Week Ending May 2, 2014
Senate Rejects Minimum Wage Increase
Despite an intense push by President Obama and Senate Democratic leaders, GOP senators remained largely united and on Wednesday rejected the Fair Minimum Wage Act of 2014 (S. 2223), which sought to increase the federal minimum wage from $7.25 to $10.10 per hour. The procedural vote to advance the bill failed on a mostly party-line vote (54 to 42), short of the 60 votes needed to end debate. Sen. Bob Corker (R-TN) was the sole Republican to vote in favor of advancing the bill. The bill is expected to be brought back to the Senate floor several times between now and the 2014 midterm elections.
Cities and States Will Lose if Highway Fund Becomes Insolvent
States and local governments stand to lose $46.8 billion in federal funding for transportation and transit projects next year if Congress does not put more money into the Highway Trust Fund. The Congressional Budget Office (CBO) has determined that the fund will run out of money in August. Unless Congress adds to the fund, there will be no money for new projects starting on October 1, 2014. As Sen. Patty Murray (D-WA) noted in a floor speech, the trust fund is “running on fumes.” The Highway Trust Fund is financed by the federal tax on gasoline and diesel fuel, so fuel efficient cars and fewer miles driven contribute to the shortfall. The fuel tax has not been raised since 1993. Without congressional action, all the federal tax money coming in would be used to pay for existing projects, leaving no money for new state and local roads, bridges and transit.
In response, the Obama administration sent a proposal to Congress that seeks to remove a prohibition on tolls for existing interstate highways, clearing the way for states to raise revenue on roads that drivers currently use at no cost. Congress banned tolls on these roads in 1956 when it created the national highway system. This would help address the funding shortfall to pay for highway repairs. The tolls, along with other changes, could provide an additional $87 billion for transportation infrastructure. The proposal comes as Congress prepares to rewrite the existing surface transportation bill.
House Passes Bill That Would Weaken Health Coverage for Lawful Immigrants
On Tuesday, the House approved the Expatriate Health Care Coverage Clarification Act (H.R. 4414), which would eliminate health coverage standards for 13 million individuals who are lawful permanent residents of the U.S., people with work visas and individuals who were granted visas for humanitarian reasons. The bill was promoted as a necessary change in the Affordable Care Act (ACA) to address complications in providing coverage to 285,000 expatriates, or U.S. citizens who spend much of the year working in a foreign country. However, the bill did not stop at addressing this more narrow concern and was used as a vehicle to attempt to eliminate ACA coverage standards for millions of lawfully present immigrants. H.R. 4414 would not only harm immigrants but would create pressure to reduce benefit standards for all others and give employers a financial incentive to bring in immigrants on special work visas rather than hire workers in the U.S.
The bill was authored by Reps. John Carney (D-DE) and Devin Nunes (R-CA). The vote in favor of the bill was 268 to 150. Sixty Democrats voted for the bill and 17 Republicans opposed it. The fight now shifts to the Senate, which may take up the bill.
House Committee Passes $301 Billion of Corporate Tax Cuts
On separate party-line votes, Republicans on the House Ways and Means Committee voted to permanently extend six corporate tax cuts benefitting business interests totaling $301 billion over 10 years, which directly benefit corporations and indirectly benefit almost exclusively America’s wealthiest 1%. The tax cuts were approved with no revenue offsets. Every GOP member who voted supported every bill and each voting Democrat opposed each bill, except Rep. Earl Blumenauer (D-OR), who voted in support of the Research and Experimentation tax bill.
Opponents note these tax cuts should not be made permanent, would worsen the federal deficit, and should be offset. Others argued that some of the corporate tax extenders should be ended. AFSCME and our coalition, Americans for Tax Fairness, strongly oppose two of these tax extenders. One allows corporations to avoid paying U.S. taxes on financial income they claim to earn in foreign countries so long as those profits remain “offshore.” The second allows multinational corporations to low-ball their earnings and instead create dividends, interest, rents, and royalties that reduce active income from high-tax nations and move it to low-tax or no-tax nations without creating any American tax liabilities. Given that many lawmakers claim the federal deficit is so large that an extension of unemployment insurance benefits needs to be paid for and basic safety net protections for struggling families, like food stamps, must be cut, it is hypocritical for them to vote for these corporate tax cuts that increase the federal deficit.
AFSCME continues to advocate that Congress end the worst corporate tax cuts and pass sensible offsets for any that continue.
Talk on Comprehensive Immigration Reform Has Not Resulted in House Action
House GOP leaders have continued to make public statements about comprehensive immigration reform (CIR) but have failed to back up their words with any votes. House Speaker John Boehner (R-OH) mocked his tea party wing at a Rotary Club meeting in his district, saying their attitude towards CIR is: “Ohhh, Don’t make me do this. This is too hard.” After an open revolt by his caucus members, Boehner shifted his message, insisting that the major impediment to moving CIR is “the American people don’t trust the president to enforce or implement the law that we may or may not pass.” This attempt to place the blame on President Obama – who has strongly and repeatedly expressed support for CIR – instead of his own failure to move legislation forward, is ludicrous.
A few members of the House GOP caucus have recently called on Speaker Boehner to bring immigration reform to a vote. Rep. Peter King (R-NY) has spoken out in favor of a bill with a path to citizenship for currently undocumented immigrants; Illinois GOP Reps. Aaron Schock, Adam Kinzinger, and John Shimkus have also stated the need for immigration reform. Rep. Joe Barton (R-TX) announced he is close to introducing a CIR bill, recognizing the electoral consequences for his party if it fails to embrace immigration reform: “I’m part of the majority party in the largest state that’s still Republican and I want to keep it that way.” Nevertheless, House GOP leaders continue to stonewall reform. Majority Leader Eric Cantor’s (R-VA) recently-released House spring agenda notably does not include moving forward on immigration reform.
In response to the House’s failure to act, President Obama’s Department of Homeland Security (DHS) Secretary Jeh Johnson is currently leading a review of how immigration policies could be implemented “more humanely within the confines of the law.” There are unconfirmed press reports that the DHS will limit deportations of undocumented immigrants who have not committed serious crimes.
AFSCME continues to urge the House leadership to hold a vote on H.R. 15, bipartisan legislation with 200 co-sponsors that is closely modeled on the CIR bill the Senate passed almost a year ago. House Minority Whip Steny Hoyer (D-MD) noted this week that the Congressional Budget Office (CBO) estimates that the Senate-passed CIR bill would save $175 billion over a decade, enough to pay for an extension of federal emergency unemployment benefits and tax cuts that are currently not paid for.
Panel Looks at Medicare Fraud; Fails to Explore “Legal” Overpayments to Drug Companies
A House health panel hearing on combatting waste, fraud and abuse in Medicare found in the past prosecutors were forced to use “pay and chase” by paying Medicare claims and then work to identify and recoup fraudulent payments. Thanks to the Affordable Care Act, Medicare has new tools to keep fraudsters out and to uncover fraudulent schemes quickly, before they drain taxpayer and Medicare Trust Fund dollars. The federal government recovered a record-breaking $4.3 billion in FY 2013 from individuals and companies who attempted to defraud federal health programs serving seniors or who sought payments to which they were not entitled. Unfortunately, the congressional panel did not explore the more costly abuse that occurs when pharmaceutical manufacturers “legally” overcharge Medicare. AFSCME submitted a statement for the record urging Congress to enact policies to curb the pharmaceutical industry’s ability to “legally” take advantage of Medicare by charging higher prices than it charges other public health programs.
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