Week Ending June 19, 2015
House Approves Revised Fast Track, Bill Goes Back to the Senate
After failing to pass fast track trade legislation last week, House GOP leaders and President Obama found a way to move the bill forward in the House. On Thursday, the House voted 218 to 208 to approve fast track legislation. The 28 Democrats who voted for this job-killing bill were:
Ashford (NE) Delaney (MD) O’Rourke (TX)
Bera (CA) DelBene (WA) Peters (CA)
Beyer (VA) Farr (CA) Polis (CO)
Blumenauer (OR) Himes (CT) Quigley (IL)
Bonamici (OR) Hinojosa (TX) Rice (NY)
Connolly (VA) E.B. Johnson (TX) Schrader (OR)
Cooper (TN) Kilmer (WA) Sewell (AL)
Costa (CA) Kind (WI) Wasserman Schultz (FL)
Cuellar (TX) Larsen (WA)
Davis (CA) Meeks (NY)
However, because the bill passed by the House no longer mirrors the version approved by the Senate in late May, it must be sent back to the Senate for consideration. We expect the Senate to debate the bill next week as well as Trade Adjustment Assistance legislation. The battle to defeat fast track has taken many twists and turns over the last month because the labor movement and other allies have blocked the path to quick enactment. While we have not yet defeated fast track, the White House and GOP congressional leaders are struggling to find a way to put it on the President’s desk. The grassroots efforts of activists are responsible for our success so far. Stay tuned for more updates and please keep the heat on your congressional delegations. We urge you to call your Senators today and demand that they oppose fast track when it is debated early next week.
House Funding Bill Slashes Resources in Labor, Education and Health
The Labor, Health and Human Services, and Education (Labor-HHS) Appropriations Subcommittee passed its fiscal year (FY) 2016 funding bill this week along party lines. Overall, the bill reduces funding $3.7 billion (2.4%) below last year’s level and $14.6 billion below the President’s proposed budget, with deep cuts to labor, education, human services and health care programs. While a 2.4% cut may seem modest, it is much deeper when adjusted to account for inflation. The Labor-HHS-Education programs have already lost $20 billion adjusted for inflation over the last five years. Compared to FY 2010 (the last year before Budget Control Act spending caps were imposed), few programs have escaped cuts, and many programs have been cut between 10 and 30 percent even though the population is increasing along with demands for public programs.
In addition to damaging cuts to essential programs, the bill is loaded with harmful policy "riders" that would block regulatory protections for working families. They would block the Labor Department’s proposed retirement advice “fiduciary” rule that protects individual retirees; thorough OSHA inspections that include worker representatives; minimum wage requirements for federal contractors; reasonable timeframes for holding union elections; update of the “joint employer” rule; and implementation of the “gainful employment” regulations to hold for-profit colleges and universities accountable. There are also policy riders that would limit access to health care services funded under the Affordable Care Act (ACA). Democrats on the subcommittee attempted to remove all the riders and increase funding for individual labor, health, and education programs as well as increase the entire bill by $11.7 billion, a 7.6% increase, but all their amendments failed.
Labor programs are cut more than $206 million, including an unprecedented 27% reduction in funding for the National Labor Relations Board. The Employment Service (ES) is flat-funded, and has already been cut by over 15% since FY 2010. Unemployment Insurance State Administration was cut by 2.7%.
Department of Education funding is cut by $2.8 billion, an even deeper reduction than the FY 2013 across-the-board “sequester” cuts, resulting in the elimination of 19 programs and seriously underfunding most other programs. Eliminations include Safe and Drug-Free Schools; preschool development grants; and math, science, and literacy programs. Title I Education for Disadvantaged Students is level-funded and has been cut by 10% since FY 2010. While the bill supports the maximum Pell award of $5,915, it cuts $370 million, which will cause problems in subsequent years. IDEA state grants for special education is one of the few increases, receiving a boost of $500 million. Even on the heels of a bipartisan reauthorization last year with new requirements that will cost $1 billion, the Child Care and Development Block Grant (CCDBG) was flat funded. Head Start funding is increased by $192 million, with Early Head Start increased by $150 million and $42 million for a Head Start cost-of-living increase.
The full House Appropriations Committee may vote on the bill as early as next week, and the Senate is scheduled to vote on its Labor-HHS bill in subcommittee next week. AFSCME strongly opposes the House Labor-HHS bill as passed by the subcommittee.
Senate Democrats Demand Budget Negotiations
Since Republican appropriators unveiled the inadequate funding levels for the 12 funding bills last month, Senate Democrats have vowed to block each of them from proceeding unless a bipartisan agreement is reached to eliminate or substantially lessen the across-the-board sequester cuts planned for this year. This week Senate Democrats, with the exception of Sen. Joe Donnelly (D-IN), voted unanimously to block the Defense funding bill from proceeding to a floor vote. Senate Democratic leadership, including Leader Harry Reid (D-NV), Barbara Mikulski (D-MD), Charles Schumer (D-NY) and Patty Murray (D-WA), explained their party’s actions in a letter to Senate Republican leadership, urging them to schedule “immediate bipartisan budget negotiations for next week to replace the devastating spending cuts to our national defense and domestic investments known as sequestration.” They noted further “that you have not displayed a greater sense of urgency to address this problem. The Congressional Budget Office has previously said sequestration will lead to job losses and stifled economic growth. At a time when the unemployment rate is falling and wage increases are starting to gain steam, failing to fix the sequestration-level budget would be a blow to our economic recovery.”
AFSCME strongly supports the call for immediate budget negotiations and urges Congress to eliminate the deep sequester cuts and to raise progressive revenues to fund essential public services.
House Votes to Weaken Funding for Affordable Care Act
On Thursday, the House approved a bill (H.R. 160) to repeal a modest excise tax on medical devices that was adopted to help fund the expansion of health coverage under the Affordable Care Act (ACA). The tax does not apply to eyeglasses, hearing aids, wheelchairs or other devices that the public generally buys directly for individual use. Instead, it applies to devices used in medical procedures in a physician’s office or hospital. The bill was approved by a vote of 280 to 140. Every Republican voted for repeal. The majority of Democrats opposed, but 46 voted for the bill.
Since the enactment of the ACA, medical device industry profits have remained strong. This is due, in part, to the increased sales the industry is experiencing under the ACA. It is more than fair to ask the industry to pay a small excise tax to help pay for the expansion of health coverage under this law.
House Committee Restricts State and Local Taxing Authority
The House Judiciary Committee approved three harmful bills that would restrict state and local government taxing authority and thereby impair the ability of state and local governments to raise funds to invest in education, health care, infrastructure, job training, and other vital public services. AFSCME led an effort by labor unions against this legislation that resulted in 11 unions co-signing a letter to committee members opposing these bills.
The committee voted 18-7 along party lines to approve the Business Activity Tax Simplification Act of 2015 (BATSA, H.R. 2584), which would effectively prevent states and localities from taxing any business without a permanent “brick and mortar” presence in its jurisdiction. It provides a road map for large, profitable corporations to restructure their business operations in ways that would enable them to avoid paying their fair share of income tax. The Congressional Budget Office has estimated BATSA would directly reduce state and local government cumulative revenues by about $2 billion annually. Before approval, the committee voted along party lines to reject positive amendments by Reps. Jerry Nadler (D-NY) and Judy Chu (D-CA), which would have weakened the proposed restrictions on the taxing authority of states and localities.
The committee approved, by voice vote, the Digital Goods and Services Tax Fairness Act of 2015, (H.R. 1643). This bill would grant firms too much discretion in where they allocate their sales of digital goods and services consumed in more than one state, which have tax liability implications.
And, the committee voted 23-4 to approve the Mobile Workforce State Income Tax Simplification Act of 2015 (H.R. 2315), which would restrict a state’s existing ability to tax income earned within its borders by a resident of another state. Before approval, the committee voted to reject two amendments by Reps. Nadler and Hakeem Jeffries (D-NY), which would have weakened the proposed tax restrictions on states and localities. This bill would mainly reduce revenues in New York and a few other states.
While some stakeholders expect the full House will vote on these bills later this year, specific next steps are currently uncertain. In the Senate, while companion bills have been introduced for H.R. 2584 and H.R. 2315, so far there have been no hearings or votes. AFSCME and allied labor unions continue to oppose these three bills.
Internet Sales Tax Bill Gains Key Bipartisan House Support
A bipartisan group of House members introduced a bill (H.R. 2775), which strengthens the ability of state and local governments to collect sales tax on purchases made via the internet and out-of-state vendors. Experts estimate uncollected “use” tax from all remote sales in 2012 cost states and localities a cumulative $23 billion. This bill, the Remote Transactions Parity Act (RTPA), would close many of these existing tax loopholes. RTPA is led by Rep. Jason Chaffetz (R-UT) and co-sponsored by Reps. Steve Womack (R-AK), John Conyers (D-MI), Jackie Speier (D-CA), and Peter Welch (D-VT). Rep. Conyers, the Ranking Democrat on the Judiciary Committee, stated: “I look forward to working with my colleagues across the aisle to turn this bill into law.” AFSCME continues to support House action to ensure progress on this issue, and continues to support the Senate’s related Marketplace Fairness Act of 2015, while further monitoring the bill.
Broken Immigration System Continues to Harm Working Families
This week marked the third anniversary of President Obama’s announcement that he would provide administrative relief from deportation and work authorization to millions of young people who came to the U.S. as children and meet certain requirements. The Deferred Action for Childhood Arrivals (DACA) program has been extremely successful. In the first two years of implementation, 60% of DACA recipients obtained a job using their newly-issued Social Security numbers, 49% opened bank accounts, and 57% got a driver’s license. Any policy that allows undocumented immigrants to move out of the underground economy – where wage theft, unpaid employer taxes, intimidation and poor working conditions are rampant – protects the wages, working conditions and organizing rights of all U.S. workers. Unfortunately, President Obama’s more recent executive actions that would allow work authorization for parents of U.S. citizens and legal permanent residents (DAPA) and an expansion of the DACA program, continue to be on hold due to a legal challenge brought by 26 states’ attorneys-general that is working its way through the courts.
Our broken immigration system continues to harm U.S. and immigrant workers alike. One example, addressed in a New York Times editorial earlier this week, described the shocking abuses allowed by the H-1B employment visa program. Walt Disney World in Orlando and Southern California Edison recently laid off hundreds of tech employees, who were replaced by temporary H-1B workers recruited by outsourcing firms based in India. Adding insult to injury, the affected workers had to train their replacements and sign non-disparagement agreements in order to receive their severance pay. On Thursday, the U.S. Department of Labor announced it was investigating two of the largest companies that supply H-1B workers, Infosys and Tata Consultancy Services.
Clearly, the H-1B program needs to be reformed to protect U.S. workers’ employment rights and to protect visa workers from exploitation, as do all the other worker visa programs. Undocumented immigrants who have been living and working in our communities must have a pathway to becoming U.S. citizens. Families who have been separated should be allowed to be reunified. All of these policies are key components of comprehensive immigration reform (CIR). AFSCME will continue to advocate for CIR as we support President Obama’s more limited executive actions and defend against congressional actions that would move immigration policy in the wrong direction.
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