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
September 24, 1999

Clinton Kills Tax Bill

Pres. Clinton kept his word and vetoed the $792 billion, 10-year congressional tax cut plan, saying it gives up too much revenue and would require deep cuts in vital federal programs. At the same time, however, Clinton urged congressional leaders to send him a smaller package. Senate Majority Leader Trent Lott (R-MS) and Speaker Dennis Hastert (R-IL) said they had no plan to move another major tax cut any time soon.

With just days remaining before the October 1st start of fiscal year 2000, Congress continued their deadlock over most major spending bills. Thus far, only four of the 13 normal spending bills have been approved by Congress and sent to the president, and only one of the bills has been signed into law. Not wanting a repeat of the 1995 government shutdown, GOP leaders disclosed that they will prepare legislation to keep the government operating with a temporary short-term funding bill in order to buy time to work out a larger deal. Under the temporary "Continuing Resolution," those programs without new funding bills would be funded for three weeks at last year’s levels. But, working out a larger deal may not be so easy since Congress has been unwilling to consider lifting the unrealistic caps on domestic spending agreed to as part of the 1997 budget deal.

With less than two weeks left before the Elementary and Secondary Education Act (ESEA) -- which authorizes all federal funding for K-12 education programs -- expires on October 1, representatives and senators have made little progress toward crafting a bill. However, under current law, the ESEA is automatically extended for an entire year if it is not reauthorized by the new fiscal year. Because of that escape hatch, neither the House nor Senate have been working to meet the October 1st deadline. In fact, aides for both Democrats and Republicans believe their side will have the political advantage in negotiating the ESEA reauthorization during an election year.

During the last week of September, the House Education and the Workforce Committee will mark up Title I funding for disadvantaged children and eight other programs. The Republicans will attempt to remove some federal requirements attached to Title I funding, yet still target it toward disadvantaged youth and schools. AFSCME has been working to protect teachers’ aides and assistants in the schools which receive Title I funds from a proposed requirement by GOP leaders that they have 2-4 years of college by the year 2002. We are asking for the development of a paraprofessional certification program administered by state or local education agencies -- and more time to complete it -- by paraprofessionals.

The House Appropriations Subcommittee on Labor, Health and Human Services and Education approved what was described as a "gimmick-laden" bill providing funding for fiscal year 2000. Overall, the bill reduces funding levels slightly below this year’s levels and $2.2 billion below the president’s request. At the same time, the bill increases funds for the National Institutes of Health and education for the disabled, it severely cuts money for job training, labor law enforcement, the National Labor Relations Board (NLRB), the Occupational Safety and Health Administration (OSHA), and employment assistance. Moreover, a great deal of the funding is "forward funded" until 2001.

In order to avoid breaking the tight existing spending caps which congressional leaders refuse to reconsider, Subcommittee chairman John Porter (R-IL) decided to push $15.7 billion in education, health and training money into 2001. The $15.7 billion is combined with almost $5 billion in funding for Title I disadvantaged student moneys that was already forward funded. In addition, the bill rescinds $3 billion in FY 2000 welfare payments to the states. It defers release of about $8 billion in additional education funds, including teacher training and vocational education, until 2001 and delays some HHS program funds, including $1.4 billion in Head Start, as well as $2.7 billion in labor programs until 2001. The bill also declares other programs, including $1.4 billion in heating and cooling aid to low-income people as emergency spending also to avoid the spending caps.

Even with the gimmicks, the bill eliminates funding for hiring new teachers and the Goals 2000 education improvement programs, cuts job training by 10 percent, takes $10 million from the National Labor Relations Board, slashes OSHA by $17 million, and freezes funding at last year’s levels for most other domestic programs, most of which fund vital state and local services.

Education Secretary Richard Riley, objecting to the education cuts and deferrals, says he will recommend that the president veto the bill. The National Governors Association (NGA) also complained bitterly, saying the bill short-changes the states.

Efforts to pass a minimum wage increase have steadily intensified over the past three months. House Democratic Whip David Bonior (MI) is leading a major push to get 218 signatures on a discharge petition which would force the House leadership to schedule a floor vote on his bill (H.R. 325. H.R. 325 would increase the minimum wage by one dollar from the current $5.15 to $6.15 an hour in two annual hikes and currently has 146 cosponsors. Even if the required 218 signatures are not obtained, the effort highlights the minimum wage issue and puts pressure on congressional leaders to negotiate a compromise. Also adding to the leadership’s headaches are pressures within their own ranks for a minimum wage increase. Seventeen GOP members signed a letter to Speaker Hastert urging support for a three-year, one dollar minimum wage increase proposal sponsored by Rep. Jack Quinn (NY).

In the Senate, Democrats, led by Sen. Edward Kennedy, want to force a vote on S. 192 which is identical to H.R. 325 by adding it as an amendment to bankruptcy reform legislation (S. 625) which has been debated on the Senate floor. But, most GOP senators oppose the minimum wage increase arguing, despite the absence of any historical proof, that it would devastate some small businesses and cost many people their jobs. In a parliamentary "dance" this week the Senate rejected, along party lines, a GOP leadership effort to end debate on the bankruptcy bill because it would prevent the minimum wage amendment from being offered.

The actions have prompted the business community and congressional allies to conclude that they may not be able to stop minimum wage legislation. They are therefore working hard to insure that any increase is smaller than the one dollar, two-year increase and that the package includes business tax breaks and some weakening of federal labor law. Reps. John Shimkus (R-IL) and Rick Lazio (R-NY) are expected to offer a minimum wage bill which would include a $1.20 increase over four years and repeals the $14 Federal Unemployment Tax Act (FUTA) surcharge. FUTA is the tax employers pay for unemployment insurance administration for employees. Of the total $56 a year per employee, $14 is a surtax which has been in effect since the 1970s. Repeal -- which AFSCME strongly opposes -- would cost the system one-fourth of its revenue without addressing serious and chronic underfunding of state office operations.

House Speaker Dennis Hastert (R-IL) has announced that managed care reform legislation will be considered on the floor of the House of Representatives during the week of October 4. It appears that three bills will be considered: a bipartisan bill (H.R. 2723) introduced by Reps. Charles Norwood (R-GA) and John Dingell (D-MI) and endorsed by AFSCME, H.R. 2824 introduced by Reps. Tom Coburn (R-OK) and John Shadegg (R-AZ) and a new bill to be introduced today by Rep. John Boehner (R-OH). The Boehner bill is expected to be very similar to one he introduced last spring and will likely win the support of the House GOP leadership.

Among the three bills, only the Norwood-Dingell bill includes whistleblower protections for health care workers. It is also the only bill which will truly hold plans responsible for injuries to patients when they refuse to authorize medical care. While proponents of the Coburn-Shadegg bill claim that it holds plans responsible for treatment decisions, this provision of the bill is convoluted and will make it difficult for patients to successfully sue plans.

At this point, it is unclear how the debate will be structured. However, leaks from the GOP leadership indicate that they intend to allow certain amendments to be offered to the Norwood-Dingell bill. It appears that the Republican leadership will mount an effort to strip the whistleblower provision from the bill. AFSCME has launched a major lobbying effort urging conservative Democrats and moderate Republicans to support the whistleblower language.

The bill (H.R. 2684) that contains funding for federal housing programs for fiscal year 2000 went to the Senate floor this week where that body chose to deem $600 million for veterans’ health care programs as so-called "emergency spending" (and thus avoiding the stringent budgeting caps) while rejecting efforts to add another $1.3 billion. The House had rejected using the emergency designation to add funds to this bill so it is unclear what position the House conferees will take in conference.

The Senate plan would increase funding for the public housing operating program slightly over the House’s figure, from $2.818 billion to $2.9 billion, and keep the Public Housing Drug Elimination program at its current level of $310 million. Funds for the Community Development Block Grant (CDBG) program would be greater than in the House-passed bill, up from $4.5 billion to $4.8 billion -- a $300 million increase over the current fiscal year. However, the funds for the Public Housing Modernization program remain the same level as in the House bill, $2.55 billion, a drop of $445 million from FY 1999, while the HOPE VI program was reduced in the Senate bill from the House’s level of $575 to $500 million.

House Judiciary Committee Chairman Henry Hyde (R-IL) has announced that the Judiciary Committee will take up a bill (H.R. 1304) which would amend antitrust laws in order to allow private practice physicians to collectively bargain contracts with managed care organizations. While a date has not been set, Chairman Hyde has indicated that it will be in October. The committee held a hearing on this bill in June at which Dr. Robert Weinmann, president of the Union of American Physicians and Dentists/AFSCME, testified. The outlook for a positive outcome in the committee is promising, with just over one-half of the committee cosponsoring the legislation.