Week Ending April 15, 2011
Congress Finalizes FY 2011 Funding; Cuts More than $38 Billion Compared to FY 2010
This week, Congress approved the final plan for FY 2011 funding (H.R. 1473), cutting $38.5 billion, and the largest annual spending cut in history but less than the $61 billion in devastating cuts supported by Republicans in a previous funding bill (H.R. 1). The House passed H.R. 1473 by a vote of 260-167, with 59 Republicans and 81 Democrats opposing the bill. The Senate cleared the bill 81-19.
The reduced spending in H.R. 1473, including a .2% across-the-board cut, affects nearly every federal program. The final deal was reached literally at the 11th hour last Friday night, with the White House leading negotiations with Senate Leader Harry Reid (D-NV) and House Speaker John Boehner (R-OH), barely averting a government shutdown. Democrats replaced many programmatic cuts with less harmful spending reductions, saving $18 billion for critical education, public health, and public safety programs.
House Passes Draconian GOP Leadership Budget
At press time, the House is expected to pass the GOP leadership’s radical budget resolution for FY 2012 before it leaves for spring recess. This terrible plan fails to effectively address our nation’s economic challenges and would impose considerable hardships on working families and state and local governments.
This budget proposal reflects the wrong priorities for our nation, setting woefully inadequate spending levels for programs that serve ordinary Americans and the most vulnerable in our society. It would eviscerate Medicaid with $1.4 trillion in cuts and privatize Medicare, making coverage more costly and less accessible, and would lay the groundwork for future cuts in Social Security.
In spite of this budget’s unprecedented whack to federal spending, it provides no significant dent in the federal deficit. The draconian cuts serve the sole purpose of lining the pockets of wealthy Americans and corporate interests by cutting the individual income and corporate tax rates nearly one-third from 35% to 25% and making President Bush’s tax cuts permanent.
AFSCME strongly opposes the House budget. The Senate is expected to create its own budget in May that will be significantly different from the House-passed plan.
AFSCME Retiree Featured at Congressional Rally
Today, AFSCME retiree activist Josephine Ball Sivels, from Baltimore, MD, spoke at a rally on Capitol Hill organized to show opposition to the House Republican leadership’s budget. Sister Sivels joined House Minority Leader Nancy Pelosi (D-CA) and other Democratic Representatives. Sivels spoke out against the draconian budget cuts to Medicare and Medicaid, and the tremendous hardship these cuts would have on seniors.
President Introduces Plan to Reduce the Deficit
This week, President Obama made clear that his plan to reduce the federal debt will include a balance of spending cuts for domestic and defense programs coupled with revenue increases. Unlike the radical budget put forth by House Republican leaders, the President noted that the best way to balance the budget is to create jobs, close corporate tax loopholes and require the wealthiest Americans to pay their fair share. The President strongly opposes vouchers for Medicare and block grants for Medicaid. He called on Congress to convene 16 of their leaders, four each designated by Speaker John Boehner (R-OH), Democratic Leader Nancy Pelosi (D-CA), Senate Leader Harry Reid (D-NV), and Senate Minority Leader Mitch McConnell (R-KY), to begin meeting in May to craft a plan to reduce the debt by $4 trillion over 12 years.
Republicans Invite Wisconsin Governor to Testify
The GOP leaders continued their relentless attack on unions by inviting Governor Scott Walker (R-WI) to testify at a hearing of the full House Oversight and Government Reform Committee entitled “State and Municipal Debt: Tough Choices Ahead.” Under sharp questioning from Committee Democrats, Governor Walker was forced to admit that public employees’ collective bargaining rights had no impact on closing the state’s budget gap, thus revealing his true goal of denying union rights and eliminating unions altogether. Governor Walker also admitted that he did not disclose during his campaign that he was committed to eviscerating collective bargaining rights if elected governor.
In sharp contrast, the Democrats’ witness, Governor Peter Shumlin (D-VT), was strongly supportive of collective bargaining rights. Governor Shumlin, whose state also faced a steep budget shortfall, emphasized repeatedly that he reached agreements with the public employees in Vermont through collaboration rather than confrontation, and that he saw collective bargaining as a basic right that should not be diminished.
A second panel of Republican witnesses continued the party-line attack on union members, collective bargaining rights and public employee benefits. Several continued to repeat the false and refuted allegation that pension costs created state and fiscal crises. The witnesses supported legislation introduced by Rep. Devin Nunes (R-CA) and others that would require state and local public pension liabilities to be reported using assumptions that would inflate liabilities, thus giving the inaccurate appearance that public pensions are grossly underfunded.
The three Wisconsin workers invited to attend the hearing included a firefighter, a state worker and a nurse. They were widely praised by Democrats for their enduring and loyal service to the people of their state, and they spoke to the press before and after the hearing.
House Votes to Repeal Funding for Preventative Health Care
The House passed legislation (H.R. 1217) by a 236-183 vote that would repeal a $15 billion prevention and public health fund in the Affordable Care Act that provides a dedicated investment in community prevention and state and local public health infrastructure and workforce. The legislation is part of the House Republican majority’s multipronged attack on the health care law enacted last year. The vote was along party lines, with no Republican members voting against the legislation and four Democratic members, Reps. Jason Altmire (D-PA), Dan Boren (D-OK), Mike McIntyre (D-NC), and Collin Peterson (D-MN), voting in support of terminating the prevention and public health fund. President Obama’s senior advisors have recommended that he veto this legislation.
Business Activity Tax Simplification Act (BATSA) Reintroduced in House
On April 13, a House Judiciary subcommittee hearing focused on the newly reintroduced Business Activity Tax Simplification Act of 2011 (BATSA) (H.R. 1439), which would preempt and restrict the taxing authority of state and local governments and thereby reduce revenues generated from business taxes. Specifically, BATSA would establish a new national standard – focused narrowly on physical presence rather than the existing broader standard of economic activity – for state income and other business activity taxes. BATSA also contains a new provision establishing a rule for apportionment, which would further reduce tax revenues. Quite simply, BATSA is designed to ensure businesses pay less in taxes.
Subcommittee Chairman Howard Coble (R-NC) said Congress needs to establish a clear tax rule by passing H.R. 1439, "hopefully during this session." In past Congresses, some bipartisan support existed for similar legislation, and AFSCME fought it by leading a coalition of labor unions and working with state and local governments and other allies to ensure businesses pay their fair share of taxes.
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