Week Ending January 21, 2011
House Votes to Repeal Affordable Care Act
On Wednesday, the House of Representatives voted 245 to 189 for a bill (H.R. 2), to repeal the Affordable Care Act, the landmark health reform law signed by President Obama last year. The vote was largely along party lines with every Republican voting for repeal and all but three Democrats voting against it. The three Democrats who voted for repeal were Reps. Dan Boren (OK), Mike McIntyre (NC) and Mike Ross (AR). Now that this vote has been conducted, House GOP leaders have indicated that they will draft a series of bills that would repeal specific provisions in the law, in an attempt to dismantle it piece by piece.
Senate Majority Leader Harry Reid (D-NV) has stated that the Senate will not take up the House repeal bill. However, it is likely that Senate Republicans will attempt to offer the repeal bill as an amendment to other legislation and also to pursue a piecemeal approach to repealing the bill. If the law were repealed, insurance companies could continue to deny coverage to those with pre-existing conditions, terminate coverage for those who get sick and charge women twice as much for the same coverage as men. Seniors would lose new guarantees including free preventive care and lower cost prescription drugs. Parents would lose the ability to keep their adult children on their health care plans. Small business owners would lose tax credits that help them provide coverage for their employees. And, over 2,000 public and private employers, who provide retiree coverage, would lose new subsidies that help support these plans. House Republicans also continue to raise the possibility that they will block all funding to implement the law.
GOP Congressional Members Propose Deep Cuts to the Federal Budget
The House Republican Study Committee (RSC) proposed deep cuts to the current fiscal year (FY) 2011 federal budget and cuts to the budget over the next decade totaling $2.3 trillion. For the current federal fiscal year, the RSC proposes to cut $80 billion from non-defense spending by freezing spending at FY 2008 levels. For fiscal years 2012-2021, the RSC proposes to freeze non-defense discretionary spending at FY 2006 levels, which they estimate would cut $2.3 trillion. These deep cuts would harm the ability of state and local governments to provide vital public services and maintain a social safety net for unemployed and distressed Americans.
Among the details, the RSC proposes to cut $16.1 billion by repealing recently increased federal fiscal assistance to states to help pay for Medicaid services, which was provided through the Federal Matching Assistance Program (FMAP). The RSC would cut $4.5 billion per year from the Community Development Block Grant program (CDBG), which provides flexible funding to state and local governments for infrastructure and social services. The RSC would cut all FY 2011 federal funding to carry out any provisions of last year's historic health care reform law. With respect to federal employees, the RSC would cut the civilian workforce by 15% and eliminate their step increases for five years. The RSC proposes many policy changes, including repeal of the Davis-Bacon Act, which requires paying prevailing local wages on government-funded construction projects.
On January 20, 2011, AFSCME joined AARP, the Center on Budget and Policy Priorities, and other national organizations to convene a briefing in Washington, D.C. detailing the congressional conservatives' proposals to cut the federal budget. More than 250 advocates attended the briefing and heard experts summarize potential threats to funding for health care, veterans assistance, community development, job creation, and other priorities.
House and Senate Republicans Drafting Legislation to Allow States to File for Bankruptcy
According to a report in The New York Times, House and Senate Republicans are working on new federal legislation allowing states to file for bankruptcy or to declare a fiscal emergency in order to restructure union contracts and benefits, including pension obligations. The only legislation that has been introduced so far is a bill (H. Res. 23) by Rep. Jason Chaffetz (R-UT), a non-binding resolution expressing the sense of the House of Representatives that "the Federal Government should not bail out State and local government employee pension plans or other plans that provide post-employment benefits to State and local government employees." AFSCME is continuing to talk to members of Congress and other outside groups about the harmful fiscal implications of allowing states to seek bankruptcy protection and the misinformation being circulated about public pensions. A new report from the Center on Budget and Policy Priorities makes the strong point that pensions have not caused the fiscal crisis in the states. According to the Center, "States and localities devote an average of 3.8% of their operating budgets to pension funding."
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