Week Ending July 27, 2012
Senate Passes One-Year Extension of Bush Tax Cuts Below $250,000; Rejects Tax Cuts for Higher Incomes
On the most important tax issue of 2012, the Senate voted 51 to 48 to approve a Democratic leadership proposal for a one-year extension of the Bush-era tax cuts on income below $250,000 for joint filers and below $200,000 for single filers. This legislation also extends several tax cuts focused on helping low-income and middle class families, such as the Child Tax Credit, Earned Income Tax Credit for families with three or more children, and the American Opportunity Tax Credit for up to $2,500 annually in college tuition and related expenses. The vote was largely along party lines with no Republicans voting for this proposal. Of the 53 Senators caucusing with Democrats, only two (Sens. Joseph Lieberman (I-CT) and Jim Webb (D-VA)) voted against it. AFSCME strongly supports this legislation.
The Senate also voted 45 to 54 to reject the GOP leadership’s proposal for a one-year extension of all the Bush-era tax cuts, including those for millionaires and billionaires. This vote was also along party lines with opposition from only two Republicans (Sens. Scott Brown (MA) and Susan Collins (ME)) and support from only one Democrat (Sen. Mark Pryor (AR)).
Despite the majority Senate vote, the Senate Democratic bill faces stiff opposition from the House GOP leadership. Most pundits expect that partisan political differences will prevent resolution of this issue before the November elections, and could defer enactment of tax legislation until 2013. Next week, the House is expected to vote on substantive tax legislation almost identical to the Senate GOP’s proposal. The House will also vote on procedural tax legislation, which would establish a fast track process for comprehensive reform of corporate and individual federal taxes. AFSCME strongly opposes these House proposals.
Report Warns of Job Losses and Deep Program Cuts for Education, Labor and Health and Human Services
This week, the Senate Health, Education, Labor and Pensions Committee (HELP) released a report and held a hearing to detail deep, projected cuts to labor, health and human services and education programs. These across-the-board cuts, known as the “sequester,” are scheduled to take effect in January as the result of Congress agreeing a year ago to reduce the deficit by $1.2 trillion. Congressional GOP leadership has blocked efforts to create a balanced plan, including higher taxes for wealthy Americans and businesses. While much attention has focused on the sequester’s impact on the military and defense jobs, this report highlights that cuts to education, health, human services and labor will have an equally devastating, if not harsher impact on nondefense jobs, services and the economy. Cuts to only three education programs – Title I, special education and Head Start – would result in the loss of over 46,000 jobs and $2.7 billion in federal funding to states and local governments for these programs that serve over 30 million children. The impact on public health would also be harsh, including nearly 700,000 fewer HIV tests, nearly 50,000 fewer women screened for cancer, and nearly 212,000 fewer children receiving vaccinations. Cuts to employment services would eliminate job-seeking assistance for 1.6 million people while unemployment remains above 8%. A report from December 2011 further details the wrong-headed approach of shifting the sequester entirely away from the military only to be absorbed by even deeper domestic cuts. That report notes that an investment of $1 billion in health and education creates far more jobs than in the military – 54% more in health care and 138% more in education. The report released this week details state-by-state impacts for selected programs.
The report's findings are based on assumed levels of cuts, but the Office of Management and Budget (OMB) has not released official projections. This week Congress passed legislation (H.R. 5872) which would require OMB to detail the cuts in a report to Congress.
Senate Considers Reauthorization of the Child Care Block Grant
This week, a Senate subcommittee held the final in a series of three hearings to examine the Child Care and Development Block Grant (CCDBG), which has not been reauthorized since 1996. Previous hearings examined the investment return from early childhood education and how to improve children’s health and safety and the quality of care. This week's hearing focused on how to improve the program without sacrificing access, as federal funding will likely be limited with the looming sequester and tight budget caps. Advocates warned that access has already been sacrificed and additional cuts or limited funding will stall quality improvements and limit access. Nearly all states have reduced eligibility, increased co-pays, cut reimbursement rates for child care providers and added to very long wait lists in the past few years. While advancements have been made in quality, low-income families' access to affordable child care has been harmed. The subcommittee also explored safety improvements including requiring worker background checks. AFSCME has been working closely with the subcommittee to address workforce supports, including accessible, affordable training and increased reimbursements tied to the attainment of credentials and educational advancement. We also are working to make sure that background checks are timely, affordable and include a transparent process to ensure accuracy. The subcommittee is working on a draft bill that could be voted on in the fall, but only a few legislative weeks remain before Congress adjourns for the elections. The House does not plan to address CCDBG.
House Panel Approves Reauthorization of Grant Program for State and Local Law Enforcement
Last week, the House Judiciary Committee passed legislation (H.R. 6062) reauthorizing the Edward Byrne Memorial Assistance Grant Program (Byrne-JAG) through FY 2017. The program, which is set to expire on September 30, helps local governments prevent crime and improve the criminal justice system by providing funds to support a range of program areas including law enforcement; prosecution and the courts; prevention and education; corrections and community corrections; drug treatment and enforcement; planning, evaluation, and technology improvement; and crime victim and witness initiatives.
The House panel authorized $800 million in annual funding for Byrne-JAG, which would be a marked increase from recent years. Lawmakers intent on slashing government programs have previously cut Byrne-JAG. Congress provided $370 million for the grant program for FY 2012.
Medicaid Expansion Reduces Mortality
As states debate whether to expand their Medicaid programs as provided by Obamacare, new research from the New England Journal of Medicine shows that expanding Medicaid coverage to nondisabled adults will result in fewer deaths. This may seem obvious, but previous research on adults and Medicaid has been hampered by difficulties in designing a study that could control for the possibility that those most likely to sign up for Medicaid were those with health problems. This has led opponents of Medicaid to argue that the program does not improve health for adults.
The study by Harvard researchers looked at Medicaid expansions in three states and compared mortality rates with nearby states that did not expand coverage. The study found a significant decrease in mortality in the expansion states. With the federal government picking up 100% of the expansion cost initially, 90% of the cost over the long term, and evidence that the expansion will save lives, the case for expanding Medicaid in every state is a no-brainer.
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