Week Ending April 17, 2015
President Obama Signs Legislation Resolving Medicare Physician Payments and Extending Children’s Health Insurance
On Thursday, President Obama signed into law the Medicare and CHIP Reauthorization Act (MACRA) after the Senate overwhelmingly approved the measure. The 92 to 8 Senate vote followed the House vote of 392 to 37 a few weeks ago. The new law repeals and replaces the scheduled cuts for physicians who treat Medicare patients and provides a two-year extension of federal funding to support states’ Children’s Health Insurance Programs (CHIP). The federal CHIP funding is important to state budgets and to the eight million children who rely on this coverage. The package also includes a two-year extension of federal payments to cash-strapped rural communities that are facing shortfalls to pave roads, keep teachers in schools and firefighters on call, known as the Secure Rural Schools Program. It also includes a two-year extension of funding for home care and personal care attendant training. And it extends funding for the Medicare-dependent hospital (MDH) program.
The package will require that Medigap policies have a deductible that matches the part B deductible (currently $147) before providing further protection against other deductibles and co-payments. This restriction on first-dollar coverage applies to Medigap policies, but not to other sources of supplemental coverage, such as retiree health plans or Medicare Advantage. Medicare beneficiaries with higher incomes will pay additional premiums totaling nearly $35 billion.
House and Senate Move to Resolve Budget Differences
The House and Senate have appointed conferees to participate in a conference committee to resolve key differences between the House and Senate budget plans passed earlier in the year. Both budgets aim to eliminate deficits within 10 years, repeal the Affordable Care Act (ACA), convert Medicaid into a block grant, and turn Medicare into a voucher system. At the same time, neither raises additional revenue and both instead propose to cut tax rates for the wealthy and corporations. The House budget reduces the deficit more deeply than the Senate’s, relying on much deeper cuts in domestic spending while increasing defense spending. The House budget also has much broader “reconciliation” instructions to committees instructing them to make spending cuts including possible cuts in Social Security, Medicare and Medicaid, using expedited budget procedures. House and Senate conferees are scheduled to begin meeting next week.
Bill to Fast Track Trade Agreements is Introduced
On Thursday, Sens. Orrin Hatch (R-UT) and Ron Wyden (D-OR) introduced Trade Promotion Authority, or fast track legislation (S. 995), to establish the process for the negotiation and congressional consideration of trade agreements. Unfortunately, this fast track bill is not much different from bills approved by the Congress in the past. The bill allows trade negotiations to be conducted behind closed doors, preventing scrutiny by the public and meaningful input by Congress. Once a deal is signed among countries, fast track procedures would prohibit Congress from amending the agreement.
Fast track would smooth the way for the approval of the Trans-Pacific Partnership (TPP) agreement, a nearly completed deal between the U.S. and 11 other nations in the Pacific Rim, including Vietnam, Malaysia and Brunei. Based on leaks of what has been negotiated, economists predict substantial job loss in the U.S. if TPP is implemented. The agreement also includes provisions that would allow global corporations to sue countries for compensation if laws and regulations limit corporate profits, including food safety rules, labor protections, environmental standards and more. Because the TPP is nearly completed, it makes no sense to establish expedited procedures for its approval, before members of Congress and the public have seen the deal.
It appears that the Senate Finance Committee will debate the fast track bill next week and that the bill could be debated on the Senate floor during the first week of May. The bill will move a bit more slowly in the House. AFSCME is working with other unions, environmental and consumer organizations, faith-based groups and others to oppose the fast track bill.
House Passes Repeal of the Estate Tax
On a largely party-line vote, the House voted 240 to 179 to approve permanent repeal of the estate tax, which would give away $269 billion over 10 years to the wealthiest .2% of estates (2 of every 1,000 estates). Only seven Democrats voted for it and only three Republicans voted against the “Death Tax Repeal Act of 2015” (H. R. 1105). Although the estate tax’s current exemption level is already extremely high and has increased significantly per couple from 2001’s level of $1.3 million to today’s $10.8 million, H. R. 1105 would end the estate tax completely and permanently.
Congress’ Joint Committee on Taxation (JCT) estimates that, all across America in 2016, estate tax will be owed by only about 5,400 estates. JCT estimates this bill grants each of these estates an average federal tax break of $3 million. Similarly, JCT estimates this bill grants each of the 318 estates exceeding $50 million an average federal tax break of $22 million. Opponents noted that House GOP leaders gave this narrowly targeted bill for the wealthiest a floor vote, while progressive proposals to address America’s broad needs, including investments in infrastructure and vital services, were denied a vote.
While Senate Republicans may try to vote on an estate tax repeal this Congress, Senate Democrats are expected to block this effort. In fact, during the March 2015 Budget Resolution consideration, the Senate voted 54 to 46 to pass an amendment that expressed support for repealing the estate tax. This falls short of the 60 votes needed to bring a repeal bill similar to the House-passed H. R. 1105 to a floor vote. Furthermore, given the White House’s threat to veto this House bill, full repeal is unlikely to be enacted during President Obama’s presidency.
AFSCME opposes this bill because it does nothing for 99.99% of Americans, increases wealth inequality and constrains current and future domestic investments. In fact, AFSCME supports strengthening the estate tax with lower exemptions and higher tax rates. Read AFSCME’s letter opposing repeal of the estate tax.
Bipartisan Press Event for 9/11 Health and Victim Compensation Funding
A standing-room-only crowd of first responders and lawmakers stood together to speak in favor of permanently reauthorizing the World Trade Center Health Program and the September 11 Victim Compensation Fund of 2001, which first became law in 2010. This bill (H. R. 1786) would extend health programs that provide relief for first responders and other public employees who were exposed to toxins and bodily harm following the September 11 terrorist attacks. AFSCME District Council 37 was represented at the press conference by Guillermina Mejia, Director of Safety & Health. Key bipartisan congressional supporters include: Reps. Carolyn Maloney (D-NY), Jerrold Nadler (D-NY), Peter King (R-NY) and Sens. Charles Schumer (D-NY) and Kirsten Gillibrand (D-NY), along with 52 other co-sponsors.
Department of Labor Proposes Rule to Ensure Investment Advisors Provide Advice in the Consumers’ Best Interests
The Department of Labor (DOL) issued a proposed rule preventing investment advisors from providing investment advice that is not in consumers’ best interests. Currently, investment advisors are allowed to have a conflict of interest and provide advice that is merely suitable for consumers. For example, a recent White House analysis reports advisors’ conflicts of interest result in investors’ cumulative annual losses of about 1%, or a total of approximately $17 billion per year. The proposed rule would close troubling loopholes in the 40-year-old regulation governing investment advice. DOL’s proposal covers a broader range of investment advisors and strengthens the test to reduce conflicts of interest. Unfortunately, there is substantial opposition to the proposed rule from large investment companies and banks, as well as members of Congress. Congressional hearings on legislation to block the rule are expected to begin next week.
AFSCME supports DOL’s proposed rule and is a founding member of the Save Our Retirement (SOR) coalition, which is advocating for new stronger, sensible safeguards. SOR stated: “This rule would close major loopholes to help ensure that workers and retirees receive retirement investment advice that is in their best interest.… This rule promises to be a major improvement over the status quo, which allows too many financial professionals to offer self-serving retirement advice at the expense of their clients. …. Although some Wall Street allies immediately began attacking the rule, those attacks ignore numerous provisions specifically designed to accommodate their concerns.”
House Pushes Legislation to Fire Federal Employees Who Owe Federal Taxes
On a largely party-line vote, the House voted 266 to 160 in favor of the “Federal Employee Tax Accountability Act of 2015” (H.R. 1563), which would require that federal workers with a seriously delinquent federal tax debt be fired and prohibits hiring job applicants with this tax debt. The bill would also force federal workers and applicants to release their confidential personal financial data. Although a majority voted for this bill, it was rejected because it failed to receive the needed two-thirds vote for bills on the House fast-track “suspension” calendar.
AFSCME opposes H.R. 1563 because it is a troubling overreaction that would cause federal workplace problems, increase spending for hiring and training, worsen federal workers’ financial difficulties, and is unlikely to increase federal tax collections. The bill would lead to firing qualified federal employees with proven effective job performance. If Congress seeks to recover taxes from federal workers, firing workers and leaving them unemployed with no income is a self-defeating option. Read AFSCME’s letter opposing this legislation.
Senators Request Investigation of High-Skilled Visa Program
A bipartisan group of 10 Senators (Dick Durbin (D-IL), Jeff Sessions (R-AL), Richard Blumenthal (D-CT), Chuck Grassley (R-IA), Sherrod Brown (D-OH), David Vitter (R-LA), Claire McCaskill (D-MO), Bill Cassidy (R-LA), Bernie Sanders (I-VT) and Jim Inhofe (R-OK)) sent a letter to the Obama administration, asking it to investigate Southern California Edison’s use of the H-1B high-skilled guest worker program to replace U.S. workers, and any other instances of displacement. In the case of Southern California Edison, several hundred currently-employed high-tech employees were told to train their H-1B replacements and were then laid off. In order to receive severance pay, they had to sign a non-disparagement agreement with the company.
AFSCME has been working with our labor and community allies to get Congress to reform, not expand, the H-1B guest worker program. We strongly oppose The “I-Squared” Act of 2015 (S. 153) which eliminates the annual cap on H-1B visas while failing to make needed reforms. These reforms include meaningful recruitment of U.S. workers before approval of H-1B visas, ensuring that the H-1B program does not cause wage depression, and allowing H-1B visa holders – not just their employers – to petition for legal resident status. Several years ago, hundreds of AFSCME District Council 37 members who worked for New York City performing information technology (IT) work lost their jobs after the city contracted with private companies to perform the IT services and they brought in H-1B visa holders. AFSCME will continue to advocate for sweeping reforms of the H-1B and other employment visa programs to protect AFSCME members’ and all U.S. workers’ jobs and wages as well as to ensure that guest workers are not exploited and used to lower workplace standards.
Status of Court Challenges to President Obama’s Immigration Executive Actions
Last week, the U.S. Court of Appeals for the 5th Circuit dismissed a lawsuit (Crane v. Johnson) that challenged President Obama’s 2012 Deferred Action for Childhood Arrivals (DACA) program. The case was dismissed on procedural grounds, with the court finding that neither of the plaintiffs – agents of U.S. Immigration and Customs Enforcement nor the state of Mississippi – had “standing” to bring the lawsuit because they failed to show any net negative fiscal effect after considering both potential fiscal costs and benefits of DACA or any other “sufficiently concrete and particularized injury.”
This ruling may have implications for the pending lawsuit, brought by 26 state attorneys-general, against President Obama’s more recent executive actions which expand DACA and establish the Deferred Action for Parental Accountability (DAPA) program. U.S. District Court Judge Andrew Hanen issued a ruling last week that denied the Obama administration’s motion to suspend, or “stay,” the preliminary injunction he issued in February that halted the DACA expansion and DAPA. Today, the 5th Circuit heard oral arguments on the Obama administration’s appeal of the preliminary injunction. Several groups filed amicus briefs with the 5th Circuit in support of President Obama’s immigration executive actions moving forward, including 15 states’ and D.C.’s attorneys-general, a coalition of more than 70 cities and counties, 181 Democratic members of the House of Representatives, four Democratic Senators, the AFL-CIO, and a group of business leaders.
The terrible consequences of the delay in implementing President Obama’s executive actions are already being felt in the AFSCME family. A Council 61 member’s husband, Max Villatoro, was picked up by Immigration and Customs Enforcement (ICE) on March 3 and deported to Honduras three days later. He was a Mennonite Pastor in Iowa City who lived in the U.S. for 20 years and has four U.S. citizen children. He very likely would have been eligible to stay in the U.S. without fear of deportation under President Obama’s DAPA executive action. While ICE contended that his two nonviolent convictions more than 15 years ago (DUI and false documents) made him a deportation priority, under the Obama administration’s prosecutorial discretion policy, Mr. Vallatoro’s decades in the U.S., strong family ties and amends for past mistakes should have been considered. AFSCME will continue to advocate for comprehensive immigration reform legislation to fix our broken immigration system, and for executive actions that move our immigration policy in a positive direction in the absence of congressional reform.
Senate Panel Unanimously Advances K-12 Overhaul Bill
On Thursday, the Senate Committee on Health, Education, Labor and Pensions (HELP) voted 22 to 0 to approve a draft bill that revamps the Elementary and Secondary Education Act. The legislation represents a negotiated compromise between Chair Lamar Alexander (R-TN) and ranking member Patty Murray (D-WA). The bill requires states to continue testing students annually but allows states to decide what weight to give the test results when rating schools. The bill also changes the funding allocation among states for teacher training grants, allowing more funding cuts than currently allowed for states, primarily in the Northeast and Midwest, that have shrinking populations in favor of additional funding for states, primarily in the South and West, that have growing populations. The bill will now move to the Senate floor, where additional amendments will be considered. One area for expected amendments is to strengthen the bill to ensure that all students, regardless of family income, receive an equal, high-quality education.
AFSCME Applauds Illinois’ State Court Order Halting “Fair Share” Fee Confiscation
On February 9, Illinois Governor Bruce Rauner issued an executive order barring labor unions from collecting “fair-share” fees from state workers. In response, 28 labor unions, including AFSCME, filed suit alleging that the Governor’s order exceeded the scope of his executive authority and that it violated state law and several collective bargaining agreements.
Last week, Associate Judge Christopher Kolker of St. Clair County Circuit Court issued an order directing the Rauner administration to immediately resume sending the fees to the unions pending a resolution to the litigation. AFSCME applauds the state court’s order to halt the fee confiscation.
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