Week Ending June 10, 2016
Senate Funding Committee Passes “Clean” Funding Bill for Labor, Health and Human Services, and Education
This week, the Senate Appropriations Committee passed a bill (S. 3040) to fund the Departments of Labor, Health and Human Services, and Education (Labor HHS) for Fiscal Year 2017. For the first time in seven years, this bill passed with strong bipartisan support. A compromise was reached to drop “poison pill” policy riders such as those blocking the Obama administration rules, like the increase in overtime pay. The compromise also used a Pell Grant surplus and savings from the Children’s Health Insurance Program to increase funding elsewhere in Labor HHS programs.
The additional funds provided in the bill, however, are not allocated evenly across all programs, as the National Institutes of Health (NIH) received a $2 billion increase. As a result, most labor, education, and other health programs were either cut slightly or level-funded. Significant increases were also provided to address the problem of opioid abuse. Funding to monitor children who have been exposed to high levels of lead is not increased.
Labor, HHS and Education programs have been inadequately funded for too long, and additional resources are needed to support these essential services for working families. This bill cuts approximately $9 million from federal grants to states’ Employment Services (ES). This is particularly harmful given the expanded role for ES caseworkers to provide intensive reemployment services under the Workforce Innovation and Opportunity Act, which is in its first year of implementation. Workforce training grants were reduced by $74 million. AFSCME is disappointed that other recently-authorized programs with new requirements, including the Child Care and Development Block Grant (CCDGB) and Title I for Disadvantaged Students (within the new K12 bill) were funded at less than the amount needed. CCDBG received a $25 million increase but needs $1.2 billion to prevent children from being cut from the program. Special education grants received an additional $40 million, far less than needed to ensure needed coverage. Head Start received a slight increase of $25 million, which is not enough to support a built-in cost of living adjustment for Head Start teachers.
Meanwhile, the House Appropriations Committee may vote on its Labor, HHS, and Education bill in the next few weeks. Unlike the Senate, we expect the GOP majority to load up its bill with anti-labor, anti-Affordable Care Act, anti-women’s health and anti-public education riders.
House Votes to Approve Puerto Rico Debt Restructuring Bill
The House voted 297 to 127 to approve bipartisan legislation, PROMESA (H.R. 5278), which would authorize restructuring the Puerto Rico government’s estimated $70 billion debt to address the emerging humanitarian crisis. The bill creates a legal process authorizing the governments of Puerto Rico and its municipalities to restructure their debt. In exchange, the bill imposes upon Puerto Rico an appointed board with broad and strong oversight powers that could overturn existing laws and budgeting and supersede the powers of democratically-elected officials. The bill also undermines worker protections such as minimum wage and overtime standards, and fails to adequately protect the accrued pension benefits of public employees and retirees.
This compromise bill reflects lengthy negotiations between House Republicans and Democrats and the Obama administration. During floor debate, many members expressed concern over many of the provisions in the bill and most strongly opposed some of its provisions, but in the end said they favored the imperfect bill over doing nothing, given the severity of the economic crisis in Puerto Rico.
AFSCME, AFL-CIO, SEIU, UAW, NEA, AFT, and other unions opposed the bill because it fails to protect workers’ and retirees’ pension benefits, undermines workers’ minimum wage and overtime protections, and supersedes the democratic rights of Puerto Rico’s people. While the Senate is expected to consider this bill relatively soon, the timeline and process is uncertain.
House Hearing on New Overtime Rule
This week, the House Education and the Workforce Committee held a hearing to examine the U.S. Department of Labor’s (DOL) final overtime rule. Currently, salaried workers earning more than $23,660 a year are not automatically entitled to receive time and a half pay for working more than 40 hours in a week. The new rule brings the salary threshold up to $47,476 regardless of title, job description, or managerial status. This new rule is supported by an overwhelming majority of Americans who believe that too many workers are working too many hours for too little pay.
Provisions in this rule are expected to impact 12.5 million people – including 4.2 million workers who together have 7.3 million children under the age of 18. This rule is a major step forward in addressing stagnant incomes and wage inequality while growing the economy and the middle class. And, it will especially benefit women, African-Americans, Latinos and young workers, many of whom are struggling to achieve and maintain a foothold in the middle class. As Department of Labor Secretary Tom Perez declared in a press conference before the hearing, “There’s no freedom in making someone work for free.”
The GOP majority stacked the hearing with three witnesses who testified against the rule as it applies to nonprofits and universities. The one Democratic witness, Dr. Jared Bernstein with the Center on Budget and Policy Priorities, along with Democrats on the panel, explained that all workers paid modest wages should not have to work for free after 40 hours, and should have time to spend with their families. He also noted that the new rule will result in more jobs as employers hire new workers to avoid paying the overtime premium. AFSCME believes every working person deserves a good job with fair pay. This final rule is an important improvement in the labor standards for American families. The new rule is scheduled to take effect December 1.
To see AFSCME’s letter to the committee in support of the rule, go to: http://www.afscme.org/ot-letter
House Passes Financial Services Funding Bill
The House Appropriations Committee voted 30-17 to approve the Financial Services spending bill, which cuts current funding by $1.5 billion – mostly by cutting services within the IRS and the General Services Administration. Among Democrats, only Rep. Henry Cuellar (D-TX) voted for the bill. In a series of largely party line votes, Republicans defeated Democratic proposals to delete harmful policy “riders,” and added several additional harmful provisions. The majority approved a provision that would deny federal funds to implement a White House executive order that requires transparency in federal contracting to ferret out contractors who have violated labor laws. GOP Committee members also voted to deny funds to the Consumer Financial Protection Bureau (CFPB) to implement its proposed payday lending rule. AFSCME strongly opposes these harmful amendments and related efforts to weaken Dodd-Frank financial reforms and consumer protections. The Committee also rejected Rep. Nita Lowey’s (D-NY) amendment to approve $1.9 billion, as the White House requested, to combat the Zika virus in Puerto Rico and elsewhere.
Health Care Costs Would be Higher for Older Individuals Under House Bill
The Affordable Care Act (ACA) addressed one of the most pressing problems in the health care system – the inability of older adults to afford or even obtain health coverage due to their age and health status. Under the ACA, insurers are limited to charging older adults up to three times the premium young people are charged for similar coverage. This feature of the ACA has helped cut the number of uninsured Americans, age 50-64, by half. But House Republican leaders held a hearing on Friday on a proposal by Rep. Susan Brooks (R-IN) that would allow insurers to charge older individuals five times the amount younger adults are charged. The proposal would not only drive up costs substantially for older people purchasing coverage through an ACA health exchange, but it would increase the number of uninsured and increase federal spending for tax credits provided to help pay for coverage. This proposal was considered at the behest of the insurance industry, along with two others that would cause more consumers to experience delays and termination of coverage obtained through health exchanges.
House Speaker Paul Ryan’s Anti-Poverty Plan Would Exacerbate Inequality
This week, House Speaker Paul Ryan (R-WI) unveiled his so-called anti-poverty plan. In reality, it is a blueprint for exacerbating poverty and inequality in the United States. While containing few policy specifics or legislative language, Ryan’s plan cannot be evaluated separately from the House’s FY 2017 budget proposal which derived three-fifths of its massive cuts from programs that help low- and moderate-income Americans, while protecting tax cuts for the wealthy and corporations. These cuts include reducing federal support for the Supplemental Nutrition Assistance Program (SNAP, formerly food stamps) by $150 billion and cutting Pell Grants, among a host of other funding reductions.
By touting the Temporary Assistance for Needy Families (TANF) block grant as a model, Ryan is telegraphing his support for converting programs like SNAP and Medicaid into “flexible” funding streams akin to block grants. We know from experience that this is a recipe for funding cuts. And, it would have disastrous effects on states and localities during economic downturns when safety net needs increase but federal funding would be stagnant. Also, Ryan’s plan specifically calls for implementing social impact financing, sometimes referred to as social impact bonds, a form of privatization of public social service programs that relies on private investors, including banks, looking to profit from their investment. The few forays into this form of financing social services have not produced successful results. Speaker Ryan also included in his plan opposition to the Department of Labor’s “best interest” rule requiring investment advisors to give advice in the clients’ best interest rather than self-dealing. The DOL’s rule is an important step towards protecting Americans’ retirement savings against predatory practices that contribute to our nation’s growing retirement crisis.
To read AFSCME President Lee Saunders’ statement opposing Speaker Ryan’s plan, go to: www.AFSCME.org/ryan-poverty.
Senate Committee Identifies Significant Problems in H-2B Guest Worker Program
The Senate Judiciary Committee held a hearing this week to examine the H-2B guest worker program that allows employers to bring foreign workers to the United States to perform low-wage work such as landscaping, forestry, housekeeping, and construction.
Committee members from both parties express their concerns that U.S. workers, including immigrants, are not given a fair chance to be hired for these jobs. And because employers are allowed to pay guest workers less than the prevailing wage, wages in whole industries are depressed. Compounding the problems in the H-2B program, last year’s spending package included a provision that allows quadrupling the number of H-2B visa holders in any year, and lets employers provide H-2B workers with far fewer work hours than they were promised.
It is clear that H-2B workers are vulnerable to abusive employers, low wages and poor working conditions – conditions that sink to the level of indentured servitude. AFSCME continues to advocate for comprehensive immigration reform that includes a path to citizenship and sweeping changes to all the current guest worker programs. In the meantime, these deeply flawed programs should not be expanded.
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