Week Ending March 18, 2011
Secretary-Treasurer Lee Saunders Addresses House Democratic Caucus
Last week, Secretary-Treasurer Lee Saunders spoke to the House Democratic Caucus. He emphasized the ongoing assault on union workers in Wisconsin, Ohio and several other states, and the heightened importance of a close working relationship between organized labor and pro-union federal lawmakers. Secretary-Treasurer Saunders also thanked those House and Senate members who have already spoken out against the outrageous state legislation passed and pending that would weaken our members’ collective bargaining rights. He urged those present to participate in the state and local activities AFSCME and our allies are organizing to fight back against these attacks on our members, our union, and the middle class.
Round Six on 2011 Spending Cuts
This week the House and Senate passed a temporary funding measure to keep the government running an additional three weeks, through April 8. The measure shaves $6 billion from the FY 2011 budget, mostly through eliminating earmarks. The House measure would not have passed without support from Democrats as many conservative and freshmen Republicans were opposed to another temporary measure. It’s unclear what the next step will be to get an agreement on a year-long spending plan. Political
Positioning on Social Security, Medicare and Medicaid Continues
Congressional Republicans this week continued to call for cutting back Social Security, Medicare and Medicaid while the Democrats stood firm on Social Security and sought to broaden the deficit discussion beyond cutting key programs. Ramping up pressure on President Obama, 23 Senate Republicans sent a letter to the President calling on him to assert “courageous leadership” and lead a bipartisan effort to rein in spending on Social Security, Medicare and Medicaid. Reiterating Minority Leader Mitch McConnell’s (R-KY) threat last week, the letter stated that they were likely to oppose an increase in the debt limit without action on entitlement spending.
In the House, Budget Committee Chairman Paul Ryan (R-WI) held a hearing on retirement security that focused on Social Security, Medicare and Medicaid. However, unlike the Senate Republicans who see entitlement cuts as solely a deficit reduction strategy, Rep. Ryan sought to make a case that paring back benefits is necessary to save the programs in the long run.
Meanwhile, congressional Democrats continued to resist efforts to put the burden of deficit reduction on Social Security and the health care entitlements. Senate Majority Leader Harry Reid (D-NV) flatly rejected the idea of taking up Social Security changes now, while House Democrats attending the House Budget Committee hearing noted that the Affordable Care Act will rein in health care costs and strengthen Medicaid and Medicare. The Budget Committee Democrats also sought to broaden the discussion on deficit reduction to include measures to regain revenue lost by closing tax loopholes benefiting corporations and rolling back tax cuts for the wealthy.
Rep. Jan Schakowsky Introduces Legislation to Increase Income Taxes on Millionaires and Billionaires
On March 16, Rep. Jan Schakowsky (D-IL) introduced the “Fairness in Taxation Act” (H.R. 1124), which would significantly increase individual income tax rates on millionaires and billionaires to ensure they pay their fair share of taxes and enable the federal government to fund vital public services and infrastructure. Currently, the highest marginal federal tax rate on individual income is 35%, which starts at $379,150 in annual income for both individual and joint filers. H.R. 1124 would raise the top tax rate from 35% to 45% for income of $1-$10 million; 46% for income of $10-$20 million; 47% for $20-$100 million; 48% for $100 million-$1 billion; and 49% for more than $1 billion. Additionally, H.R. 1124 would tax income from capital gains and dividends at the same rate as ordinary income for taxpayers with income exceeding $1 million. If enacted in 2011, H.R. 1124 would raise more than $78 billion.
Rep. Schakowsky said: “In the United States today, the richest 1% owns 34% of our nation’s wealth – that’s more than the entire bottom 90%, who own just 29% of the country’s wealth.” AFSCME strongly supports this legislation and similar proposals to ensure that America’s highest earners pay their fair share of taxes and to slow down or reverse America’s widening income inequality.
Infrastructure Bank Legislation Introduced in the Senate
Sens. John Kerry (D-MA) and Kay Bailey Hutchison (R-TX) introduced legislation on March 16 that would create a new infrastructure bank to help finance roads, bridges and other projects. The legislation would finance infrastructure projects through a new American Infrastructure Financing Authority. The Authority would be an independent entity, initially using $10 billion in federal funds and becoming self-sustaining by leveraging as much as $640 billion in private funds over 10 years. The Authority would offer loans and loan guarantees to fund what Sen. Kerry called “commercially viable projects.” The Authority would not issue any grants, different from similar infrastructure bank proposals, in an effort to limit federal costs.
AFSCME strongly supports federal investment in improving our nation’s critical infrastructure. However, we have emphasized the importance of improving and developing publicly owned and operated infrastructure with an explicit prohibition on the direct or indirect financing of projects that will result in the privatization of publicly owned facilities. We are also working to ensure that existing workers are not disadvantaged when infrastructure projects are built. Finally, AFSCME believes public employees should perform project oversight to protect the public interest.
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