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Legislation Department
February 4, 2000

Tax Cut Fever Heats Up In Congress

House Ways and Means Committee Republicans, anxious to bring a tax cut bill to the House floor, approved on a party-line vote of 23-13 a marriage penalty relief tax cut bill (H.R. 6). Approval of this bill was the first step of their strategy to pursue a series of tax cuts rather than a single, massive tax cut plan that last year totaled nearly $800 billion. Committee Democrats said they also supported changing tax provisions that cause some dual-income married couples to pay more in total taxes than they would if they filed as single taxpayers, but complained the GOP bill was too costly and was targeted to the wealthy instead of working families. Democrats, instead, offered their support for the less costly, more balanced plan advanced by President Clinton. The Clinton plan would cost $45 billion over 10 years, while the GOP plan is expected to cost $182 billion over a 10-year period, even more than the marriage penalty relief that was a part of last year's tax bill which was vetoed by the President.

Additionally, House Democrats complained that it was unusual for the committee leaders to push such a costly tax bill before agreement could be reached on the annual budget blueprint. At the same time, there does not appear to be any agreement between the House leadership and their Senate GOP counterparts on either the size or scope of the tax cuts. With the February 7th submission of the President's budget blueprint, the budget and tax cuts are expected to move to center stage in Congress.

Senate Passes Inadequate Minimum Wage Plan

Last November, the Senate took action on rival minimum wage proposals as part of its consideration of legislation to change the nation's bankruptcy laws. An amendment offered by Sen. Edward Kennedy (D-MA) to raise the minimum wage by $1 over two years was defeated in a close vote, 50-48. The Senate then went on to approve, on a party line vote of 54-44, a minimum wage amendment that would increase the minimum wage by $1 over three years while also cutting taxes by $18.4 billion for businesses. But in the end, the Senate adjourned for the year before taking final action on the bankruptcy bill.

This week, the Senate voted to approve, 83-14, the Bankruptcy Reform Act that included the previously passed minimum wage increase. The House had passed a rival bankruptcy bill last year that did not include any minimum wage provision. Over the course of several weeks last fall, the House GOP leadership had promised members that they would be able to vote on two competing bills to increase the minimum wage, but the scheduled vote was repeatedly canceled.

This week, the House GOP has once again announced that they will allow a vote on the competing minimum wage proposals. AFSCME strongly supports The Minimum Wage Act of 1999 (H.R. 325), sponsored by Rep. David Bonior (D-MI) and 150 cosponsors, which would raise the minimum wage by $1 over two years. AFSCME opposes the Wage and Employment Growth Act (H.R. 3081), sponsored by Reps. Rick Lazio and John Shimkus and seven cosponsors, that would also increase the minimum wage by $1, but over a three-year time span and take effect later in the first year.

Medicare — Prescription Drug Coverage Developments

Although pharmaceutical companies have asked the White House for a cease-fire over the contentious issue of drug coverage for Medicare beneficiaries, internal documents suggest they "have every intention of continuing their assault." The Newark Star-Ledger reports that the drug firms may have "deceptively" softened their public stance on drug coverage, to avoid being criticized by President Clinton in his State of the Union address. The documents, which suggest the companies may be renewing their assault on the President's drug proposal, included a calendar of upcoming events, such as grassroots mail campaigns, television ads and media tours in states that border Canada, where drugs are cheaper.

Anti-Worker Legislation Moves Forward

The House of Representatives began the 2000 session by directly attacking workers – and injured workers at that. In a close vote, 222-194, the House passed legislation (H.R. 2005) that would prohibit workers injured on the job by machinery which is over 18 years old from being able to sue the manufacturer. It does not include injuries from motor vehicles or other vessels used to transport passengers, nor does it limit suits for injuries sustained from exposure to toxic materials such as asbestos. But if a worker and a bystander were both injured by the same piece of malfunctioning machinery, only the bystander would be able to sue and collect damages if the machine was bought more than 18 years ago. President Clinton has threatened to veto H.R. 2005.

Federal Employees Proposals In President's Budget

President Clinton's fiscal 2001 budget would give federal employees a 3.7 percent pay raise in 2001 and, for the first time, would allow government workers to use pretax dollars to pay their health insurance premiums. The budget, scheduled for release February 7, 2000, also would roll back a 1997 deficit-reduction measure that required federal employees to contribute more toward their retirement. The pay raise and improved benefits would put an extra $2,658 annually into the pocket of the average federal employee according to the Office of Personnel Management (OPM).

The budget also proposes a legislative initiative to help control future increases in health insurance premiums for employees and provide for parity in benefits for mental health and substance abuse by January, 2001. It would reverse last year's budget agreement that delays the last fiscal 2000 paycheck of many employees until 2001 and restore pay dates to their normal schedule.

Another proposal would allow newly hired or retired employees to participate immediately in the Thrift Savings Plan, a 401(k)-type stock investment program. And it would make long-term care insurance available to employees and their families. The employees would pay the full cost of premiums but officials said the rates would probably be 15 percent to 20 percent less than regular rates available elsewhere.

Patients' Bill Of Rights In Conference Committee

The GOP has yet to schedule a meeting of the entire conference committee appointed to reconcile the differences between the House and Senate managed care reform bills. However, Republican conferees did meet this week to discuss their strategy for negotiations with Democratic conferees. GOP leaders have recently made public statements indicating a willingness to negotiate over expanding the liability of managed care plans which cannot now be sued in state court when their medical decisions harm patients. Despite these statements, they appear to be coalescing around a proposal which would make it extremely difficult for patients to receive their day in court and which may very well be unconstitutional.

In order to demonstrate continued support for the AFSCME-supported Norwood-Dingell bill (H.R. 2723) in the House of Representatives, Rep. Marion Berry (D-AR) offered a resolution instructing House conferees to insist that the provisions of H.R. 2723 be adopted by the conference. The resolution was approved by a vote of 207 to 175 with six Republicans and all but one Democrat voting in the affirmative. Twenty-eight Republicans voted "present." By and large these were Republicans who favored the sentiment of the resolution but did not want to vote against the position of the GOP leadership.

Workplace Safety and Health Developments

The Occupational Safety and Health Administration (OSHA) has extended its comment period for members of the public wishing to submit comments on its proposed ergonomics standard that was issued late last year. Originally the comment period was scheduled to end February 1. However, in yet another effort to kill the ruling, the business community successfully flooded the agency with letters asking that the comment period be extended. OSHA announced that the comments are now due by March 2.

The change in the comment schedule has also changed the schedule for the public hearings that are planned around the country. Hearings will begin in Washington, D.C. on March 13 and run through April 1. Hearings are scheduled from April 11-21 in Chicago, and the schedule for Portland has not yet been confirmed.

On January 28, the House Education and the Workforce Subcommittee on Oversight Investigations held a hearing on OSHA's policy on employees who work at home. Charles Jeffess, Assistant Secretary of Labor for occupational safety and health, testified that OSHA is not planning to go into homes to enforce workplace safety and health standards. Jeffess also testified that the agency does hold employers responsible for recordkeeping of work-related injuries at home and for certain manufacturing operations, especially when hazardous materials are used. But he assured the subcommittee that the agency would conduct inspections of hazardous workplaces only when OSHA receives a complaint or referral.

Corrections Week Legislation Introduced

Sen. Charles Robb (D-VA) introduced Senate Resolution 248 (S. Res. 248) on January 31, 2000 which would designate the week of May 7, 2000 as "National Corrections Officers and Employees Week." Citing the "vital role played by correctional personnel in protecting the rights of the public to be safeguarded from criminal activity" and the "demanding circumstances and danger faced by corrections officers in their daily work lives," Sen. Robb said that recognition of their dedication and service is essential. AFSCME is working to obtain co-sponsors for the resolution.

Internet Sales Tax Developments

In 1998, Congress passed legislation creating a three-year commission to study the future of Internet taxation issues but less than a year into the study a number of bills have been introduced to make permanent the agreed-to moratorium on any new state and local taxes. This week, Rep. Christopher Cox (R-CA) and Sen. Ron Wyden (D-OR) introduced bills to make the temporary moratorium on new taxes permanent before the commission even completes its work. In addition, senator and GOP presidential hopeful John McCain (R-AZ) and Majority Leader Trent Lott (R-MS) have introduced a bill (S. 1611) which bans all Internet-related taxes, including the collection of existing sales taxes. Rep. John Kasich (R-OH) has also introduced a similar bill (H.R. 3255). With Internet sales expected to top $350 billion by 2002, we are concerned that state and local governments will be deprived of significant revenues hurting service delivery and public workers if any of these proposals are adopted.

Bankruptcy Reform Bill Passes Senate

The Senate passed a bankruptcy law overhaul bill (H.R. 833) by a vote of 83-14 which makes it harder for individuals to walk away from consumer debt. The measure now goes to a conference committee to iron-out differences with the House-passed bill.

The White House opposes both the House and Senate versions of the bill as too hard on debtors. The bill has the support of banks, credit card companies and businesses. Opponents say these companies are reaping the results of their aggressive marketing of credit.

The bill contains a provision making it possible for children who are subject to school violence to obtain vouchers to go to private schools.

Briefing Held On Mandatory Social Security Coverage For Public Employees

The AFSCME Legislation Department joined with representatives of various public pension plans from the states of Illinois, Ohio, Missouri and Kentucky in a briefing to the congressional delegations from those states. Sen. George Voinovich (R-OH), Reps. Rob Portman (R-OH) and Ken Lucas (D-KY) also spoke at the briefing against mandatory coverage. The negative impact on employees and their pension plans as well as the $26 billion price tag, which is discussed in the AFSCME-sponsored study released last May, were prominently discussed.