Week Ending March 15, 2013
Rep. Ryan’s and Sen. Murray’s Budgets: Stark Differences in Priorities
This week, House Budget Chairman Paul Ryan (R-WI) introduced a budget with the same wrong-headed policies and priorities we have seen three years in a row and that America resolutely rejected on election day. The Budget Committee passed the proposal 22 to 17 along party-lines with no Democratic support. His budget would impose considerable hardships on those who can least afford them in order to slash taxes for the wealthy and corporations. The entirety of deficit reduction in the Ryan budget is from spending cuts with no revenues raised. President Lee Saunders noted that: “The economy may be recovering, but a budget like Paul Ryan’s is nothing more than a time machine ride back to financial instability. There is too much at stake to play these games with the federal budget.”
Ryan’s spending reductions of more than $4 trillion, on top of the $1.2 trillion sequester cuts over ten years, would incapacitate state and local governments, leading to massive cuts in vital public services and enormous job losses that would threaten our fragile economic recovery. But loopholes and giveaways to the wealthy are alive and well in the Ryan budget. It would reduce the top individual tax rate on the highest income Americans from 39.6% to 25%, and reduce the corporate tax rate from 35% to 25%. The budget proposal gives tax breaks for top earners at the expense of middle-class taxpayers, whose federal tax bill will increase for an average family by $2,000 per year. The Budget Committee’s Ranking Democrat Chris Van Hollen (D-MD) said Ryan’s budget calls for “cutting the tax rate for millionaires by over one-third – while holding overall revenues constant… While providing a tax windfall to the very wealthy, this proposal absolutely guts vital investments that are essential to shared prosperity, upward mobility, and rising middle-class wages.”
The Ryan budget would end Medicare as we know it by turning the guarantee of medical care for seniors into a fixed voucher for all beneficiaries by 2024. It would also raise the age of eligibility from 65 to 67. These changes would shift higher and higher costs to seniors and employers over time. Over the next ten years, the Ryan budget would cut Medicare spending by a total of $356 billion.
The Ryan budget also takes an axe to the Medicaid program, cutting $810 billion over ten years to state operated Medicaid programs. As a consequence, states will be forced to eliminate services and reduce coverage. Because two-thirds of Medicaid expenditures are for low-income seniors and people with disabilities, states will be forced to make deep cuts in nursing home and other long term care services. The reduction in federal funding will also force states to cut spending on education, transportation, law enforcement and other services, as they balance the demands between health care and other needs.
Although the Ryan budget doesn’t include specific cuts to Social Security benefits it includes a “fast track” procedure to push through policy changes if the program is not fully solvent over the next 75 years. If such a fast track process were adopted, it is clear that the GOP congressional leadership would continue to push for benefit cuts such as reducing annual cost of living adjustments and raising the retirement age.
The Ryan budget also includes a two-year hiring freeze for federal employees to cut an additional 210,000 employees and would require that current federal employees pay more into their retirement accounts.
In contrast, Senate Budget Committee Chair Patty Murray’s (D-WA) budget is a more realistic proposal that aims to balance cuts with increased revenues and focuses on job creation rather than blindly seeking deficit reduction. The Murray budget was also approved by the Committee along party-lines. It rejects austerity, eliminates the sequester, values public services and addresses deficit reduction responsibly by making the wealthy and corporations pay their fair share of taxes for a total of $975 billion over 10 years. The bill also proposes $150 billion in cuts to non-defense annually funded programs, which we are urging senators to reject and replace with additional progressive revenues. Unlike the draconian budget bill introduced by Rep. Ryan, the Murray budget prioritizes economic growth and prosperity by strengthening the middle class and working families, and it preserves the integrity of Medicare, Medicaid, the Affordable Care Act and other critical programs and services including K-12 education, Head Start, child care, transportation, infrastructure, public safety and many more. The bill also invests $100 billion in job creation and infrastructure.
Even if the Ryan budget passes the House and the Murray budget passes the Senate, the budget process will likely remain challenging and contentious. The budgets are so different that they are likely impossible to merge into a budget upon which the House and Senate can both agree. While both budgets include $966 billion as the overall “topline” number to guide appropriations bills for FY2014, they differ on the split between defense and non-defense funding. The Murray budget maintains the sequestered cap with $497 billion for defense and $469 billion for non-defense, while the Ryan budget raises the defense spending cap to $522 billion and lowers the non-defense cap to $414 billion. This is significant.
Floor votes on their budget in both the House and Senate will occur next week. AFSCME is strongly opposing the Ryan budget and strongly supporting the Murray budget.
Tell Your Representative to Vote No on the Ryan Budget!
Next week, we expect BOTH the House of Representatives and the Senate to vote on their budgets.
The House will vote on Budget Committee Chairman Paul Ryan’s (R-WI) federal budget proposal that was approved by the Budget Committee on a mostly party-line vote. It proposes extraordinarily deep spending cuts to pay for tax cuts that would overwhelmingly benefit the wealthiest 2% of Americans and corporations. Rather than rebuild the middle-class, and this budget puts the American Dream further out of reach.
The Senate will vote on Budget Committee Chairwoman Patty Murray’s (D-WA) federal budget proposal that prioritizes jobs, economic growth and makes wealthy Americans and corporations pay their fair share in taxes.
Call your Representative toll-free at 1-866-695-2510. Urge him/her to vote against Rep. Ryan’s unbalanced, unfair budget proposal because it would end Medicare and Medicaid as we know them and slash vital services to pay for tax breaks for the wealthiest Americans and corporations.
Senate Completes Funding Bill for the Rest of the Fiscal Year; Vote Next Week
Next week, the Senate will vote on its version of H.R. 988 to continue FY2013 funding beyond its scheduled expiration on March 27 through the end of fiscal year on September 30. Most areas of spending were flat funded.
Senate Appropriations Chairwoman Barbara Mikulski (D-MD) and Labor, Health and Human Services (LHHS) Chairman Tom Harkin (D-IA) worked diligently to improve the bill, but the damage was essentially done as House action prohibited the possibility of repealing or replacing sequestration. While it is essential to avoid a harmful, disruptive government shutdown if no bill was agreed to, this bill fails to responsibly address this year’s sequester cut of $85 billion. AFSCME could not support a bill that includes the sequester’s impact of furloughs, job losses and harmful program cuts.
Sen. Tom Harkin (D-IA) offered an amendment to redistribute funding within the LHHS bill to boost education, labor and human services funding. It also failed on a straight party-line vote.
The bill includes an extension of the federal pay rate freeze that is also in the House-passed funding bill. Federal employees can say goodbye to a promised .5% pay raise. Adding to the pain for federal workers, many will also begin forced unpaid furloughs in April which may for some amount to a pay cut of up to 20% through the end of the fiscal year in September.
Slow but Steady Progress in Congress on Comprehensive Immigration Reform
This week, a House subcommittee on workforce protections held a hearing on "Examining the Role of Lower-Skilled Guest Worker Programs in Today's Economy." The issue of guest worker programs in comprehensive immigration reform (CIR) is a key one for AFSCME and all of the labor movement because the current temporary work visa programs limit employment opportunities and depress wages for U.S. workers and create second class status for foreign workers. Another House subcommittee held a hearing on "Separation of Nuclear Families under U.S. Immigration Law." AFSCME is on record supporting a CIR bill that protects and strengthens the family-based immigration system to help reunite family members who are now forced to live apart for years and even decades.
Also this week, labor held a briefing for members of the Senate Judiciary Committee on the H-1B guest worker program for high-skilled workers. The attendees heard about the deep flaws in this program, including that outsourcing firms almost have a monopoly on hiring H-1B foreign workers. They also heard that many employers use the H-1B program to pay lower wages and therefore compete on price with employers that hire U.S. workers and pay them decent wages. The speakers also note that whistleblowers must be protected and that H-1B workers should have the right to organize. One of the speakers was an H-1B worker herself and a member of American Federation of Teachers.
Activities both in Washington, D.C. and around the country will continue until Congress passes and President Obama signs, a CIR bill. We will keep affiliates informed of rallies, press events and other activities, and actions you can take to support our lobbying efforts here in D.C. to get the best bill possible.
House Passes Bill to Limit Welfare-to-Work Flexibility for States
On Wednesday, in a largely partisan vote of 246-181, the House passed H.R. 890, which would extend the Temporary Assistance for Needy Families (TANF) program – now scheduled to expire on March 27 – through the end of 2013. However, the bill included a poison pill that would prohibit states from gaining more flexibility in their TANF welfare-to-work programs by requesting a waiver from the narrow activities that “count” toward meeting the program’s work requirements. Last summer, the Obama Administration announced it would allow waiver requests but if a state failed to move 20% more people from welfare to work, it would lose the additional flexibility. AFSCME sent a letter to all House members opposing H.R. 890.
The Senate included an extension of TANF through September 2013 in its funding bill for the rest of the fiscal year, without the work requirement language the House included. Now the House and Senate must agree on legislation that will prevent this safety net program from expiring in less than two weeks.
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.