Week Ending February 15, 2013
President Obama Seeks to Avoid Across-the-Board Spending Cuts
Hundreds of AFSCME members came to Washington, D.C. to participate in the union’s Legislative Conference. They participated in a massive rally on Capitol Hill demanding that Congress protect Social Security, Medicare and Medicaid. They also lobbied Congress and attended meetings with their senators and representatives on budget and tax issues, as well as support for comprehensive immigration reform. In addition, AFSCME members attended workshops on the Affordable Care Act (ACA), retirement security, privatization, taxes and budget, attacks on workers’ rights and immigration reform.
AFSCME President Lee Saunders spoke to conference attendees about the need to seize the moment and fight for jobs not cuts; protect Social Security, Medicare and Medicaid; and to move forward on comprehensive immigration reform. AFSCME Secretary-Treasurer Laura Reyes joined in the call for a reform plan that includes a path to citizenship for undocumented immigrants already living in the United States.
On Tuesday, AFSCME members rallied with fellow union members and activists from AFGE, SEIU, CWA, IATSE, AFL-CIO and others to protest cuts to public services and programs and to demand that Congress work to create jobs. A crowd of more than 1,000 gathered across from the U.S. Capitol to make their voices heard. “We’re here for the families across America, from California to New York, who have had enough,” President Saunders told the crowd. Too often, politicians have selective sight, Saunders said. “They don’t truly see the workers who toil day after day, night after night... Yes, they can see the wealthiest two percent of Americans. But somehow, some way, everybody else is invisible to them. Marion Garth Saffold, an AFSCME retiree from Ohio and Mishell Warner, a nurse from AFSCME Local 1363 in Miami, Florida also addressed the crowd.
State of the Union Address
President Obama delivered the first State of the Union address of his second term to a joint session of Congress on Tuesday night. He reminded the nation that “preserving our individual freedoms ultimately requires collective action.” Obama’s bold remarks included his commitment to protect Medicare, Medicaid and Social Security. He also called for restoring equality and economic opportunity for all, including a strong vision for moving away from deficit reduction politics and instead rebuilding the middle class and creating jobs for all Americans, as well as providing a path to citizenship for immigrants.
President Obama made jobs and rebuilding the middle class the cornerstone of his speech. He wants to rebuild the economy in part through increased manufacturing. He also wants a new $50 billion “Fix it First” investment to rebuild our nation’s crumbling infrastructure so we can repair 70,000 structurally deficient bridges and modernize ports and schools. He also called for new investments in education, job training and American-made technologies. And, he said we must rewrite the tax code to eliminate tax breaks that encourage companies to move jobs outside the U.S. He surprised many when he called for a gradual increase in the federal minimum wage, currently $7.25 an hour, to $9 by the end of 2015, and for automatic increases thereafter to keep pace with inflation.
The President spoke forcefully in favor of establishing a pathway to citizenship for the estimated 11 million undocumented immigrants in the country. He wants to improve the immigration system for families, workers and businesses, and crack down on employers who knowingly hire illegal immigrants in the future.
The President pledged to provide access to high-quality preschool for all 4-year-olds from families with low or moderate incomes. He also renewed his call to pass the Violence Against Women Act to protect victims of domestic violence and help law enforcement investigate and prosecute sexual assaults.
President Obama also declared that the need to fix the broken election process is a civil rights issue. He said: “Our journey is not complete until no citizen is forced to wait for hours to exercise the right to vote.” He called for a commission to help improve voting across the nation by eliminating lengthy waits and unnecessary ID requirements.
In a statement to the press, AFSCME President Lee Saunders said Obama “understands we must move everyone forward, not just the wealthiest 1 and 2 percent” and that “the time for action is now.” Saunders added: “We can pull together and rebuild the middle class and strengthen vital services or we can cede more power and wealth to a chosen few.”
New Budget Proposals Emerge in Attempt to Avoid Across-the-Board Spending Cuts
In two weeks, across-the-board spending cuts (known as sequestration) will reduce fiscal year 2013 funding for most domestic and military programs. Domestic cuts include education, housing, public works, transportation, law enforcement and other public services, but not Medicare, Medicaid or Social Security benefits. The partisan rift continues, with GOP leadership refusing to allow increases in taxes on the wealthiest and corporations in order to stop the spending cuts. This week, Senate Majority Leader Harry Reid (D-NV) introduced a bill that would delay the sequester through the end of the calendar year and replace half of the spending cuts with revenues generated by closing tax loopholes on the wealthy and corporations. The remaining spending cuts would be divided between defense and farm subsidies.
Earlier this week, Sen. Sheldon Whitehouse (D-RI) introduced two bills (S. 277 and S. 278) that would stop the sequester budget cuts for ten years, replacing them with new tax revenues. These would include imposing a minimum 30% federal tax rate on taxpayers earning more than $2 million (“Buffett Rule”); closing tax loopholes for big oil and gas companies; imposing a tiny .03% financial transaction tax on securities transfers; capping itemized deductions at 28% for joint filers earning above $250,000 and single filers earning above $200,000; and limiting offshore tax abuses by ending incentives to ship jobs, profits, and property overseas. AFSCME strongly supports both of Sen. Whitehouse’s bills.
Additionally, Sens. Carl Levin (D-MI) and Whitehouse introduced a bill (S. 268), which would reduce tax loopholes that allow multinational corporations and the wealthiest Americans to avoid paying their fair share of taxes. This bill addresses a disturbing downward trend in the share of the tax burden paid by corporations. In the 1950’s, corporate tax revenue was around 7% of gross domestic product (GDP), and just seven years ago, it was 2.7%. In 2012, corporate taxes were just 1.2% of GDP. Sen. Bernie Sanders (I-VT) introduced legislation (S. 250) to end the tax deferral of corporations’ overseas profits. AFSCME strongly supports both of these bills.
Comprehensive Immigration Reform Proceeding, But Not Without Bumps in the Road
This week the Senate Judiciary Committee held its first hearing on comprehensive immigration reform (CIR). In his opening statement, Committee Chairman Patrick Leahy (D-VT) called for “a fair and straightforward path to citizenship” which is not “rigged by some illusive precondition.” He was referring to the position of some senators that a path to citizenship cannot begin until our borders are completely secure. President Obama and other senators are insisting that enhanced border enforcement and the path to citizenship must proceed together. Some people in the hearing room interrupted Department of Homeland Security Secretary Janet Napolitano’s testimony by calling for a halt to deportations.
Ongoing discussions are proceeding between the AFL-CIO and the Chamber of Commerce to see if common ground can be reached between business and labor on what rules should apply to the “future flow” of immigrants into our country after CIR. The AFL-CIO is calling for an independent commission that would use a data-driven system to identify potential labor shortages before employers can hire temporary guest workers. The Chamber has so far rejected this approach. Currently, employers can self-attest to labor shortages, resulting in guest workers being brought into this country to fill jobs that U.S. workers are willing and able to perform. And, temporary foreign workers are a permanent under-class who do not have the wage or workplace protections of U.S. workers. So far, the senators who have taken the lead on CIR are deferring to these negotiations to produce “future flow” policies that labor and employers agree to. This may or may not happen.
As part of AFSCME’s Legislative Conference last week, AFSCME members flooded Capitol Hill offices to tell senators and representatives to support CIR that includes a roadmap to citizenship and protections for workers’ rights.
Senate Passes Violence Against Women Act
The Senate passed S. 47, an extension of the Violence Against Women Act (VAWA), by a bipartisan vote of 78-22. The measure now goes to the House of Representatives. The legislation strengthens federal penalties for repeat sex offenders and creates a federal "rape shield law" to prevent offenders from using victims' past sexual conduct against them during trial. Both the Senate and House passed versions of an extension last year but could not work out their differences before the session ended. The House version did not contain a provision that would bar agencies that receive federal funding from discriminating against gays and lesbians (LGBT), or one that would allow undocumented immigrants who faced domestic violence in their home country to seek legal status in the U.S.
Congressional leaders agreed to take the immigration language out of S. 47 and instead include it in a comprehensive immigration reform package, but the LGBT provision remains in the Senate bill. AFSCME strongly urges the House to quickly address the serious issue of domestic and sexual violence and bring the Senate VAWA to the House floor for a vote as soon as possible.
House Votes to Extend Federal Employees’ Pay Freeze
This week, the GOP majority in the House overwhelmingly passed H.R. 273, a bill sponsored by Rep. Ron DeSantis (R-FL), which eliminates the 2013 statutory pay adjustment for federal employees. This extension would mean that the federal civilian employees’ across-the-board pay freeze would continue for a third consecutive year. This is in addition to an already-enacted 2.3% increase in retirement contributions for newly-hired federal employees. Democrats and a few Republicans say that federal workers have already done more than their fair share to help reduce the federal deficit. The bill is likely to receive a cold reception in the Democratic-controlled Senate.
Bipartisan Legislation Introduced to Enable States and Localities to Collect Sales Tax on Internet Purchases
On Thursday, a bipartisan group of 18 senators and 35 representatives introduced an Internet sales tax bill in their respective chambers. The bicameral, bipartisan “Marketplace Fairness Act of 2013” would enable state and local governments to collect sales tax on purchases from remote and online sellers of goods and services. Sens. Michael Enzi (R-WY), Dick Durbin (D-IL), Lamar Alexander (R-TN) and Reps. Steve Womack (R-AR) and Jackie Speier (D-CA) are the lead sponsors. Their joint press conference highlighted strong bipartisan congressional support and endorsements from many governors, other state and local elected and appointed officials, large businesses and mom and pop stores, and labor unions. Supportive senators are sending a letter to leaders of the Senate Finance Committee to request that a bill be considered by the Committee.
AFSCME has long advocated closing tax loopholes that allow sellers to avoid collecting sales tax on hundreds of millions of remote purchases made via internet, telephone, and mail. This is a matter of fundamental fairness for Main Street brick and mortar stores and helps maintain America’s shopping areas. Furthermore, the uncollected “use tax” from all remote sales in 2012 was estimated to cost state and local governments a cumulative $23 billion in lost revenues. These funds are needed to maintain investments in education, health care, infrastructure, and other vital public services that protect the vulnerable and assist working families. AFSCME strongly supports this legislation and is working to see it enacted this year.
Consumers and Taxpayers Would Save Billions if Medicare Negotiated Prescription Drug Prices
A new report by the Center for Economic and Policy Research looks at the savings that other countries achieve by negotiating with pharmaceutical companies over the price of prescription drugs paid for by government-sponsored health care programs. If Medicare were allowed to negotiate drug prices, the experience in countries like Canada indicates that the federal government would save at least $230 billion over ten years. In addition, states would save at least $31 billion and consumers would save at least $48 billion.
While current law prohibits Medicare from negotiating with pharmaceutical companies, it is a standard business practice among insurance companies and other businesses that purchase drugs. Moreover, the Veterans Administration bargains over prices for drugs used to care for veterans. The need to end this sweetheart deal for the drug industry was referenced by President Obama during his State of the Union address this week. Recently, Sen. Amy Klobuchar (D-MN) introduced S. 117 and Sen. Al Franken (D-MN) introduced S. 77, bills that direct the Medicare program to negotiate prescription drug prices. AFSCME supports both bills.
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