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Legislation Department
May 5, 2000

House Judiciary Ok's Five-Year Extension of Internet Tax Moratorium

The House Judiciary Committee approved legislation being pushed by House GOP leaders that would extend until 2006 a moratorium on Internet taxes set to expire October 1, 2001. A House floor vote is expected next week. The legislation (H.R. 3709) follows in part the recommendations of a majority of the congressionally appointed Advisory Commission on Electronic Commerce. Although the extension of the moratorium does not prevent states from collecting sales taxes, it is expected to cut into state revenues and unfairly benefit Internet-based sellers by continuing the non-collection and present lack of enforcement of sales taxes. The loss of such taxes has already resulted in $5 billion in lost revenues for state and local government and, with increased use of the Internet, that figure could easily reach $15 billion or more by 2003, further threatening state and local governments to deliver vital government services like education and public safety. AFSCME is leading a coalition opposing the measure.

House and Senate Democrats Putting Final Touches on a Medicare Prescription Drug Bill

The Democratic leaders in the House and Senate are planning to unfold their Medicare Prescription Drug proposal next week. The specifics of the plan are still being worked out, but reports indicate that the plan will resemble the President's plan, which includes a 50-50% copayment, catastrophic coverage and a subsidy for low-income seniors. The size of the monthly premium is still being worked out.

Two Plans: Saving Social Security or Bankrupting Social Security

House and Senate GOP leaders are privately questioning the political wisdom and timing of GOP Presidential candidate Governor George W. Bush's decision to announce that as President he would push to privatize the Social Security system. Last year, House and Senate GOP leaders floated similar privatization plans, but quickly withdrew them after they proved unpopular to a majority of the public. While it is no secret that the GOP leadership in the House and Senate still supports privatizing Social Security, they had decided not to push their plan in Congress until after the 2000 elections.

The Bush plan is similar to House and Senate GOP plans that would permit workers to divert a portion of their current contribution to the Social Security Trust Fund to an individual private investment account. The effect of this plan on the Social Security system would be devastating. To divert that portion of the payroll tax into the accounts while also paying benefits to current retirees would require using all or most of the roughly $2 trillion in surplus Social Security revenues. This would bankrupt the system within a decade. The only way to avoid using the entire surplus Social Security revenues would be to raise the retirement age and cut benefits to current and future retirees.

Because the U.S. economy has been performing so well recently, the dire predictions of shortfalls in the Social Security system have proven to be false alarms. Without any changes in the program at all, Social Security can pay 100 percent of benefits through 2037 and 75 percent of benefits forever thereafter. Therefore, only modest changes are needed to enable the program to pay 100 percent of benefits after 2037.

Vice-President Al Gore told a labor gathering that Bush was devising a risky plan to allow private accounts that would put the retirement income of American workers at risk, jeopardize millions of taxpayers' savings and be bad for the economy. Gore favors using the Social Security surplus over the next decade to pay down the debt and would put the savings in interest payments on the debt into the Social Security system. This would enable the program to pay 100 percent of benefits until 2050 and add benefits for working women and widows.

Senators who have long advocated major changes to the entitlement programs, Sens. John McCain (R-AZ), Bob Kerrey (D-NE), and Daniel Patrick Moynihan (D-NY), introduced legislation that would establish a bicameral Social Security Commission charged with reporting out a comprehensive reform plan for the next president's consideration by the end of 2001.

It's Official: National Correctional Officers and Employees Week

S.Res. 248 passed the Senate on May 4th, so May 7-13 is officially "National Correctional Officers and Employees Week."

Low Spending Levels May Prompt Veto

The Senate Appropriations Committee approved 2001 spending allocations allowing the committee to move ahead on the 13 individual spending bills. However, committee Democrats warned that the allocations are unrealistically small for many of the non-defense spending bills. "This process is doomed to failure," said Sen. Harry Reid (D-NV). Senate Appropriations Committee Chairman Ted Stevens (R-AK) acknowledged that some of the allocations are "low," but said appropriators will look for offsets and other ways to make more money available, particularly for the bills facing the deepest cuts, including the Veterans Affairs-Housing and Urban Development and Interior measures. The House Appropriations Committee issued similar but not identical allocations but will not formally adopt them until next week.

Meanwhile, White House officials complained that the spending levels are so low compared to what the President recommended that it may be necessary to veto the spending bills. Under the congressional budget plan, deep cuts are expected across-the-board in domestic spending programs. The plan also calls for using the growing budget surplus for large new tax cuts. In addition, the congressional budget calls for increased defense spending by roughly $17 billion.

Activity on the Patients' Bill of Rights is Stepped Up

At a meeting this week with AFSCME and other patients' rights advocates, White House Chief of Staff John Podesta announced that the President is asking lawmakers who serve on the House-Senate patients' rights conference committee to meet to discuss conference negotiations. This follows President Clinton's focus on the legislation in last Saturday's weekly radio address in which he expressed frustration with the delay in producing a final bill.

AFSCME is sending out a direct mail piece to over 400,000 AFSCME members in selected states and congressional districts. The mailing urges AFSCME members to contact their senators or representative about the negotiations and to urge that the conference committee extend patient protections to public employees. Currently, GOP leaders are insistent that the bill cover only a limited segment of the population and would exclude public employees, the self-employed, the clergy and many workers in small- and medium-sized businesses.

The Republican chair of the conference committee is Sen. Don Nickles from Oklahoma. Nickles has led the effort to exclude the public sector from the bill and to prevent an expansion of the right to sue managed care organizations when they harm patients by denying or delaying care. It is interesting to note that Oklahoma Governor Frank Keating (R) signed a patients' rights bill last week that expands liability to hold managed care plans accountable for medical decisions. While the sentiment of the Oklahoma governor and legislature is clear, it is unlikely that the courts will uphold the liability feature. The courts have ruled previously that expanding liability requires federal legislation.

Hike for Minimum Wage Workers Still a Distant Dream

Despite repeated vows to proceed, the GOP congressional leadership is no closer to agreeing to untangle a procedural tangle that has prevented the minimum wage legislation from going to a conference to reconcile the differences between the House- and Senate-passed minimum wage bills. The House bill would give minimum wage workers a $1 increase over two years while the Senate bill stretches the $1 hike over three years. The House bill, which AFSCME supports, would put $1,000 more money in the paychecks of minimum wage workers over the next three years than the Senate bill would. The delay results from Senate Majority Leader Trent Lott's (MS) refusal to allow the Senate to vote on a Democratic motion to instruct the Senate conferees to support the House-passed wage hike of $1 over two years.

White House and GOP Concede that PNTR is Bad Economics

Proponents of PNTR have intensified pressure on wavering lawmakers to vote to grant China Permanent Normal Trade Relations (PNTR) by saying that the national security of the U.S. depends on it. The shift of emphasis to national security issues reflects a growing feeling that the economic arguments in favor of PNTR are not working and that labor is making the economic case that PNTR is bad for workers in the U.S. and China. Sandy Berger, the administration's National Security Advisor, said that a rejection of PNTR would threaten to set off a downward spiral in bilateral ties that would be like a second cold war. PNTR supporters hope that shifting from making the economic case to reviving the cold war menace will sway enough undecided members to win.

In another attempt to scramble for votes, Rep. Sandy Levin (D-MI) is finalizing a proposal to establish a commission to review human rights, labor rights and development of the rule of law in China after PNTR. AFSCME and the rest of labor are opposed to the Levin plan because it would have no teeth.

Legislative Branch Cuts

Despite concerns about tight funding levels, the House Appropriations Legislative Branch Subcommittee approved, 6-3, along party lines a draft fiscal 2001 spending bill that cuts agencies under its umbrella $94 million below the fiscal 2000 bill. It was approved over the opposition of Democrats who said the budget resolution severely underfunded the legislative branch.

There would be a 17.7 percent slash in the Architect of the Capitol's budget, despite the office's request for a big increase to address fire safety violations that brought citations from the congressional Office of Compliance and new criticism just this week from the House inspector general. The Architect's custodial and maintenance staff would be cut by more than 100 employees under this bill. AFSCME Local 626 employees are part of the Architect's office, and many are part of the custodial team. There is a proposed $5 million cut in the Copyright Office of the Library of Congress where AFSCME has two locals of over 600 members.

AFSCME is working with members of the full House Appropriations Committee to restore the cuts.

Education Bill Debate Continues

The Senate took its first votes on amendments to a massive education measure (S. 2), the reauthorization of the Elementary and Secondary Education Act (ESEA). On a party-line vote of 45-54, the Senate rejected the comprehensive Democratic substitute offered by Sen. Edward Kennedy (D-MA) which included accountability requirements, funding for school construction, reduction in class size and hiring more qualified teachers.

Centrist Democrats, led by Sen. Joseph Lieberman (D-CT), are working on a compromise to help shape the reauthorization of S. 2. AFSCME objects to language in the compromise proposal pertaining to the use of paraprofessionals in the classroom.

House Committee Holds Hearing on Fair Labor Standards Act

The House Education and the Workforce Subcommittee on Worker Protection held a hearing on the Fair Labor Standards Act's (FLSA) provisions which exempt employees holding executive, administrative or professional provisions from its overtime requirements. Regulatory tests developed by the Labor Department base white-collar exemptions on whether or not employees are salaried and at what level and whether their job duties included management tasks.

House Committee Hears Testimony on Proposed National Right-To-Work Law

The House Education and Workforce Subcommittee on Oversight and Investigations held hearings on the proposed "National Right-To-Work Act" (H.R. 792), sponsored by Rep. Bob Goodlatte (R-VA), that currently has 134 co-sponsors. Sen. Paul Coverdell (R-GA) has introduced identical legislation (S. 424) that has 23 co-sponsors in the Senate. The proposed legislation would amend the National Labor Relations Act (NLRA) and the Railway Labor Act to repeal provisions allowing unions and employers to agree on bargaining contract provisions that require workers to join the union and pay full dues, or pay fees to cover the union's cost of representing all the unit members.

Hearing on Collective Bargaining Bill for Corrections Officers and other Law Enforcement Personnel

AFSCME submitted a statement for the record on the Public Safety Employer Employee Cooperation Act (H.R. 1093) to the House Education and the Workforce Subcommittee on Employer-Employee Relations. The statement will focus on the productive partnerships between employers and employees that result from the collective bargaining process and their benefit to the public. This bill extends the right to bargain over wages, hours and working conditions to public safety employees of state and local governments.