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Legislation Department
September 17, 1999

Tax Bill Sent To The President

The $800 billion congressionally-approved tax cut for the wealthy and big corporations was sent to President Clinton. The president has already said he will veto the bill when he receives it and although he has signaled his willingness to negotiate a smaller, fairer tax cut measure, congressional leaders have said they are not interested in a compromise, although House Majority Leader Dick Armey (R-TX) has now said he is ready to talk about serious tax relief after action is completed on spending issues.

Fiscal Year 2000 Budget: The Hunt For Dollars

The desperate search for billions of dollars to fund the FY 2000 federal budget is being described in many ways from "creative" to "a train wreck waiting to happen." Sen. Arlen Specter (R-PA), Chair of the Senate committee which drafts the spending plan for education, labor, health care and social service programs, said, "We all know that we engage in a lot of smoke and mirrors."

Americans hearing of the unprecedented budget surpluses just do not understand why Congress is cutting Medicare, education and other vital domestic programs while promising a huge tax cut which the congressional leadership claims is going to be funded from the budget surplus. Here is the actual situation: there is no non-Social Security budget surplus. The so-called "surplus" is not a "surplus" at all, but the result of a budget agreement between the administration and the Congress in 1997 that placed budget caps on discretionary programs which required real spending cuts in federal programs in the next federal fiscal year which begins on October 1, 1999 and in the two subsequent budget years.

However, instead of explaining why the budget caps are too low and offering a credible plan to raise the caps, the congressional leadership is resorting to gimmicks, tricks and "robbery" to try to fund the federal budget for the budget year beginning in less than a month.

These are some of the "gimmicks" discussed this week:

  • Gimmick #1 - The 13-Month Year Plan:

    Declare that the calendar year will consist of 13 months instead of 12. This strategy, rumored to having been developed by the Senate leadership, would employ the "advance funding" gimmick to free up $12 to $16 billion more for spending for FY 2000. Since the additional funds would not be released until after the end of FY 2000, they would not count against the spending caps. The strategy is short-sided because it will simply delay and worsen the budget crunch for FYs 2001 and 2002 when the budget caps are even lower than for FY 2000.

  • Gimmick #2 - Robbing From the Working Poor Plan:

    The House leadership is considering a proposal which would delay $7 billion worth of tax credit checks to millions of working poor families. Rather than receiving their earned-income tax credits (EITC) in a lump sum after they file -- as most of the 20 million recipients currently do, and as all taxpayers who receive tax refunds do -- people receiving EITC would get them in quarterly or monthly installments.

  • Gimmick #3 - The Indian-Giver Plan:

    Getting states to give back the federal dollars that they have not spent for welfare, Medicaid and other programs.

House Approves Campaign Finance Reform Bill

In a near repeat of last year's action, the House has once again approved a bipartisan campaign finance reform bill. The Shays-Meehan bill sponsored by Reps. Christopher Shays (R-CT) and Martin Meehan (D-MA) was approved by the House by a vote of 252-177. The bill calls for a ban on soft money, curbs "issue advocacy" ads, tightens independent expenditures, increases disclosure and makes it illegal to raise money from foreign nationals. A number of amendments and substitutes to the bill were turned away. One amendment by Rep. William Goodling (R-PA) deceptively named the "Paycheck Fairness" amendment, which would have required written permission from both union members and non-members before spending dues money on political activities, was withdrawn without a vote because there was not enough support to pass it. The Shays-Meehan bill now moves to the Senate. In action last year, the Senate was unable to garner the 60 votes needed to end a filibuster and the bill died.

Managed Care Reform

The House Republican leadership continues to campaign against the managed care reform bill (H.R. 2723) introduced by Reps. Charles Norwood (R-GA) and John Dingell (D-MI), which AFSCME has endorsed. House leaders have also failed to endorse a bill (H.R. 2824) introduced by Reps. Thomas Coburn (R-OK) and John Shadegg (R-AZ). That bill was drafted at the request of Speaker Dennis Hastert (R-IL) as an alternative to the Norwood-Dingell bill.

Small and large business groups, as well as the insurance industry, are continuing a media and grassroots effort aimed at defeating the Norwood-Dingell bill. By and large, these groups also oppose the Coburn-Shadegg bill and are claiming that both bills would allow patients to sue their employers when they are injured by a health plan's refusal to authorize treatment. However, these claims belie provisions in both bills which prevent employers from being held liable unless they are involved in treatment decisions.

While the situation is still fluid, it appears that the GOP leadership is leaning towards a strategy to schedule a floor vote on H.R. 2723 as soon as early October. However, under this plan, they would allow amendments to be offered which would gut the bill. An amendment to strip the whistleblower provision is almost certain to be one of the amendments allowed. Opposition to the whistleblower provision comes primarily from the GOP leadership, from organizations representing hospitals and some health care insurers.

Medicare Provider Cuts

The Senate Democrats met this week to finalize their legislation to restore Medicare payment cuts to nursing homes, home health care agencies, hospital outpatient services and teaching hospitals. The Democrats are considering a package of about $20 billion over five years to restore cuts in Medicare reimbursement rates made as part of the 1997 Balanced Budget Act. Sen. William Roth (R-DE), Chair of the Senate Finance Committee, is also putting together a package of payment restorations as part of a broad Medicare reform package.

Fiscal Year 2000 Housing Funds

The Senate Veterans Affairs and Housing and Urban Development (VA-HUD) and Independent Agencies Appropriations Subcommittee approved its spending plan for FY 2000 by raising the funds for the Public Housing Operating program slightly over the House's figure from $2.818 billion to $2.9 billion, and bumping up the budget for the Public Housing Drug Elimination program from $290 million in the House bill to $310 million. Funds for the Community Development Block Grant (CDBG) program was also increased over the House bill from $4.5 billion to $4.8 billion -- a $50 million increase over the current fiscal year. However, the funds for the Modernization Program remained the same at $2.55 million, a drop of $450 million from FY 1999, while the HOPE VI program was reduced from the House's level of $575 million to $500 million.

D.C. Appropriations

Senators approved the conference agreement for the FY 2000 District of Columbia spending bill by a vote of 52-39, making it the fourth of 13 spending bills ready to be sent to the president. The president, however, has threatened to veto it because it contains objectionable policy riders. One such rider would stop the District from spending its own funds on needle exchange programs, which provide intravenous drug users with clean needles. The compromise bill appropriates $429 million in federal funds for District activities, which is $255 million below last year's level.

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!