Week Ending December 16, 2011
FY 2012 Funding Done in Nick of Time
Waiting until the last day before a deadline that could have precipitated a government shutdown, House and Senate leaders agreed to a combined fiscal year 2012 spending bill “megabus” for the nine federal funding bills that remained unfinished. We expect both houses of Congress will pass the bill, and President Obama will sign it. Since the bill will not be finalized before midnight, Congress will pass a one-week continuing resolution to keep the government open.
The overall funding complies with the budget limits set in the Budget Control Act passed over the summer which set budget caps in an attempt to limit spending and reduce the deficit. Spending is reduced $7 billion below last year’s funding levels, and some programs fare better than others. Labor, Health and Human Services and Education programs will be cut around 2% across the board, excluding Pell grants. AFSCME is very concerned about the impact these cuts and inadequate funding increases will have as state and local governments continue to struggle with their own budget cuts, reduced revenues, and slow economic growth. In spite of many domestic spending cuts, defense programs received a $5.1 billion increase. Some specific program funding levels include:
- The Health Resources and Services Administration (HRSA) is cut by $41 million. This agency funds many health care programs, including community health centers.
- Head Start received an additional $424 million, which will allow the program to expand using Recovery Act funds.
- The Child Care and Development Block Grant (CCDBG) received an additional $60 million.
- The Community Services Block Grant escaped the harsh cuts proposed earlier with an increase of $12 million.
- Education funding included a boost of $60 million for Title I, a continuation of the maximum Pell award at $5,550, an increase of $100 million for special education, and Race to the Top is cut $148 million.
- The Labor Department’s budget for training programs is cut $68 million, but training funds directed at veterans are increased by $9.3 million.
- Homeland Security is cut by $2 billion, including a $1 billion reduction from FEMA First Responder Grants.
- Environmental Protection Agency funding includes a $101 million cut from the Clean Water and Drinking Water State Revolving Funds.
Payroll Tax Cut Extension Bill’s Fate Uncertain; Threats to Unemployment Benefits and Program, Federal Employee Pay, and Health Programs Remain
At press time, the fate of legislation that would extend the current payroll tax cut, extend unemployment benefits, prevent a large cut in doctors’ pay who treat Medicare patients (so-called “doc fix”), and other tax-related measures remains uncertain. Earlier this week, the House on a largely party line vote passed its version of a bill (H.R. 3630), but it was a nonstarter in the Senate. One major objection to the House’s bill among Senate Democrats was that the bill slashed unemployment benefits for the long-term unemployed and made policy changes that would fundamentally undermine this crucial social insurance program. It would open the door to means testing and allow states to tap into their unemployment insurance (UI) funds for purposes other than paying cash benefits, including the establishment of “workfare” programs that exploit the unemployed. Under the House bill, states could reduce UI claimants’ benefits to pay for reemployment services which always have been federally funded. Two other provisions would establish new eligibility rules that would block individuals from receiving unemployment benefits even if they otherwise would qualify: One would allow states to screen for substance abuse; the other would require individuals to have a high school degree or be enrolled in classes leading to a degree. In addition, the House would continue a pay freeze for federal employees and make harmful cuts to health care, including federal funding cuts to large public hospitals and a reduction in funding support for the Prevention and Public Health Fund established by the Affordable Care Act. Another contentious issue is a provision in H.R. 3630 to fast-track the construction of the Keystone XL oil pipeline from Canada to the Gulf of Mexico.
It is possible the Senate will pass a two-month extension of the current payroll tax cut legislation, which would continue the 2% cut in employees’ contributions to Social Security and the current 73 weeks maximum of federally funded UI benefits (in addition to 26 weeks of state benefits in most states), and the doc fix. House Speaker John Boehner (R-OH) has pledged that the House will insist that the oil pipeline language be added to a short-term bill, as well as other changes. President Obama has said he would reject the bill with the pipeline mandate. Or, it is possible that Congress could reach a deal and pass a year-long bill before it recesses next week for the winter holidays. How to pay for the bill is still contentious, with Democratic leaders advocating use of revenues from closing tax loopholes for high-income individuals and counting savings from drawing down troops in Iraq and Afghanistan. Republican leaders want to make additional spending cuts to cover the full cost. Stay tuned.
Senate Rejects Balanced Budget Amendments
This week, the Senate fulfilled the Budget Control Act’s requirement that it vote on a constitutional balanced budget amendment (BBA) to the U.S. Constitution. The Senate failed by a large margin to deliver the necessary two-thirds vote on S.J. Res 10 offered by Senate Minority Leader Mitch McConnell (R-KY) and S.J. Res. 24 offered by Sen. Mark Udall (D-CO). The McConnell amendment was defeated 47-53 with no Democrats voting yes, and the Udall amendment was defeated 21-79. AFSCME strongly opposed both balanced budget amendments.
President Obama Announces New Proposal to Help Home Care Workers
On Thursday, AFSCME members from Local 389 (Council 1707), Local 406 (Council 67), and United Domestic Workers (AFSCME Local 3930) stood alongside President Obama when he announced new rules proposed by the U.S. Department of Labor that would provide basic federal wage and hour protections for home care workers who provide in-home care services for individuals with disabilities and older adults. This announcement was the latest in a series of executive actions the Obama Administration has taken to strengthen the economy because Congress has failed to act. Currently, home care workers are classified as “companions” and are not covered by the federal Fair Labor Standards Act’s (FLSA) minimum wage and overtime pay requirements. The proposed rule would expand these protections by ensuring that all home care workers employed by third parties are covered by the FLSA. Under the proposed rule, the minimum wage and overtime exemptions would not be available to third party employers, such as home health care agencies, even if the household itself may claim the exemption (such as in a joint employment relationship). AFSCME has fought hard for changes in federal wage and hour rules and will continue to press for a strong final rule.
Ryan and Wyden Introduce New Scheme to End Traditional Medicare
On Thursday, Rep. Paul Ryan (R-WI), Chair of the House Budget Committee, and Sen. Ron Wyden (D-OR) issued a plan that would redesign Medicare, creating a “premium support” system in which beneficiaries would receive a flat amount to purchase coverage from a private insurance company. This proposal is similar to a Medicare privatization plan authored by Rep. Ryan last spring. While the Ryan-Wyden plan would initially maintain traditional Medicare, over time it would lead to the collapse of traditional Medicare and the guaranteed set of benefits it provides. Like previous proposals to privatize Medicare, this one would lead to higher costs for seniors and undermine Medicare’s ability to drive quality and efficiency innovations throughout the health care system. While Ryan and Wyden have released their plan, they have not yet developed legislation to advance it.
Bipartisan Support Grows to Extend Mass Transit Commuter Tax Benefit
There is growing bipartisan support in Congress to act this year to extend the $230 monthly benefit cap on the mass transit commuter federal tax benefit, which is currently scheduled to expire December 31, 2011. On December 9, a bipartisan group of 22 Senators, led by Sens. Barbara Mikulski (D-MD) and Ben Cardin (D-MD), sent a letter to the Senate Finance Committee urging extension of the tax-free benefit for mass-transit users, and a bipartisan group of 50 Representatives, led by Reps. Jim McGovern (D-MA), Michael Grimm (R-NY) and Earl Blumenauer (D-OR), sent a letter to House leaders requesting year-end legislation include a provision to maintain parity between the parking and transit portions of the transportation fringe benefit. To view a copy of the Senate letter please log on to: http://mikulski.senate.gov/media/pressrelease/12-9-2011.cfm.
This extension would prevent the monthly benefit cap from decreasing from $230 to $125, which in 2012 could cost a commuter up to $1,260 and increase federal taxes on a typical affected commuter by more than $400. Under federal law, commuters do not treat these tax-free benefits as income and their employers do not pay federal payroll taxes on the benefit amount. There is also free-standing legislation (S.1034 - H.R. 2412) to extend this benefit. The Senate bill sponsored by Sen. Charles Schumer (D-NY) has 10 co-sponsors, and the House bill sponsored by Rep. McGovern has 56 co-sponsors. AFSCME strongly supports extending this benefit and is working with key congressional offices to get it enacted. It is currently in the mix as part of the payroll tax cut legislation that remains unresolved in Congress.
House Budget Panel Approves Line-Item Veto Bill
The House Budget Committee passed a bill (H.R. 3541) that would give the President enhanced powers to influence, delay, and cancel congressional budget decisions. It was introduced by Budget Committee Chairman Paul Ryan (R-WI) and Ranking Member Chris Van Hollen (D-MD), and passed with a bipartisan vote of 23 to 14.
The bill would empower the President to submit proposed cuts to Congress within 45 days following passage of a spending bill. To ensure the bill’s constitutionality, Congress would have to approve the President’s request. The bill provides for a fast-track procedure to expedite congressional approval and prohibits any further amendment to the President’s cuts. The budget savings could not be used for other programs and would be earmarked specifically for budget reduction, thereby reducing the deficit limits that were previously set in the Budget Control Act passed this summer. This proposal would sunset in 2015.
Some panel members expressed concerns that this bill would do little to improve current budget challenges and would shift too much power to the executive branch, thereby undermining Congress’ constitutional role in crafting budget policies.
House Passes Extension of Temporary Assistance for Needy Families
On Thursday, the House passed legislation (H.R. 3659) that would extend the Temporary Assistance for Needy Families (TANF) cash assistance program through fiscal year 2012, which ends on September 30. The bill, which passed by voice vote, continues funding at current levels. However, it would require states to implement practices that would prevent recipients from withdrawing their TANF benefits in liquor stores, gambling halls, or strip clubs. States that fail to implement this provision are subject to losing 5% of their TANF federal funding. The bill also provides $2.9 billion for the Child Care and Development Block Grant. TANF funding will expire on December 31 unless an extension is signed into law before then
2.5 Million Young Adults Gain Health Coverage Due to Affordable Care Act
While most of the provisions of the Affordable Care Act (ACA) will not be implemented until 2014, there are a number of provisions that have already taken effect. One of these is a measure that allows young adults to remain on their parents’ health insurance plan until age 26. Data released this week by the National Center for Health Statistics show that the ACA has significantly increased the number of young adults who have health insurance. From September 2010 to June 2011, the percentage of young adults age 19 to 25 with insurance increased from 64% to 73%. This translates into 2.5 million additional young adults with coverage. This provision of the law was designed to address the fact that young adults have traditionally been the age group least likely to have insurance.
AFSCME Joins With Other Unions and Environmental Activists to Tout Benefits of Water Infrastructure Investment
AFSCME affiliates across the country joined with other unions, environmental activists and elected officials to unveil a report by Green for All showing how investment in water infrastructure will create jobs and make Americans healthier. In Arkansas, AFSCME Council 38 and advocates were joined by state representative Kathy Webb at the Junction Bridge in Little Rock, where they talked about the over 16,000 jobs that could be created by water investment in the state. In New Mexico, AFSCME Council 18 was part of a clean water jobs coalition that included UA Plumbers and Pipefitters, Laborers International Union of North America (LIUNA), Conservation Voters of New Mexico and Food and Water Watch. They were joined by City of Albuquerque and Bernalillo County elected officials, who spoke in support of federal legislation supporting local water projects. In Iowa, where a major sewer line had broken just the day before, AFSCME Council 61 joined with the City of Des Moines Public Works Director, Great Plains Laborers International, the State Building Trades Council, Heavy Highway and Construction Contractors Association and Food and Water Watch to explain how these investments would create over 21,000 jobs in Iowa. Similar events took place in California, Michigan and Ohio.
Rebuilding America’s decaying water and sewer systems is a vital component of President Obama’s American Jobs Act because funding these projects would put almost two million people back to work over the next few years. Our water infrastructure is long overdue for improvements. In 2009, the American Society of Civil Engineers gave a grade of D- to both drinking and waste water infrastructure, the lowest grade of any public infrastructure. Outdated infrastructure has disastrous health effects: nearly four million people get sick every year from swimming in contaminated water, and 20 million people get sick each year simply from drinking contaminated water.
Sign Up to Receive the Weekly Report and Action Alerts via Email and Become an AFSCME e-Activist!!!
In an effort to move toward electronic transmission which will allow us to put important federal legislative updates in your hands sooner, we urge you to sign up to receive the Federal Legislative Report via your email address.
Please go to http://www.afscme.org/join and check the "Federal Legislative Report" box under subscriptions on the bottom of the page.