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Legislation Department
July 21, 2000

Legislation to Privatize Veterans Employment Services Is Delayed

AFSCME succeeded last week in getting a delay of a House committee meeting on legislation that, among other things, would have permitted 30 local pilot projects to competitively bid and privatize veterans employment services. Authors of the bill had hoped to rush the legislation to the House floor during the last week of July, but agreed to our request for the delay and have assured us that they will drop the privatization provisions. The bill, which also includes other changes to the veterans employment service programs, is not expected to be enacted into law this year.

Marriage Penalty Repeal Advances

The Senate followed the House and passed a second Republican leadership tax-cut priority, a bill (H.R. 4810) that would give married couples a $89.5 billion tax cut over five years. The bill is one of two tax bills advanced by GOP leaders. The measure aims to fix quirks in the tax code that cause some two-earner married couples to pay more than they would as single taxpayers. House Minority Leader Richard A. Gephardt (D-MO), described the GOP-backed tax cuts as "fiscally reckless, deeply flawed" and called for tax relief targeted to middle- and low-income families. According to Gephardt, the tax cuts are skewed to the top 1 percent of all taxpayers.

The House passed the measure by a vote of 271-156, which included three more Democratic supporters than the first time the House passed the bill, but the vote is still not large enough to override President Clinton's expected veto. The Senate agreed to the bill by a vote of 60-34.

Estate Tax Repeal Passed by Senate and Sent to the President

The Senate approved and sent to President Clinton a bill (H.R. 8) to repeal the federal inheritance tax, but the 59-39 vote fell well short of the two-thirds majority needed to override his promised veto. Nine Senate Democrats crossed party lines and voted for the bill: Senators Patty Murray (D-WA), John Breaux (D-LA), Max Cleland (D-GA), Dianne Feinstein (D-CA), Robert Torricelli (D-NJ), Ron Wyden (D-OR), Mary Landrieu (D-LA), Blanch Lincoln (D-AR) and Chuck Robb (D-VA). Three Republicans voted against repeal: Senators Lincoln Chafee (R-RI), James Jeffords (R-VT), and Arlen Specter (R-PA). The bill would phase in repeal of the estate tax by the year 2010. It would apply to those with estates in excess of $675,000 and would cost $104.5 billion over the next ten years. The House passed the same bill last month by a vote of 279-136, with 65 Democrats backing the bill. President Clinton is expected to veto the measure.

House Passes Plan to Boost Retirement Savings

The House passed by a vote of 401-25 a measure (H.R. 1102) that would increase from $2,000 to $5,000 the amount people may contribute annually to their individual retirement accounts (IRAs). The bill would also allow employees to become vested in company pension plans after three years, rather than the current five. Democrats argued the measure disproportionately favors high-income individuals who are already saving the maximum permitted, while providing few benefits for low- or middle-income workers. To that end, Democrats pushed a substitute amendment which was rejected by a vote of 200-221. Their plan would have created Retirement Savings Accounts allowing middle- and lower-income people to receive a refundable tax credit of up to 50 percent, for a maximum of $1,000, on contributions made to a traditional IRA or an employer-sponsored 401(k) plan. The House approved plan also includes a number of provisions aiding public pension plans by allowing enhanced portability between retirement plans, purchase of service credits, modernization of governmental 457 deferred compensation plans and certain other changes.

House Votes to Protect Irresponsible Contractors

The House approved an amendment to the Treasury-Postal Appropriations bill sponsored by Representatives Tom Davis (R-VA) and Jim Moran (D-VA) that would block the Administration from issuing pending "Responsible Contractor" regulations.

There have been laws on the books for decades that require that the government can only award government contracts to responsible contractors - contractors with a satisfactory record of integrity and business ethics. In June 2000, the Clinton Administration proposed new rules that would clarify the rules for determining who is a "responsible contractor". The regulations, which AFSCME strongly supported, would require that contractors receiving federal money establish that they have conducted their business responsibly and in compliance with law. The regulations would allow the government to consider substantial noncompliance with labor law, employment laws, environmental laws, antitrust laws, tax, civil rights or consumer protection laws in determining whether a contractor is 'responsible.' Each contract would be reviewed individually so that only companies that demonstrate a serious and pervasive noncompliance with law might be found not responsible and denied a particular contract.

The "Responsible Contractor" reforms are supported by environmental, consumer, civil rights, labor and women's organizations, but opposed by the business community, especially the hi-tech and defense industries. Below is a list of the Republicans who voted "right" and the Democrats who voted "wrong" on the Davis-Moran amendment.

"Responsible Contractor" Bill
Sponsored by Representative Tom Davis (R-VA)
and Jim Moran (D-VA)
Republicans Voting Right
Democrats Voting Wrong
Diaz-Balart(FL) Berry(AR) McIntyre(NC)
Gilman(NY) Boyd(FL) Moran(VA)
Hyde(IL) Cramer(AL) Spratt(SC)
King(NY) Davis(FL) Stenholm(TX)
Ney(OH) Dooley(CA) Tanner(TN)
Quinn(NY) Eshoo(CA) Tauscher(CA)
Ros-Lehtinen(FL) Hall(TX) Taylor(MS)
Shimkus(IL) Inslee(WA) Traficant(OH)
Smith(NJ) John(LA) Turner(TX)
Sweeney(NY) Larson(CT) Udall(CO)
Lucas(KY) WU(OR)
Martinez(CA)
McCarthy(NY)

Tax Cut for Social Security Recipients Jeopardizes Medicare

The House Ways and Means Committee approved the latest on its list of GOP leadership backed tax cuts. The bill, H.R. 4865, was approved on a largely party line vote. The bill would benefit seniors whose outside income plus half of their Social Security benefits exceeds $34,000 for individuals and $44,000 for a couple. Such people now pay income tax on 85% of their Social Security benefits. The bill would roll back the taxable percentage of benefits from 85% to 50% - the level in effect prior to 1993. The percentage was increased as part of the 1993 budget deficit agreement between the Clinton Administration and the Congress and is dedicated to the Medicare Hospital Insurance Trust Fund. AFSCME and all but one Democrat on the Committee, Congressman Gerald Kleczka (WI) who voted with the majority, opposed the bill because of its negative impact on Medicare. The Senate is on record as supporting the rollback.

Child Support Legislation Approved

The House Ways and Means Committee approved legislation to allow poor families to keep more child support money when they are on welfare. As expected, the Committee also dropped a provision that would have given private collectors access to government databases and enforcement tools, including tax intercepts and replaced it instead with a study. The bill was approved with bipartisan support.

Senate Quickly and Quietly Passes Legislative Branch Bill

After months of being entangled in a procedural feud, the fiscal 2001 spending bill that funds Congress' own operations finally passed the Senate by voice vote. The House and Senate bills now head to conference where negotiations are likely to be acrimonious over the steep cuts House lawmakers made in the day-to-day operations of the Capitol. AFSCME is sending a letter to the members of the conference committee supporting the Senate version (S. 2603) which increases funding for all legislative agencies, including a 26 percent increase for the Capitol Police.

Now, China in September

A week ago, it appeared that strong pressure from proponents of Permanent Normal Trade Relations (PNTR) for China would persuade the Senate GOP leadership to schedule the vote before the August congressional recess. However, this week, Senate Majority Leader Trent Lott (MS) said that the Senate would likely postpone the debate and not vote on PNTR until after Labor Day in order to make as much progress as possible on spending bills prior to the recess.

Corrections Legislation Moves

Next week, two bills that will directly impact corrections officers may be considered in the Senate. S. 2081, the "Religious Land Use and Institutionalized Persons Act", is scheduled to come to the Senate floor for a vote. AFSCME has opposed this legislation because it could increase prisoner litigation. Check AFSCME's web site for more detailed information and send an e-mail to your Senator at www.afscme.org, under AFSCME Corrections United. The Senate Health, Education, Labor and Pensions Committee is holding a hearing on S. 1016, the Public Safety Employer-Employee Cooperation Act of 1999 on July 25, 2000. This bill extends collective bargaining rights to the approximately 10,000 corrections officers who currently do not have these rights.