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Legislation Department
April 30, 1999

Social Security

House Ways and Means Committee Chairman Bill Archer (R-TX), Social Security Subcommittee Chairman Clay Shaw (R-FL), and Ways and Means members Phil English (R-PA), Jennifer Dunn (R-WA) and Rob Portman (R-OH) unveiled a proposal that would create private investment accounts to replace a portion of Social Security benefits. Acting despite some concerns within their leadership and total opposition from Democrats, Archer said that he hoped his proposal would jump-start efforts to enact a major Social Security overhaul this year. There were also disturbing signs that there are some within the Administration who also want to reopen discussions with the GOP even if it means moving closer to some GOP priorities.

The Archer plan would use the federal budget to finance individual private accounts in an amount equal to 2 percent of each individual worker’s wages up to the current wage cap of $72,600 every year. These accounts would be invested, through private investment firms, into a mix of stocks and bonds. The plan would maintain Social Security’s retirement, disability and survivors benefit programs. At retirement, the personal accounts would be converted into annuities and would be transferred to the Social Security Administration to replace an equivalent portion of the Social Security benefit. Individuals who are disabled prior to retirement would have their personal accounts debited to pay a portion of their benefit.

The plan is massively flawed. It is not adequately financed: initially the plan would be financed out of budget surpluses, but after 2112 when the surplus is projected to disappear funding would entail cutting of other programs, raising taxes or bringing back deficits. The plan is wasteful, inefficient and a bonanza for Wall Street: Wall Street brokerage firms who manage the private accounts would stand to take billions out of the accounts in commissions only to have the proceeds ultimately transferred back to Social Security to replace a portion of the guaranteed benefit. And, there is a high degree of risk that this plan would lead to an erosion of the existing Social Security program.

Mandating Social Security Coverage For State And Local Workers

A bipartisan group of senators, led by Sens. Dianne Feinstein (D-CA) and George Voinovich (R-OH), has sent a letter to President Clinton asking him not to consider a proposal to force those state and local employees not now covered by Social Security into the program. The senators said mandating coverage would "place an undue burden on a small number of states.” Other signers of the letter included Sens. Ted Kennedy (D-MA), Barbara Boxer (D-CA), Mike DeWine (R-OH), John Ashcroft (R-MO), Wayne Allard (R-CO), Richard Bryan (D-NV), Dick Durbin (D-IL), Chris Dodd (D-CT), Ben Nighthorse Campbell (R-CO), and Peter Fitzgerald (R-IL)

Patients’ Bill of Rights

Senate Majority Leader Trent Lott (R-MS) recently sent a letter to Senate Minority Leader Tom Daschle (D-SD) with a list of the Republicans’ priority pieces of legislation. Managed care reform was not on the list, indicating that the Majority Leader does not plan to move such legislation in the near future. Sen. Daschle responded by urging Lott to make managed care reform a priority.

The ongoing negotiations between Sens. Daniel Patrick Moynihan (D-NY) and William Roth (R-DE) are proceeding slowly. A primary sticking point is Sen. Moynihan’s insistence that all of the features of the bill cover all managed care plans. Sen. Roth favors a bill which excludes public employees from many of the protections. Even if Sen. Moynihan wins out on this issue, the bill is still expected to provide very few protections compared with the Kennedy/Dingell Patients’ Bill of Rights (S. 6/H.R. 358).

In the House, the Commerce Committee and the Education and Workforce Committee have both held hearings on managed care reform and plan additional ones. It now appears that the Chair of the Commerce Committee, Rep. Thomas J. Bliley (R-VA), prefers to delay consideration of a bill until October.

SIGN THE PBR PETITION TO CONGRESS

A petition to Congress on the Patients’ Bill of Rights has been posted on AFSCME’s home page at www.afscme.org. By clicking on the petition site, AFSCME members can sign this electronic petition urging Congress to pass a real Patients’ Bill of Rights which includes whistleblower protection for health care workers.

Please sign the petition and urge your members to sign too!

Minimum Wage

The Democrats in the House and Senate increased the pressure to increase the minimum wage last raised in 1996-7 and which currently stands at $5.15 an hour. H.R. 325 and S. 192 are identical bills which would increase the present minimum to $6.15 an hour in two annual 50 cent increases. H.R. 325 has 131 co-sponsors, all Democrats, and S. 192 has 27, again all Democrats.

In response to Democratic pressures in the House, the Education and Workforce Committee held its first hearing on the minimum wage since the Republicans took control of the Congress in 1994. Three Republican witnesses urged the Committee not to increase the minimum wage despite the booming economy and the fact that the inflation-adjusted minimum is 19 percent lower today than in 1979. Despite the fact that studies have shown that the 0.09 increase phased in over the 1996-7 period raised the wages of low-wages workers from low-income families without leading to job losses, the three GOP witnesses testified otherwise. They all argued that an increase is bad for minimum wage workers because they have to pay a higher marginal tax rate and therefore lose some, but not all, of the increase in higher taxes and promotes job losses. The single witness selected by the Committee Democrats testified that "the facts clearly support the contention that if Congress wants to make work pay,” the current proposal to increase the minimum wage to $6.15 makes sense.”

Acting on his vow to force the Senate to repeatedly vote on a measure to increase the minimum wage, Sen. Kennedy offered his proposal (S. 192) as an amendment to the Y2K legislation. The vote failed 55-44 along strict party lines.

Education

President Clinton signed the Education Flexibility Partnership Act which allows states greater freedom in spending federal education dollars. The so-called Ed-Flex legislation allows all states to waive certain federal education requirements in order to improve school and student performance.

Law Enforcement Officers

On April 14, Rep. Bart Stupak (D-MI) introduced a bill (H.R. 1424) to prohibit the purchase of body armor by violent felons and to facilitate the donation of federal surplus body armor to state and local law enforcement agencies. This bill is now pending in the House Judiciary Committee.

On April 22, the Senate passed a resolution (S. Res. 22) to commemorate the dedication and sacrifice made by the men and women who have lost their lives serving as corrections or other law enforcement officers. This resolution will now await a final vote on the Senate floor.

Today, April 29, the Senate passed a resolution (S. Res. 29) to designate next week, the week of May 2, 1999, "National Corrections Officers and Employees Week.” This resolution requests that the president observe this week with ceremonies honoring corrections officers and others who work in corrections facilities.

Workplace Safety and Health

The Senate Committee on Health, Education, Labor and Pensions approved the Safety Advancement for Employees Act (S. 385) on a 10-8 party-line vote on April 29. S. 385 would severely weaken current workplace safety and health law by allowing employers to hire private consultants to certify that a workplace is safe. The employer would then be exempt for one year from fines or violations.

Democrats on the Committee offered several amendments which they believed would strengthen the bill. On behalf of AFSCME, Sen. Paul Wellstone (D-MN) offered an amendment to strike the exemption of state and local government employees from OSHA coverage. That amendment failed, primarily along party lines, as did all of the other Democratic amendments. One Republican, Sen. Jim Jeffords (R-VT), Chairman of the Committee, joined the Democrats by voting on the AFSCME amendment. Sen. Mike DeWine had been contacted by AFSCME members in Ohio requesting that he vote for the AFSCME amendment. However, Sen. DeWine voted against the amendment.

The Department of Labor will recommend that the president veto the bill, and the Department of Justice has said that the measure is unconstitutional.