Legislation & Politics

Week Ending March 14, 2008

Congress – The Week of March 10, 2008

House and Senate pass strong budget resolutions and reject President Bush's budget plan.

House and Senate Pass Strong Budget Resolutions and Reject President Bush's Budget Plan

The House voted 212-207 with no Republican support to approve its budget and the Senate did the same, on a 51-44 vote, with only two Republican supporters. Both chambers rejected President Bush's proposed budget cuts; and compared to the discretionary spending included in Bush's proposed budget, the House adds about $25 billion and the Senate $22 billion. Earlier, the House defeated alternative budgets from the Progressive Caucus, Black Caucus, and Republican leadership. The progressive's budget increased investments for public services and funding for state fiscal relief, which AFSCME strongly supports. The Senate earlier voted 43-55 to reject Sen. Bernard Sanders' (I-VT) amendment to put children ahead of millionaires and billionaires by restoring the pre-2001 top income tax rate on individuals earning above $1 million, and transfer this revenue to significantly increase funding for key public services, including Head Start, Child Care, Individuals with Disabilities Education Act (IDEA), nutrition, and deficit reduction.

On taxes, the House and Senate budgets both presume some of Bush's 2001 and 2003 tax cuts will expire in 2010 as scheduled. In a symbolic action, the Senate voted 99-1 to approve Finance Committee Chairman Max Baucus' (D-MT) amendment to extend expiring middle-income tax breaks, including the lowest 10 percent tax bracket, $1,000 child tax credit and relief from the so-called "marriage penalty."  In contrast, the Senate voted 47-52 to reject a Republican amendment to extend other Bush 2001 and 2003 tax cuts, such as lower tax rates for capital gains and dividends. The Senate voted 50-50 to reject a Republican amendment to increase the estate tax's exemption per individual to $5 million and reduce the maximum tax rate to 35 percent, without offsetting the forgone revenue.

The House and Senate will soon begin to iron-out the differences between their respective bills with a vote likely on the final congressional FY 2009 Budget Resolution in early April.

OCSEA/AFSCME Operations Director Bruce Wyngaard Represents the AFL-CIO at House Appropriations Committee Hearing on Bush Proposals to Cut Employment Services and Job Training Programs

OCSEA/AFSCME Operations Director Bruce Wyngaard testified this week in opposition to the Bush Administration's proposals to eliminate the state Employment Service (ES), to cut Workforce Investment Act (WIA) training funds for dislocated workers, youth and other unemployed workers, and to under fund Unemployment Insurance (UI) operations. He spoke on behalf of the 10 million members of the AFL-CIO.

At the hearing, Wyngaard stated that it is counterproductive to cut these programs just as the economy appears to be entering a recession and as fiscal pressures grow on state and local governments. He was joined in his critique by state officials from Texas and Pennsylvania. Together, the three witnesses effectively outlined the special role that the Wagner-Peyser program plays as a statewide system capable of addressing regional economic challenges and as the glue that holds the local One-Stop system together. Wyngaard also pointed out the important role the state job counselors play helping UI claimants, workers in the Trade Adjustment Assistance (TAA) program and veterans.

In addition, all three witnesses noted a serious problem with the resources available to run the UI program, just as claims for UI benefits are growing. This year, a $110 million gap has appeared, and the Bush budget request for FY 2009 is approximately $500 million below the amount that the states estimate they need.

Congress Approves Short-Term Extension of 2002 Farm Act

Faced with a looming deadline and a failure to reach final agreement on the outlines of a new Farm Bill, the House has approved an extension of the existing Farm programs until April 18. The principal difficulty has been the inability of House, Senate and White House negotiators to agree on a total amount of money for the bill and a way to finance it.

Meanwhile, efforts by the private companies to prevent the House language reinforcing merit staffing requirements in the Food Stamp program from being included in the conference report provision have intensified. On February 29, a communications company sent to various professional journals a bogus and inaccurate "study" of the effect of the provision on the Medicaid, State Children's Health Insurance Program (SCHIP) and other human services programs and on contracts that the states have with private companies. The survey implied falsely that non-profits' outreach activities and contracts for information systems would be hurt by the provision. IBM also appears to be working to get its employees to contact Senate offices in opposition to the provision.

House Committee Passes Three Bills to Tighten Safeguards Governing Federal Contractors 

The House Oversight and Government Reform Committee approved three bills, which would tighten safeguards and strengthen administrative oversight governing federal contractors, who received the staggering amount of $420 billion of federal funding in FY 2007.

The Contracting and Tax Accountability Act of 2007 (H.R. 4881), introduced by Rep. Brad Ellsworth (D-IN) would prohibit individuals or companies with major delinquent federal tax debts from receiving federal contracts. The Contractors and Federal Spending Accountability Act of 2007 (H.R. 3033), introduced by Rep. Carolyn Maloney (D-NY), would create a centralized government database on federal contractors' completed judicial actions, consent decrees, administrative agreements, terminations or settlements, such as federal suspensions and debarments and contractors' defaults. Maloney said this would help Congress ensure "taxpayer dollars are not wasted on contractors who do not have a good record of performance."  The Contractor Accountability Act of 2007 (H.R. 3928), introduced by Rep. Christopher Murphy (D-CT), would require firms receiving in excess of 80 percent of their revenues from federal contracts in a fiscal year to report their top ranking officials' names and salaries, including CEO, CFO, the three other highest compensated individuals and all directors. This applies to non-publicly traded companies receiving in excess of $5 million in annual gross revenues from federal contracts or subcontracts.

These protections would help ensure the benefits of federal contracts flow only to good actors. This would also provide a federal precedent for states and localities and union workers to consider in their efforts to curb privatization. AFSCME supports efforts to curb privatization in federal programs and halt privatization abuses. 

Bill to Block Cost-Shifting Medicaid Regulations Introduced

Reps. John Dingell (D-MI) and Timothy Murphy (R-PA) introduced the "Protecting the Medicaid Safety Net Act of 2008" (H.R. 5613) to impose a one-year moratorium on the seven Medicaid regulations recently issued by the Centers for Medicare and Medicaid Services (CMS). The bill would prohibit CMS from taking action to implement these regulations until April of 2009. According to the Congressional Budget Office, the regulations would shift nearly $20 billion in federal Medicaid costs onto states and providers over the next five years. The bill would block the CMS regulations limiting Medicaid payments for public safety net institutions, coverage of rehabilitation services for people with disabilities, outreach and enrollment in schools as well as specialized medical transportation to school for children covered by Medicaid, graduate medical education payments, coverage of hospital clinic services, case management services that allow people with disabilities to remain in the community, and state provider tax laws. A Senate companion bill is also expected to be introduced.

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