Issues / Legislation » Legislative Weekly Reports

Week Ending February 10, 2012

House-Senate Negotiations on Continuing Unemployment Insurance Enter New Phase

House and Senate negotiators or “conferees” met this week in a lengthy public meeting and discussed how to pay for the payroll tax cut extension and prevent a drop in the payments to physicians under the Medicare program which are in the same legislation as the unemployment insurance program extension. House Republicans proposed freezing federal employee pay and charging some Medicare recipients higher premiums. Senate and House Democrats contended that it did not make sense to make federal employees pay for the tax cut or charge seniors to maintain income for doctors. They proposed a small surtax on individuals earning over a million dollars which the Republican negotiators opposed. The question of whether to offset the cost of the unemployment benefits extension and, if so, how was not discussed. 

As it became clear that the two sides had moved no closer together, the conferees decided to shift to private discussions where members might have more flexibility to discuss compromises.  However, House negotiators subsequently rejected a Senate offer to scale back slightly the number of weeks of unemployment benefits and establish a separate grant program so states could set up program innovations to help get unemployed workers back to work. 

Aviation Bill Finally Clears Congress

It took five years and 23 short-term extensions, but the legislation reauthorizing the Federal Aviation Administration (FAA) has finally cleared both congressional chambers and is on the President’s desk awaiting his signature. The measure will provide $15.9 billion annually for federal aviation programs through fiscal year 2015, including $3.35 billion annually for the Airport Improvement Program, which provides grants for planning and development of public airports and $9.7 billion annually for FAA operations. In addition, the bill contains language that AFSCME has advocated for years that will establish a process for settling labor disputes within the agency. The language institutes an impasse procedure that encourages collective bargaining and resolution of negotiations through impartial binding third-party arbitration.  In addition, the bill will help the agency modernize its operations.

Just months earlier, in July 2011, the FAA shut down due to Congress’ inability to pass a long-term bill or a short-term extension. At that time, 4,000 FAA employees were furloughed including approximately 2,000 represented by AFSCME. Another 70,000 workers who work on major aviation construction projects across the country were out of work due to the shutdown. 

House GOP Leaders Plan Cuts in Federal Employee Benefits to Pay for Transportation Bill

Legislation in the House of Representatives making changes to federal employee pensions (H.R. 3813) has been merged with the American Energy and Infrastructure Act (H.R. 7), as a means to offset the costs of the massive transportation bill. AFSCME opposes the move in which more than $37 billion of federal employee pension money would be used to help pay for federal transportation programs. H.R. 3813 increases employee contributions to the Civil Service Retirement System (CSRS) and the Federal Employee Retirement System (FERS) by 1.5% of their salaries over a three-year period, starting next year. Employees enrolled in FERS currently give .8% of their paychecks to the pension fund. 

In addition, H.R. 7 cuts highway spending, guts transit funding, imposes numerous privatization mandates on states, and slashes transportation safety programs. The bill may come to the House floor as early as the week of February 13. 

By a vote of 85-11 the Senate on February 9 voted to proceed with consideration of its surface transportation bill (S. 1813) which would provide $109 billion for federal surface transportation programs over a two-year period.  The vote clears the way for the Senate to begin debate next week on a transportation bill that is far less controversial than the bill that is moving in the House.

New Budget Process Bills Pass House

This week, the House approved two new budget process bills. Neither will improve budget challenges and both would undermine Congress’ work to craft budgets that accurately reflect the economy and national needs. One bill would grant the President new enhanced powers to influence, delay and cancel congressional budget decisions through the use of a line-item veto (H. R. 3521).  It would allow the President to send Congress up to two proposals for cuts or rescissions within 10 days of a bill’s enactment. Congress would then have an up or down vote under an expedited procedure. Spending cuts would go exclusively to deficit reduction. AFSCME is concerned that this would shift too much congressional power to the President and undermine Congress’ constitutional role to craft budgets. Further, it could lower already low budget caps that will make funding decisions very difficult and endanger many public programs. H.R. 3521 passed by a bipartisan vote of 254-173 with 41 Republicans voting no and 57 Democrats voting yes.

The second budget process bill (H.R. 3581) would change the federal accounting of direct loans and guarantees to inflate their costs, and in turn, inaccurately increase the size of the deficit. This change would add extra costs that do not exist, require an offset, and would further complicate an already burdened budget process. This bill passed the House largely along party lines.

Next week the President will release his FY 2013 budget proposal. We will report next week on that proposal, along with any other proposals from congressional budget committees when they become available. 

Unions, Government Groups, Retailers Support “Marketplace Fairness Act”

Earlier this week, AFSCME and eight other unions sent a joint letter to Senators strongly supporting the bipartisan Marketplace Fairness Act (S. 1832), which grants the authority needed for state and local governments to collect sales and use taxes from remote and online sales. This legislation is important because these uncollected taxes will cumulatively cost state and local governments $23 billion in 2012 in uncollected taxes and more each subsequent year. These funds are urgently needed to invest in vital public services, infrastructure and job creation. Numerous government interest groups and a large coalition of business trade associations and individual businesses have expressed their support for S. 1832. 

Recently, all 12 bipartisan Senate co-sponsors urged the Senate Finance Committee to hold a hearing on the Marketplace Fairness Act as soon as possible. An upcoming hearing may address both S. 1832 and a broader mix of congressional proposals affecting state and local taxes.  

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