Week Ending September 30, 2011
Senate Passes Two Stop-Gap Bills to Prevent Government Shutdown
Just days before the country would face a government shutdown on October 1, the Senate passed two stop-gap funding bills. The first (H.R. 2017) would fund the government through October 4 at the same level set by the Budget Control Act (BCA) in August. On September 29, the House met in a pro forma session to consider the bill, which was approved. President Obama is expected to sign this bill immediately to ensure funding continues to flow to the federal government and thereby prevent a shutdown.
The Senate also approved a longer stop-gap funding bill (H.R. 2608) which would fund the federal government through November 18. It includes a 1.5% across-the-board cut on all yearly-approved spending to meet the BCA spending caps, which is identical to a separate House bill. It also includes $2.65 billion in disaster relief funding without cutting other programs. The House will consider this longer extension bill next week. Needless to say, this latest House-Senate disagreement does not bode well for the broader budget talks leading up to the super committee's deadline to release a plan by November 23 to reduce the deficit by cutting spending, raising revenues or both.
Working Families Tell Congress: Pass the American Jobs Act!
As members of Congress took the week off to head home over the congressional recess, they were met back home by constituents urging them to get back to work and pass the American Jobs Act (AJA). AFSCME members organized events across the country at crumbling bridges, congressional offices, and city landmarks urging their U.S. representatives to pass President Obama’s proposal that would put hundreds of thousands of people back to work immediately rebuilding our nation’s infrastructure and keep 300,000 teachers, police officers and other first responders on the job (H.R. 12; S. 1549).
On Wednesday, members of AFSCME Council 13 in Pennsylvania held a press conference at the structurally deficient Washington Ave. bridge in Newtown, PA, urging Rep. Michael Fitzpatrick (R-PA) to pass the AJA and put Pennsylvanians back to work. They also gathered outside of Rep. Lou Barletta’s (R-PA) town hall meeting in West Hazleton to protest his politics-before-jobs approach. AFSCME members held similar protests in Boynton Beach, FL targeting Rep. Allen West (R-FL) and in Winter Garden, FL targeting Rep. Daniel Webster (R-FL).
On Thursday, AFSCME Council 18 members in Las Cruces, NM participated in a rally outside Rep. Steve Pearce’s (R-NM) office, while AFSCME Council 38 members in Arkansas held a press conference with state legislators and labor leaders in Jonesboro calling on Rep. Rick Crawford (R-AR) to vote for the AJA. And on Friday, Council 79 AFSCME members in Florida held a press conference at the structurally deficient Newnan St. bridge in Jacksonville, FL urging Rep. Ander Crenshaw (R-FL) to support the AJA and put Floridians back to work rebuilding the state’s infrastructure.
Cities Experiencing Brunt of Economic and Jobs Crisis
Across the country, cities continue to lay off workers and delay infrastructure projects due to persistent revenue declines, according to the National League of Cities’ (NLC) annual City Fiscal Conditions report. Property tax collections, income tax receipts, and sales taxes all continue to experience multi-year declines. In response, 72% of cities are cutting employees, 60% are delaying infrastructure projects, and 36% are changing employee health care benefits.
Decreased state aid is exacerbating cities’ fiscal crises. States are facing their own budgetary pressures due to the weak economy, insufficient federal assistance, and persistent high unemployment. Since 2009, cities report 50% cuts in general aid from states, 49% cuts in shared revenues, and 32% cuts in reimbursements and other transfers. As the NLC’s report notes, the resulting spending cuts will continue to be a drag on the national economy.
This report highlights the need for Congress to pass President Obama’s American Jobs Act. It would help rebuild our infrastructure and increase employment by 4.3 million jobs over the next two years, including protecting the jobs of 300,000 teachers, police officers and other first responders.
House Panel Chair Releases Proposed Funding Bill for Labor-HHS- Education
On Thursday, Rep. Denny Rehberg (R-MT), Chair of the House Appropriations Committee, released draft legislation to fund the programs under the Departments of Labor, Health and Human Services (HHS) and Education for fiscal year 2012. The funding proposed is about $4 billion less than the current level and the amount the Senate appropriators have agreed upon. Among other provisions, the draft bill would prohibit HHS from continuing any implementation of health reform until 90 days after all legal challenges are resolved; it would rescind $1 from health reform’s Prevention and Public Health Fund; it contains several controversial provisions relating to the National Labor Relations Board that would limit collective bargaining rights and reduce wage rates for several categories of workers; and it proposes to cut approximately 75% from the funding level currently provided for basic grants to states and localities for training and employment.
The draft stakes out the House leadership’s position on upcoming spending negotiations with the Senate this fall that will likely result in an omnibus spending bill covering all federal spending for FY 2012.
Chair of House Budget Committee Lays Out Health Care Vision
House Budget Committee Chairman Paul Ryan (R-WI) gave a speech this week in which he revisited the controversial aspects of the health care proposals he incorporated in the budget that the House approved in the spring, along party lines. In his speech, Ryan reiterated several proposals from his budget, including one to privatize Medicare and shift more costs to seniors. He also called for reducing federal payments to states for the Medicaid program, which would force states to reduce coverage for nursing home and other long-term care services. Of significant note, Ryan also argued for the elimination of the tax exclusion for employer-provided health coverage requiring workers to pay taxes on benefits provided by their employer.
House Members Oppose Taxes on Employer-Sponsored Health Care Benefits
Earlier this week, Reps. Joe Courtney (D-CT) and Tom Cole (R-OK) circulated a bipartisan sign-on letter to their colleagues which opposes capping or eliminating the federal tax exclusion for work-based health care coverage. The letter, addressed to the Joint Select Committee on Deficit Reduction, states: “We write today to raise concerns about imposing new taxes on health benefits as part of debt reduction proposals. Efforts to cap or to eliminate these tax exclusions would have far reaching consequences that would not only reduce health coverage for millions of Americans, but would also increase long-term federal spending obligations.”
Currently, employer-sponsored health care covers roughly 156 million Americans – or two-thirds of all Americans with health insurance – and this broad coverage is facilitated by its exemption from federal taxable income (“federal tax exclusion”). This tax exclusion is both the lynchpin of America’s health care framework and the basis for 2010’s historic health care reform. If Congress imposes a new tax on employer-sponsored health care benefits, it would undermine this framework and erode employer-sponsored health coverage.
During the debate on health care reform, 193 House Democrats signed a similar letter – also led by Rep. Courtney – in opposition to a tax on so-called high cost health insurance plans. AFSCME is now working with a broad coalition of labor unions, including the AFL-CIO, to contact House members to co-sign the new bipartisan letter.
We encourage AFSCME members to contact your representative and urge him/her to co-sign. For the full text of the letter, please click here.
House Leadership Adopts Senate Approach to Funding Surface Transportation Bill
House Transportation and Infrastructure Committee Chair John Mica (R-FL) announced this week that he received approval from House leadership to move forward on a surface transportation bill that will maintain spending at current levels for six years. The new proposal includes an additional $15 billion annually that will supplement the Highway Trust Fund. The decision to increase spending on surface transportation programs is a huge departure from the position Chairman Mica and the House leadership had previously taken. Chairman Mica originally proposed limiting spending to only what was collected from the Highway Trust Fund, a move that would have resulted in major surface transportation spending cuts.
The House bill is now closer to the measure being considered in the Senate, making it more likely that Congress will pass a surface transportation bill. More obstacles exist, however, including the duration of the bill since the Senate is considering a two year bill, and identifying new revenues to pay for the funding increase.
Surface transportation reauthorization provides funding for the nation’s transit, highway construction, and highway safety programs. It sets the nation’s transportation priorities, creates jobs and boosts economic growth. Several short-term extensions of the current law have been passed since Sept. 30, 2009, when the current law expired.
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