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Legislation Department
March 3, 2000

Federal Budget Plan Yet to Materialize

Despite assurances that this year's congressional budget would not be delayed like it has been in previous years, House and Senate GOP leaders have still not reached agreement on a strategy for moving their fiscal year 2001 budget plan. While House GOP leaders have voiced their support for freezing spending at last year's level, Senate Republicans have been unable to reach agreement.

House Budget Chairman John Kasich (R-OH) wants to hold so-called "discretionary spending" controlled by Congress to $586 billion, about $20 billion below inflation, while Senate Budget Chairman Pete Domenici (R-NM) says at least $600 billion is needed. Despite mediation efforts by Senate Majority Leader Trent Lott (R-MS), a conservative faction led by Sen. Rod Grams (R-MN) say they want even less than the House level. By comparison, President Clinton's budget calls for $614 billion, which would have provided for modest growth in spending for some high priority concerns like education and health.

Senators and representatives, serving on the conference committee to reconcile differences in the House and Senate managed care reform bills, met for an hour on Thursday. While the conferees were selected four months ago, this was their first meeting. GOP leaders in both houses have stacked the conference with members who oppose the strong consumer and worker protections of the Norwood-Dingell bill, which was approved by the House in October. These conferees will be pressing for adoption of a bill much like the one that was approved by the Senate last July. Unlike the Norwood-Dingell bill which is supported by AFSCME, the Senate bill fails to cover two-thirds of those with private health insurance, including the entire public sector and most workers in small and medium-sized businesses. The Senate bill does not include whistleblower protections for health care professionals and also fails to hold HMOs financially accountable for harm to patients when care is denied or delayed.

Also on Thursday, six AFSCME members joined President Clinton and several members of Congress in a news conference on the Patients' Bill of Rights. Four of the members were school nurses from Local 2250 in Prince George’s County, Maryland, and two were physicians from Local 1199/NUHHCE employed by the District of Columbia health care system. During the event, President Clinton urged the conferees to adopt legislation mirroring the provisions of the Norwood-Dingell bill. Significantly, two Republican senators participated in the press event, breaking rank with the GOP leadership by urging the adoption of the Norwood-Dingell bill.

Defying President Clinton’s promised veto, the Senate passed legislation (S. 1134) that would allow families to set aside up to $2,000 per child into tax-free accounts for K-12 educational expenses. The 61-37 final vote capped Senate rejection of various Democratic amendments to use the money on improving teacher quality and funding school construction and renovation.

As expected, the House will vote on competing proposals to increase the minimum wage probably on March 9. Lawmakers will be asked to choose between giving minimum wage workers a $1 boost over the next two years or spreading it out over three years. The difference to a minimum wage worker is $1,480. AFSCME supports the proposal authored by Rep. David Bonior (D-MI), which is the two-year increase and opposes the three-year plan sponsored by Reps. Rick Lazio (R-NY) and John Shimkus (R-IL).

The minimum wage proposals will be offered along with a Shimkus-Lazio plan (H.R. 3081) tax relief to businesses. AFSCME opposes the tax cut measure which would grant $35 billion in tax cuts over the next five years with 73 percent of the benefit going to the top one percent of all taxpayers. The bill could cost as much as $120 billion over 10 years.

On February 29, Rep. Al Wynn (D-MD) introduced a bill (H.R. 3766) which would suspend contracting out until the federal government adopted a series of reforms. These reforms include: developing procedures to monitor existing contracts, including anticipated and actual costs; use of public-private competition before transferring work to the private sector; a 10 percent savings requirement; and a requirement that agencies subject work performed by contractors to public-private competition as well. The "TRAC" Act has 67 co-sponsors.

Rural forest counties throughout the nation are currently facing a serious economic crisis due to the decline in timber sales across the country. While most local governments across America prosper from the collection of property tax revenues, approximately 800 rural counties adjacent to federal lands must rely on the revenues generated from the land's resources. These counties do not collect property taxes from their largest landowner, the federal government. To remedy this tax-base loss, the federal government established a partnership with rural communities in 1908, promising a percentage of the federal land receipts. These funds provide rural communities with the economic stability to fund local government programs. Due to the decline in federal timber sale receipts, local economies have been forced into a tailspin, slashing local government and school budgets, and forcing county officials to lay-off county employees, close schools, gut recreation programs and critical infrastructure needs.

In an effort to resolve this crisis, Sens. Ron Wyden (D-OR) and Larry Craig (R-ID) have introduced a bill, the "Secure Rural Schools and Community Self-Determination Act of 1999 (S. 1608). The bill, similar to a measure passed in the House last year, aims to provide relief to rural forest counties across the nation by providing a temporary payment safety net for five years while identifying a process for developing a long-term solution to the problems.

AFSCME is an active member of the National Forest Counties and Schools Coalition, a group of 750 national, state, regional and local organizations in 38 states. The coalition seeks to ensure passage of S. 1608. A representative from AFSCME and other coalition members met with top White House officials recently requesting that the administration support the legislation and work to ensure that these counties receive protection from this devastating problem.

The Clinton Administration released a report which contends that any prescription drug plan which only covers low-income seniors would deny needed help to millions of middle-income Americans who struggle to pay for prescription drugs. Nationwide, over half of beneficiaries without drug coverage have income above 150 percent of poverty. There are various proposals being considered in Congress which would limit a new Medicare benefit to those below 120 percent of poverty, an approach supported by the drug industry.

The House, by a vote of 422-0, passed a bill (H.R. 5) that would repeal the earnings limit that penalizes many Social Security recipients aged 65-69 who keep on working. In a letter to House Speaker J. Dennis Hastert (R-IL), President Clinton reiterated his promise to sign the measure if it reaches his desk without extraneous provisions. Each year about 800,000 seniors lose $1 in Social Security benefits for every $3 earned above $17,000. Eliminating the penalty will cost $23 billion over the next decade but is not expected to have longer-term costs because more seniors are expected to continue working and paying Social Security taxes. The legislation would leave intact the earnings limit and penalty for those who collect Social Security before the age of 65.

The Quality Health-Care Coalition Act of 1999 (H.R. 1304), the bill to allow private practice physicians to collectively bargain with managed care organizations, is scheduled for consideration in the House Judiciary Committee on March 8. However, it may be delayed until March 15 due to lengthy and contentious debates expected for controversial bills scheduled ahead of it.

A House Ways and Means subcommittee held a hearing on proposals to reform the unemployment insurance system last week. Subcommittee members heard from a wide range of witnesses including Reps. Sandy Levin (D-MI) and Phil English (R-PA), the administration, state and business advocates of devolving the program back to the state, and organized labor. Originally the hearing was intended to focus on a devolution bill introduced by Rep. Jim McCrery (R-LA), but witnesses also made recommendations for alternative ways to strengthen administrative funding and for reforms to help more low-wage and part-time workers qualify for unemployment benefits.

While Congress is unlikely to act on devolution or any other broad reform package this year, the hearing did stimulate concern on the subcommittee about current funding levels for the employment service (ES) and unemployment insurance (UI) system. As a result, we hope to have more support for the administration's funding requests for next year. The Department of Labor (DOL) is asking for an additional $50 million for employment services targeted to UI claimants. It addition, the department wants to restructure UI funding in a way to increase stability in the system and increase UI operations by $93 million.

Rep. William Jefferson (D-LA) offered an amendment to the "Social Security earnings penalty" repeal being considered for markup at the House Ways and Means Committee. The amendment, for Government Pension Offset reform, would exempt the first $1,200 of combined pension income from current pension offset provisions, which now reduce benefits for federal and other government retirees and ravage benefits for widows who are eligible for both civil service pensions and Social Security benefits. The amendment was rejected, but Rep. Jefferson vowed to push for a congressional hearing on the need for government pension offset reform. There are now approximately 207 cosponsors of the AFSCME-supported bill (H.R. 1217).

A tentative agreement on funding streams has been reached on the Federal Aviation Administration (FAA) reauthorization bill by a House-Senate conference committee. The Chairman of the Senate Budget Committee, Pete Domenici (R-NM), indicated that Senate conferees agreed with House Transportation and Infrastructure Chairman Bud Shuster (R-PA) on a three-year, $40 billion bill that would give aviation programs a funding boost. We are working to make sure that the employee protections in this bill – Merit Systems Protection Board coverage and whistleblower protection for FAA employees which are represented by AFSCME – remain in the bill which now is likely to be enacted into law. Standing to gain by the agreement is funding for airport grants and capital programs. FAA administrative operations and air traffic control will still be subject to the annual appropriations process.

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