Join AFSCME
 About AFSCME
 The AFSCME Web
 Press Room
 Privatization
 Legislative Action
 Health & Safety
 AFSCME LaborLinks
 Publications
 What's New
 AFSCME en Español

Legislation Department
May 14, 1999

Social Security

After a meeting between President Clinton and House Ways and Means Democrats, House Democratic Leader Richard Gephardt (D-MO) and Rep. Charles Rangel (D-NY), the ranking Democrat on the Ways and Means Committee, announced that they will introduce legislation in the coming weeks incorporating President Clinton’s proposal to save Social Security. House Democrats said that President Clinton is eager to build momentum for his Social Security legislation and that they would press the GOP leadership to begin consideration of Social Security legislation in this Congress.

In his State of the Union Address last January, President Clinton had proposed devoting 62 percent of the projected budget surpluses over the next 15 years to strengthening the Social Security program. This would enable Social Security to pay 100 percent of guaranteed benefits to 2055. If no action is taken, the program is projected to have a shortfall starting in 2034. The president had also proposed investing 20 percent of the Social Security Trust Fund in securities, while maintaining the balance (80 percent) in government bonds. This would extend the solvency beyond 2055 by bringing in higher returns.

A hearing is set for May 20 in the Senate Finance Committee to consider the Republican-sponsored managed care reform bill (S. 326) which was reported out of the Senate HELP Committee in March. The Finance Committee will take up tax-related issues in the bill. Democrats on Senate Finance will offer a motion to strike language in the bill which expands Medical Savings Accounts (MSAs). It is not clear whether such a motion will succeed.

Medical Savings Accounts are a favorite of conservatives because they provide a tax shelter for the wealthy. The accounts are used in conjunction with high deductible catastrophic health plans. Those who could afford huge deductibles and have few health care costs would have a financial incentive to establish MSAs and purchase catastrophic coverage with their employer contributions. This would cause a deterioration in the risk pool for traditional plans and drive those premiums up substantially. Consumer groups predict that a substantial expansion of MSAs could even drive traditional plans out of the market.

As part of the emergency spending bill being considered by the Congress, House and Senate negotiators accepted an amendment offered by Sen. Kay Bailey Hutchison (R-TX) that prohibits the federal government from recouping any portion of the money states receive under the tobacco settlement.

The Senate this week debated legislation (S. 254) to overhaul the juvenile justice system. Among other things, this legislation would negatively impact juvenile justice workers. Under current law, the federal government cannot administer juvenile justice programs in a way that would interfere with existing collective bargaining agreements, negatively impact wages, or displace workers. S. 254, however, would repeal these long-standing protections. Sen. Edward Kennedy (D-MA) is expected to introduce an amendment to put this important provision back into the legislation.

On May 11, Rep. Joel Hefley (R-CO) introduced a resolution (H. Res. 165) to acknowledge the dedication and sacrifice made by the men and women who have lost their lives while serving as law enforcement officers. This resolution, which has already garnered 130 cosponsors, is now pending in the House Judiciary Committee. A similar resolution (S. Res. 22) is pending in the Senate Judiciary Committee.