Issues / Legislation » Legislative Weekly Reports

Week Ending April 27, 2012

Congress and the President Focus on College Affordability

This week President Obama and Congress focused on an issue that is a serious concern to millions of students hoping to receive a college education and to families working to find the money to pay for it. On July 1, more than 7.4 million students with federal student loans will see their interest rates double from 3.4% to 6.8% unless Congress acts. Should the interest rates double, the average student would be saddled with an additional $1,000 in debt this year, and for each year Congress allows the rates to double.

The House, on a largely partisan vote of 215 to 195, passed legislation (H.R. 4816), introduced by Rep. Judy Biggert (R-IL), that would pay for the interest rate reduction by eliminating funding for public health activities such as breast and cervical cancer screenings, child immunizations, newborn screenings, protection of our food supply and responding to disease outbreaks, bioterrorism and natural disasters.  By gutting the Affordable Care Act’s (ACA) Prevention and Public Health Fund, the bill would hit middle and working class families with the bill for immediate health care needs.  This approach would hurt women, children and families, and result in increased health care costs overall.

American families should not be forced to choose between access to an affordable college education and their health. Far better options exist for preventing the interest rate increase, including ending wasteful taxpayer subsidies for big oil and gas companies, as provided in the Stop the Rate Hike Act of 2012 (H.R. 4816) sponsored by Rep. John Tierney (D-MA). Senate Majority Leader Harry Reid (D-NV) has scheduled a May 8 vote on a bill (S. 2343) that would pay for freezing student loan interest rates by ending a corporate tax break.

AFSCME is working with Congress to support a responsible fix to the student loan problem that does not compromise the health and well-being of American families.  

House Committees Continue Slash and Burn Approach to Deficit Reduction

In a follow up to last week’s House committees’ cuts to health care, nutrition and social services, the House Energy and Commerce and Government Oversight Committees approved bills along party lines that would slash  an estimated $114 billion from health services and $82 billion from federal pensions over the next 10 years.

The health bill eliminates funding for parts of the ACA, allows states to cut back on Medicaid enrollment, slashes nearly $25 billion from Medicaid through changes in the provider tax, reduces payments to safety net hospitals, repeals a portion of Medicaid funding, and reduces Medicaid payments to territories, including Puerto Rico.  These cuts would increase the number of uninsured Americans and shift costs onto states and health care providers in order to give the wealthiest and well-connected even more tax breaks.  The proposal would also make it harder for those harmed by medical malpractice to achieve justice in the courts, once again favoring the well-heeled interests of nursing homes, medical device manufacturers, and pharmaceutical companies over ordinary Americans.

The retirement changes would require employees in the Federal Employees Retirement System (FERS) to contribute 5% more of their pay to pensions by 2017, up from .8%. Employees in the older Civil Service Retirement System (CSRS) would contribute 12%, up from 7%.

These House cuts will be rolled together into a “reconciliation” package that the House Budget Committee will consider in early May, and which will be brought to the House floor later in May. AFSCME is strongly opposed to these draconian cuts.  The package has no chance of becoming law, as the Senate has no plans to take up the House bill. 

Senate and House Ready to Negotiate Surface Transportation Bill

The House and Senate have appointed negotiators who will iron out differences between the Senate-and House-passed versions of the Surface Transportation Bill. The House appointed 33 representatives and the Senate named 14 senators to the conference committee. Earlier in the week, the GOP-led House rejected a Democratic motion to simply accept the Senate bill (S. 1813). It is expected, however, that the final bill will resemble the Senate bill, which provides $109 billion in federal transportation funding for two years. 

The most controversial provision is language in the House bill (H.R. 4348) that mandates quick approval of the Keystone XL oil pipeline. This controversial project would bring crude oil from Canada to refineries on the Gulf Coast. The White House has threatened a veto, noting that the House bill’s provision circumvents a long-standing and proven process for determining whether cross-border pipelines are in the national interest. The majority of the Senate conferees are opposed to efforts to approve the pipeline. Leadership in the House and Senate are hoping that a compromise will be reached on this issue so that negotiations on transportation related provisions can begin and a final bill can be approved. 

Senate Votes to Support New NLRB Rule

On Tuesday, the Senate voted down a GOP-backed motion intended to block a National Labor Relations Board (NLRB) rule that would speed up union elections. In a largely party-line vote, the Senate defeated by a vote of 45 to 54 a resolution (S.J. RES 36) aimed at blocking a rule to update and modernize the NLRB procedures used to supervise union elections. Health, Education, Labor and Pensions (HELP) Committee Chairman Tom Harkin (D-IA), a leader of the Democratic opposition to the motion, said the vote was a defense of “the right of American workers to form a union – one of the pillars of our middle-class – giving workers the ability to bargain for fair wages, good benefits and safe working conditions.” The White House had threatened to veto the GOP measure, calling the NLRB election ruling “common sense.”

Senate Hearing Focuses on Tax Reform’s Potential Impact on State and Local Governments

The Senate Finance Committee’s April 25 hearing entitled, “Tax Reform: What It Means for State and Local Tax and Fiscal Policy,” covered numerous proposals affecting state and local government tax revenues.  Senators focused on pending streamlined sales tax legislation (S. 1832); several bills that federally preempt state and local taxes on specific business activities, products, and industries; the existing federal income tax deductions for state and local income and property taxes; and existing federal income tax exemptions for interest on state and local government bonds. 

Senator Ben Cardin (D-MD) forcefully supported the bipartisan “Marketplace Fairness Act” (S. 1832), which grants state and local governments the authority to collect the sales and use tax they are already owed on buyers’ remote purchases via the internet, phone and mail order catalogs. A bipartisan group of 10 senators wrote a joint statement supporting S. 1832.  AFSCME strongly supports the “Marketplace Fairness Act” and helped generate a letter from nine labor unions in support.  Separately, AFSCME submitted a broader statement for the record covering many of the issues above. 

Senate Committee Passes Farm Bill

This week, the Senate Agriculture Committee approved its Farm Bill by a vote of 16 to 5.  Those voting against were Sens. Kirsten Gillibrand (D-NY), Thad Cochran (R-MS), John Boozman (R-AR), Saxby Chambliss (R-GA) and Mitch McConnell (R-KY).  Senator Gillibrand’s no vote was in opposition to cuts to the Supplemental Nutrition Assistance Program (SNAP, formerly food stamps); the southern senators opposed changes to crop subsidy programs.

The SNAP cut would cause an estimated 500,000 low-income households to lose an average of $90 in monthly benefits.  The bill also included a change to the SNAP quality control tolerance threshold, lowering it from the current $50 down to $25.  This means that minor errors in the $25-$50 range will be added to states’ error rate totals, subjecting the program to more allegations of “fraud and abuse.”  Some harmful SNAP amendments were withdrawn but could be offered on the Senate floor.  AFSCME will work to protect and strengthen SNAP as the bill moves forward.  The House Agriculture Committee has scheduled a nutrition hearing for May 8.   

Job Creation is Key to Strengthening Social Security and Medicare Trust Funds

Recently-released reports from the respective Medicare and Social Security Trustees reflect how economic factors affect the solvency of these trust funds.  The Social Security Trust Fund may be exhausted in 2033, in large part because the economic downturn reduced payroll contributions.  The Medicare hospital insurance trust fund is solvent through 2024 – the same prediction made in last year’s report.  Like Social Security, the trust fund that pays for hospital care for Medicare beneficiaries is funded through payroll contributions, which also are impacted by downturns in the economy. The Affordable Care Act has been largely responsible for adding eight additional years of solvency to Medicare.  The law taps into Medicare’s purchasing power to prompt providers, who are increasingly concentrated and can effectively drive up payments regardless of quality, to do more to control their costs.  It also cracks down on wasteful overpayments to insurance companies, as well as fraud and abuse.


House Panel to Examine Medicare Voucher Proposals

On Friday, a House subcommittee held a hearing on a proposal to replace current Medicare guaranteed premiums and benefits with a flat payment to beneficiaries to purchase coverage through traditional Medicare or a private plan. This radical restructuring of Medicare was proposed by House Budget Committee Chairman Paul Ryan (R-WI) as a “premium support” and adopted in the budget by the House along party lines. Medicare has given generation after generation of Americans access to a doctor and hospital care.  It protects seniors and their families from economic ruin due to illness or accident by pooling resources and spreading the risk of costly care.  Regardless of income or medical history, people age 65 and older can count on Medicare’s guaranteed health benefits. AFSCME vigorously opposes the “premium support” proposal because it will end the guarantee of health and financial security for seniors and their families


Affordable Care Act Lowers Costs for Traditional Medicare Beneficiaries

According to a new report from the Centers for Medicare and Medicaid Services (CMS), beneficiaries in traditional Medicare will enjoy $208 billion in lower premiums and out-of-pocket costs through 2021, due to the ACA. In addition, the independent CMS Actuary found that the ACA will help save the Medicare program $200 billion by cracking down on wasteful overpayments, fraud and abuse. These savings would disappear if the changes to Medicare and the ACA proposed by House Budget Committee Chairman Ryan, and adopted by the House along party lines, became law.  


Affordable Care Act Provides $1.3 Billion in Premium Rebates 

According to a new report, consumers and businesses are expected to receive an estimated $1.3 billion by this August in rebates from health insurers who spent more on administrative expenses and profits than the ACA allows. The rebates include $541 million in the large employer market, $377 million in the small business market, and $426 million for those buying insurance on their own. Nearly a quarter of projected large group rebates are from insurers in New York, with $127 million in expected refunds. Of those large businesses and their employees receiving rebates, the largest average per-enrollee rebates are in Vermont ($386), Nebraska ($248), Minnesota ($146), New York ($142), and North Carolina ($121). These rebates would be gone if the changes to Medicare and the ACA proposed by House Budget Committee Chairman Ryan, and adopted by the House along party lines, became law.

U.S. Supreme Court Hears Arizona Immigration Case

On Wednesday, the U.S. Supreme Court heard oral arguments in Arizona v. United States, the federal government’s challenge to the state of Arizona’s SB 1070.  The most controversial provision of SB 1070 authorized law enforcement to question the immigration status of anyone stopped if the officer has a reasonable suspicion that an individual is an undocumented immigrant.  The 9th Circuit Court of Appeals found in favor of the federal government, ruling that it would be impossible to enforce the law without racial profiling.  The only issue before the Supreme Court, however, was whether the federal government has the exclusive authority to regulate immigration enforcement.  The impact of the court’s decision will extend well beyond Arizona – Alabama, Georgia, Indiana, South Carolina and Utah have passed similar laws.  The Supreme Court’s decision is expected in late June.   

Court Enjoins DOL Regulations Aimed at Protecting U.S. and Foreign Workers

On the eve of their effective date, the Department of Labor’s (DOL) comprehensive new H-2B regulations were enjoined by a district court judge in the Northern District of Florida.  H-2B is a guest worker program for non-agricultural, non-professional temporary foreign workers.  The court based its preliminary injunction on the assertion that the DOL lacked authority to issue substantive regulations relating to the H-2B program.  However, the judge’s order left in place H-2B regulations issued by the outgoing Bush administration in 2008 which, according to the court’s reasoning, are equally invalid.  The court’s ruling leaves open the question of how the DOL will provide certifications that the admission of H-2B workers will not depress the wages and working conditions of U.S. workers.  The judge will decide in about two months whether to issue a permanent injunction.  The Obama administration is expected to seek review of the judge’s order in the Eleventh Circuit Court of Appeals.  

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