Week Ending March 27, 2015
House and Senate Pass Austerity Budgets; Fail to Reverse Automatic Spending Cuts
This week, the House and Senate approved budgets that continue austere budget caps and automatic cuts (“sequestration”) for federal government spending next fiscal year and propose significantly deeper cuts over the next 10 years. The House approved its budget by a vote of 228 to 199, with no support from Democrats. The Senate approved its budget 52 to 46, also without any Democratic support.
Both budgets propose to slash approximately $5.3 trillion in federal spending, eliminate the Affordable Care Act (ACA), block grant Medicaid, voucherize Medicare, slash the Supplemental Nutrition Assistance Program (SNAP), shift enormous resources from domestic priorities to Pentagon spending, and shrink federal investments in programs that middle-class families rely on, including public health, education, transportation, law enforcement and others, to the smallest percentages of federal spending on record. Nearly 70% of these budget cuts are from programs that combat poverty. At the same time, they raise no additional revenue and instead propose to cut tax rates for the wealthy and corporations. These budgets rely enormously on gimmickry to “balance” the federal budget in 10 years, for example by relying on “savings” by repealing the ACA while including projected ACA revenues. The budgets have some slight differences which will need to be resolved in a “conference committee.” To find out how the proposed budget cuts would impact your state, go to:
In stark contrast, to the President’s budget, alternative budgets offered by House Democrats and amendments offered by many Senate Democrats sought to frame a very different federal vision that prioritizes working families, focuses on jobs and economic growth, expands the middle class, raises significant and progressive revenues to make the wealthy and corporations pay their fair share, and invests in federal programs.
The good news is that congressional budgets are nonbinding blueprints for policy direction. The ACA, Medicare, Medicaid and SNAP will continue in their current forms unless new laws are passed to change them. The bad news is that both the House and Senate budgets include “reconciliation” instructions for committees to find significant savings in these and other programs before the August recess. That is code for deep cuts. In addition, reconciliation creates an expedited process to bundle all of the proposed cuts into one package that only requires a simple majority vote in both the House and Senate. In other words, the Democratic minority in the Senate cannot filibuster a reconciliation package.
The other bad news is that without a new law to replace the one that created the budget caps and sequestration, Congress will have no choice but to create 2016 spending bills with approximately the same amount of money as last year. Sen. Patty Murray (D-WA) offered an amendment to build on her bipartisan 2013 budget deal that replaced two years of automatic budget cuts, evenly divided between defense and nondefense spending. Her amendment would also have raised revenue by closing wasteful tax loopholes used by the wealthiest Americans and profitable corporations. Unfortunately, her amendment was defeated.
President Obama proposed sequester relief in his budget, evenly divided between defense and nondefense programs, and he has said he will not sign spending bills that lock-in automatic cuts. So, either Congress needs to change its budget stance or no funding bills can be finalized. This raises the potential of another government shutdown this fall.
House Committee Approves Repeal of Estate Tax
The House Ways and Means Committee voted 22 to 10 along party lines to repeal the federal estate tax (H.R. 1105), which is estimated to affect about 5,400 estates annually at a cost in lost revenues of $269 billion over the next 10 years.
Opponents of the repeal, including AFSCME, highlight that the estate tax’s current exemption level is extremely high and has increased significantly from 2001’s level of $650,000 to today’s $5.43 million per person. Thus, this tax is paid by only the wealthiest 2 out of every 1,000 estates. Moreover, experts estimate that by 2016, 73% of this tax break would benefit estates exceeding $20 million. For these reasons and because this bill constrains future needed domestic investments, AFSCME opposed this bill.
The timing of this week’s vote on these tax breaks was ironic because House GOP leaders cited concerns about large federal deficits to get approval for the House vote on its budget resolution, which cut nondefense federal spending by $5.3 trillion over 10 years, including $3.7 trillion in cuts to low and moderate income programs.
House leaders may try to schedule a floor vote on this estate tax repeal legislation, the so-called “Death Tax Repeal Act,” near the federal tax filing deadline of April 15.
House Passes Package to Block Medicare Physician Payment Cuts and Extend Children’s Health Insurance Programs
The House passed the Medicare and CHIP Reauthorization Act (MACRA) (H.R. 2) by a vote of 392 to 37. The package permanently repeals and replaces the scheduled cuts in Medicare reimbursement rates to doctors and provides a two-year extension of federal funding to support states Children’s Health Insurance programs (CHIP). The federal CHIP funding is important to state budgets and enables eight million children to access this health care coverage. The package also includes a two-year extension of federal payments to cash-strapped rural communities that are already facing shortfalls to pave roads, keep teachers in schools and firefighters on call. And, it includes a two-year extension of funding for grants for home care and personal care attendant training. The package adds a new requirement that Medigap policies have a deductible that matches the part B deductible (currently $147) before providing further protection against other deductibles and co-payments. It also will increase premiums for higher income Medicare beneficiaries. The Senate is expected to take up the legislation when it returns from recess. The strong bipartisan House vote will place pressure on the Senate to pass the bill as is but many senators have called for improving the legislation.
Paycheck Fairness Act Re-Introduced
This week, Sen. Barbara Mikulski (D-MD) and Rep. Rosa DeLauro (D-CT) re-introduced the Paycheck Fairness Act (S. 862; H.R. 1619). This bill would give women workers the tools they need to fight pay discrimination and help close the wage gap which averages more than $11,000 in lost wages for women every year and even more for women of color.
The Paycheck Fairness Act would help end wage discrimination by closing loopholes in the Equal Pay Act of 1963. Workplaces and the roles of women as breadwinners have changed significantly since 1963. It is time for federal law to change and promote pay equity. The bill would make it harder for employers to pay women less for the same work, prohibit retaliation against employees who compare their pay, and require that employers who break the law fairly compensate the women they discriminated against. The bill also creates a grant program for women employees to strengthen salary negotiation and other workplace skills, and requires the Department of Labor to enhance outreach and training efforts to eliminate pay disparities.
AFSCME strongly supports the Paycheck Fairness Act.
Nurse Staffing and Advocacy Bill Introduced
The National Nursing Shortage Reform and Patient Advocacy Act (S. 864; H.R. 1602) was introduced in the Senate by Sens. Barbara Boxer (D-CA) and Sherrod Brown (D-OH) and in the House by Rep. Jan Schakowsky (D-IL). The bill would improve the safety and quality of health care by demanding that hospitals meet minimum nurse-to-patient staffing levels as a condition of receiving reimbursement from Medicare and Medicaid. Safe nurse staffing standards also help address the nursing shortage by turning around the working conditions that drive nurses away from the bedside. Research shows that inadequate nurse staffing puts patients at greater risk of medical errors, hospital-acquired infections and death. The bill also protects the rights of nurses to speak out for their patients and for themselves without the fear of discrimination or retaliation.
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