Week Ending March 23, 2012
Ryan Budget Paves a Path to Austerity
This week, House Budget Chairman Paul Ryan (R-WI) introduced his austere and unfair budget plan, which passed the Budget Committee 19 to 18 with two Republicans crossing over, because they want deeper, faster cuts. The full House will vote on it next week. The plan is dead on arrival in the Senate. President McEntee noted: “At a time when this country needs jobs, economic growth and protection for the most vulnerable Americans, Ryan’s budget does the exact opposite... It is a disaster for working people, retired Americans, and the most vulnerable Americans. This budget sets the wrong priorities for our nation.”
Sound familiar? This is nearly the same wrong-headed plan Rep. Ryan introduced last year but even worse. It proposes extraordinarily deep spending cuts totaling $4.2 trillion over 10 years to pay for $4.6 trillion in tax cuts which would overwhelmingly benefit the wealthiest 1% of Americans and corporations. The Ryan budget decimates vital services and programs that working families, seniors, and low-income Americans rely on and lays the groundwork for slashing Social Security.
Because one in three nondefense, yearly federal dollars is currently distributed to state and local governments, cuts this large will enormously impact services and programs and cause further major job losses in the public sector. Further, the outgrowth of these cuts would literally end all federal programs aside from Social Security, health care and defense by 2050. Once again, the Ryan budget irresponsibly ignores expert, bipartisan economic advice to address the deficit through a balance of revenue increases and measured programmatic cuts once the economy has stabilized.
These drastic, new cuts renege on last year’s bipartisan agreement in the Budget Control Act (BCA) to split cuts between defense and nondefense programs. Cuts to education, labor, health and other critical nondefense programs would increase by an additional $27 billion in 2013 and by more than $1 trillion over 10 years. Instead of raising revenues, the Ryan plan cuts them and provides tax breaks to large, profitable corporations and an average tax break of $150,000 to the wealthiest 1%. To pay for these tax giveaways, other tax benefits like deductions for mortgage interest, employer-sponsored health insurance, and retirement savings will likely be cut, resulting in major tax increases for middle-class families. In spite of Rep. Ryan’s dire warnings about the growing deficit, the Ryan budget actually increases rather than decreases the deficit.
The Ryan budget would end Medicare as we know it by turning the guarantee of medical care for seniors into a voucher that will shift higher and higher costs to seniors and employers over time, raise the eligibility age to 67, and increase costs for prescription drugs.
Medicaid would be cut by $810 billion and converted into a block grant with inflexible state funding caps, shifting enormous and unsustainable costs to states. These Medicaid cuts would likely result in at least 14 million people losing health coverage in addition to the 17 million people who would lose access to coverage because the Ryan budget eliminates the Medicaid expansion in the Affordable Care Act (ACA). Food stamps would be cut by $134 billion and also converted into a block grant. The block grants would eliminate Medicaid’s and food stamps’ current built-in mechanisms to respond to growing demand during natural disasters or times of economic hardship.
The Ryan GOP budget would repeal the ACA, taking away many benefits that people are already receiving. In addition to the impact the repeal would have on Medicare and Medicaid, it would kick 2.5 million young adults off of their parents health plans; 50,000 people with pre-existing conditions would lose their health coverage; and millions of small businesses would no longer receive tax credits to help pay for coverage for their workers. The repeal would allow insurance companies to revert to harmful practices such as terminating coverage when people get sick, placing annual limits on the amount of benefits paid and using an excessive share of premiums for profits and administrative overhead, rather than for health services.
In summary, the 99% would see critical programs and services cut to the bone, and large numbers of middle income Americans would see their taxes increase. This economic policy is a proven failure. Instead of “paving the path to prosperity,” this kind of trickle-down economics created the worst recession of our lifetimes and a huge divide between the richest 1% and everyone else struggling to stay afloat in this difficult economy. Further, economists note that this budget would likely worsen the chasm between haves and have-nots, producing the largest redistribution of income from the lowest earners to the highest earners we have ever seen.
Affordable Care Act Helps 5.2 Million Medicare Beneficiaries Save over $3.2 Billion
New data shows that the Affordable Care Act (ACA) has reduced the financial burden of health care for seniors and people with disabilities who rely on Medicare. More than 5.1 million people with Medicare saved over $3.2 billion on their prescription drugs in 2011 because of the new health care law. In the first two months of 2012, about 100,000 people have received $92.7 million in discounts – about $904 per person. This lifesaving help would disappear if the changes to Medicare proposed by House Budget Committee Chairman Ryan became law.
House Panel Attacks Labor Rule to Help Home Care Workers’ Wages
For decades, federal law has treated home care workers as casual baby sitters. They have been denied basic federal minimum wage and overtime protections because, historically, they’ve been regarded as just “companions.” President Obama and Labor Secretary Solis have proposed new Fair Labor Standards Act rules that would ensure that these workers are treated fairly. Just before the public comment period ended on March 21, a House panel held a hearing on March 20 to attack the proposal.
AFSCME members from District Council 1707 attended the hearing at which not a single home care worker was permitted to testify. The for-profit home care industry has attacked the proposed rule. AFSCME’s statement was included in the hearing record. Some 87 groups sent a letter to the panel urging support for providing home care workers with federal wage and hour protections.
AFSCME stands in solidarity with our sisters and brothers who provide back-breaking personal care assistance to individuals with disabilities due to age or illness. These workers are the lifeline of independence for their consumers and deserve to be treated with respect. It is time to value the workers. They should receive the same minimum wage and overtime protections afforded other workers.
House Lessens Protections for Medicare Beneficiaries and Repeals Parts of Affordable Care Act
The House voted of 223 to 181, mostly along party lines, to repeal the Independent Payment Advisory Board (IPAB), a component of the ACA designed to strengthen Medicare’s solvency and benefits by recommending improvements to Medicare to lower costs by getting rid of waste in the system, incentivizing best practices and prioritizing primary care (H.R. 5). Under the ACA, IPAB is clearly prohibited from proposing any policies that ration care, increase premiums or cost-sharing, restrict benefits, or modify who is eligible for Medicare. Also included in the passed bill are new federal rules that would deny families’ access to justice when they are harmed due to medical malpractice or negligence. Seven Democratic members voted in support of repeal, and 10 Republicans voted against. AFSCME opposes the repeal of the IPAB.
Senate Transportation Bill Introduced in the House
Several members of the House introduced the Senate-passed surface transportation bill (S. 1813) on March 21. The Senate bill passed last week with a bipartisan vote of 74 to 22. Rep. Tim Bishop (D-NY) is the lead House sponsor of the legislation. He was joined by more than 80 members in introducing the bipartisan, job creating Senate transportation bill. They urged the House GOP leadership to consider the bill immediately and bring it to the floor for a vote. S. 1813 reauthorizes spending on the nation’s highway, transit and transportation safety programs at current spending levels, adjusted for inflation, for two years. The extremely partisan transportation bill that had been moving through the House would slash funding for these programs, cut jobs, privatize transportation design and engineering functions and jeopardize important safety programs. If Congress does not act quickly, transportation programs will shut down on March 31, when the current extension expires.
AFSCME Leader Testifies Before House Committee
Richard Abelson, Executive Director of AFSCME’s Council 48 in Wisconsin, testified on March 21 before the House Transportation Committee’s Subcommittee on Water Resources and the Environment. Abelson was asked to share AFSCME’s experience with the privatization of water and wastewater systems in Wisconsin. In 2008 the City of Milwaukee considered leasing its drinking water facility for 75-99 years in exchange for a large cash payment to help the city resolve its financial problems. After a year-long battle, the deal was abandoned when AFSCME and other advocates proved that such schemes are not in the best interest of the public. During the hearing, Abelson not only shared with the Subcommittee the pitfalls of privatizing water systems; he also proposed creative ways that labor unions could be a partner in finding ways to pay for the nation’s ailing water infrastructure.
Ryan Budget Would Undermine Job Training Programs While New Bill Introduced by Key Democrats Would Strengthen Them
The Ryan budget plan provides support for bills that have been introduced by several GOP members of the House Education and the Workforce Committee, including the Committee Chair, John Kline (R-MN). The bills would combine into block grants many federal job training programs and eliminate the state employment service and separate programs for dislocated workers under the Workforce Investment and Trade Adjustment Assistance Acts. Under these bills funding for federal job training programs would decline over time, and there also would be no role for organized labor in the workforce system.
In stark contrast, key Democrats on the House Education and the Workforce Committee introduced legislation this week that would strengthen the current workforce system. Sponsored by Representatives John Tierney (D-MA), George Miller (D-CA), and Rubén Hinojosa (D-TX), the Workforce Investment Act of 2012, expands the role of organized labor in the workforce system and promotes industry sector training programs, career pathways and labor-management partnerships. It requires employment service staff to be located in the one-stop centers and includes a pilot program to strengthen the employment service by making available career upgrading for staff and implementing new ways to work with the employer community. The bill also creates a new funding stream for operating one-stop centers, and expands the role of community colleges in providing education and training services.
New Funds Move to States to Provide Reemployment Services to Unemployment Insurance Claimants
The Department of Labor this week issued guidance to the states on the use of new federal funds to provide reemployment assessments and reemployment service to unemployment insurance claimants. The new program is part of the recently-enacted law that continued the Federal Emergency Unemployment Compensation program through the end of this year. It guarantees significant new funding for the next two years on top of regular annual funding for state unemployment insurance operations and employment services under the Wagner-Peyser law.
The guidance specifies clearly the functions that must be performed by state merit staff employees and encourages states to use their unemployment insurance and employment services programs to provide the new services. We urge AFSCME affiliates representing this workforce to reach out to state agencies to discuss how they plan to implement the new program.
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