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Week Ending January 23, 2015

State of the Union Address

President Obama delivered his sixth State of the Union address laying out an ambitious domestic agenda to the nation and the new Republican-controlled Congress. He asked for cooperation with Congress, but said he wasn’t afraid to use his veto power when necessary.  Obama covered a variety of topics, mentioning new proposals for universal, free community college, guaranteed paid sick leave and more tax hikes on the wealthy. The details of these and other policies will be included in his Fiscal Year 2016 federal budget plan which he will submit to Congress on February 2.  The President made “middle-class economics” his major theme as he laid out a vision to make middle-class prosperity a top priority. He said the economy is healthier now than what he inherited, citing a decline in the federal deficit and huge job growth over the last year, but said more needs to be done to address income inequality and bring all Americans into the recovery.

AFSCME President Lee Saunders said, “President Obama put forth a comprehensive plan filled with common sense solutions to strengthen the middle class and give Americans access to greater opportunity.”  Importantly, Obama reminded Congress of the role unions play in building a strong middle class, something he was encouraged to say by President Saunders.  The President said, "We still need laws that strengthen rather than weaken unions and give American workers a voice.” President Saunders added, “Workers need to be empowered to bargain for fair pay and secure benefits. Sadly, the nationwide attacks on collective bargaining persist, as deep-pocketed, anti-worker forces systematically target unions. Their efforts to undo collective bargaining weaken all workers.”  (

President Obama called for raising wages and incomes, expanding overtime and increasing the minimum wage. He also suggested expanding education and training, expanding access to college, and reducing the burden of student loan debt.  He would streamline child care tax benefits and triple the maximum child care credit for middle-class families with young children. He wants to make high-quality preschool available to every four-year-old, and he would strengthen paid leave policies for working families.

President Obama also called for greater tax fairness and wants to use revenues generated from closing loopholes to reinvest in America. He said, “Let’s close loopholes so we can stop rewarding companies that keep profits abroad, and reward those that invest in America. Let’s use those savings to rebuild our infrastructure and make it more attractive for companies to bring jobs home.” The President also wants to raise the capital gains rate, eliminate the “trust fund loophole” tax break on inheritances, and raise a small tax on financial transactions by large banks, and expand middle-class and low-income family tax credits, as well as initiate broader tax reform.

As expected, President Obama called for new trade deals, but said they must include fair wages, safe workplaces, and clean environmental rules. He also wants to improve clean energy technologies in the U.S. as well as continuing to invest in advanced manufacturing. He also called for passing comprehensive immigration reform and protecting the Affordable Health Care Act so it can continue to make access to quality health care available to more uninsured Americans. 

House Panel Considers Increasing Costs for Medicare Beneficiaries

Significant cuts in Medicare payments to physicians are scheduled to begin in April.  How Congress chooses to pay for Medicare physician payment reform (roughly a $140 billion price tag) will have significant impact on the pocketbooks of current and future Medicare beneficiaries and employer-sponsored health plans. During two days of hearings, a House panel discussed increasing Medicare premiums for beneficiaries as a way to pay for a third of the cost.  AFSCME strongly opposes paying for the bill by increasing out-of-pocket costs from Medicare beneficiaries and their retiree plans, either through higher premiums or higher deductibles or changing the age of eligibility. 

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