Week Ending December 2, 2011
Senate Rejects Competing Payroll Tax Cut Proposals
Thursday night, the Senate voted on competing versions of legislation to continue and expand a temporary cut in the Social Security and Medicare payroll tax, which was part of President Obama’s economic recovery law enacted in the first month of his administration. President Obama has campaigned to continue the payroll tax cut for workers for another year, and to apply the cut to employers on the first $5 million in payroll costs, in order to keep money in the hands of working families who will support local businesses with their purchases and help boost local economies. The legislation designed by the President and by Senate Democratic leaders would have paid for the lost revenue by imposing a 3.25% increase on the income tax for those earning $1 million or more each year.
After months of fighting the extension of the payroll tax cut, Republican leaders switched gears this week announcing that they would support it. But they rejected the surtax on millionaires to pay for it. Instead, they proposed cutting federal employee jobs and extending a freeze on federal employees’ pay. In addition, they also would impose new cuts in domestic programs administered by state and local governments, including education, transportation and health care, while reversing some of the defense spending cuts previously agreed to by the Congress. In sum, the Senate GOP would pay for the loss of revenue resulting from the payroll tax cut by undermining spending that supports public sector jobs.
The vote on the Democratic bill (S. 1917) was 51 to 49 in favor, but it failed because it required a super-majority of 60 votes to prevail. The Republican version (S. 1931) was rejected more soundly, by a vote of 20 to 78. Many Republicans rejected their leadership’s bill because they continue to oppose the payroll tax cut, no matter how it is paid for.
House Republicans and Senate Democrats are expected next week to move forward on their own package extending the payroll tax cut for employees as well as extending its federal unemployment insurance program.
House Votes To Restrict New NLRB Rules
Under the guise of preserving the status quo, the so called “Workforce Democracy and Fairness Act” (H.R. 3094) amends the National Labor Relations Act to actually erode the right of private sector workers to form a union. The bill passed the House largely along partisan lines (235-188) on Wednesday. It allows employers to indefinitely delay the scheduling of the election for workers to choose whether to join a union. No election could occur sooner than 35 days after the filing of a petition with no limit to how long an election could be delayed. H.R. 3094 mandates a full hearing on any issue that any party raises. It requires the National Labor Relations Board to hear and decide every appeal, no matter how trivial, before any election can be scheduled. The bill denies workers the opportunity to hear the case for the union while protecting companies’ ability to mount vigorous anti-union campaigns. AFSCME strongly opposed this legislation and sent a letter in opposition to every member of the House of Representatives. H.R. 3094 is unlikely to pass the Senate.
American Recovery and Reinvestment Act Continues to Boost Employment
According to a new report by the nonpartisan Congressional Budget Office (CBO), the economy would have been in much worse shape, and unemployment higher, without the Recovery Act that President Obama pushed through the Congress in the early days of his administration. The CBO report also estimates that the Recovery Act boosted employment in the third quarter of this year by as many as 3.3 million jobs and boosted economic growth by as much as 1.9%. While the effects of the Recovery Act peaked during the first half of 2010, the CBO estimates that the measure will raise employment by as much as 1.1 million in 2012 and raise economic growth by as much as 0.8%.
Senate Holds Hearing on Balanced Budget Amendment
Although a recent House vote fell short of the two-thirds needed to advance a constitutional balanced budget amendment (BBA), the Senate is required by the Budget Control Act, passed this summer, to vote on a BBA by year’s end. The process began this week with a hearing in the Senate Judiciary Committee examining, “A Balanced Budget Amendment: The Perils of Constitutionalizing the Budget Debate." AFSCME submitted testimony in opposition to a BBA.
A constitutional scholar noted that inserting courts into budget battles is unwise and will not help to bring deficits under control. Further, he noted that the lack of enforcement and clarity of process will make already bruising budget battles even messier and more drawn out. Senator Dick Durbin (D-IL) also noted that requiring super-majorities to raise taxes essentially safeguards tax expenditures and special-interest loopholes for wealthier Americans and corporations while appropriated programs that mostly serve working Americans would be cut drastically under a balanced budget requirement. A BBA would also force deep cuts in Medicare and Medicaid and, depending on the version, in Social Security.
A floor vote in the Senate is expected to occur by mid-December.
Surface Transportation Bill Delayed Until Next Year
John Mica (R-FL), Chairman of the House Transportation Committee, announced this week that he will not move a transportation reauthorization bill this year. Mica said that there was not enough time to produce a bill before the holidays. The current reauthorization expires at the end of March. Mica said that he believes that there is plenty of time to get it done before the expiration date. Mica’s announcement is a departure from what House leadership had previously stated which was that a bill would pass by the end of this year. House Democrats plan on introducing a new transportation bill that they say will create badly needed transportation jobs.
White House Urges Senate Vote to Approve Obama Nominee, Richard Cordray, to be Director of Consumer Financial Protection Bureau (CFPB)
The Obama administration, Democratic congressional leaders, labor unions, and consumer groups seek a Senate vote before January to confirm President Obama’s nominee to lead the Consumer Financial Protection Bureau (CFPB), which was created by the historic 2010 Dodd-Frank financial reform law. This week, Treasury Secretary Timothy Geithner criticized opponents for undermining financial reform by "blocking appointments of new leadership to key oversight positions," and creating other obstacles. The CFPB is important to working families because it protects consumers’ financial transactions by ensuring a fair, transparent and efficient marketplace for important financial products, such as credit cards, student loans, credit scores and home mortgages.
Richard Cordray has long advocated for working families, most recently leading CFPB’s enforcement division. Senate Republican leaders acknowledge Cordray is qualified, but oppose his nomination because they oppose enforcement of the consumer safeguards that the Dodd-Frank law established. On October 6, the Senate Banking Committee voted 12 to 10 to approve Cordray’s nomination – with unanimous Democratic support and unanimous Republican opposition. AFSCME strongly supports Richard Cordray’s nomination.
House Panel Votes to Repeal Long-Term Care Insurance Program
The House Energy and Commerce Committee voted 33 to 17 to repeal a significant component of the Affordable Care Act that would have offered workers financial support for long-term care through a voluntary insurance program. The panel’s vote on H.R. 1173 sets up a possible vote in the full House of Representatives in a few weeks. The vote to repeal the Community Living Assistance Services and Supports (CLASS) program was largely along party lines, with all Republicans and three Democrats, Reps. Jim Matheson (UT), Mike Ross (AR), and John Barrow (GA), voting to repeal the program. All three Democrats voted against the health care reform law last year. The federal Department of Health and Human Services has put the CLASS program on hold. Democratic members who opposed repeal argued that an alternative long-term care program should be on the table before repealing the only existing statutory framework to address the coming long-term care crisis. With a growing aging population, enabling middle-class families to afford long-term care is important, because Medicare and private health insurance programs do not pay for the majority of long-term care services. AFSCME strongly opposed repeal.
Unemployed Workers Urge Congress to Renew Federal Unemployment Insurance Program
A federal unemployment insurance program, which extend benefits beyond state limits, is set to expire at the end of 2011. If Congress doesn’t pass a renewal very soon, more than 1.6 million unemployed workers will run out of benefits in January alone. Given the urgency of renewing the temporary assistance program, Rep. Sandy Levin (D-MI), a major champion of unemployment insurance, held a press conference on Wednesday, November 30 in the U.S. Capitol to urge for the program’s renewal. He was joined by U.S. Secretary of Labor Hilda Solis, other members of Congress, and a group of displaced workers who are depending on an extension of the program. Recently laid-off AFSCME members from New York, Pennsylvania and Washington, D.C participated in the event. Afterwards, workers visited their members of Congress’ offices to urge them to renew the federal unemployment insurance program. Without an extension, more than six million unemployed workers will lose that assistance by the end of 2012.
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