Week Ending May 5, 2017
On Thursday, by a vote of 217 to 213, the House voted to approve the American Health Care Act (H.R. 1628), a bill that repeals the core of the Affordable Care Act (ACA) and cuts $839 billion from Medicaid in the first ten years. The bill was opposed by every Democrat as well as 20 Republicans. The Republicans who voted no were mostly moderates who thought the bill went too far, but also included a few who thought it did not go far enough in repealing the ACA. The 20 Republicans who opposed were:
Rep. Andy Biggs (AZ)
Rep. Mike Coffman (CO)
Rep. Ileana Ros-Lehtinen (FL)
Rep. Thomas Massie (KY)
Rep. Walter B. Jones (NC)
Rep. Frank LoBiondo (NJ)
Rep. Christopher Smith (NJ)
Rep. Leonard Lance (NJ)
Rep. Dan Donovan (NY)
Rep. John Katko (NY)
Rep. Michael R. Turner (OH)
Rep. David Joyce (OH)
Rep. Ryan A. Costello (PA)
Rep. Patrick Meehan (PA)
Rep. Brian Fitzpatrick (PA)
Rep. Charlie Dent (PA)
Rep. Will Hurd (TX)
Rep. Barbara Comstock (VA)
Rep. Jaime Herrera Beutler (WA)
Rep. Dave Reichert (WA)
While we don’t think that the House bill can be approved by the Senate, it does not mean that the Senate Republicans won’t try to develop their own consensus bill. Senate Republicans have already restarted discussions in their caucus to develop a bill that can win approval. While a number of Senate Republicans have previously objected to the phasing out of the Medicaid expansion in the House bill, they have not expressed similar objections to the more damaging conversion of Medicaid funding to a per capita cap system. It is unclear when the Senate will be ready to move. It is possible that Republican leaders will try to move the bill before the Memorial Day recess, but just as likely that it will be delayed into June.
The bill approved by the House:
Eliminates coverage for an estimated 24 million people by 2026.
Cuts $839 billion from Medicaid over ten years. Medicaid is converted to a per capita cap system, which ends the guarantee that the federal government will pay a specified share of each state’s Medicaid costs. This will reduce federal payments to the states over time and is the most damaging feature of the bill. Further, Medicaid expansion under the Affordable Care Act is phased out.
Eliminates $500 billion in taxes on wealthy individuals, health insurers, pharmaceutical manufacturers and medical device makers.
Delays, but does not eliminate, the 40% tax on high cost health plans.
Reduces tax credits for those who purchase coverage on their own. Low-income and older people will be hurt the most by the tax credit reductions.
Allows insurers to charge older people five times what they charge younger people.
Eliminates ACA protections for people with pre-existing conditions. It allows states to opt out of community rating rules if they set up high-risk pools for people with pre-existing conditions. Insurance companies will be able to charge higher premiums for those with pre-existing conditions in those states.
Provides $130 billion over ten years to states to stabilize health insurance coverage. States could use these grants to subsidize high-risk pools for people with pre-existing conditions.
Provides $8 billion over five years for high-risk pools. If states used all of the $130 billion above and this additional funding to subsidize high-risk pools, it would not be enough to address the problem. Those with pre-existing conditions will experience higher premiums, benefit exclusions, annual and lifetime limits on coverage and waiting lists to get into state pools.
Allows states to opt out of requirements that ACA plans provide ten essential benefits. Examples include maternity care, prescription drug coverage, emergency room coverage and mental health and substance abuse treatment.
Gives employers the ability to impose annual and lifetime limits on coverage in states that opt out of essential health benefit requirements.
Congress finally wrapped up funding decisions for FY 2017 with bipartisan support in both the House and Senate on a $1.07 billion package of eleven bills. While President Trump's proposed cuts of $18 billion to domestic public services were largely ignored, these programs were mostly underfunded while the Pentagon received a $20 billion boost. And the bill is long overdue, coming more than halfway into the fiscal year.
On the plus side, the bill includes important Medicaid relief for Puerto Rico and a permanent fix for retired miners’ health care. Further, it does not include over 160 poison-pill policy riders that had been included earlier, threatening workers’ rights to organize, workplace safety protections, workers’ retirement savings, overtime protections, sanctuary cities, consumer protections, environmental protections, and more. The bill also does not provide the administration's requested funds to build a wall at the border with Mexico.
Finishing the FY 2017 budget clears the way for work to begin on the FY 2018 budget. The full Trump budget is expected as early as the week of May 22, with more details on taxes, Medicare, Medicaid, TANF, SNAP, and Social Security. House Republicans have mentioned that the House Budget Committee may vote on a budget the week of May 15 and hold a floor vote the following week. But it is likely that the FY 2018 timeline will continue to slip.
Funding for key issues are detailed below:
Puerto Rico - The bill provides $295 million in Medicaid funding for Puerto Rico, providing helpful short-term assistance to temporarily address the looming Affordable Care Act Medicaid cliff. AFSCME continues to advocate for needed additional Medicaid funding for Puerto Rico to ensure uninterrupted health services to those in need amidst its fiscal and humanitarian crises. The President had been critical of aid for Puerto Rico.
Department of Labor (DOL) - The bill cuts the DOL budget by $83 billion. The bill:
- Cuts Employment Training Administration (ETA) by $90 million.
- Level funds the Workforce Innovation Opportunity Act (WIOA) job training state grants at $2.7 billion.
- Increases apprenticeship grants by $5 million.
Education - The bill provides $66.9 billion for the Department of Education, a cut of $1.1 billion. The President had proposed a $2.97 billion cut. The omnibus:
- Increases the maximum Pell grant award to $5,920, an increase of $105, and reinstates year-round Pell for approximately one million students providing an additional average grant of $1650.
- Increases Title I Grants for Disadvantaged Students by $100 million to $15.5 billion, increases IDEA special education grants by $90 million, and increases 21st Century Community Learning Centers for aftercare by $25 million.
- Cuts Title II funds for education employee training and class reduction by $294 million to $2.1 billion. The President had proposed cutting this more deeply by $1.2 billion.
- The Child Care and Development Block Grant increases by $95 million. The program, however, has new requirements and needs more than $1 billion to ensure that families do not lose child care subsidies. Head Start increases by $85 million to $9.3 billion, a small increase that will not allow the program to meet its goal of providing full-day, full-year services.
Health - The Department of Health and Human Services received a $2.7 billion increase, despite the President’s proposed cut of $2.8 billion. The National Institutes of Health (NIH) is increased by $2 billion. The bill:
- Increases funding for the prevention and treatment of opioid abuse by $650 million.
- Increases seniors' nutrition programs by $3 million.
Transportation - The bill retains protections against diverting federal funds to public-private-partnerships for surface transportation package. The bill also:
- Continues level funding of $500 million for the Transportation Investment Generating Economic Recovery (TIGER) competitive grant program, which the President had proposed to eliminate.
- Increases capital investment grants for transit systems by $236 million.
Law Enforcement - The bill provides $1.25 billion for state and local law enforcement assistance, which is a cut of $150 million from the FY 2016 enacted level. This includes $376 billion for Byrne-Justice Assistance Grants and $22.5 million for bulletproof vests, both unchanged from FY 2016. The Community Oriented Policing Services (COPS) office received a $9.5 million increase.
Clean Water - The bill:
- Maintains level funding for rural water and waste water programs at $1.2 billion.
- Includes a provision requiring American-made steel for use in rural water and waste programs.
- Cuts the Environmental Protection Agency (EPA) by $81 million overall, and maintain water programs at level funding, including $1.394 billion for the Clean Water State Revolving Fund and $863 million for the Drinking Water State Revolving Fund. $100 million is also provided separately for Flint, MI to upgrade its drinking water infrastructure along with $30 million for low-interest loans.
Public Housing - The bill:
- Increases funding for the Public Housing Capital Fund by 2.2% to address public housing modernization and renovation needs.
- Cuts the Public Housing Operating Fund by 2.2% or $100 million, providing insufficient funds for current operating needs of Public Housing Authorities.
- Dramatically raises the number of public housing units available for conversion under HUD’s Rental Assistance Demonstration (RAD) program from 185,000 to 225,000 and delays RAD’s expiration until 2020. RAD leads to privatization of the public housing stock.
This week, the House voted largely along party lines to approve a bill that would jeopardize overtime pay for millions of working families across America. By a vote of 229 to 197, the Working Families Flexibility Act (H.R. 1180) advanced to the U.S. Senate. H.R. 1180 undermines the 40-hour work week by allowing employers to substitute compensatory time for overtime pay for workers in the private sector.
There was bipartisan opposition to the bill from Democrats and six Republicans, Brian Fitzpatrick (PA), David Joyce (OH), Frank LoBiondo (NJ), Tom McArthur (NJ), Patrick Meehan (PA), and Christopher Smith (NJ). AFSCME strongly opposes this bill.
State and local governments would receive an additional $20 billion annually in cumulative new revenues from internet sales tax legislation reintroduced in the House and Senate last week. Sens. Michael Enzi (R-WY), Richard Durbin (D-IL), Lamar Alexander (R-TN), and Heidi Heitkamp (D-ND) reintroduced the “Marketplace Fairness Act” (S. 976) and Reps. Kristi Noem (R-SD) and John Conyers (D-MI) reintroduced the “Remote Transactions Parity Act” (H.R. 2193). These bills would both enable states and localities to collect sales and use tax from remote and internet sellers of goods and services. This growing tax loophole demands immediate solutions to prevent e-tailers from taking advantage of this loophole giving them unfair advantage over mom-and-pop Main Street retailers. Even Amazon and other large corporations with billions of dollars in internet sales now support these bills.
AFSCME supports these bills because they grant states, which streamline their sales tax systems to facilitate transactions, the authority needed to collect from remote sellers the sales and use taxes owed to states and localities. Sen. Richard Durbin said, “by ensuring Internet retailers meet the same tax responsibility as local businesses, the Marketplace Fairness Act creates a level playing field and gives small business owners – our nation’s job creators – a real shot at success.” Both bills are the same bills introduced last Congressional session. For details, here are the Senate and House press releases.
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