Week Ending October 30, 2015
Bipartisan Budget Deal Will Increase Spending and Prevent Default on Debt
With less than a week to spare before breaching the debt ceiling, the House and Senate passed the Bipartisan Budget Act of 2015 (H.R. 1314). The House vote was 266 to 167, the Senate vote was 64 to 35. In addition to preventing the U.S. from defaulting on our debt obligations through March 2017, the bill significantly raises spending levels for the next two years, extends the solvency of Social Security Disability Insurance (SSDI), lessens increases in Medicare premiums and deductibles, and likely will prevent the threat of a government shutdown next year. AFSCME is disappointed that the agreement fails to raise significant revenues or ensure greater tax fairness. While far from perfect, the bill is a reasonable compromise which AFSCME supports.
H.R. 1314 eliminates 75% of the next two fiscal years’ across-the-board “sequestration” budget cuts, providing an additional $80 billion for fiscal years (FY) 2016 and 2017. Funding is front-loaded, eliminating 90% of the cuts in FY 2016 and 60% in FY 2017. The deal includes parity – dollar for dollar increases in both defense and domestic spending – a critical principle that was established in the original sequester relief deal for FY 2014 and FY 2015. The bottom line is that an additional $33 billion has been added for investments in domestic programs for FY 2016, which began on October 1, and the same amount of funding will be available for domestic investments in FY 2017. AFSCME will encourage Congress to invest the additional $33 billion in vitally important state and local programs including education, infrastructure, law enforcement, workforce, child care and many others. And, we will advocate for additional funding for FY 2017.
H.R. 1314 also extends SSDI for seven years to 2022. Without this action, the trust fund would have experienced a shortfall in late 2016 and resulted in a 20% cut in benefits. The deal ends a 20-state pilot that allows disability determinations to be made without review by a medical expert. AFSCME has long advocated for an end to this pilot program. The bill also increases funding for disability program integrity efforts by approximately $484 million, despite the agency having few incidents of fraud.
While we would have preferred no increase in Medicare premiums or deductibles, the bill strikes a reasonable compromise. Without H.R. 1314, all Medicare beneficiaries would have seen their Part B (covering doctor visits) deductible increase from $147 a year to $223 for 2016. Instead, the bill sets the Part B deductible at about $167. In addition, 30% of Medicare beneficiaries would have seen their monthly premiums jump from roughly $105 to $160 or more, including retirees who do not collect Social Security. H.R. 1314 sets a more moderate monthly premium, of $123. Beneficiaries with higher incomes (above $85,000 for individuals) will pay an income-related premium above $123. At the same time, continued Medicare “sequester” provider cuts included in the budget agreement threaten an already strained health care delivery system.
There are several pension changes in the bipartisan budget agreement including an increase in Pension Benefit Guarantee Corporation (PBGC) premiums and a two-year extension of interest rate “smoothing” that effectively allows single employers to delay their pension contributions. The changes are designed to create additional savings and improve PBGC solvency.
The compromise agreement does not address concerns with harmful policy provisions, or “riders,” already included in funding bills which jeopardize labor, education, women’s health, environmental, consumer and other protections. Instead, these issues will be negotiated in the next step of packaging the mammoth spending package of the 12 bills that fund individual federal departments and programs – known as an omnibus bill – before the current funding bill expires on December 11. AFSCME is strongly urging Congress to keep the omnibus “clean” and free of all harmful riders.
Congress Passes Short-Term Extension of Surface Transportation Programs; 6-Year Bill on House Floor Next Week
On Wednesday, the Senate passed a three-week extension of surface transportation programs by voice vote, which the House had approved on Tuesday. These programs would have expired on Thursday had Congress not acted.
The surface transportation extension buys the House time to finish work on a six-year bill, which passed the Transportation and Infrastructure Committee last week. That legislation, The Surface Transportation Reauthorization and Reform Act (H.R. 3763), will be on the House floor next week. This will be the first major floor action for Speaker Paul D. Ryan (R-WI). Should H.R. 3763 pass the House, there will be a negotiation between House and Senate leaders to resolve differences between this bill and one passed by the Senate (H.R. 22).
AFSCME is working with members of Congress to strengthen labor protection language related to public-private partnerships. AFSCME is also concerned about funding sources in the House bill, many of which remain unknown. AFSCME opposed many of the funding sources in H.R. 22 — such as privatization of IRS collection services — because they would drastically undermine basic government services and overwhelmingly favor corporations.
House Votes to Block Department of Labor Rule Protecting Retiree Savers and Investors
The House voted 245 to 186, largely along party lines, to block the Department of Labor (DOL) from issuing new safeguards that would protect investors by requiring investment advisors to act in their clients’ best interests. Unfortunately, under current law investment advisors can recommend specific investment strategies that enrich themselves but are not in their clients’ best interest. Only two Republicans voted against this harmful bill and only three Democrats voted to approve it. The so-called Retail Investor Protection Act (H.R. 1090) would prohibit the DOL from advancing its proposed “fiduciary rule” to reduce conflicts of interest in investment advisors’ advice until the Securities and Exchange Commission acts on this issue.
AFSCME strongly supports DOL’s fiduciary rule and efforts to require investment advisors to provide advice in the best interest of their clients. AFSCME opposes this legislation and any related bills that would delay, derail or weaken this DOL rulemaking.
House Advances Bill to Reverse Joint Employer Decision
On October 29, the House Committee on Education and the Workforce voted 21 to 15, along party lines, to advance the Protecting Local Business Opportunity Act (H.R. 3459). This legislation seeks to reverse the new joint employer standard adopted by the National Labor Relations Board in the Browning-Ferris case. It has 91 House co-sponsors.
The standard adopted in Browning-Ferris mandated that two or more companies are considered joint employers of a worker if they share the ability to govern the worker's terms and conditions of employment, including salary and working conditions. Additionally, an entity’s “indirect control” or even its “unexercised potential to control” another entity's employees could establish joint employment as well.
H.R. 3459 would reject this new standard and instead require that two or more employers must have “actual, direct and immediate” control over employees to be considered joint employers for labor and employment violations. The bill is expected to go to the House floor for a vote, where it will likely be approved. The Senate has a companion bill (S. 2015).
AFSCME strongly opposes this legislation and will continue to fight for workers’ rights and full employer accountability.
Paul D. Ryan Elected House Speaker
Rep. Paul D. Ryan (R-WI) was elected the new Speaker of the House of Representatives, garnering 263 votes. After several weeks of uncertainty over who would be the new speaker, Ryan was nominated by his GOP colleagues in a closed door party meeting on Wednesday, although without unanimous support. Ryan was the 2012 GOP vice presidential nominee and has been serving as Chairman of the House Ways and Means Committee. Prior to that he chaired the House Budget Committee. Ryan takes over for resigning speaker John Boehner (R-OH), who surprised colleagues with the recent announcement that he would step down from the office of speaker and resign his seat in Congress at the end of October. A number of contentious issues still face Congress before the end of the year as Speaker Ryan tries to unite a fractious caucus.
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