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Legislation Department
July 30, 1999

Senate Follows House and Passes Tax Cut for the Rich

On a largely partisan vote of 57-43, the Senate passed its version of the tax cut bill (S. 1429) which would squander Americaís budget surplus on an outrageous $792 billion tax cut that largely benefits the rich and big business. Crossing party lines, Republican Sens. Arlen Specter (PA) and George Voinovich (OH) opposed the measure while Democratic Sens. Bob Kerrey (NE), John Breaux (LA), Mary Landrieu (LA), and Robert Torricelli (NJ) joined the GOP majority in voting "yes."

The bill will give the top one-fifth of all families about 70 percent of the tax breaks while the other four-fifths would get whatís left over. Big business would get $50 billion in new tax breaks over the next 10 years. Democrats offered an alternative which contained $290 billion in targeted tax relief to middle- and lower-income families by increasing the standard deduction and also providing a variety of education, child care and other tax credits. The Democratic alternative was defeated, 39-60, with all Republicans voting "no" and six Democrats also voting against it. Some of these Democrats oppose any tax cut, arguing that Congress should wait to see if the projected surplus is real before reducing taxes.

Republican leaders failed, in a 51-48 tally, to obtain the required 60 votes needed to overcome a requirement that the billís costs after 10 years be offset with revenue increases or spending cuts. The practical effect of the vote is that every provision of the GOP leadership plan will expire at the end of 2009. Republican Sens. Susan Collins (ME), Olympia Snowe (ME), and Arlen Specter (PA) voted with all the Democratic senators on this vote.

Sen. Ted Kennedy (D-MA) offered an amendment which would have increased the minimum wage by 50 cents each year for the next two years. The amendment was subjected to a procedural point-of-order which requires 60 votes to proceed to a vote on the amendment itself. Forty-six senators voted to waive the point-of-order so it failed, but it put senatorsí positions on a minimum wage increase on the record.

House and Senate tax conferees are expected to begin negotiations to produce a new compromise version that will be sent to the president. They hope to reconcile the differences between the Senate bill (S. 1429) and the House-passed bill (H.R. 2488) before they leave for the August recess. The president, however, has said he would veto any tax bill that is modeled after the House- or Senate-passed bills and, therefore, GOP congressional leaders will probably not send it to him before September.

Highway Privatization

AFSCME has launched a major lobbying campaign to defeat a damaging highway privatization measure that was included in the Senate-passed tax cut bill. Known as the Highway Innovation Cost Savings Act (HICSA), the measure was introduced in the Senate by Sen. John Chafee (R-RI) and is now Section 1117 of the Senate tax package. Section 1117 would authorize a series of pilot projects allowing private companies to use tax exempt bonds to build, operate and maintain private bridges and highways.

AFSCME President McEntee has joined forces with Bob Georgine, President of the Building and Construction Trades Dept., AFL-CIO, in expressing to the Clinton administration their strong opposition to Section 1117 of the tax package. Although there are numerous public policy reasons why Section 1117 is unacceptable, Presidents McEntee and Georgine outlined three major problems with the measure: the lack of federally-required labor, environmental, civil rights and planning and engineering standards; the lack of a procedure for projects to revert back to public ownership after construction; and the fact that the legislation would allow significant new tax shelters for the private companies building and operating covered transportation projects.

Patientsí Bill of Rights

Discussions between House Commerce Committee Chair Thomas Bliley (R-VA) and ranking Democrat John Dingell (D-MI) broke down early this week when the two were unable to come to agreement on a bipartisan managed care reform bill. Apparently, Bliley was unable to sell the House Republican leadership on compromises he and Dingell were contemplating. As the Dingell-Bliley talks ended, Speaker Dennis Hastert (R-IL) announced the creation of an ad hoc task force charged with drafting a bill for floor consideration next week. However, on Wednesday after a caucus of House Republicans, Hastert stated that moving a bill to the floor before the August recess was a "long shot."

The inability of the Republicans to reach agreement reflects divisions within the caucus over how much authority doctors should have to make treatment decisions and whether plans should be held liable when they deny care that results in injury to patients. Several renegade Republicans have threatened to join Democrats to defeat legislation which would continue to allow plans to override treatment decisions by doctors and which would not expand the liability of plans. Reps. Greg Ganske (R-IA), a physician, and Charlie Norwood (R-GA), a dentist, have been leaders among the renegade group. Both are now threatening to sign the Democratsí discharge petition in September in order to force a debate and floor vote on the Democratsí Patientsí Bill of Rights (H.R. 358). However, in order to reach the required number of signatures, additional Republicans would also have to sign the petition.

A just-released survey of doctors and nurses by the Kaiser Family Foundation provides new evidence that plans frequently disagree with health care professionals about the care of patients. Eighty-seven percent of doctors stated that their patients had experienced health care plan denials of service over the last two years. Two-thirds of doctors reported that such denials resulted in adverse health results for their patients. Seventy-eight percent of nurses said that managed care had decreased the quality of care for people who are sick.

SIGN THE PBR PETITION TO CONGRESS

A petition to Congress on the Patientsí Bill of Rights has been posted on AFSCMEís 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 Patientsí Bill of Rights which includes whistleblower protection for health care workers.

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

Funding for Housing, Community Development and Veterans Programs

Attempts to pass major appropriations bills in the House and Senate which fund programs which benefit working families were in disarray.

The effort to pass the funding bill for housing, community development and veterans programs revealed the game of "hide and seek" to which House GOP leaders have resorted. The GOP leaders are attempting to hide two truths. Truth 1: Domestic programs will have to suffer draconian cuts unless the artificially low budget caps are lifted. Truth 2: They are not saving the budget surplus for Social Security. To hide the fact that the budget caps are being broken, appropriators were slapping emergency designations on regular spending items in order to plug the budget holes. By attaching the "emergency" label, those funds do not count against the budget caps but come out of the surplus which the GOP leaders have pledged is being saved for Social Security and the tax cut.

Because lawmakers were faced with these truths, the Republican leadership was desperately seeking enough votes to pass the bill -- and that meant more than just twisting arms. Their search led them to include over 200 pork-barrel projects to win membersí votes while they make deep cuts in key housing and community development programs. (House Speaker Hastert is getting $11.5 million for three of the 215 special interest projects).

By mid-week, the House Appropriations Subcommittee on VA-HUD and Independent Agencies approved a budget for the next fiscal year which took a cleaver to housing and community development programs despite the fact that the subcommittee declared that $3 billion in funding for veteransí programs was an "emergency." The use of the emergency designation meant that that $3 billion was not counted in the total billís cost.

The Public Housing Operating Subsidies program, which funds thousands of AFSCME membersí jobs, was frozen at last yearís level, $2.818 billion, almost $500 million less than what is needed to meet HUDís requirements under its Performance Funding System for operating support. The Public Housing Modernization was reduced by $450 million from its FY 1999 level; the Public Housing Drug Elimination Grants program was cut by $20 million from last yearís level. Even the popular Community Development Block Grant program (CDBG) was not spared, getting whacked with a $250 million cutback from FY 1999 to $4.5 billion.

The full Appropriations Committee was expected to consider the bill to fund housing, community development and veterans programs by the end of the week, but it will face an even greater uphill struggle. Bowing to the conservative wing of the party, Speaker Hastert declared that the $3 billion "emergency" designation for some veterans programs cannot be used. That means that the full committee will have to make additional cuts in the amount of $3 billion in order to meet the billís bottom line. If the full Appropriations Committee does succeed in approving the bill, it will be sent to the House floor for a vote next week before members leave Washington for their August recess.

Medicare

Democrats in the Senate offered a series of amendments to the tax bill which focus on the issue of Medicare. One amendment, offered by Sen. Ted Kennedy provides funding for a Medicare prescription drug program while another amendment, offered by Sen. John Kerry (D-MA), would have restored cuts imposed in the 1997 Balanced Budget Act. Both amendments failed. The amendments highlighted the fact the GOP leadership tax bill does nothing to strengthen or reform the Medicare program.

Prison Privatization

On Wednesday, July 21, 1999, the Public Safety Act (H.R. 979) was endorsed by its 100th cosponsor, Rep. David Bonior (D-MI). This bill, introduced at AFSCMEís urging, would prohibit the further privatization of federal, state, and local corrections facilities. The sponsors of the Public Safety Act are expected to request a hearing on the bill in the near future.

Attacks on Workers Rights

By a strict party line vote -- all GOP members in favor and all Democratic members opposed -- the House Education and the Workforce Committee approved legislation which guts fundamental worker rights. The latest in a series of bills which weaken federal labor protections, the committee affirmed anti-worker bills H.R. 1441 and H.R. 1987. H.R. 1441 would overturn a 1998 unanimous Supreme Court decision which upheld the long-standing practice of union organizers applying for and holding jobs for the purpose of organizing a particular workplace. H.R. 1987, mislabeled "The Fairness" bill, would require that the National Labor Relations Board (NLRB) and the Occupational Safety and Health Administration (OSHA) pay the fees and legal expenses of small businesses incurred in administrative and judicial proceeds before these agencies, even if the governmentís position is found to be justified.

Regulatory Policy/ Worker Safety

On Monday, July 26, 1999, the House passed the Regulatory Right-to-Know Act (H.R. 1074) by a margin of 254-157, leaving the bill vulnerable to Pres. Clintonís promised veto. This legislation would require the Office of Management and Budget to annually estimate the "efficiency" of federal regulations by calculating the overall costs and benefits. By forcing benefits, such as worker safety, to be expressed in dollars, this legislation would underestimate the value of federal regulations and would assist efforts to weaken worker safety protections in the future. Rep. Joe Hoeffel (D-PA), along with several other members of Congress, offered an amendment to the bill that would bring corporate subsidies under the scope of the legislation. This amendment failed by a vote of 192-217.

Social Security

Months after a small group of bipartisan senators announced their intention to introduce a bill requiring all workers aged 61 or less to establish a private investment account, they have finally done so. If the delay was caused by efforts to bring a large group of original cosponsors to the plan, they failed. S. 1383 was introduced with only six cosponsors in addition to the sponsor, Sen. Gregg Judd (R-NH). The six cosponsors are Sens. Bob Kerrey (D-NE), Charles Robb (D-VA), John Breaux (D-LA), Charles Grassley (R-IA), Fred Thompson (R-TN), and Craig Thomas (R-WY). S. 1383 would mandate that two percent of the current 12.4 percent combined employer-employee payroll tax be diverted into individual private accounts. The Social Security Trust Fund would suffer from reduced revenues to pay guaranteed benefits. In order to cover the shortfall, changes to the existing Social Security program would be made, including increasing the age of both early and normal retirement and reducing retirement benefits by cutting cost of living increases.

As the Senate debated its $792 billion tax giveaway legislation, lawmakers rejected proposals to establish a lockbox for Social Security trust fund receipts, 54-46; a lockbox for about $300 billion over 10 years to address Medicare, 42-58; and a proposal to delay the implementation of the tax cut until the solvency of Medicare and Social Security was assured, 46-54.

Corrections/ Mental Health

On Friday, July 23, 1999, Rep. Ted Strickland (D-OH) introduced legislation (H.R. 2594) to deal with the growing problem of mentally-ill inmates in corrections facilities. This bill, Americaís Law Enforcement and Mental Health Project, would authorize 25 demonstration projects in which certain nonviolent inmates who suffer from a mental illness could voluntarily enter into a separate judicially-supervised program. This bill would also authorize federal funds to be spent on the training of corrections officers to identify and address the needs of mentally-ill inmates. Recent news reports have stated that between 20-30 percent of the nationís inmate population suffer from some mental illness.

Funding for the District of Columbia

By a vote of 333-92, the House passed a $453 million fiscal District of Columbia spending bill (H.R. 2587). The legislation contained several social policy provisions which once threatened the possibility of passage. In the end, members agreed to let the measure move forward and battle the differences during the conference with the Senate.

Census 2000

The House took its first step toward funding next yearís census as the Appropriations Subcommittee on Commerce, Justice, State and Judiciary approved its version of the Commerce spending bill for the fiscal year that starts October 1, 1999. The subcommittee, chaired by Rep. Harold Rogers (R-KY), allocated $4.5 billion for final census preparations and operations. The subcommittee paid for the large jump in census costs by classifying Census 2000 funding as "emergency" spending.

The Senate also debated its version of the FY00 Commerce spending measure. The bill (S. 1217) does not include the extra funds the administration requested in order to comply with a January Supreme Court decision which prohibits sampling methods to calculate the state population totals used for congressional apportionment. The Senate approved S. 1217 by voice vote.

Trade Breaks for China

The resolution (H.J.Res. 57) disapproving the renewal of "normal trade relations" (NTR) with China (formally called MFN - Most Favored Nation) failed to get the necessary two-thirds vote. The vote was 170-260, with opponents of normal trade relations garnering four votes over the 1998 tally. AFSCME and the rest of the labor movement had supported H.J.Res. 57 because of Chinaís egregious record of worker and human rights abuses.