Legislation & Politics

Week Ending January 16, 2009

Congress – The Week of January 12, 2009

House Democratic leaders unveil economic recovery package.
Children's health bill approved by House; advances in Senate.

House Democratic Leaders Unveil Economic Recovery Package

On Thursday, House Democratic leaders outlined details of an $825 billion Economic Recovery and Reinvestment Act which includes substantial and significant AFSCME-supported provisions. As outlined below, the proposal includes spending to help avert cuts by states and local governments, save or create over three million jobs, provide urgent relief to working families who are struggling to feed their families, pay bills and get needed health care, and it invests in priorities like health care, education, infrastructure and energy that are needed for a long-term economic recovery. The proposal also includes targeted tax cuts.

Several House committees are expected to take action next week on the yet to be introduced package. With Senate Democratic leadership expected to release details of their version of the package shortly, Congress has begun to move towards delivering a single economic package for newly sworn-in President Obama to sign by mid-February. House Republican leaders have already indicated opposition to the size of the bill and spending for public services and jobs. The House Republican leader has offered a Republican alternative that excludes aid to states struggling with budget shortfalls.

A complete summary of the full House proposal is available at http://appropriations.house.gov/pdf/PressSummary01-15-09.pdf. Highlights of the package include:

State Aid through Medicaid:  The House proposal includes $87 billion in new funds for state Medicaid programs through September 2010. All states would receive aid and states with high rates of unemployment would receive additional relief. Because Medicaid is the largest category of total state expenditures, these additional funds will help relieve state budgetary pressures to cut health care and other public services. The proposal would also extend a moratorium on adverse Bush Administration regulations which shift Medicaid costs onto states. 

Health Care Coverage for the Unemployed and Services for the Disabled:  Under current law (COBRA), unemployed workers can extend their employment-provided health care coverage for a limited time but must pay the entire premium, which for most workers eats up most of their unemployment benefits. The proposal includes $30.3 billion to help workers who lose their jobs keep their health care coverage through subsidies. The proposal would also help workers age 55 and older who become unemployed to retain coverage under COBRA until they become eligible for Medicare. The proposal would add $2.5 billion for community health centers. State formula grants for centers for independent living would receive an additional $200 million. 

Unemployment Insurance, Reemployment Services and Training:  The economic recovery package significantly boosts assistance for unemployed workers and the state agencies that help them. It includes the Unemployment Insurance Modernization (UIMA) program, a separate $500 million increase for Wagner-Peyser reemployment services, a $25 per week increase in the average unemployment insurance benefit, and an extension of the current federal extended unemployment benefits program through the end of 2009. Overall, state agencies will receive an increase of $1 billion to process unemployment claims and help unemployed workers connect with jobs and training. In addition, states will receive financial incentives if they extend eligibility for unemployment benefits to more low-wage, women and part-time workers. And, the package increases funding for a variety of training programs, including an increase of $1.5 billion for dislocated worker assistance, $1.2 billion for youth, and $500 million for adult training. 

Education and Early Childhood:  The House proposal includes substantial investments in education, the second largest state budget item after Medicaid. The $2 billion proposed for the Child Care and Development Block Grant (CCDBG) would fund an additional 300,000 children and generate 125,000 jobs, and the $2.1 billion for Head Start would provide services for an additional 110,000 children and generate 50,000 jobs. The proposal also includes $600 million to help states serve children with disabilities age two and younger. Public education investments for K-12 include $13 billion to local school districts with disadvantaged children through Title I; $13 billion for special education; $14 billion for a new School Modernization and Repair program; and $1 billion for education technology. To offset higher college tuition, the maximum Pell grant would increase by $500, Stafford loan limits would increase by $2,000, and $490 million is included for work-study. 

Child Support Enforcement and Cash Assistance:  The House proposal includes a two-year restoration of federal matching funds for states' child support enforcement programs, at a cost of $1 billion. And it provides additional Temporary Assistance for Needy Families (TANF) Contingency Funds.

Public Housing and Community Development:  The House package contains $5 billion for the Public Housing Capital Fund for repairs and modernization. It also contains $1 billion for the Community Development Block Grant program. 

Public Infrastructure:  Public infrastructure spending in the House package includes $30 billion for highway and bridge construction; $31 billion to modernize federal and other public infrastructure that will lead to long term energy cost savings; $19 billion for clean water, flood control, and environmental restoration; $3 billion for airport improvement projects; and $10 billion for transit and rail.

State and Local Law Enforcement:  The proposal includes $4 billion for state and local law enforcement. The Byrne Justice Assistance Grants (Byrne-JAG), which help state and local law enforcement control drug-related and violent crime, will receive $3 billion to support their efforts with equipment and operating funds. The Community Oriented Policing Services (COPS) hiring grant program, which has effectively reduced crime and increased community safety, will receive the remaining $1 billion to hire about 13,000 new police officers for three years.

SNAP/Food Stamps:  The House package includes $20 billion for the Supplemental Nutrition Assistance Program (SNAP/Food Stamps) to enhance and expand food assistance, and an extra $300 million for states to administer the program in recognition of dramatically increased caseloads.

Taxes:  The House package includes several significant tax provisions that add up to $275 billion in tax cuts. For individuals, a "Making Work Pay Credit" is expected to create a $500 per person payroll tax credit and the Earned Income Tax Credit (EITC) for low-income workers would be expanded. The proposal includes several business tax breaks, including a five-year carry-back of net operating losses (excluding beneficiaries of TARP funds, Fannie Mae, Freddie Mac); bonus depreciation, and extension of increased small business expensing. The package would prospectively repeal the Bush Administration Treasury Department's recent Section 382 or "Wells Fargo Ruling," named after its largest beneficiary, that granted only to banks a tax break for the losses of an acquired company. The expansion of this tax write-off would reduce federal revenue by $140 billion. The package also contains several tax changes designed to ease the costs of borrowing for state and local governments. It omits an AMT "patch" which may be added by the Senate.

Urge Congress to Pass an Economic Recovery Package
We need to jump-start the economy NOW!  Please call the Capitol Switchboard at 202-224-3121 and ask to speak to your Representative and Senators.
Tell them to support an economic recovery plan that creates jobs and invests in public services. Urge Congress to pass an economic recovery package that provides substantial state and local aid that will maintain needed public services and help working families.

Children's Health Bill Approved by House; Advances in Senate

On Wednesday, the House approved the Children's Health Insurance Program Reauthorization Act of 2009 (H.R. 2) by a vote of 289 to 139. Forty Republicans and all but two Democrats voted for the bill. H.R. 2 would provide coverage to an additional four million children and preserve the health care of 6.7 million children already enrolled. The expanded coverage is paid for with a 61 cent per pack increase in the federal tobacco tax. The bill is similar to legislation overwhelmingly approved by the Congress in 2007 but twice vetoed by President Bush. One improvement in the bill is that it restores the ability of states to receive federal funding to cover legally present, immigrant children and pregnant women who have been in the country for fewer than five years.

On Thursday, the Senate Finance Committee approved a similar bill. The bill now moves to the full Senate for approval. It is likely that attempts will be made to strip out the coverage for legal immigrants and weaken the bill in other ways. 

Senate Takes Up Important Pay Equity Bill

In a quick follow-up to last week's House action, the Senate voted to take up the Lilly Ledbetter Fair Pay Act (S. 181), which would ensure that women get the pay that they deserve to survive and support their families during these difficult economic times. S. 181 would restore longstanding protections against wage discrimination. This may be the first bill that President Obama signs, which parallels former President Clinton's commitment to women and families when the first bill he signed into law was the Family and Medical Leave Act. 

Collective Bargaining Bill Introduced

On January 9, Rep. Dale Kildee (D-MI) introduced the Public Safety Employer-Employee Cooperation Act of 2009 (H.R. 413) which establishes minimum state collective bargaining standards for police, emergency medical technicians, corrections officers and firefighters. The bill passed the House last Congress, but stalled in the Senate. AFSCME will continue to support this important piece of legislation and fight for passage.

Repeal of Government Pension Offset and the Windfall Elimination Provision Bill Reintroduced

On January 7, Rep. Howard Berman (D-CA) introduced legislation (H.R. 235) to repeal both the Social Security Government Pension Offset (GPO) and Windfall Elimination Provision (WEP). Berman recruited 81 original, bipartisan co-sponsors, but the list has already grown to 111. A list of co-sponsors can be found at: http://thomas.loc.gov/cgi-bin/bdquery/D?d111:1:./temp/~bdIOq1:@@@P|/bss/111search.html|. A similar bill is expected to be introduced soon in the Senate by Sen. Dianne Feinstein (D-CA). AFSCME hosted a meeting of CARE (Coalition to Assure Retirement Equity), which consists of over 40 national organizations representing public sector retirees, to discuss legislative strategy for the new 111th Congress. 

Two New Senators Seated This Week

Senate Democrats have added two new members to their ranks this week. Former Illinois Attorney General Roland W. Burris, appointed by disgraced Illinois Governor Rod Blagojevich to fill President-elect Barack Obama's seat, was sworn in on Thursday. Ted Kaufman, long-time aide to Vice President-elect Joe Biden, was appointed to replace Biden by Delaware Governor Ruth Ann Minner and was sworn in on Friday. 

Make America Happen. Again

The Legislative field program launched its Make America Happen campaign, an effort to jump-start the economy and grow the middle class by passing an economic recovery plan, health care reform and the Employee Free Choice Act (EFCA).

The campaign kicked off with a new web video, called Make America Happen – Again. View the video and join the campaign at http://www.makeamericahappen.com/.

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