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Legislation Department
October 1, 1999

Fiscal Year 2000 Budget: Broken Promises, Lies and Robbery

At the start of the 106th Congress last January, the GOP congressional leadership made two promises to the American public. First, they pledged that they would get all 13 FY 2000 spending bills signed into law on time, by the start of the fiscal year which begins every year on the first day of October. And, second, they promised to lock-up the Social Security surplus in a "lock box" which would keep it from being used to fund other government programs.

Now nine months later, they have already broken the first promise and seem on the verge of breaking the other. As of September 30, only three funding bills have been signed into law by the president while another, the District of Columbia funding bill, has been vetoed by Pres. Clinton and another awaits his signature. House-Senate deliberations have been completed on another two funding bills, transportation and foreign operations. However, the bills which fund most federal domestic programs remain mired in controversy. The housing and community development bill has passed both chambers but a difficult conference and a presidential veto threat loom ahead while the most contentious bill which funds education, labor, health care and most social service programs is pending action before the House and has not passed the Senate.

In order to keep the federal government operating and prevent a shutdown, the Congress passed and the president signed a three-week stop-gap spending bill. This gives the Congress and Pres. Clinton until October 21 to complete the 13 appropriations bills. Administration officials left open the possibility that any further extension of the appropriations deadline might be vetoed.

Now desperate for money to finance their spending bills, congressional leaders seem to be resorting to a combination of lying about the numbers and devising a funding scheme that is closer to robbery than an accounting gimmick.

In order to reduce the amount of money which they will raid from the Social Security program, House Majority Whip Tom DeLay (R-TX) announced a plan to delay billions of dollars in federal tax breaks from the Earned Income Tax Credit (EITC) for millions of low-income working families. For 25 years, the EITC has been paid to qualifying families -- about 20 million Americans in households earning $10,200 to $30,580 in a lump payment. Under the DeLay plan, taxpayers receiving the EITC would get 12 monthly checks instead of a single annual payment like every other tax payer receives when qualifying for a tax refund. The average family qualifying for the EITC received $1,890 in one check allowing some to pay off a debt, make a down payment on a car or pay tuition. Instead, that same family would receive a check for $157.50 a month, a sum better suited for buying groceries or paying utility bills. Even Texas Governor George Bush, campaigning in California, criticized the GOP congressional leadership plan, saying "I don't think they ought to balance their budget on the backs of the poor."

Fiscal Year 2000 Labor, Health and Human Services Funding Tangled Up In Conflict and Controversy

Congressional leaders continued to struggle this week to produce a viable funding bill for a wide range of domestic programs in the face of their self-imposed and unrealistic spending caps. In the House, the full House Appropriations Committee finally approved the bill after a tortuous day-long meeting during which the committee backed away from taking $3 billion in welfare (TANF) money from the states and, instead, adopted a plan to delay $8 billion in EITC payments to the working poor (see above). The House bill is essentially a political document which seriously underfunds many labor-related programs, including state unemployment insurance operations, rejects other proposals proposed by the president, including his plan to add 100,000 teachers to reduce class size, and pushes $16 billion in program spending into the first month of the next fiscal year.

In the Senate, the Appropriations Committee approved a bill with higher funding levels which it achieved by transferring approximately $10 billion from the defense and commerce funding bills and by "forward funding" or pushing into the first month of the next fiscal year approximately the same amount as the House. As a result, the Senate bill does not have the same low funding levels for Labor Department programs.

The Senate bill cut $850 million from the Title XX social services block grant, putting it at $1.050 billion, far below the $2.38 billion provided by law. AFSCME joined a wide range of organizations in supporting an amendment by Sen. Bob Graham (D-FL) to add $1.33 billion to the social services block grant which, for budget scorekeeping reasons, would be released in the first month of the next fiscal year. A total of 13 Republican senators joined all but one Democrat in supporting the amendment.

The Senate also took up two labor-related amendments. One, which failed on a tie vote, would have sliced funding for the National Labor Relations Board. The other, which passed, would weaken OSHA enforcement by shifting funds from enforcement activities to voluntary compliance. Action on the bill will continue on the Senate floor next week when amendments to block the OSHA ergonomics standards and weaken Davis-Bacon are expected.

Managed Care Reform

The House floor debate on managed care reform is expected to take place next week. It appears that the Norwood-Dingell bill (H.R. 2723) will be the underlying bill for debate, with bills sponsored by Rep. John Boehner (R-OH) (H.R. 2926) and Reps. Tom Coburn (R-OK) and John Shadegg (R-AZ) (H.R. 2824) offered as substitutes. The House leadership has also indicated that certain amendments will be offered in order to weaken H.R. 2723 or to load it up with enough "poison pills" that it would become unacceptable to a majority in the House.

It is expected that an amendment will be offered which would strip a provision which makes plans accountable for medical decisions which result in injury or death to a patient. It is also likely that an amendment to strip whistleblower protection will be offered by the Republican leadership. The leadership has stated that it will also attempt to add a package of amendments which would expand Medical Savings Accounts, Association Health Plans and Healthmarts. All of these are opposed by AFSCME because they would segment the insured population into healthy and not-so-healthy groups and drive up the cost of insurance plans which cover AFSCME members. Several AFSCME affiliates are working in targeted districts to urge members to support the Norwood-Dingell bill and to oppose an amendment to strip whistleblower protections from the bill.

Minimum Wage

Bowing to increased pressure to increase the federal minimum wage, Senate Majority Leader Trent Lott (MS) said that the Senate will take up minimum wage legislation by the year's end. Lott's announcement was a reversal of past publicly-stated plans. Just last week, Lott had supported a procedural move that, in effect, blocked Democratic attempts led by Sen. Edward Kennedy (MA) to debate and vote on increasing the minimum wage by one dollar. Lott said that the level of the increase will depend on what small business benefits are tied to the package. Lott's position was not supported by other members of the Senate GOP leadership. Majority Whip Don Nickles (OK) opposes any federal minimum wage, even the current one.

A GOP House package which would include a minimum wage increase coupled with tax breaks is expected.

Transportation Funding

On Wednesday, September 29, Senate and House negotiators adopted a $50.2 billion FY 2000 spending agreement leading up to what some believe will be a dramatic floor debate over language in the agreement on funding for the Federal Aviation Administration (FAA). The conference agreement would provide $27.7 billion for highway spending and $5.8 billion for transit programs, amounts representing increases over FY 1999 levels.

District of Columbia Funding

Pres. Clinton vetoed the FY 2000 District of Columbia spending bill on Tuesday, September 28, marking the first veto of a spending bill this year. The president said that the bill (H.R. 2587) contained a "number of highly objectionable provisions that are unwarranted intrusions into local citizens' decisions about local matters." Although the president favored the $429.1 million in federal funding provided in H.R. 2587, he was opposed to language which: restricted the city from using its own funds to advocate voting representation in the Congress; prohibited the use of federal or local funds to pay for abortions; disallowed a local law providing health benefits for domestic partners; and language which prohibited the city from using local funds to implement a needle exchange program.

Federal Employees

On October 1, 1999, the Library of Congress will join the over 140 federal agencies who have established a transit fare subsidy program for its employees. The presidents of the four unions (including two AFSCME locals) and representatives of Library management have jointly developed implementation procedures which were presented to staff in mid-September. AFSCME locals spearheaded the drive to win this new benefit.

Congress approved the conference report for the FY 2000 Treasury, Postal Service and General Government funding bill (H.R. 2490). The measure contains a 4.8 percent pay increase for federal workers next year. Rep. Steny Hoyer (D-MD) and Sen. Paul Sarbanes (D-MD) led the effort in Congress this year to ensure pay parity between military and civilian workers.

Government Pension Offset

Rep. William Jefferson (D-LA), principal sponsor of legislation (H.R. 1217) that modifies government pension offset provisions that currently reduce benefits for retirees and slash benefits for widows who are eligible for both civil service pensions and Social Security spousal benefits, announced 11 new cosponsors to the bill. This brings the total to 192, and the Congressman credited massive grassroots lobbying by government workers across the country with attracting this many cosponsors.

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