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Legislation Department
March 24, 2000

House Passes Flawed Budget Plan

The House passed its budget blueprint for FY 2001 by the narrow vote of 211-207. The budget plan, which was drafted by the House GOP leadership, provides for a $10 billion tax cut in the first year, ballooning to $250 billion in five years, with the expectation that it would reach as high as $500 billion or more over 10 years. The plan also increases defense spending significantly while cutting domestic spending needed to fund vital education, health care, and environmental programs by about $20 billion in the first year and $135 billion over five years. The overall reduction in domestic spending amounts to a cut of 8.3 percent. Most Democrats opposed the plan, saying it was unrealistic and that it wasted the budget surplus on tax cuts while not doing enough to extend the life of Social Security and Medicare. Four alternative budget plans were also debated and rejected, including a Democratic leadership plan that resembled the President's budget.

The Senate Budget Committee abruptly postponed consideration of the budget blueprint for FY 2001 when Republican members of the committee balked over the details of the GOP-crafted plan. Majority Leader Trent Lott (R-MS) and Budget Committee Chairman Pete Domenici (R-NM) had indicated their support for the plan reached between House and Senate leaders, but Domenici was forced to postpone consideration when conservative members of the committee said they were opposed. Lott said he would not hesitate to bring the measure that significantly cuts domestic spending to pay for tax cuts directly to the Senate floor without a committee vote. The Senate plan is virtually identical to the House-approved blueprint mentioned above. Even though the bill cuts domestic spending by 8.3 percent over 10 years, Senate Republicans say they want to cut spending even more.

The Senate followed the House’s lead and passed legislation (H.R. 5) that would eliminate the earnings limit for Social Security recipients ages 65 through 69. The measure passed unanimously. The President is expected to sign the measure into law, after the Senate and House bills are reconciled. Under current law, seniors lose $1 in Social Security payments for every $3 they earn above $17,000. The repeal would be retroactive to Dec. 31, 1999.

In an effort to move negotiations on the minimum wage bill forward, House and Senate GOP leaders tried, but failed, to reach an agreement to separate out the minimum wage and tax provisions from the overall bankruptcy bill. The Senate-passed minimum wage increase, $1 over three years, was passed as an amendment to S. 625, legislation to overhaul the nation's bankruptcy laws.

And, although both the House-passed two-year, $1 boost in the minimum wage and the Senate-passed three year, $1 hike contain tax cuts for businesses worth over $100 billion, the National Restaurant Association and the National Retail Federation are working overtime to kill any minimum wage increase. If these industry associations are unable to kill the measure outright, they prefer the Senate three-year increase. AFSCME and the rest of the labor movement are working hard to see that workers get their much-deserved $1 increase over two years.

The House Ways and Means Committee approved, 21-16, a bill (H.R. 7) that would allow parents to contribute up to $2,000 a year to tax-free education savings accounts for private school expenses from grade school through college. The panel approved the bill almost strictly along party lines, with only Rep. Nancy Johnson (R-CT) opposing it. Johnson joined with Rep. Charlie Rangel (D-NY) in offering an amendment to make $22 billion available for school construction over the next two years by providing tax credits for purchasers at zero-interest. The proposal, endorsed by Vice President Al Gore and Secretary of Education Richard W. Riley, was rejected by voice vote.

The bill may be considered by the full House as early as next week.

Members of the House and Senate conference committee had planned to hold a public meeting on Thursday to announce that additional provisions had been agreed to in the negotiations over a Patients' Bill of Rights. However, after two weeks of discussions, the conference has not been able to agree on any further issues. Thus far, only three consumer protections issues have been tentatively settled. While whistleblower protections for health care professionals has been raised, there has not yet been a thorough discussion of the issue.

This week, discussions at the staff level centered on an external appeals process that would allow patients to appeal plan denials for treatment to a panel outside of the plan's control. The Senate bill would allow patients to appeal only whether the plan had followed its own rules in making a denial. Such a set-up allows plans to continue to deny care that is appropriate and medically necessary for the patient. The House-approved Norwood-Dingell bill would allow patients to appeal a denial to a panel of outside medical experts who could reverse the plan's denial of a recommended treatment if the panel determined that it was appropriate and necessary.

The House Judiciary Committee was scheduled to continue its consideration of the Campbell-Conyers physician bargaining bill (H.R. 1304), sponsored by Reps. Tom Campbell (R-CA) and John Conyers (D-MI), on Wednesday. However, at the last moment, the committee meeting was postponed due to scheduling conflicts. The committee is expected to renew deliberations on Tuesday, March 28.

Rep. Edward A. Pease (R-IN) has drafted two amendments to the bill for consideration by the committee. One would require physician bargaining units to get the approval of the Federal Trade Commission (FTC) before they could engage in bargaining. Because the FTC opposes the bill, the amendment would essentially give the FTC the ability to prevent bargaining from taking place. The second Pease amendment would prohibit physicians from making implicit threats to strike. The amendment is so broadly written that physicians could be charged with a violation of this provision based on posturing or even gestures at the bargaining table.

At this time, it appears that Rep. Pease lacks the support needed to win approval of the amendments. Both Committee Chair Henry Hyde (R-IL) and Ranking Democrat John Conyers oppose the amendments.

H.R. 979 continues to gain bipartisan support of members of Congress across the country. The "anti-prison privatization" bill has added nine co-sponsors in the last month and is up to a total of 117 co-sponsors. AFSCME is making a strong push for additional co-sponsors in advance of "National Correctional Officers and Employees Week" which is slated for the week of May 7, 2000. Corrections officers are also making calls on H.R. 979 and S.Res. 248, "National Correctional Officers and Employees Week," to convince their legislators to support these measures.

The House Government Reform Civil Service Subcommittee approved two bills that would extend health care benefits for federal workers and ensure that some workers' dependents are covered as well. The first bill (H.R. 4040) would authorize federal agencies to offer long-term health care to their employees, including active and retired civilian and military personnel and their spouses. The intent is to help workers find long-term health insurance at low cost before they need it. The bill was approved by voice vote. The subcommittee also approved by voice vote a bill (H.R. 2842) that would allow federal agencies to enroll employees in the federal health plan if a court orders the employer to provide health care for a dependent.

Both bills will now go to the full Government Reform committee for consideration.

FAA Administrator Jane Garvey testified before the House Appropriations Subcommittee of Transportation and Related Agencies on March 22 in support of a budget request seeking a total funding for the FAA of $11.2 billion, an increase of $1.2 billion. Within specific accounts, the budget request provides for $6.6 billion for Operations – a 12 percent increase over FY 2000 levels, $1.95 billion for Airport Improvement Program, $2.5 billion for Facilities and Equipment and $184 million for Research, Engineering and Development. Garvey noted that an increase was necessary to lift an agency-wide hiring freeze on both safety and non-safety workforces and to remove previous reductions in travel, training and other services.

AFSCME President Gerald McEntee joined members of Congress, farmers and religious leaders at a noontime rally on the Mall to denounce policies that are hurting workers and farmers alike. Called by the National Farmers Union and the National Family Farm Coalition, the Rally for Rural America drew thousands of farmers to Washington for two days. The crowd at the rally roared its approval as speaker after speaker condemned recent U.S. trade and farm policies that are putting the family farmer out of business. The National Farmers Union, in a close 64-62 vote, recently joined with labor in opposing the upcoming congressional vote to grant China Permanent Normal Trade Relations (PNTR).

• AFSCME Weekly Report Archive