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Legislation Department
March 5, 1999

Privatization of Corrections

At AFSCME’s urging, Reps. Ted Strickland (D-OH), John Sweeney (R-NY), Peter King (R-NY), and Jim Walsh (R-NY) yesterday announced they will introduce "The Public Safety Act" which will ban the further privatization of state and federal correctional facilities. By keeping the operation of prisons a public function, this bill will provide communities with greater protection against incarcerated criminals, and will protect taxpayers by avoiding hidden costs and financial and legal liabilities. AFSCME President Gerald W. McEntee and Council 82 President Rich Abrahamson spoke at the press conference and gave AFSCME’s strong endorsement of the legislation.

House and Senate Republican leaders outlined a broad framework for their fiscal year 2000 budget at a joint news conference. The budget plan reportedly reserves 100 percent of Social Security surpluses for the Social Security program, but ignores President Clinton’s proposals to save part of the surplus for Medicare and new individual retirement accounts. It contains a tax cut that starts at $10-15 billion in FY 2000 and grows in subsequent years. It also would provide for a huge spending increase for defense, resulting in drastic cuts in domestic spending.

In an effort to pass a budget resolution by April 15, House and Senate GOP leaders have been meeting behind closed doors to work out the details of a broad budgetary agreement before work officially begins in the House and Senate budget committees later this month. Republican leaders are hoping to avoid a repeat of last year’s deadlock between the House and Senate, which ultimately handed President Clinton an advantage in end-of-session budget negotiations.

Rep. Wally Herger (R-CA) and conservative Democrat David Minge (D-MN) introduced a bill (H.R. 863) that would allow part of future federal budget surpluses to be used for tax cuts by walling off the Social Security trust fund monies but opening up the interest payments for use by GOP tax cutters. As The New York Times noted, "the practical effect of their plan would be precisely to allow the [Social Security] money left on the table to be used for tax cuts." AFSCME strongly opposes the legislation as just another ploy to give more tax cuts to the wealthy.

House Republican leaders are considering a plan to deal with managed care reform through a series of five bills, each with narrow scope, rather than through one comprehensive package. Such a strategy would allow opponents of real reform to approve some of the individual patient protections but defeat mechanisms to enforce them. Democratic leaders oppose the GOP leadership strategy and are pushing for a single, comprehensive bill which integrates strong patient protections with meaningful enforcement provisions.

Last week, the Employer/Employee Relations Subcommittee of the House Committee on Education and the Workforce held its first hearing on managed care reform. While witnesses representing health plans testified that enforcement mechanisms in the Patients’ Bill of Rights would cause large premium increases, they could not substantiate their claims when questioned by members of the subcommittee.

In the Senate, the Health, Education, Labor and Pensions Committee (formerly Labor and Human Resources) has held two hearings on managed care issues thus far, with more expected this month. The committee may be ready to take up legislation in late March or early April. Chairman James M. Jeffords (R-VT) and Ranking Democrat Sen. Edward M. Kennedy (D-MA) are discussing the possibility of cosponsoring a reform bill.

In the Senate Finance Committee, Chairman William Roth (R-DE) and Sen. Daniel Patrick Moynihan (D-NY) continue to discuss their own bipartisan bill. However, it appears that they will focus on a narrow range of issues, centered on improving the ability of patients to appeal care denial.

Unable to reach consensus on a controversial proposal for Medicare beneficiaries to use vouchers to purchase private health care, the Bipartisan Commission on Medicare Reform missed their March 1 deadline and extended their deliberations until the end of the month.

During their consideration of an emergency spending bill, the Senate Appropriations Committee approved a provision which would prevent the federal government from recouping any money from the tobacco settlement. The provision is identical to a bill introduced by Sens. Bob Graham (D-FL) and Kay Hutchison (R-TX) which sought to protect the $206 billion settlement that the tobacco companies reached with 46 states.

Congressional Democrats joined by President Clinton and Vice President Gore unveiled their Unified Democratic Agenda. Similar to the president’s budget proposal, the cornerstone of the new "Families First" agenda is based on the use of the federal budget surplus, projected to grow to $4.5 trillion over the next 15 years, to save Social Security and Medicare, pay down the debt and address certain domestic concerns. Key elements of the plan call for passing the Patients’ Bill of Rights; providing targeted tax cuts for retirement savings, child care and long-term care; hiring 50,000 more police; raising the minimum wage and enforcing fair pay; protecting pensions; protecting the environment and improving livability; cracking down on crime against seniors; and protecting individuals’ privacy.

The Ed-Flex bill (H.R. 800) was approved in the House Education and the Workforce Committee by a vote of 33-9. The measure attempts to give states greater leeway with federal education funds through a waiver application process. There were several Democratic amendments offered. One would have authorized $11.4 billion to fund the last six years of President Clinton’s plan to hire more teachers. It was defeated.

Democrats were successful with less substantive amendments, including provisions that would require state and local agencies to notify the public about proposed waivers, and would revoke waivers for schools where student achievement dropped through two consecutive years. Finally, Rep. Dale Kildee (D-MI) was successful in obtaining an amendment that would "sunset" Ed-Flex with reauthorization of the Elementary and Secondary Education Act (ESEA).

The Senate is currently debating its version of the Ed-Flex bill (S. 280). The legislation would build on a 12-state pilot program, in effect since 1994. However, partisan bickering and parliamentary maneuvering have dominated the debate on the Senate floor.

Democrats, who have written most current federal law on education which could be waived by Ed-Flex’s enactment, vociferously oppose the bill without certain backstops to ensure that children, particularly low-income students, show improvement. GOP leaders are opposing an effort by Sens. Ted Kennedy and Patty Murray (D-WA) to offer an amendment incorporating President Clinton’s plan to hire 100,000 new teachers to reduce classroom size.