Week Ending June 23, 2017
Senate Vote on Health Care Expected Next Week
After weeks of working behind closed doors, Senate Majority Leader Mitch McConnell (R-KY) released a draft proposal to repeal the Affordable Care Act (ACA) and gut Medicaid and use the savings to provide a tax cut for the wealthy and profitable corporations. The proposal largely tracks the bill approved by the House of Representatives, but is worse in the impact it would have on state budgets. Below are key features of the bill.
- Maintains the so-called “Cadillac tax” on high-cost health plans, delaying the implementation of the tax from 2020 to 2026.
- Allows states to waive rules that require health plans to include 10 essential health benefits. Employer-sponsored health plans could impose annual and lifetime limits on the essential health benefits, which include hospitalization, prescription drugs, mental health and substance abuse treatment, maternity care and other services.
- Ends guaranteed federal funding to the states for Medicaid and replaces it with a fixed per capita amount in 2020. The amount is adjusted annually, but at a rate that will fall far below the growth in costs, shifting more and more of the funding burden onto states. States will be forced to reduce spending on health care and eventually spending on other public services, in order to balance their budgets. The per capita cap provision in the Senate bill is worse than the House bill.
- Eliminates Medicaid funding for the Community First Choice Option, which is helping to fund home care services in a number of states.
- Ends the Medicaid expansion, phasing-down extra federal funding to states that opted to cover all low-income adults up to 138% of poverty level. The federal funding is phased out between 2020 and 2024.
- Repeals an increase in the Medicare tax on earnings above $200,000 beginning in 2023. This will weaken the financial health of the Medicare trust fund.
- Cuts taxes on insurance, pharmaceutical and other corporations. We do not yet know the amount of the tax cuts, but they totaled over $600 billion over 10 years in the House bill.
- Reduces tax credits for those who purchase coverage from an ACA exchange and reduces the quality of coverage.
- Includes an “age tax” that allows insurance companies to charge older people five times what they charge young adults, compared with the ACA’s 3:1 limit.
- Provides insurance companies with a backdoor way of screening out those with pre-existing conditions.
We expect the Senate to begin debate on the bill as early as Tuesday, with a vote by the end of next week. While Majority Leader McConnell does not yet have enough votes for passage, he is very close and working hard to lock down the votes.
Congress Moves Slowly on Budget and Funding Bills
President Trump issued his federal budget plan with harsh cuts at the end of May, but Congress is far behind their mid-April deadline to produce a budget to frame federal spending limits. Further, the budget deal providing partial relief from across-the-board cuts, known as sequestration, expired this year. If Congress cannot agree on a new budget deal, then nondefense discretionary programs including health, labor, education, transportation and other public services will be cut by $2 billion. While Senate Majority Leader McConnell has expressed support for avoiding this spending reduction, House leaders are discussing an even deeper cut of $5 billion. They also want to shift more spending into border security, which could make the cuts to other nondefense discretionary programs much deeper, and as much as $15-20 billion.
In addition, House leaders are considering deep cuts to Medicare, Medicaid and SNAP (food stamps). They may use special procedures to limit a filibuster and allow these cuts to be approved with just 51 votes in the Senate, rather than a supermajority of 60 votes. Similar procedures are also being considered to fast track huge tax cuts for the wealthy and corporations.
Current year (FY 2017) funding expires in only three months at the end of September and there are only about 30 legislative days until then. The House may take up a budget resolution next week, but the Senate is not likely to act until September.
AFSCME is working with allies and affiliates across the country to urge Congress to increase domestic funding, invest in public services, oppose reconciliation instructions that would cut safety net programs or fast-track tax cuts for the rich.
House Chairman Introduces Bill to Privatize Air Traffic Control
House Transportation and Infrastructure Chairman Bill Shuster (R-PA) introduced legislation (H.R. 2997) on Thursday that would privatize air traffic control operations and remove them from the Federal Aviation Administration (FAA). A privatized system would force the public interest to take a backseat to private interests in decisions over the use of air space. Mayors from many small cities have expressed concern that a privatized system, dominated by the airlines, would reduce service to their cities in favor of larger cities. Law enforcement experts have raised concerns that security would be weakened in a privatized system. AFSCME has been working with other unions as well as consumer and good-government allies to oppose this legislation.
President Trump announced his support for privatizing air traffic control two weeks ago. House Minority Leader Nancy Pelosi (D-CA) responded with a strong statement of opposition. In the Senate, there is bipartisan skepticism of the scheme, including key Republican senators with jurisdiction over aviation, Sen. John Thune (SD) and John Barasso (WY).
The FAA must be reauthorized by the end of September and it’s unclear whether Chairman Shuster will use that deadline to put pressure on the Senate to support the proposal.
Sign Up to Receive the Weekly Report and Action Alerts via Email and Become an AFSCME e-Activist!!!
In an effort to move toward electronic transmission which will allow us to put important federal legislative updates in your hands sooner, we urge you to sign up to receive the Federal Legislative Report via your email address.
Please go to www.afscme.org/join and check the "Federal Legislative Report" box under subscriptions on the bottom of the page.