Week Ending March 4, 2011
Stop-gap Funding Measure Averts Shutdown Until March 18; White House Leads Budget Talks
This past week, President Obama signed another stop-gap funding measure that will keep the government running another two weeks, through March 18. This temporary extension was needed after the House's full year funding package indiscriminately and irresponsibly cut $61 billion from current FY 2011 funding, which could destroy almost one million jobs and cost our economy billions of dollars. The Senate and the President oppose such drastic cuts. In an effort to resolve the dispute, President Obama appointed Vice President Biden, White House Chief of Staff William Daley and Office of Management and Budget (OMB) Director Jacob Lew to begin meeting immediately with congressional leadership, including Sens. Harry Reid (D-NV) and Mitch McConnell (R-KY) and Reps. John Boehner (R-OH) and Nancy Pelosi (D-CA), to sort out a spending plan for the rest of the fiscal year.
Republicans in Congress are still insisting on drastic cuts to vital public services in the current fiscal year. They continue to demand $61 billion in immediate cuts, and are using the threat of a shutdown to force cuts that will further hurt the states, slash up to one million jobs and harm our economy.
To see how these cuts would affect your states, go to http://bit.ly/gpQOc1
Call your Senators toll-free at 1-888-665-9823 NOW!!!
Tell them to stand up for the middle class and good jobs by fighting for adequate funding to support education, law enforcement, clean water, transportation, housing, health care and many other vital services.
Senate Narrowly Rejects Call for Balanced Budget Amendment
This week, Sen. Mike Lee (R-UT) offered an amendment on the Senate floor that called for passing a balanced budget amendment (BBA). The amendment, which required 60 votes to pass, was narrowly defeated 58 to 40, with Sen. Joe Lieberman (I-CT) and Democratic Sens. Mark Begich (AK), Michael Bennett (CO), Sherrod Brown (OH), Tom Carper (DE), Herb Kohl (WI), Joe Manchin (WV), Claire McCaskill (MO), Bill Nelson (FL), Ben Nelson (NE) and Mark Udall (CO) crossing party lines to support it. A simplistic answer to a complicated problem, a BBA would provide a constitutional mandate for Congress to balance the budget. It could severely weaken the economy, jeopardize job growth and result in major cuts to education, health care, transportation and other important public services. AFSCME strongly opposes any BBA.
It is likely that a BBA will be offered repeatedly in the Senate, and we will continue to update and engage you to voice opposition.
Republicans Starting to Take Aim at Social Security
Republican and Democratic leaders began to stake out public positions on Social Security this week.
Republican legislators began to move toward cutting the program. House Speaker John Boehner has announced that he wants to offer a budget that will curb Social Security spending. On the Senate side, three Republican senators, Lindsey Graham (SC), Mike Lee, and Rand Paul (KY) announced they intend to introduce legislation that will raise the retirement age and "means test" benefits by providing lower benefits to individuals with higher incomes. In addition, Rep. Cynthia Lummis (R-WY) this week introduced specific legislation to increase the retirement age over time to 70, with the first increase to 67 starting in 2023 for individuals who are now 55 or younger.
Key Senate Democrats and administration officials have stated clearly that Social Security does not contribute to the deficit and should not be part of any deficit reduction package that emerges in the next few months. A caucus formed by Sen. Bernie Sanders (I-VT) now has 16 members, and some House Democrats have introduced legislation to address the program’s long term solvency by raising the cap on wages subject to the Social Security tax and to improve the program’s benefit index.
AFSCME is an active member of a broad based coalition that has been lobbying both Congress and the administration to protect Social Security from benefit cuts.
New Threats to Medicaid
This week, the House Energy and Commerce Committee held a hearing aimed at renewing the GOP push to convert the Medicaid program into a block grant. The hearing was preceded by a public health care discussion at the National Governors Association meeting, during which a number of Republican governors called for block granting Medicaid despite the fact that it would shift financial costs and risk to the states.
Under a block grant funding scheme, the federal government would no longer pay a share of a state’s Medicaid costs. Instead, the federal government would pay a fixed amount which would be capped so that it would rise more slowly than a state’s Medicaid costs. In return for receiving less federal funding, states would be granted more flexibility in the operation of their programs.
In addition to shifting the Medicaid burden onto states over time, a block grant would also put states at greater risk during future recessions. States have had great difficulty managing increased Medicaid enrollment under the current shared financial structure. In future recessions, states would bear the full cost of enrollment growth.
Block granting Medicaid would also undermine health care reform; one half of the expansion in coverage is achieved through the expansion of the Medicaid program. But the expansion of Medicaid is largely paid for by the federal government – 96% in the first 10 years. A block grant would yield less funding to states for this expansion and force lawmakers to revisit health care reform.
House Passes Bill Repealing Business Reporting Requirement in ACA
By a vote of 314 to112, the House passed legislation (H.R. 4) that would repeal a business reporting requirement in the Affordable Care Act (ACA) known as the 1099 requirement. The reporting requirement was aimed at rooting out fraud in corporate tax filings. However, the small-business community strongly opposed the measure and has pushed for a number of months to do away with it. To make up for the $19 billion in lost revenue, H.R. 4 requires low- and moderate-income families who receive affordability tax credits from the health insurance exchanges to repay the government if their income is more than expected in a given year. The "no" votes – which all came from Democrats – reflected opposition with this offset, which will harm middle class Americans and discourage participation in the exchanges by those health care reform is intended to help. Before the final vote, the House rejected, on a procedural vote, a Democratic proposal that would have provided a tax credit to those whose taxes would be increased by the legislation and offset those costs by repealing oil and gas tax breaks for major oil companies.
It is not clear whether the Senate will take up the House-passed bill. Last month, the Senate included repeal of the 1099 requirement as part of its Federal Aviation Administration (FAA) reauthorization legislation. It would pay for the 1099 repeal by authorizing the OMB to recapture unobligated federal funds that pay for a wide range of services, excluding the Departments of Defense and Veterans' Affairs, and the Social Security Administration. The White House has expressed disagreement with both the House and Senate’s current approaches to offsetting the cost of the 1099 repeal.
Florida Judge Issues "Stay" on Previous Decision Invalidating Health Care Reform
In February, federal district court Judge Roger Vinson of Florida declared that the individual mandate in the ACA was unconstitutional and could not be severed from the rest of the law. However, the judge did not specifically issue an injunction to halt implementation of the law. The Obama administration asked Judge Vinson to clarify the decision. On Thursday, Vinson issued a clarification stating that he had intended his decision in February to have an "immediate injunction-like effect," halting implementation of the Act. However, he acknowledged that the government could suffer harm if his decision was implemented and later overturned. So, he issued a "stay" of his decision conditioned on the administration filing an appeal and seeking expedited review within seven days.
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