Week Ending July 29, 2011
Government Default Looms With No Plan Yet
Congress and the President have four days to raise the debt ceiling to avoid a government default. This week began with dueling plans offered by Senate Majority Leader Harry Reid (D-NV) and House Speaker John Boehner (R-OH). The Reid plan would cut $1.2 trillion in discretionary spending, including $1 trillion in savings from winding down the wars in Iraq and Afghanistan. It would raise the debt ceiling through 2012 to promote our country’s economic stability and create a bipartisan, joint congressional committee to target future savings and possible revenue increases. While this compromise would make some very painful cuts to domestic spending, it would safeguard Medicare, Medicaid and Social Security from deep cuts.
The Boehner plan would cut $917 billion in discretionary spending and place a spending cap on these programs, but it would exclude defense spending from cuts. It would require another vote to lift the federal debt ceiling early next year, setting the country up for another bruising debate and another looming economic crisis. It would further require a second round of cuts totaling $1.8 trillion and a constitutional balanced budget amendment before the debt ceiling could be raised again. These cuts would surely include severe cuts to Social Security, Medicare and Medicaid. Yet, it protects tax loopholes and subsidies for millionaires and wealthy corporations. There is no sense of shared sacrifice in the Boehner plan. Instead, it reserves all the pain for working families, seniors, children, the disabled, and even our veterans.
A House vote on his plan will occur later today. The Senate is planning to vote on Sen. Reid’s plan tomorrow.
There is no time left for political brinkmanship. American families cannot afford to lose more jobs or see hikes in interest rates on mortgages, credit cards and student loans.
Constitutional Balanced Budget Amendment Votes Pending
As the nation teeters on the brink of default, House GOP leaders are planning votes on two constitutional balanced budget amendments which prominent economists warn would pose serious threats to the economy and make economic downturns worse. H.J. Res. 1 is particularly problematic since it imposes enormous program cuts by capping spending at an unrealistically low 18% of the gross domestic product (GDP) and requiring supermajorities to raise much-needed revenues and increase the debt ceiling. H.J. Res 2 would also devastate important public services and adversely affect state and local governments that are struggling through a cycle of serious fiscal problems by limiting federal spending. Both bills are backdoor paths to slashing Social Security, Medicare and Medicaid.
AFSCME strongly opposes any constitutional balanced budget amendment. A vote could occur on Saturday.
AFSCME’s Federal Aviation Workers Furloughed
Congress’ inability to negotiate a long-term aviation bill has resulted in a partial shutdown of the Federal Aviation Administration (FAA) which began on July 22 after the House refused to pass a clean extension of the FAA reauthorization. As a result, over 4,000 FAA employees have been furloughed; almost 900 are AFSCME members who work at the FAA headquarters in Washington, D.C. In addition, approximately 90,000 construction workers who were working on major aviation projects across the country are also out of work.
The FAA has been operating under a series of short-term extensions for almost four years. Although Congress has extended the law 20 times by passing simple bills allowing the agency to continue functioning, this time the House included two policy changes that are unacceptable to the Senate. These polices are unrelated to the FAA’s authority, including a provision reversing a decision by the National Mediation Board involving labor elections for rail and aviation workers.
In an effort to help FAA families during the shutdown and to keep the aviation system fully operational, Sen. John Rockefeller (D-WV) introduced legislation that will give the FAA authority to pay its employees and maintain their benefits while Congress works on a long-term bill.
Senator Kerry and Rep. Stark Introduce Bills to Improve Medigap Plans
Sen. John Kerry (D-MA) and Rep. Pete Stark (D-CA) introduced legislation (S.1416, H.R. 2645) which would improve the value of Medicare supplemental insurance, or Medigap policies, for beneficiaries by requiring insurers to spend more premium dollars on health care services. Medigap policies help pay for cost-sharing requirements and for some services that are not covered by the program and are particularly important to low and middle income beneficiaries. Under current law, Medigap insurers must now spend only 65 cents of every premium dollar on health services. The legislation will increase that amount to 80 cents, and Medigap insurers in the group market will be required to spend at least 85 cents of every premium dollar on a beneficiary’s health services. These changes will mean beneficiaries will see more of their premium dollars going to health care benefits, not administrative costs or insurance company profits.
House and Senate Panels Hold Immigration Hearings
This week, the Senate Judiciary Immigration Subcommittee heard from a bipartisan group of mayors who testified that immigrants, whether legal or illegal, contribute to local economies and help revitalize economically distressed downtown areas. Chairman Charles Schumer (D-NY), an advocate for comprehensive immigration reform, noted at the hearing that low-skilled immigrants create economic benefits similarly to high-skilled immigrants who gain legal entry through special visas.
On the other side of the Capitol, the House Judiciary Immigration Subcommittee held a hearing on Chairman Lamar Smith’s (R-TX), “Hinder the Administration’s Legalization Temptation Act” (H.R. 2497). This bill would bar the Obama administration from exercising the discretion all presidents have had in enforcing immigration laws on humanitarian and other grounds. The bill would sunset on the day of the next presidential inauguration in January 2013. AFSCME continues to advocate for comprehensive immigration reform that would provide a path to legalization for undocumented people currently living in the U.S., control the flow of immigrants in the future, and enforce immigration laws fairly and humanely.
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