Week Ending November 4, 2011
President's Infrastructure Jobs Initiative Fails in the Senate
The Senate rejected the Rebuild America Jobs Act (S. 1769), the infrastructure component of President Obama’s jobs plan, by a vote of 51 to 49, short of the 60 votes needed to proceed with consideration of the bill. The legislation, which was pulled from the President’s overall jobs initiative, would create and sustain jobs by investing $60 billion to rebuild America’s ailing infrastructure. It would make immediate investments in highways, transit, rail and aviation, establish a national infrastructure bank to leverage private and public funds for a broad range of infrastructure projects, and is completely paid for by asking millionaires to pay a small surtax.
Since the unveiling of the President’s $447 billion jobs proposal, key components have been rejected in the Senate largely along party lines. The Rebuild America Act would have put hundreds of thousands of Americans back to work rebuilding crumbling bridges and roads and modernizing the air traffic control system.
Congressional “Super Committee” Continues to Consider Harmful Cuts to Medicare, Medicaid and Social Security
As Thanksgiving approaches, so does the super committee’s deadline to present a plan to Congress to reduce the deficit by at least $1.2 trillion. They are required, by law, to vote within committee by November 23 and then report on the plan by December 2. This week, a bipartisan group of 100 House members (60 Democrats and 40 Republicans) weighed in, urging the committee to “go big” and seek a higher deficit reduction target closer to $4 trillion. They urged the committee to consider cuts to any program and have revenues “on the table.”
Several deficit reduction plans have now been proposed to the super committee. This week, Erskine Bowles, co-chair of the presidential commission on deficit reduction, floated a $2.6 billion “compromise” deficit reduction plan that would cut $600 billion from health care programs as well as make cuts to Social Security by changing how cost-of-living increases are calculated. However, it is a “compromise” between a Republican plan that would raise minuscule revenues and make deep Medicaid and Medicare cuts, and a proposal offered by some Democrats on the super committee that makes huge concessions, totals $3 trillion in deficit reduction, includes $2 trillion in total spending cuts and $475 billion in cuts from Medicare and Medicaid. AFSCME will continue to fight against harmful cuts to Medicare, Medicaid and Social Security, and to insist that wealthy corporations and individuals contribute fairly to get our economy back on track.
Fiscal Year 2012 Appropriations Progress
This week, the House and Senate passed a package combining three spending bills – for Agriculture, Commerce-Justice-Science, and Transportation-Housing – into one bundle (H.R. 2112). The differences between the House and Senate versions are being worked out and signs point to a final deal potentially being available by November 14, in time for an additional short-term spending bill to be attached. The current short-term spending bill expires November 18 and the extension would carry into mid-December. If talks continue and time permits, Homeland Security and Legislative Branch funding may also be rolled into this package.
House Republicans are reported to be moving toward smaller cuts to the Women, Infants and Children (WIC) nutrition program, which could help garner Democratic support. Because the spending level imposed by the Budget Control Act (BCA) is higher than the House-passed budget, Republicans will need Democratic support to shepherd the bill.
A second small package of combined spending bills is expected to include Energy-Water, Financial Services, and State-Foreign Operations funding. The Senate is expected to take it up next week while the House is in recess. The remaining funding bills will likely be included in a final package to tie up loose ends. Labor-HHS is also likely to be in this final package.
Harmful Regulatory Reform Bill Advances in the House
The House Judiciary Committee approved the Regulatory Accountability Act (RAA) (H.R. 3010) by a vote of 16 to 6. This bill requires that costs and benefits become the primary consideration when implementing laws instead of safety and health or scientific findings. The RAA would give corporate interests increased influence during the rulemaking process, making it more difficult for federal agencies to look beyond cost when writing important rules that should protect the public. H.R. 3010 would severely weaken longstanding laws such as the Occupational Safety and Health Act (OSHA) that protects the safety and health of workers in the workplace. OSHA would be subjected to a burdensome and lengthy process that would undermine efforts to protect workers. The public at large would be adversely impacted as well since important protections in the areas of safe drinking water, consumer products, civil rights, health care and education would be endangered. The potential impact and cost to businesses and corporations would become the primary determinant in the rulemaking process.
Wall Street Tax Bill Act Introduced
Sen. Tom Harkin (D-IA) and Rep. Peter DeFazio (D-OR) recently introduced the Wall Street Trading and Speculators Tax Act (S. 1787/H.R. 3313), which would raise much needed federal revenues by imposing a tiny .03% tax on Wall Street speculation and financial transactions, including trading of stocks, bonds, futures, options and swaps. This progressive tax would generate additional federal revenues from the wealthiest Americans, large profitable corporations, and financial institutions, which would be used to create jobs, maintain vital public services, strengthen infrastructure, and reduce the federal deficit. The tax would also help to better match the interests and incentives affecting pension funds and investment managers. AFSCME, the AFL-CIO, and many other organizations have endorsed this legislation. It is a type of “financial transaction tax.” Members of Congress are considering other related proposals and AFSCME generally supports these types of taxes.
House Passes Wireless Tax Fairness Act
The House approved by voice vote the Wireless Tax Fairness Act of 2011 (H.R. 1002), which would restrict state and local government taxing authority. Specifically, it would prohibit states and localities – for five years after enactment – from imposing new taxes on mobile services, providers, and property at a higher rate than the tax on other respective services or property. Fortunately, it does not supersede or affect existing taxes. The bill allows new taxes if voters approve.
AFSCME opposes H.R. 1002 because it would establish a harmful and financially costly precedent of federal preemption over state and local tax decisions. It also fails to recognize that state and local tax systems vary greatly, and confer an unfair advantage on the wireless industry. Given current high unemployment, slow growth and low tax revenues, states and localities need autonomy and flexibility to generate new revenues to balance budgets – or suffer cuts to vital public services and infrastructure. AFSCME led a union sign-on letter opposing H.R. 1002, which was also signed by the AFL-CIO, AFT, IAFF, IFPTE, NEA, and the Department for Professional Employees, AFL-CIO. Another opposition letter was signed by U.S. Conference of Mayors, National League of Cities, National Association of Counties and other organizations representing localities. Sen. Ron Wyden’s (D-OR) similar bill (S. 543) has 12 co-sponsors. While next steps are uncertain, AFSCME will continue to oppose these bills and others that would federally preempt other state and local taxes covering specific industries, certain good and services, and business activity taxes. Together, these could reduce state and local revenues by hundreds of billions of dollars.
Attempt to Repeal Insurance Program for Long-Term Care Services Foiled
Sen. Jay Rockefeller (D-WV) blocked Sen. John Thune’s (R-SD) effort to repeal the Community Living Assistance Services and Supports (CLASS) program by a unanimous consent vote on November 2. The CLASS national insurance program, which was created as part of the Affordable Care Act, is designed to address the growing need for long-term care, which is expensive and can quickly wipe out a family’s savings. In objecting to the repeal vote, Senator Rockefeller stated that 70% of people over 65 will require long-term supports and services at some point in their lives and that 40% of people who need long-term supports and services are under the age of 65. The CLASS program is designed to help address those growing needs. The federal Department of Health and Human Services has put the program on hold. AFSCME is pressing to keep this program in operation and to move forward with its implementation.
Public Employees Benefitting from Health Reform’s Early Retiree Reinsurance Program
The Government Accountability Office (GAO) reported this week on the Early Retiree Reinsurance Program (ERRP), a $5 billion program created by the Affordable Care Act to help health plan sponsors, including employers and unions, cover the health insurance costs for retirees age 55 and older who are not eligible for Medicare, and their spouses, surviving spouses and dependents. Almost half of the ERRP payments the Department of Health and Human Services (HHS) has approved are for state and local government employers. This is not surprising because public employers are more likely to offer retiree health coverage than are private employers. The GAO reported that HHS accepted almost all of the requests it received for the program before cutting off applications in May due to funding constraints. So far, HHS has spent about $2.9 billion of the total ERRP funding, and GAO expects the funding to run out in 2012. Sens. John Kerry (D-MA) and Debbie Stabenow (D-MI) introduced legislation that would provide an additional $5 billion in funding for the ERRP (S. 1088). This legislation is currently stalled in Congress.
House Members Sign Bipartisan Letter to Super Committee Opposing New Federal Taxes on Health Benefits
A large bipartisan group of members of the House of Representatives signed a letter to Congress’ super committee (Joint Select Committee on Deficit Reduction), which raised “concerns about imposing new taxes on health benefits as part of debt reduction proposals” and stated, “we would encourage you to reject proposals to scale back or eliminate tax exclusions for employer-sponsored health coverage.” As the super committee’s November 23 deadline approaches, some congressional leaders seek to “go big” and reduce the deficit by $3 trillion – $4 trillion, which could include new taxes on worker health benefits. This letter highlights solid bipartisan support to protect workplace health benefits, and ensure that deficit reduction does not simultaneously raise taxes on workers and cause “erosion of employer-sponsored health plans.”
Employer-sponsored health care currently covers roughly 156 million Americans – or two-thirds of all Americans with health insurance. This coverage is facilitated by its exemption from federal taxable income (“federal tax exclusion”). This tax exclusion is the lynchpin of America’s health care framework and is the basis for last year’s historic congressional health care reform legislation. If Congress imposes a new tax on employer-sponsored health benefits, it would undermine this framework and erode employer-sponsored health coverage. In late 2010, both the Obama-appointed Simpson-Bowles “National Commission on Fiscal Responsibility and Reform” and the Domenici-Rivlin “Debt Reduction Task Force” recommended phasing out this federal tax exclusion.
The bipartisan letter, led by Reps. Joe Courtney (D-CT) and Tom Cole (R-OK), was supported by varied interests. AFSCME lobbied representatives to sign this letter in alliance with the AFL-CIO, 27 other labor unions, and additional health care, consumer and aging organizations.
The 160 signers were extremely ideologically diverse. The 146 Democrats and 14 Republicans included current Republican presidential candidate Rep. Ron Paul (R-TX) and former Democratic presidential candidate Rep. Dennis Kucinich (D-OH). The letter was signed by 75% of all Democratic Representatives, including 40% (10 of 25) of conservative Blue Dog Democrats; and 12 Ranking Democrats on House Committees.
AFSCME will continue to follow this issue closely in the super committee process and elsewhere in Congress.
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