Week Ending September 11, 2015
Government Funding Crisis Heats Up
Temperatures may be cooling down, but the heat is rising in the nation's capital. Congress returned to work this week after a four week summer break with only six legislative days remaining before the government could shut down. None of the 12 funding bills have been signed into law that would keep the government operating past September 30 when the current federal fiscal year ends. Last year there was no shutdown crisis because Congress was operating under a two-year agreement reached in 2013 after a politically-motivated government shutdown over efforts to revoke the Affordable Care Act (ACA) and concern over insufficient funding for domestic programs. Frequently, Congress has resorted to passing a short-term funding measure, known as a “continuing resolution” (CR), to temporarily fund government operations. CRs are usually “clean,” meaning they do not include legislative directives or “riders.” However, some conservative Republicans at this time want to attach a highly controversial legislative rider to the CR to de-fund Planned Parenthood, which will slow down or prevent passage of the CR, possibly causing a shutdown. The House may vote on some version of a CR next week, and then it is expected to be in recess the following week and not return until September 28, leaving only two legislatives days to complete work.
Congressional Democrats and President Obama are united in efforts to increase funding for domestic programs, which are scheduled for a $37 billion cut under across-the-board “sequestration” cuts. This week, Reps. Chris Van Hollen (D-MD) and Barbara Lee (D-CA) introduced a bill to require immediate negotiations to provide sequester relief for both domestic and defense programs, and raise spending limits by October 1.
In addition to the fiscal year cliffhanger, the debt ceiling limit is also nearing its limit and will need to be raised before the end of the year. Some in the GOP are preparing to hijack the need to raise the debt ceiling to force more spending cuts, dangerously risking the stability of the U.S. and international economy. The chair of the House Ways and Means Committee, Rep. Paul Ryan (R-WI), has prepared a plan allowing the country to default on its debt obligations for the first time in history. His plan would guarantee payment in only very limited circumstances, prioritizing payments to banks, hedge funds and treasury bond holders in Iraq and China, but not ensuring funds for our troops, retired and disabled veterans, hospitals that treat Medicare patients, school meals, Pell grants for college students, taxpayers due IRS refunds, and other important programs.
AFSCME strongly opposes these repeated and unnecessary political maneuvers that risk jobs, economic stability and the ability of important programs including healthcare, education, public safety and more to operate smoothly. AFSCME urges Congress to pass a clean CR, raise spending limits, and raise the debt limit.
U.S. Court of Appeals Upholds Wage and Hour Protections for Home Care Workers
While Congress was in August recess, a unanimous panel of three judges from U.S. Court of Appeals for the District of Columbia upheld the final Department of Labor rule providing nearly two million home care workers with basic federal wage and hour protections. AFSCME Pres. Lee Saunders said: “The court reinforced that these workers are more than mere ‘elder sitters’ outside the scope of federal minimum wage and overtime protections. They provide essential services that allow the elderly and disabled to remain in their own homes, and our laws should reward their labor with the same protections available to other workers. With this decision to stand on, we look forward to the Department of Labor’s enforcement of the rule in the states so that all home care workers can finally receive the fair wages they deserve.”
AFSCME has been on the forefront of the effort to end this long-standing injustice that hurts home care workers and their consumers. The challenge to the minimum wage and overtime rule was brought by the trade associations for home care agencies and franchises of the $84 billion home care industry. They are currently appealing the appeals court’s ruling to the U.S. Supreme Court. U.S. Secretary of Labor Tom Perez sent a letter to all Governors noting the Court of Appeals home care decision and encouraging states to thoughtfully prepare for compliance now.
Puerto Rico Faces Worsening Fiscal Crises: New Recovery Plan Released
Amidst the Commonwealth of Puerto Rico’s continuing fiscal and budget crises and enormous $73 billion debt load, the government-authorized Working Group for the Fiscal and Economic Recovery of Puerto Rico released its “Puerto Rico Fiscal and Economic Growth Plan,” which intends to transition Puerto Rico to greater economic stability. The plan estimates that without corrective action, over the next five fiscal years Puerto Rico’s total financing gap will be $27.8 billion. Furthermore, Puerto Rico will effectively exhaust its cash reserves before 2015 ends. These challenges threaten the future of both the Commonwealth government and Puerto Rico’s people.
To ensure compliance with the plan, the working group proposes a control board and numerous local policy reforms. It also recommends reforming U.S. federal policies – especially in the areas of health care and taxes – to help fund vital public services. Many of these changes would require congressional approval, which would be extremely difficult in the current political environment. However, even if the plan was successfully implemented, Puerto Rico still could not meet all its currently scheduled debt payments and must restructure its liabilities. And, even if the plan is fully implemented, Puerto Rico would still face a cumulative five year gap of $14 billion.
While members of Congress, the Treasury Department and other stakeholders are reviewing the plan’s details, it appears to carry both potential benefits and risks. It is likely Puerto Rico’s serious financial issues could affect the broader U.S. economy in a variety of troubling ways. Just last week, Presidential candidates Secretary Hillary Clinton and Sen. Marco Rubio (R-FL) visited Puerto Rico and offered their suggestions for recovery. AFSCME is evaluating the plan and advocating for appropriate federal assistance to help the people of Puerto Rico.
Employees of Federal Contractors Now Entitled to Paid Sick Leave
On Labor Day, President Obama signed an executive order requiring that federal contractors and subcontractors allow their employees to accrue a minimum of seven days of paid sick leave each year. The order will give approximately 300,000 full-and part-time working Americans access to paid sick leave for the first time. The paid leave can be used to care for one’s self, a family member or domestic partner and includes victims of domestic violence. The order applies to new federal contracts starting in 2017. In his remarks after signing the order, President Obama said the United States needs to do more to support its workers, and all working Americans should have the basic security of paid leave. AFSCME joins the labor community in applauding the President’s executive order.
Study Confirms Risk of Expanding Role of Private Insurance Plans in Medicare
A recent study by the independent Commonwealth Fund confirms that expanding the role of private insurance plans in Medicare would not likely improve quality or reduce cost of care. The congressional budget proposed by GOP leaders guts Medicare and would turn its guaranteed benefits into a voucher program that would limit coverage. Advocates for “premium support” vouchers count on a highly competitive market to lower costs for the Medicare program and its beneficiaries. But the study found that current private insurance plans in Medicare – known as Medicare Advantage (MA) – are highly concentrated and not truly competitive. Some 97% of markets in U.S. counties lack competition among MA plans. Currently three nationwide insurance companies have huge market power in the 100 counties with the most Medicare beneficiaries. In short, competition among private MA plans does not exist and will not help beneficiaries under premium support proposals.
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