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Legislation & Politics | ||
Week Ending February 1, 2008Congress – The Week of January 28, 2008Congress works to advance economic stimulus plan. Congress Works to Advance Economic Stimulus PlanLess than a week after crafting a bipartisan compromise, the House by a vote of 385-35, overwhelmingly passed a $150-billion economic stimulus package to send tax rebates to millions of low- and middle-income Americans and cut certain corporate taxes. After House passage, Senate leaders, who were not part of the negotiations between Speaker Nancy Pelosi (D-CA), Minority Leader John Boehner (R-OH) and Bush Administration officials, went to work crafting their own package. On January 30, the Senate Finance Committee approved a modified version of the House-passed stimulus plan. The Senate bill expands the number of people covered by the tax rebate, including seniors and disabled veterans, and adds extended unemployment insurance benefits. The Finance Committee plan (PDF), crafted by Max Baucus (D-MT) and supported by Ranking Republican Charles Grassley (IA), grants $500 rebates for every American reporting at least $3,000 in wages, Social Security income, or net self-employment income on a 2007 tax return. The rebate would double for married taxpayers filing jointly, and families will receive an additional $300 for every qualifying child under age 17. The Senate bill would also allow higher wage earners to get the tax rebates. The benefit would begin to phase out for individuals with adjusted gross income above $150,000 and married couples with incomes above $300,000. Federal unemployment insurance benefits would be extended for 13 weeks in all states through December 2008, and extended for an additional 13 weeks of benefits in states meeting certain criteria for high unemployment. Additional business tax relief was also added to the Senate bill, bringing its cost to $158 billion. Left out was aid to the states, additional Food Stamp benefits, low-income energy cost assistance, funds for already-approved infrastructure projects and other proposed stimulus measures. The Senate plan is expected to be considered by the Senate early next week. However, it remains unclear whether Baucus has the votes to get his plan through the Senate since some Republican senators have made it clear they prefer the House-passed, White House supported bill. AFSCME Urges Senate to Reign in Privatization of MedicareDavid R. Fillman, AFSCME International Vice-President and Executive Director of Council 13, testified at a Senate Finance Committee oversight hearing on Medicare Advantage private fee-for-service plans. Fillman told the Committee how insurance companies are targeting public retiree health care as a way to boost profits at retirees' expense. In 2003, the Republican-controlled Congress gave insurance companies significant profit incentives to develop and market Medicare Advantage plans to replace, not supplement, Medicare. The private plans cost taxpayers and the Medicare program more – for every dollar spent for traditional Medicare benefits, it costs $1.13 for Medicare Advantage plans to provide those same benefits. The $54 billion in subsidies to these plans over the next five years advance Medicare's insolvency and will ultimately force benefit cuts and/or increases in costs for taxpayers and beneficiaries. Even with subsidies, the private plans limit access to care and choice, cost more for sicker beneficiaries, have an additional layer in the claims appeal process, lack quality and accountability, and are allowed to change benefits and beneficiary out-of-pocket costs every year. AFSCME urged the Senate to pass legislation to stop corporate greed from ruining Medicare and our retirees' health. To learn more about how these private plans undermine Medicare, and to read David R. Fillman's full testimony, please visit the Legislation page on our website. Sign Up to Receive the Weekly Report and Action Alerts via Email and Become an AFSCME e-ActivistIn an effort to move toward electronic transmission which will allow us to put important federal legislative updates in your hands sooner, we urge you to sign up to receive the Federal Legislative Report via your email address. Please go to http://www.unionvoice.org/afscme/join.html and check the "Federal Legislative Report" box under Subscriptions on the bottom of the page. Then send an email to legislation@afscme.org with your name and address, and we will remove you from the mailing list. As you work to develop economic stimulus plans to address the deteriorating economy, we write to urge you to include temporary assistance to states to help avert cuts in health care, education, aid to local governments, and in critical services. Fiscal assistance to states and localities, as a growing number of states confront budget deficits, constitutes an effective stimulus, shoring up budgets while preserving essential services for millions of low- and middle-income families. State and local fiscal assistance should be a vital component of any economic stimulus package. We urge you to adopt a provision, based on the successful 2003 legislation, that temporarily increases the federal Medicaid match as well as general funding aid to state and local governments. When the economy weakens, states primarily cut health insurance programs, education, and aid to local governments to ensure that their budgets remain balanced. Local government revenues are plummeting in many areas, due to falling property tax revenues that reflect the decline in home values. To avert slashing fire, police, and education in response to falling property tax revenues, many local governments are now beseeching their states to help fill the gap. But that puts even greater pressure at the state level on programs like SCHIP and Medicaid. Therefore, to protect a range of critical services, a new stimulus package should include both an increase in the federal share of Medicaid costs, as it did in 2003, and general aid to states and localities. • States also should be given a grant based on population. Given the housing crisis and the loss of property taxes, it would be important for states receiving assistance to be required to pass a percentage of that grant through to local jurisdictions in the state. In the last recession, states instituted actions that caused one million families and children to be cut off or denied Medicaid before federal relief belatedly arrived part way through 2003. Unfortunately, some recent federal actions will add to states’ and local governments’ fiscal distress and heighten their need to consider cutting safety net health care services, beyond the revenue declines and the increased need for services normally experienced in economic downturns. For example, if they are not put on hold, Medicaid regulations proposed or issued by the Bush Administration since January 2007 would result in approximately $3.5 billion in cuts in Fiscal Years 2008 and 2009 in federal funding for state Medicaid programs, and $12 billion in cuts over five years. Most of these Medicaid cuts represent a shift in costs to state and local governments, rather than any reduction in health care costs. Because of these policies and ongoing fiscal pressures, states and many local governments are facing imminent cuts either to Medicaid or to other social services programs to cover the states’ rising share of Medicaid cuts. Congress must act to address these cost-shifting and adverse regulations as quickly as possible. State and local fiscal relief will help lessen the severity of spending cuts, which also constitutes effective stimulus. In the absence of fiscal relief, a number of states will start cutting their budgets in coming months to bring the budgets back into balance for the fiscal year that ends this June 30th, and a much larger number of states will lower the boom on July 1st. These state budget cuts and tax increases will remove demand from the economy, deepening the downturn. Fiscal relief can substantially lessen the degree to which that occurs and thereby avert or lessen the further damage to the economy as a result of contractionary state policies. Therefore, we urge you in the strongest terms possible to again include temporary state and local fiscal relief – and specifically an increase for a period of time in the FMAP – to preserve health care for our most vulnerable citizens. Thank you for your consideration; we look forward to working with you to ensure that states receive the timely help that they need. AFL-CIO |
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