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Week Ending May 26, 2017

Congressional Budget Office Releases Updated Score of House Health Care Bill

The nonpartisan Congressional Budget Office (CBO) released its evaluation of the American Health Care Act (H.R. 1628), the bill to repeal the Affordable Care Act and restructure Medicaid, which was approved by the House of Representatives on May 4.  The CBO estimates that:

  • In 2018, the number of uninsured would increase by 14 million, compared with current law.
  • By 2026, the number of uninsured would increase by 23 million, relative to current law.
  • Many who purchase coverage in ACA exchanges would pay higher premiums for skimpier benefits with higher out-of-pocket costs.
  • Federal Medicaid payments to the states would be cut by $834 billion, or 16.7%, over the next 10 years.
  • By 2026, the cut in federal Medicaid payments would grow to $150 billion annually, a reduction of 24% in payments to the states.
  • The bill provides more than $600 billion in tax cuts for the wealthy and for profitable corporations (paid for by taking health care coverage away from millions of people).

The bill ends Medicaid as we know it, cutting back on the federal government’s responsibility to ensure health care for low-income families.  The bill would place a cap or limit on the amount of money that states receive in Medicaid funding from the federal government each year, regardless of the cost of providing health care to those who qualify.  And once Medicaid is restructured, it will be easier for Congress to further “dial down” Medicaid payments to the states in the future.  In fact, the budget released by President Trump this week would do exactly that, cutting payments to the states by at least another $600 billion over the next 10 years. 

The bill would hit working families by making it harder and more expensive for them to get affordable nursing home care or home care services for older parents or for children with severe physical and mental disabilities.  The Medicaid cuts would hurt health care providers – especially rural hospitals – forcing many to close as a result of the cuts.  Because the Medicaid payment cuts are so large, many states will be forced to raise taxes or cut funding for other public services, such as schools, transportation and law enforcement. 

Negotiations are continuing among Senate Republicans over what changes will be made to the House bill in the Senate.  Some moderate Republicans have expressed concern over some features of the House bill, but none have stated publicly that they would oppose a bill. Democrats are united in opposition to the House-passed legislation.  (Barbara Coufal- bcoufal@afscme.org)

President’s Budget Harms Working Families

President Trump’s “The New Foundation for American Greatness,” proposes a budget of $4.1 trillion for fiscal year (FY) 2018, dramatically increasing military spending; calling for deep cuts to domestic programs; and a huge tax cut for the rich and profitable corporations.  The budget cuts fall sharply on poor Americans and working families. Further, these budget cuts would wreak havoc on state and local government budgets, by cutting federal assistance and shifting a greater share of responsibility to the states for health care, education, nutrition assistance and more.

Excluding veterans and homeland security, and adjusting for inflation, the Trump budget cuts non-defense 17% below FY 2017 and 33% below FY 2010. If enacted, the federal government will have 33% less resources than in 2010 to provide vital services and infrastructure to working families and Americans struggling to make ends meet.

Democrats in Congress and many Republicans also have decried the harshness of the budget cuts. But previous Republican budgets have included similar steep cuts in Medicaid, SNAP, and other programs that ensure basic standards of living. AFSCME continues to oppose budget cuts to working families and communitites. At a press event with Rep. Nancy Pelosi (D-CA) and others, AFSCME President Lee Saunders said, “this budget is morally unacceptable, unprecedented in its austerity and cruelty.” See blog post about event HERE.

  • Deeps Cuts in Domestic Spending.The Trump budget lays out an austere vision for reordering the nation’s priorities and hurting the very people President Trump says he wants to help. Domestic programs outside of military, some veterans’ programs, and homeland security, would fall by $57 billion in FY 2018 and by $3.6 trillion over 10 years, slashing investments in housing, education and training, economic development, environmental protection, transportation, infrastructure, medical, food and drug safety, law enforcement, and countless other programs that make America great and that working families rely on. The proposed Trump budget would completely eliminate funding for more than 60 services and programs, including many providing significant funds to state and local governments and that invest in services delivered by AFSCME members. For example, Trump’s budget would zero out the Community Services Block Grants (about $700 million); Social Services Block Grants (about $1.7 billion); and Community Development Block Grants (nearly $3 billion. 
    • Labor programs are cut by 20% (this includes deep cuts to Adult Employment and Training Activities grants to states (cut by $324 million), Dislocated Worker Employment Training (cut by $540 million), Community Service Employment for Older Americans (eliminated), Unemployment Insurance (cut by 12%), and National Labor Relations Board (NLRB) (cut $16 million).
    • Education programs are cut by 14%.
    • Health and Human Services programs are cut by 18%, National Institutes of Health (NIH) would be cut by $7 billion/22%, harming cancer research, gene therapy and fighting other illnesses.
    • EPA programs are cut by 31%,
    • Transportation programs are cut by 12%, and
    • Housing programs are cut by 15% (this includes elimination of Community Development Black Grants (CDBG) and HOME; cuts to Public Housing Operating Fund (11% - a reduction of $500 million); Public Housing Capital Fund (68% - a reduction of $1.314 million); (to see the impact of Trump’s cuts to Public Housing on a state-by-state basis, click HERE). Cuts to Section 8 housing vouchers ($771 million, which eliminates vouchers for about 250,000 low-income households); cuts homeless assistance ($133 million) and eliminates the National Housing Trust Fund and related programs ($174 million); changes to HUD’s Rental Assistance Demonstration Program (RAD), (eliminating the current 225,000 unit cap on public housing projects). 
  • Breaks Promise Not to Cut Social Security, Medicare and Medicaid and Assumes $1.85 Trillion in Cuts to Medicaid, Health Care and Entitlements. President Trump said he would not cut Social Security, Medicare or Medicaid, but the Trump budget makes cuts to Social Security Disability Insurance, Medicare and Medicaid, along with other “safety net” programs.  
    • Medicaid- The budget proposed $1.25 trillion in cuts from repealing and replacing the Affordable Care Act. It then proposes at least $610 billion in additional Medicaid cuts.  This would mean Medicaid funding would be cut nearly in half by 2028.
    • Medicare- While the White House is touting no cuts to Medicare, the cuts in Medicaid will harm one in five people (11 million) who also have Medicare and who rely on Medicaid.  In addition, the budget eliminates the Medicare State Health Insurance Assistance Programs (SHIPs), which is a $52 million cut in federal funding. 
    • Social Security Disability Insurance- The Trump budget cuts the Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI) by $72 billion over 10 years. Cuts to SSDI may mean as many as 12 million families lose eligibility for Medicare, harming individuals with disabilities and shifting additional health care costs onto states.
    • CHIP-  The Trump budget makes nearly $6 billion in cuts over 10 years to the Children’s Health Insurance Program. It eliminates the 23% federal match to the states added by Affordable Care Act (ACA) which will mean a further reduction in eligibility for many children. The Trump administration also proposes to end the maintenance of effort under CHIP, which gives states the opportunity to cut benefits.
    • Food Stamp Program (SNAP)- would be cut by more than $190 billion over a 10-year period, shifting $116 billion in SNAP payments to the states and requiring them to fund as much as 30% of benefits.
    • Temporary Assistance for Needy Families (TANF)- Would make a $16 billion reduction in TANF.
    • Child Care Tax Credits and Earned-Income Tax Credits-  Immigrants in the country illegally would be blocked from these benefits, saving $40 billion over the next decade.
  • Trillions of Dollars in Tax Breaks for the Wealthiest and Large Profitable Corporations Will Hurt Working Families. Trump’s budget gives away $6.2 trillion in tax breaks mostly to the wealthiest 1% of taxpayers and large corporations. Trump’s budget hides the long-term cost of these tax breaks, which will explode the federal debt and increase pressure to cut vital services with budget gimmicks that ignore the tax breaks’ true multi-trillion costs.  For example, Trump’s tax plan would reduce the top tax rate from 39.6% to 15% that is currently paid on business-related income of many partnerships (“pass through income”), including law firms, doctors’ offices, financial advisors, and consulting firms – even if these individuals are earning millions of dollars annually. Trump’s tax plan would also eliminate the estate tax, which only applies to estates exceeding $11 million per couple, which is less than 1% of estates. Trump’s tax plan would also dramatically reduce the corporate income tax rate.
  • Public Education Programs Are Cut by Over $10 Billion. The Trump budget eliminates programs that help recruit teachers, reduce classroom size, provide after-school and summer learning programs for low-income students, fund social workers and other student support services and enrichment opportunities (like music and art).
    • Early learning is cut, the Child Care and Development Block Grant (CCDBG) is cut, Head Start is cut by $85 million, and the CAMPIS program for mothers enrolled in college is eliminated.
    • Title I Funds for Disadvantaged Students are cut by $550 million.
    • IDEA special education is cut by about $112 million.
    • Work study is cut in half.
    • Higher education programs are cut by $7 billion, including elimination of the program that forgives loans for public service jobs, like teachers and doctors; eliminates the subsidized student loan program that helps lower costs for college; and cuts funding for federal work study by almost $500 million.
    • Investments are focused instead on school vouchers through portability ($1 billion added to Title I) and studies and pilot programs on private school vouchers ($250 million).
  • Incentivizes Infrastructure Privatization. President Trump said he would invest $1 trillion in infrastructure, but his budget cuts over $200 billion in current infrastructure spending, including more than $96 billion directly from the Highway Trust Fund. The Trump budget also calls for new efforts to “incentivize” private, state and local spending on infrastructure that will encourage privatization and result in the loss of jobs.
    • Lift the Cap on Private Activity Bonds and Expand Eligibility to Other Non-Federal Public Infrastructure. The Private Activity Bonds (PABs) program allows the Department of Transportation to allocate authority to issue tax-exempt bonds on behalf of private entities constructing highway and freight transfer facilities. PABs have been used to finance many Public Private Partnerships (P3s) projects, along with Transportation, Infrastructure, Finance and Innovation Act (TIFIA). As of August 15, 2016, nearly $11.2 billion in PABs have been issued for 23 projects. The Trump administration recommends removing the $15 billion cap under current law to ensure that future P3 projects can take advantage of this cost-saving tool, and encourage more project sponsors to take advantage of this tool. The Trump administration also supports the expansion of PAB eligibility.
    • Air Traffic Control Corporatization. The Trump budget proposes to create a    non-governmental entity to manage the nation’s air traffic control system. The proposal would reduce aviation passenger taxes and the new entity would be responsible for setting and collecting fees directly from users based on their use of the nation’s airspace.
  • Weakens Federal Workers’ Retirement Benefits. The Trump budget would takeaway about $150 billion from federal employees over the next decade. It would:
    • Increase federal employees’ contributions to their employer-sponsored retirement plans, which would cost employees $72 billion over the next decade.
    • Reduce federal retirees’ retirement benefits by $77 billion over the next decade. 
    • Reduce employee annuity payments paid to retirees by the federal government and specifically, eliminate Cost of Living Adjustments (COLAs) for retirees in the Federal Employees Retirement System (FERS) and reduce COLAs by .5% for retirees in the Civil Service Retirement System (CSRS).
    • Change the pension formula calculation to include a federal worker’s “High 5” salary years rather than current “High 3” salary years.
  • Increases Funding for Defense and Border Security.The budget calls for an increase in military spending of 10% and border security spending increases by more than $2.6 billion, including $1.6 billion to begin work on a Mexican border wall.
    • Immigration budget includes $300 million to recruit and hire additional Customs and Border Protection and ICE enforcement.
    • $1.5 billion to detain and deport immigrants, including funding for an unprecedented 51,379 detention beds.
  • Claims to Balance Budget in 10 Years, But Uses Wildly Optimistic Projections. Assumes unrealistic economic growth from tax cuts, which is rejected by virtually all independent analysts and apparently double counts as much as $2 trillion of the erroneous savings. Instead, the Trump budget plans to use the savings from unprecedented and massive spending cuts to pay for tax cuts for millionaires, billionaires and wealthy corporations.
  • Creates A New Paid Leave Program.  Creates a new un-paid for program requiring states to provide six weeks of paid leave to new parents. Funding is to come from existing unemployment insurance programs and would require states to approve new taxes or cuts to pay for it. Further, most benefits go to the wealthy and it is does little to help working families.  (Ed Jayne- ejayne@afscme.org) (Becky Levin- blevin@afscme.org) (Marc Granowitter- mgranowitter@afscme.org) (Karl Stark- kstark@afscme.org) (Barbara Coufal- bcoufal@afscme.org) (Linda Bennett- lbennett@afscme.org) (Katie Smith- ksmith@afscme.org) and (Getsemani Yañez- gyanez@afscme.org)

Progressive Caucus Releases Infrastructure Proposals

The Congressional Progressive Caucus (CPC) on Thursday held a press conference featuring AFSCME Secretary-Treasurer Elissa McBride and leaders from several other community and public interest groups, to discuss its infrastructure plan. Unlike the Trump plan, the CPC proposal makes direct investments in critical domestic programs that keep our country running. Moreover, it protects AFSCME’s work through investment in grant programs for AFSCME transportation workers in surveying, design, construction and maintenance. Substantial investments are also made for airport improvements, water and sewer workers, school maintenance and support, transit and community services. In all, the CPC outline invests $2 trillion directly in America’s infrastructure.

The CPC proposal also bolsters labor protections by reinstating the Department of Labor’s pre-1982 three-step process for determining the prevailing wage for each classification of worker and re-establishing Fair Pay for Safe Workplaces Executive Order, rescinded earlier this year by President Trump. AFSCME worked with the CPC to solidify core principles for public services investment guided by the principle that public money should go toward the public good.  (Karl Stark- kstark@afscme.org)

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