Week Ending July 19, 2019

 Minimum Wage Increase and Repeal 40% Health Care Tax Both Passed by the House of Representatives

• Minimum Wage Gets A Boost
• House Votes to Repeal 40% Tax on Worker Health Benefits
• Federal Budget Deal Needed Now
• Transportation Department Delays Local Grants

Minimum Wage Gets a Boost

Members of the House of Representatives took a major step this week to raise the wages of America’s workforce. The Raise the Wage Act of 2019 (H.R.582) was passed with a bipartisan vote of 231 to 199. This bill reaffirms a fundamental belief that an honest day’s labor must be valued. It strengthens the notion that the compensation of full-time workers making a minimum wage should be sufficient to sustain them. 

• House Floor Action: In efforts leading up to the final vote, members of Congress defeated a procedural motion designed to kill the bill. On the final vote, just six Democrats joined a majority of Republicans to oppose the bill and three Republicans voted to approve. AFSCME sent a letter of support to House members that was entered into the official record. AFSCME helped lead coalition efforts to secure this win.
• AFSCME Statement: President Lee Saunders said, “A $15 minimum wage will reduce inequality and strengthen our communities, lifting families out of poverty and putting upward pressure on wages for everyone. Absolutely no one working full-time should be unable to provide the basic necessities – food, housing, health care and more – that their family needs to survive.” 
• Historic Increase: The bill increases the minimum wage from $7.25 to $15 per hour by 2025 and indexes the wage to inflation after that. The bill would eliminate the tipped minimum wage.

What You Need to Know: When low-income workers are paid fairly, it lifts the entire economy. Companion legislation is pending in the U.S. Senate (S. 150), along with the House-passed bill. AFSCME, along with allies, is demanding that the Senate pass the increase.

House Votes to Repeal 40% Tax on Worker Health Benefits

The House of Representatives voted 419 to 6 to approve the Middle Class Health Benefits Tax Repeal Act (H.R. 748), which would repeal the 40% tax on high cost worker and retiree health benefits – often mislabeled the “Cadillac Tax.” 

• Big Win for AFSCME – AFSCME strongly supports repealing this harmful tax because it has already been encouraging health insurers and employers to reduce workers’ health benefits and increase workers’ copays, coinsurance, deductibles and related medical expenses.
• Makes Health Care More Affordable – This legislation, sponsored by Rep. Joe Courtney (D-Connecticut), will help make health care more affordable and has diverse and deep bipartisan support. It’s endorsed by AFSCME and 42 other  labor unions and patient and consumer organizations. 

What You Need to Know: Repeal would benefit many AFSCME members, especially in communities with high health care costs, because when we collectively bargain for a new contract, management will have fewer reasons to propose cutting member health benefits.  More broadly, the Congressional Budget Office estimates that unless it’s repealed, roughly 15% of workers enrolled in employer-sponsored health plans in 2022 would have premiums subject to the tax and that this percentage would increase significantly in future years. We are concerned that this tax disproportionately burdens older workforces and female-dominated occupations like nursing and teaching.

The Senate is expected to consider this repeal legislation soon. AFSCME is pressing for a swift Senate vote. AFSCME President Lee Saunders stated, “We applaud the House on voting to repeal this regressive health tax … also it is hurting AFSCME members and public service workers who are negotiating contracts.”

Federal Budget Deal Needed Now

House Speaker Nancy Pelosi (D-California) and Senate Democratic Leader Chuck Schumer (D-New York) have been meeting with Trump administration officials on federal budget issues and may be close to a deal. Reports from the administration say they have a deal, but Democrats have not been willing to agree to budget cuts proposed by the administration. Congress must take swift action to raise the federal debt ceiling before Congress adjourns for a monthlong summer recess, which will allow continued borrowing and smooth operations of the government without roiling financial markets. Additionally, to facilitate passage of the 12 annual federal spending bills before the Oct. 1 start of the new fiscal year, Congress must first reach an agreement to raise the tight budget spending caps that are set to take effect on domestic spending to avoid a 10% cut.

• House Spending Bills Pending in the Senate – The House has already passed 10 of its 12 bills without cuts. The House has increased investments in health, education, labor, transportation, public safety, housing and more. The Senate, however, has not acted on any of the annual spending bills since they are waiting for instructions from the Trump administration. This delay is creating a big problem for any hope of getting the budget done on time.
• Democrats Want a Fair Deal – Meanwhile, Democrats are insisting on a two-year deal to lift the spending caps, so that the same impasse does not come up again next year. They also want to include in any deal an increase in the debt ceiling, which all sides recognize is essential to prevent an economic meltdown. 

What You Need to Know: Without a budget deal now, Congress will have very little time to meet the Sept. 30 deadline and avoid another possible government shutdown.

Transportation Department Delays Local Grants

Congress needs to renew surface transportation programs ahead of their 2020 expiration. On Tuesday, the House Transportation and Infrastructure Committee took a step in that direction by considering modifications to Capital Investment Grants, the Federal Transit Administration’s (FTA) largest grant program.

• Capital Investment Grants – These are important because they fund projects nationwide like commuter rail and bus rapid transit, but the FTA is taking twice as long to approve grant awards. These delays are leaving states and localities scrambling for money while costing transit projects an extra $845 million. 

What You Need to Know: One of the Trump administration’s infrastructure priorities was to decrease the federal government’s contribution to transportation projects, but so far, Congress has all but rejected the idea. Privatization advocates and corporate financiers, on the other hand, continue to use local funding shortfalls to push “alternative financing,” as well as options to privatize services and cut jobs. Delaying and decreasing the federal government’s cost share of local projects increases the threat of a private takeover. AFSCME continues to fight these harmful policies.

Acosta Out, Scalia In at Labor Department

President Trump announced his intention to nominate Eugene Scalia as his next Secretary of Labor to fill the position vacated by the resignation of embattled former Secretary, Alexander Acosta.

• No Friend Of Labor – Scalia, a longtime labor lawyer and son of the former Supreme Court justice Antonin Scalia has close tied to anti-labor interests. Scalia has a record of representing Walmart and other companies that battled against unions and tougher labor protections. He worked previously at the Labor Department in the administration of George W. Bush. He is currently a partner in the Washington office of Gibson, Dunn & Crutcher, a prominent corporate law firm.
• AFSCME to Closely Monitor – AFSCME President Lee Saunders issued a statement regarding President Trump's plan to nominate Eugene Scalia to Secretary of Labor, saying; "Working people need a labor secretary who has their backs… His record, both in private law practice and as the Labor Department's top attorney, indicates support for unchecked corporate power and neglect of the welfare of working people."

What You Need to Know: Once Scalia is nominated, a hearing and vote could occur very soon in the Senate HELP Committee, followed by a vote of the full Senate.