Week Ending June 7, 2013
States Experience Huge Losses from Federal Budget Cuts
In fiscal year 2013, states will lose $5.1 billion in federal grants due to sequestration and tightening budget caps on federal spending as documented in a recent report by the Economic Policy Institute (EPI). Federal grant funding will decline for 25 states including the District of Columbia. That is significant because roughly one-third of total state revenues comes from federal grants. The five hardest hit states are Louisiana, Indiana, Maine, Connecticut and Massachusetts. The report warns, “sequestration… limit(s) states’ ability to provide necessary vital services on which millions of families rely. Lurching from fiscal crisis to crisis is no way to ensure that we’re providing or planning for essential government services.” AFSCME continues to urge Congress to repeal or replace sequestration.
Immigration Reform Bill Headed to Senate Floor; House Path Less Clear
Next week, the Senate will begin floor consideration of the “Border Security, Economic Opportunity, and Immigration Modernization Act (S. 744).” The bill as amended by the Judiciary Committee retains a roadmap to citizenship for the 11 million undocumented immigrants living in the U.S. It also increases border security; requires the phase-in of E-Verify, an employment-based electronic verification system of immigration status; new workplace protections for immigrants; a new Wvisa program for low-skilled foreign workers; an expanded H-1B visa program for higher-skilled foreign workers; and changes to family visa programs. AFSCME supports this legislation and will work to improve it through the Senate floor amendment process, which is expected to go through June.
During the congressional recess at the end of May, AFSCME and other unions rallied at the kickoff of the “Nuns on the Bus” tour to urge Congress to pass immigration reform legislation that includes a roadmap to citizenship for 11 million aspiring Americans, promotes family unity, and protects all workers’ rights. In his speech, President Lee Saunders said: “AFSCME members know that aspiring citizens contribute to our culture and are committed to our country. ... They want to join our fight for good wages, better working conditions and retirement security. And we are standing by their side in this struggle for the better life they deserve.”
On Thursday, AFSCME participated in a labor briefing on S. 744 for Senate staff that handle immigration and labor issues. Other participants included speakers from the AFL-CIO, the Los Angeles County Federation of Labor, SEIU and AFT. Dozens of key staff attended and heard labor’s position on W and H-1B visas, foreign labor recruiters, and equal treatment for newly-legalized immigrant workers.
Also this week, Rep. Luis Gutierrez (D-IL) addressed AFSCME’s International Executive Board about progress on comprehensive immigration reform in the House. Rep. Gutierrez is a member of the House’s bipartisan “gang” which is close to completing a comprehensive bill. At the same time, however, conservative GOP House members, including the Chair of the House Judiciary Committee Bob Goodlatte (R-VA), are embracing a piece-meal approach to immigration reform. Rep. Gutierrez urged AFSCME to maintain our lobbying momentum both in Washington, D.C. and across the country as comprehensive reform legislation works its way through the House and the Senate. “This is civil rights and human rights….I missed so many times in my life when I could have participated … We’re all going to look back and say, ‘What was I doing when 11 million people were alienated from the American Dream?’”
One indication of the difficult road ahead in the House was an amendment attached to the spending bill for the Department of Homeland Security this week. The amendment, sponsored by Rep. Steve King (R-IA) and supported by House Speaker John Boehner (R-OH) and Rep. Paul Ryan (R-WI), would reverse an Obama Administration policy of prosecutorial discretion and instead step up deportations of DREAMers – those undocumented immigrants who were brought to the U.S. as children.
Senate Fails to Stop Spike in Student Loan Reform
This week, the Senate was unable to garner enough support to move forward legislation to avoid the interest rate on subsidized Stafford loans from doubling on July 1 from 3.4% to 6.8%. Two bills were offered on the Senate floor — S. 953, sponsored by Sens. Jack Reed (D-RI) and Tom Harkin (D-IA), and S. 1003, sponsored by Sens. Tom Coburn (R-OK), Richard Burr (R-NC) and Lamar Alexander (R-TN). Neither measure was able to secure the necessary 60 vote hurdle.
AFSCME supported S. 953, which would have extended the current interest rate for two more years to give Congress time to construct a long term, comprehensive solution that would ensure affordable college loan rates. The bill was paid for by closing three corporate tax loopholes. AFSCME opposed S. 1003 because it would have made college more expensive by allowing all student loan rates to increase each year at fixed-variable rates with no cap, resulting in higher rates and even more debt than if rates are allowed to double this July.
Senators Introduce Bipartisan Child Care and Development Block Grant (CCDBG) Bill
This week, Sens. Barbara Mikulski (D-MD), Tom Harkin (D-IA), Lamar Alexander (R-TN) and Richard Burr (R-NC) introduced a bill to reauthorize the Child Care and Development Block Grant (CCDBG). The bill would add significant new responsibilities for states including inspecting child care centers and homes annually, providing consumer education on child care quality, developing workforce and competency requirements, increasing training requirements, and conducting comprehensive background checks on licensed, regulated, and registered providers. The bill also includes a provision that could block states from using CCDBG funds for license-exempt providers.
The bill establishes 12-month eligibility for assistance, and increases a funding set aside for improving quality for infants and toddlers.
It seems unlikely that CCDBG could use at least 70% of its funds for direct services (access to eligible families for child care services) with the additional administrative requirements, many of which are important yet very expensive. CCDBG has been historically underfunded, and sequestration and current low budget caps will further challenge the program’s ability to fulfill many of the proposed new requirements while maintaining current levels of access. AFSCME is reviewing the legislation. There is no House companion bill, so it is unlikely the bill is on a path to becoming law in the near future.
Influential Progressive Organization Calls for End to Austerity Policies
The Center for American Progress (CAP), a key progressive organization with close ties to the White House, this week released a new report asserting that austerity economic policies should be abandoned. The CAP report calls for a reset button and points out significant changes that have occurred since it supported enactment of a grand bargain on deficit reduction. It cites the improvement in the short-term and long-term deficit picture due to the enactment of $2.5 trillion in deficit reduction and the dramatic slowdown in health care cost increases. In addition, the report notes the failure of austerity policies in Europe and the discrediting of a key economic paper justifying austerity policies.
The CAP report notes the economic drag that further federal spending cuts would have and calls for an end to the sequester, additional tax revenue from the wealthiest, and new investments in early childhood education and infrastructure, among other measures. The call for a shift in federal policy to emphasize job creation over deficit reduction also dominated a jobs conference sponsored by the Roosevelt Institute this week, where economists and others noted the collapse of employment prospects for young adults and the dangerously slow improvement in the jobs picture overall. The CAP report is available here.
Medicare Trust Fund Solvency
The recently-released Medicare Trustees report projects that the trust fund that finances Medicare’s hospital insurance coverage will remain solvent until 2026, two years beyond what was projected in last year’s report. As noted in the report, the Affordable Care Act (ACA) helped to put Medicare on an even stronger financial foundation. It did so without cutting any guaranteed Medicare benefits; in fact it expanded and improved Medicare’s benefit package. ACA’s Medicare reforms that helped reduce spending and slow health care costs are a gain for both taxpayers and beneficiaries. For example, although the Part B premium (for doctor visits) for 2014 will not be determined until later this year, the report’s preliminary estimate is it will not increase.
A separate recent analysis of immigrants’ payroll contributions and expenditures from the Medicare trust fund offered good news about immigrants’ impact on the solvency of Medicare. The study found that immigrants, particularly noncitizens, heavily subsidize Medicare, generating a cumulative surplus in contributions totaling $115.2 billion between 2002 and 2009. This study’s findings counter the assumption that immigrants drain public resources.
Obamacare Protects Young Adults from Financial Ruin
Since its enactment in 2010, the ACA has protected young adults from financial ruin that often comes with a major injury or illness, according to a new RAND analysis published in the New England Journal of Medicine. The study found that the new law, which allows young adults between the ages of 19 and 25 to stay on their parents' private health insurance plans, resulted in $147 million in hospital bills charged to private insurance companies in 2011. These costs would have otherwise come out of the pockets of young adults and their families or substantially increased uncompensated care provided by hospitals.
Senator Lautenberg Dies After Long Illness
Senator Frank Lautenberg (D-NJ) died this week at the age of 89 after struggling with poor health for many months. He was a long-time leader on environmental protection, transportation and protecting public health. During his long service in the U.S. Congress, he championed many progressive causes from women’s health to gun safety, LGBT rights, and anti-tobacco laws.
New Jersey Governor Chris Christie has appointed New Jersey Attorney General Jeff Chiesa as the interim Senator until a special election is held in October. Democratic Rep. Rush Holt has already announced his candidacy in the August primary, and Rep. Frank Pallone, as well as Newark Mayor Cory Booker, are expected to enter the race. On the Republican side, Steve Lonegan, former mayor of Bogota, N.J. and state director of Americans for Prosperity, has announced he will run for the seat. Lt. Gov. Kim Guadagno, state Senate Minority Leader Tom Kean Jr., and state Sen. Joe Kyrillos are also considering bids.
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