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Legislation Department
September 10, 1999

Congress Returns From Recess to Battle the Budget, But Gives Up On Tax Cuts

Congress returned to work this week after its month-long August recess to a full agenda and relatively few days to complete action, particularly before the September 30th end of the fiscal year when the new budget has to be approved. However, before turning their full attention to the budget, House and Senate leaders quickly pronounced their $800 billion tax cut for the rich to be dead in the water. Not only does the tax cut face a certain presidential veto, but it also lacks the national support leaders had hoped would materialize. As they abandoned hope of reaching a compromise on a smaller tax bill, leaders instead vowed to fight Pres. Clinton on spending. Rather than squandering the projected surplus on a tax cut for the wealthy and big business, GOP leaders say they will try to hold the line on spending, forcing deep cuts in domestic spending and fighting Pres. Clinton’s efforts to push increases in popular programs. Doing so, however, will mean spending bills for the new fiscal year will seriously underfund federal programs for education, the environment, health care, housing and much more.

The House passed, 235-187, H.R. 2684, the Veterans’ Affairs, Housing and Urban Development (VA-HUD) and Independent Agencies Fiscal 2000 Appropriations bill which contains funding for federal housing programs. The Public Housing Operating Subsidies program, which funds thousands of AFSCME members’ jobs, was frozen at last year’s level of $2.818 billion, almost $500 million less than what is needed to meet HUD’s requirements under its Performance Funding System for operating support. The Public Housing Modernization program was reduced by $450 million from its FY 1999 level; the Public Housing Drug Elimination Grants program was cut by $20 million from last year’s 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.

Funding for these programs has not been considered yet in the Senate, even at the subcommittee level. With deep cuts to the housing and NASA budgets, the final compromise angered many and has provoked the White House to issue a veto threat.

Just prior to the August recess, Reps. John Dingell (D-MI) and Charles Norwood (R-GA) introduced a bipartisan, compromise bill to reform managed care -- the Consensus Managed Care Improvement Act of 1999 (H.R. 2723). The bill provides meaningful reform and includes many of the same protections as the Democrats’ Patients’ Bill of Rights. In a big victory for AFSCME, the bill includes whistleblower protections for health care professionals who advocate for their patients. In addition, the bill applies to all who are covered by managed care plans, including public sector workers.

The bill was introduced just minutes before the Congress adjourned for its August recess. Among the original 65 cosponsors, there are 21 Republicans. Since most Democrats are expected to support the bill, the legislation appears to have enough support to be approved if it were to be brought up for a vote on the House floor. However, it is not clear if the House Republican leadership will allow a clean vote on the bill. The leadership is adamantly opposed to the bill as is the insurance industry and the National Federation of Independent Business (NFIB). The latter two groups have been waging a media and grassroots campaign against H.R. 2723 in selected congressional districts.

Since H.R. 2723 was introduced, the House Republican leadership has been scrambling to come up with an alternative which they could bring to the floor for a vote. Reps. Thomas Coburn (R-OK) and John Shadegg (R-AZ) agreed to work on an alternative and introduced a bill yesterday. The Coburn-Shadegg bill has significant weaknesses, including the absence of a provision to protect health care professionals who advocate for patients. While the bill technically would allow plans to be sued for injuries to patients, the bill has features which allow plans to effectively block suits from proceeding to court. There are also significant limits on the damages which could be awarded to injured patients, or their survivors, should a suit be heard.

However, even the watered-down Coburn-Shadegg bill may fail to secure the support of the House Republican leadership. The bill was introduced without an endorsement from House Speaker Dennis Hastert (R-IL).

On Thursday, September 9, the House approved the FY 2000 District of Columbia spending agreement (conference report) by a vote of 208-206. Democrats strongly opposed the measure because of the social policy provisions which were included. The conference report provides $429 million in federal funds for District activities and provides a $6.8 billion budget.

The controversial social policy measures include an amendment that would stop the District from spending its own funds on needle exchange programs, which provide intravenous drug users with clean needles. Del. Eleanor Holmes Norton (D-DC) has called upon Pres. Clinton to veto the measure.