Week Ending December 18, 2014
Senate Passes “Cromnibus” Spending Bill During Weekend Session
In a rare weekend session late Saturday night, the Senate passed the combination omnibus and continuing resolution or “cromnibus” spending package by a vote of 56 to 40. It will fund most federal agencies for the remainder of Fiscal Year 2015, and the Department of Homeland Security through February. The President signed the bill this week, eliminating the possibility of a government shutdown. For bill details, click here.
The Senate faced similar problems experienced by the House last week, with progressive Democrats criticizing the bill mainly due to concerns about changes in campaign contribution limits and Dodd-Frank consumer protections from Wall Street excesses. The tea party wing of the GOP also took support away from the final package due to their opposition to President Obama’s Executive Action on immigration and other concerns. Twenty-one Democrats joined 19 Republicans in opposing the final package.
Senate Passes Tax Breaks Bill – Mostly for Businesses
The Senate voted 76 to 16 to approve a one-year, retroactive package of “tax extenders” (H.R. 5771). The bill extends from January 1, 2014 to December 31, 2014 more than 50 different tax provisions that had expired on December 31, 2013. The overall package costs $44.7 billion in lost tax revenues (over 10 years) which will increase the federal debt significantly. Nearly all this overall cost is from granting tax breaks to businesses, including the research and development credit and “bonus depreciation.” AFSCME strongly opposes many of these business tax breaks because they are bad policy and costly. For example, the tax break that allows multinational corporations to defer paying taxes on income earned overseas is one of the reasons General Electric paid, on average, only a 1.8% effective U.S. federal tax rate over 10 years. AFSCME supported closing other federal corporate tax loopholes to offset these lost revenues. And, AFSCME supported a few of the tax break extenders that help individuals, including the federal tax deduction for state and local sales tax, the federal tax exclusion for employer-sponsored mass transit commuter benefits, and the federal tax exclusion for mortgage debt forgiveness.
Previously, House GOP leaders pursued a more costly $400 billion package containing several outrageously expensive permanent tax breaks for businesses, which the White House threatened to veto. In response to this veto threat, Congress settled on this smaller one-year bill, which President Obama is expected to sign into law.
Congress Approves New Tax-Free Accounts for Individuals with Disabilities
The House passed the Achieving a Better Life Experience (ABLE) Act as stand-alone legislation and again as part of the legislative package that extended expiring tax breaks. The ABLE Act allows individuals to establish “ABLE accounts,” which would resemble qualified tuition programs, known as “529 accounts.” These individuals must be severely disabled before turning 26, based upon marked and severe functional limitation or receipt of benefits under SSI or Disability Insurance (DI) programs. Qualified expenses are costs related to the individual’s disability, such as personal supportive services, housing, transportation and assistive technology. Earnings on an ABLE account would generally not be included in the taxable income of the contributor to the account or the designated beneficiary. The first $100,000 in an ABLE account would be exempt from being counted toward the SSI programs’ $2,000 individual resource limit. Funds in an ABLE account and distributions from the account for qualified disability expenses would be disregarded when determining the designated beneficiary’s eligibility for Medicaid and most federal means-tested benefits.
Coalition Raises Concerns Over Impact of Trade Provisions on Medicare and Medicaid
This week, the AFL-CIO, AARP, Doctors Without Borders, OXFAM and the Generic Pharmaceutical Association held a press conference raising concerns about the pharmaceutical proposals that the Obama administration is advancing in negotiations over the Trans Pacific Partnership (TPP) trade agreement. The groups warned that the U.S. proposals will drive up the cost of prescription drugs in Medicare, Medicaid and other public programs and put the long term financial sustainability of these programs at risk.
AFSCME shares these concerns and recently joined a number of other groups in sending a letter to President Obama, urging that the administration not agree to trade provisions that would further delay generic competition or undermine measures to control prescription drug costs in Medicare and Medicaid. AFSCME joined this letter and has been involved with this issue because it could directly impact the health care costs of our active members and retirees. If the Trans Pacific Partnership trade agreement results in further delays of generic competition with expensive brand-name drugs or foreclosing Medicare’s options for controlling rising drug prices, then the cost of drugs would go up for AFSCME members, workers generally and retirees.
Senate Confirms Federal Judges and Other Officials
Before leaving town Tuesday evening, the Senate confirmed 27 more of President Obama’s judicial nominees. This will allow both criminal and civil cases to proceed through the federal court system without extreme delays. Some courts have had vacancies for as long as six years.
The Senate also confirmed Sarah Saldana as the new head of the Immigration and Customs Enforcement (ICE). This is the agency within the Department of Homeland Security that is responsible for enforcing immigration laws. Sen. John Cornyn (R-TX) has already laid down the gauntlet for next year, calling Saldana’s defense of President Obama’s immigration Executive Actions “untenable.”
The Senate failed to confirm Carolyn W. Colvin, President Obama’s nominee for Commissioner of the Social Security Administration (SSA). Senate Majority Leader Harry Reid (D-NV) was unable to gain bipartisan agreement to move her confirmation quickly through the Senate before the end of its session. The vote on Colvin’s nomination will now be held in the Republican-controlled Senate next year. She has been Deputy Commissioner of SSA since 2010.
Sign Up to Receive the Weekly Report and Action Alerts via Email and Become an AFSCME e-Activist!!!
In an effort to move toward electronic transmission which will allow us to put important federal legislative updates in your hands sooner, we urge you to sign up to receive the Federal Legislative Report via your email address.
Please go to www.afscme.org/join and check the "Federal Legislative Report" box under subscriptions on the bottom of the page.