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Legislation Department
October 15, 1999

Budget

The House delayed action on the final fiscal year 2000 Labor, Health and Human Services and Education (Labor-HHS-Education) spending bill, but GOP leaders assured their rank-and-file that they would complete the budget process without tapping into Social Security surpluses or by making "deep and painful" spending cuts. The latest gimmick is a proposed across-the-board cut of one percent in all 13 appropriations bills with no exemptions.

However, despite the assurances by the GOP leaders that the Social Security surpluses would not be raided, the nonpartisan Congressional Budget Office (CBO) says that the Republican-controlled Congress is on a path to spend between $30-$35 billion more than permitted under the FY 2000 spending caps. CBO Director Dan Crippen estimates that, after subtracting the projected $14 billion non-Social Security surplus, Congress is on a path that will cause them to dip into the Social Security Trust Fund surplus by $16 billion to $21 billion -- something GOP leaders vowed they would not do.

Managed Care Reform

Now that both the House and Senate have passed patients' rights legislation, a conference committee must be appointed by congressional leaders in order to reconcile the differences between the two bills. After being criticized for dragging its feet, the House GOP leadership has indicated that it will appoint conferees next week. The Senate conferees have just been selected and they are: Jim Jeffords (R-VT), Edward M. Kennedy (D-MA), Judd Gregg (R-NH), Christopher J. Dodd (D-CT), Bill Frist (R-TN), Tom Harkin (D-IA), Tim Hutchinson (R-AR), Barbara A. Mikulski (D-MD), Don Nickles (R-OK), John D. Rockefeller (D-WV), Phil Gramm (R-TX), and Michael B. Enzi (R-WY).

Senate Majority Leader Trent Lott (R-MS) has indicated that he is not interested in working out a compromise bill which would be significantly different than the Senate-passed bill. That bill (S. 1344) was passed in July, largely along party lines, and has many serious deficiencies. It fails to cover state and local government workers, lacks whistleblower protections for health care workers and does not hold plans accountable when they injure patients by delaying or denying care. The Republican conferees selected by Sen. Lott are expected to reflect his point of view as they all helped lead the fight against efforts to pass real reform in the Senate.

AFSCME will be working with allied organizations to push conferees for legislation which mirrors the provisions of the House-passed bill.

CALLS NEEDED!!!

Call your representative and senators at 1-877-722-7494. Let them know that you want the conference committee to begin its work without delay. Also let them know that S. 1344 is inadequate and that you support H.R. 2723 because it would provide meaningful protections for consumers and whistleblower protections for health care workers.

Minimum Wage And Big Tax Breaks For Business

A bipartisan group of House members introduced a minimum wage proposal which also contains a package of tax breaks for small businesses totaling $35 billion over five years.

The minimum wage proposal resembles the GOP's dream tax bill with proposals to cut the estate tax by $16 billion over five years, a reduction in the deduction for business meals worth $5.2 billion, an extension of tax incentives to businesses who hire low-income workers and full deduction of health care costs for the self-employed. All of these measures were lifted from the GOP-crafted $792 billion tax bill which President Clinton vetoed earlier this fall. The lead cosponsor of the proposal, Rick Lazio (R-NY), reiterated the GOP's plan to provide enough tax breaks to achieve a 2-1 ratio to the costs of the wage increase. Democrats charged that the cost of the measure would balloon after 2004 just as the vetoed tax bill would have done. The bill is reported to increase the minimum wage by $1 per hour over three years beginning April 2000, with additional one-year increments of 33 cents.

The minimum wage now stands at $5.15 an hour and the Bonior-Kennedy proposal (H.R. 325 and S. 190) would increase the minimum wage by $1 in two annual hikes beginning on January 1, 2000. AFSCME supports the two-year, $1 increase and believes that the three-year, $1 increase is inadequate and that the size and nature of the tax breaks are indefensible.

Unemployment Tax Retained In Bipartisan Minimum Wage Bill

In a victory for AFSCME, the sponsors of the bipartisan minimum wage bill decided not to include a provision sought by business groups to repeal the unemployment surtax paid by employers. This FUTA surtax accounts for 25 percent of the revenue in the federal unemployment insurance trust fund and is a key component in broader unemployment insurance reform efforts.

Campaign Finance Reform

The Senate has once again started debate on campaign finance reform. However, rather than taking up the more comprehensive House-passed bill, Senate sponsors John McCain (R-AZ) and Russ Feingold (D-WI) are calling for action on a scaled-back bill which focuses on banning "soft money" contributions to political parties. The plan avoids placing restrictions on "issue advocacy" advertising by third parties and other controversial provisions. Even with the scaled-back bill, Sen. Mitch McConnell (R-KY) and others are opposing the bill, making it unlikely that the Senate will be able to complete action. Another "Paycheck Deception" amendment by Sen. Don Nickles (R-OK) is expected which would attempt to limit union political activity. The revised bill already calls for a codification of the Beck decision which is intended to prohibit unions from using dues for political purposes without consent.

District of Columbia Appropriations

Several weeks after a presidential veto of the FY 2000 spending bill for the District of Columbia, the House has approved yet another D.C. spending bill by a vote of 211-205. The measure, which was drafted by House and Senate leadership, makes virtually no changes to the original bill and maintains the social policy riders that prompted the presidential veto. White House officials released a statement saying that they will recommend that the President again veto this bill.

Fiscal Year 2000 Housing and Community Development Budget

The House passed the Veterans Affairs, Housing and Urban Development (VA-HUD) and Independent Agencies conference agreement by a vote of 406-18. It is awaiting action in the Senate and is expected to be signed by the President. Funding levels for the public housing programs, which were of chief concern to AFSCME, all received increases in the conference over the original House- and Senate-passed bills.

Medicare -- Payments to Providers

The House Ways and Means Subcommittee on Health approved a bill restoring cuts to health care providers made under the 1997 Balanced Budget Act (BBA). The package totals $9.4 billion over five years.

As passed, the package is not offset by new revenues, but would be paid for from the non-Social Security surplus. The plan includes $1.8 billion for skilled nursing facilities, $1.3 billion for Medicare managed care plans, $3 billion for hospitals, $1.3 billion for home health agencies, $600 million for rehab services, and $400 million for dialysis providers.

The Senate Finance Committee is working on a similar package.

Education

The House Education and the Workforce Committee approved legislation (H.R. 2) that would authorize $8.35 billion for federal education grant programs for poor and disadvantaged children. The bill, touted as a bipartisan compromise, was approved 42-6 with few changes. The funds would be used for the Title I Local Education Agency Grants in FY 2000, plus more for related programs for native, rural, homeless and other special students, for a total of $9.33 billion a year for five years.

As approved, the bill would, among other things, increase the standards for paraprofessionals or teacher aides in the classroom who receive Title I funds. This means that affected workers have three years from the date of enactment of the new law to demonstrate, through an "assessment," the ability to complete their educationally-related duties.

Welfare-To-Work Program Modified

A House Ways and Means subcommittee has approved legislation which includes revisions to current eligibility rules for participating in the welfare-to-work program. The changes are intended to make it easier for states to enroll individuals in this program. They are included in a bill called the Fathers Count Act which also creates a small program of grants to encourage unmarried fathers of children on welfare to participate in their children's lives. The program includes authority to create subsidized employment, and as a result of our efforts, extends the welfare reform worker displacement provisions to the employment activities.