Week Ending May 11, 2012
House Passes Draconian Spending Cuts Bill
This week, the House passed a spending cuts package (H.R. 5652) which would impose immediate deep cuts to critical domestic programs. The bill uses the excuse of deficit reduction to impose enormous hardships and drastic cuts on those who can least afford them rather than closing tax loopholes and increasing taxes on the wealthiest Americans and large corporations. And, it shifts the planned across-the-board cuts scheduled for January entirely away from the Pentagon and onto public services.
This irresponsible budget plan would slash funding for state and local governments, further cut vital public services, cost millions of jobs, and send our economy into a downward tailspin. Just this week, the Wall Street Journal reported that sharp cuts already instituted by state and local governments are responsible for a full percentage point of unemployment, causing the rate to be 8.1% instead of 7.1%.
The package passed largely along party lines would cut Medicaid by nearly $25 billion through changes in the provider tax, reductions in DSH payments to safety net hospitals, repeal of state maintenance of effort requirements and reductions in payments to territories. Unemployment benefits would be cut off until applicants are nearly broke. And, 5.5 million low-income children whose working parents do not have Social Security numbers would be denied the refundable child tax credit.
The list of mean-spirited cuts goes on. H.R. 5652 would cut $33 billion from food stamps and cut off free school meals for 300,000 children at a time when food insecurity is peaking, yet it preserves farm subsidies when producers are reaping record profits. Another $79 billion would be cut from federal employee pensions on top of the previously enacted cuts of $75 billion.
AFSCME strongly opposes H.R. 5652. The President has stated that he would veto this bill, and it is dead on arrival in the Senate. While this package will not advance further, it is yet another reminder of the rising stakes leading up to critical decisions Congress must make this fall. At the end of this year the Bush tax cuts, funding for unemployment benefits, the alternative minimum tax (AMT) fix, the 2% reduction in Social Security payroll taxes and reimbursement rates for Medicare providers will expire. Also, FY 2013 funding will need to be finalized, across-the-board spending cuts are scheduled for January 2013, and the debt ceiling will need to be raised. In order to sustain critical public programs and promote job growth, revenues increases are imperative. We will keep you updated as these important issues are addressed.
GOP Leaders Block Vote to Prevent Doubling of Student Loan Rates
Coming on the heels of a House vote prior to recess, the Senate attempted to vote on a bill to stop the doubling of interest rates on federally-subsidized Stafford loans from 3.4% to 6.8% before the current rate expires on July 1, 2012. Unfortunately, all Senate Republicans blocked the vote. The Senate bill (S. 2343) is a responsible fix to the student loan problem. It would prevent 7.4 million students this year from paying higher interest rates by closing a tax loophole that only benefits wealthy individuals seeking to dodge their tax responsibilities. AFSCME strongly supports S. 2343. This is must-pass legislation, and we will keep you updated on its progress.
Representatives DeLauro and Braley Introduce Rebuild America Act
Representatives Rosa DeLauro (D-CT) and Bruce Braley (D-IA) announced this week that they are introducing a House version of the Rebuild America Act (S. 2252), which Senator Tom Harkin (D-IA) developed and introduced in the Senate in March.
The Rebuild America Act is a comprehensive bill intended to strengthen and expand America’s middle class. Among its provisions are funds to hire teachers, police, firefighters and other local government employees. These provisions are especially important in light of a growing awareness that the continued hemorrhaging of public sector jobs is holding back declines in local unemployment rates. The Rebuild America Act also includes funds to rebuild the nation’s roads, bridges and other infrastructure, modernize schools, expand and improve child care opportunities, and expand job training in growing sectors of the economy. In addition, the legislation includes an increase in the minimum wage to $9.80 over three years, and strengthens overtime protections for white collar workers. It also would improve Social Security benefits and strengthen the private pension system.
Finally, the Rebuild America Act restores fairness to the tax code by including, among other provisions, a Wall Street trading and speculators tax, the so-called “Buffett Rule” ensuring that the wealthiest taxpayers pay at least as much as middle-class families, and an increase in the capital gains tax rate. A more detailed summary can be found here.
Obama Urges Congressional Action on Proposals to Create Jobs and Help Homeowners
President Obama announced five key issues on America’s “Congress To-Do List,” urging Congress to enact legislation to create jobs and help the middle class before it leaves for its summer recess. Specifically, Obama focused on rewarding the creation of American jobs, not outsourcing; tax credits for small businesses that create jobs; clean energy manufacturing; refinancing at lower interest rates for responsible homeowners; and a Veterans Jobs Corps.
Negotiations Begin on Transportation Bill
House and Senate negotiators held their first meeting this week to iron out the differences between their different versions of a surface transportation bill, legislation that funds the nation’s highway, transit and transportation safety programs. The conferees presented opening statements outlining their priorities. It is clear that House negotiators want to make major changes to the Senate’s method of paying for the bill. The Senate would pay for its two-year, $109 billion bill primarily by transferring money from the general fund into the Highway Trust Fund.
Another major area of disagreement is the House language that would mandate quick approval of the Keystone XL pipeline and limit the Environmental Protection Agency’s authority to regulate coal ash disposal. House GOP negotiators are also pressing for approval of language in their bill that would ease environmental reviews of transportation projects. Conference Committee Chair, Senator Barbara Boxer (D-CA) wants to have the conference report completed by early June.
House Funding for Crucial State and Local Law Enforcement Programs Breaks Budget Agreement
On Thursday, the House passed a budget (H.R. 5326) for the Departments of Commerce, Science and Justice for FY 2013 that sets funding levels below those agreed to in last year’s debt limit law.
While funding for the Community Oriented Policing Services (COPS) program and for the Byrne-Justice Assistance Grants (JAG) are kept at current levels, deep cuts have occurred in vital public safety programs over the last two years. The Justice Department budget was cut by 17% and funding for state and local law enforcement assistance was cut even deeper, by 24%.
The Senate continues to work on its budget for these agencies, but has already proposed $2.2 billion for grants to state and local law enforcement. This includes $248 million for the COPS program, an increase of almost 25%. Additionally, the Senate bill would provide $255 million for the State Criminal Alien Assistance Program (SCAAP) and $392 million for Byrne-JAG grants (increases of 6% each), and includes $24 million for bulletproof vest matching grants.
House Panel Adopts Flawed Violence Against Women Act Reauthorization
This week, the House Judiciary Committee passed its version of a five-year renewal of the Violence Against Women Act (VAWA). While the continuation of the VAWA historically has been uncontroversial since it was first enacted in 1994, GOP leaders on the committee added changes that would harm immigrants while rejecting amendments that would have strengthened protections for lesbian, gay, bisexual and transgender victims of abuse. The bill (H.R. 4970) passed on a largely party-line vote 17-15, with Rep. Ted Poe (R-TX) the only GOP member joining the Democrats in opposing it.
H.R. 4970 could go to the House floor for a vote as early as next week. Last month, the Senate passed its VAWA reauthorization bill (S. 1925), which does not contain the harmful House provisions.
Affordable Care Act Helps Medicare Beneficiaries Save Over $3.2 Billion
Thanks to the Affordable Care Act (ACA), Medicare beneficiaries saved $3.2 billion on their prescription drugs from the enactment of the law in 2010 through March 2012. In the first three months of 2012 alone, nearly a quarter of a million people saved an average of $837 on their prescription medicines. The ACA provides a 50% discount on brand-name prescription drugs and this year a 14% discount on generics. In addition, from January through March this year, 8.9 million people in traditional Medicare received at least one preventative health service at no cost to them. This lifesaving help for Medicare beneficiaries would end if the changes to Medicare proposed by House Budget Committee Chairman Paul Ryan (R-WI), and adopted by the House along party lines, become law.
$452 Million in Medicare Fraud Alleged
New enforcement tools in the Affordable Care Act led to a nationwide crackdown by the Medicare Fraud Strike Force which resulted in charges against 107 individuals in seven cities for their alleged participation in Medicare fraud schemes involving approximately $452 million in false billing. This coordinated enforcement effort targeted the highest amount of false Medicare billings in a single takedown in Strike Force history.
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