keep working to define the program.”

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