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Legislation Department
March 31, 2000

Senate Budget Mirrors Flawed House Plan

Snared in intramural squabbles, Senate GOP leaders finally resolved a month-long dispute that has slowed congressional approval of a budget and tax plan for the coming year. The Senate Budget Committee approved the spending plan on a party line vote after Senate Budget Chairman Pete Domenici (R-NM) announced a compromise that mirrored the plan approved by the full House last week. Until now, the right-wing of the GOP, led by Sen. Phil Gramm (R-TX), had blocked Budget Committee action in an attempt to cut domestic spending and give a bigger tax cut.

The Senate plan calls for $596.5 billion in total fiscal 2001 discretionary spending, up about $10.5 billion over this year's level but below an inflation-adjusted level. Most of the small increase is targeted to the military. The plan calls for net tax cuts of $150 billion over the next five years. The compromise also sets aside $20 billion for a new Medicare prescription drug program provided that the Congress and the administration can reach agreement on the specifics.

Efforts to pass the 2001 budget blueprint have also been complicated by a parallel drive by the Clinton administration and House GOP leaders to pass an "emergency" supplemental spending bill. The House Republican leaders tacked about $8 billion in additional spending onto President Clinton's $5.3 billion request with about $9 billion of the total going to the Pentagon. But the fate of the supplemental spending bill in the Senate is uncertain. Senate Majority Leader Trent Lott (MI) has said that he does not want to bring a mid-year spending bill to the Senate floor.

The Senate Finance Committee, on a party line vote, approved a $248 billion bill designed to eliminate the so-called marriage penalty tax. The measure, which was supported by all Republican members and opposed by all Democrats, would give the lion's share of benefits to the highest income taxpayers, and, in fact, half of the tax breaks provided would go to taxpayers who already receive a marriage bonus. The committee, again on a party line vote, rejected a narrower marriage penalty relief bill offered by Sen. Daniel Patrick Moynihan (D-NY).

The trustees of the Medicare and Social Security Trust Funds released their report about the fiscal viability of both programs. In the most positive assessment of the Medicare program in a quarter century, the trustees extended the financial life of the Medicare program by eight years, to 2023. The trustees issued an almost equally positive report about the Social Security trust fund, projecting that it would remain solvent for another three years past earlier projections, until 2037.

The Medicare trust fund projections could increase pressure on Congress to add a new prescription drug benefit to the program.

Efforts to give minimum wage workers a long overdue increase remained stalled. The Senate GOP leadership failed to get agreement to separate the minimum wage provision from the larger bankruptcy bill in which it is contained so that it could be sent to a conference with the House. The Senate-passed provision would require that the $1 increase be stretched out over three years, costing minimum wage workers about $1,400. The House passed the two-year, $1 hike last earlier this month. In an effort to short-circuit the need to go to a conference, Sen. Edward Kennedy (D-MA) has re-introduced his proposal (S. 2284) calling for a minimum wage hike of $1 over two years.

House leaders pulled a key GOP tax proposal (H.R. 7) that was scheduled for floor action this week which included a proposal to establish tax-free Education Savings Accounts (ESAs). However, a group of mainly moderate Republican members balked when the GOP leadership tried to squelch an amendment dealing with school construction – an issue that is also a top priority for Democrats. Concerned that they could not prevail on a key procedural vote, GOP leaders pulled the bill.

AFSCME and other unions and education associations have been lobbying against ESAs because they, in effect, take federal funds away from the public schools that need them and only benefit upper income taxpayers.

After a mark-up that stretched over two weeks, the House Judiciary Committee voted 26 to 2 on Thursday to approve the Quality Health-Care Coalition Act (H.R. 1304), introduced by Reps. Tom Campbell (R-CA) and John Conyers (D-MI). Following the mark-up, Reps. Campbell and Conyers held a press conference during which they urged House Speaker Dennis Hastert (R-IL) to quickly schedule the bill for a floor vote. The bill, strongly supported by AFSCME, would allow health care professionals who are in private practice or are independent contractors to collectively negotiate the terms of their contracts with managed care organizations.

However, it is not clear that a floor vote will take place soon. Leaders of the Education and the Workforce Committee, the Commerce Committee, and the Ways and Means Committee have all written the Speaker asserting that their committees should be given a chance to consider the bill. Referring the bill to another committee would be a serious setback as there are a limited number of legislative days left in this session.

During the committee debate on Thursday, Rep. Edward Pease (R-IN) offered an amendment which would have required all bargaining units to receive approval of the U.S. Department of Justice or the Federal Trade Commission before they could engage in bargaining. Because these agencies oppose the bill, the effect of the Pease amendment would have been to gut the legislation. However, at the last moment, Rep. Pease withdrew his amendment.

Senate HELP Committee Chair, Sen. Jim Jeffords (R-VT) unveiled a bipartisan proposal to reauthorize the Ryan White AIDS law. The proposal, supported by the committee’s ranking Democrat, Sen. Edward Kennedy, would double the minimum funding available to states. It would also authorize a new supplemental state grant for underserved areas.

House Democrats are likely to fall well short of supplying the 100 votes the GOP leadership has said it needs from that side of the aisle in order to pass legislation granting China Permanent Normal Trade Relations (PNTR). Rep. Robert Matsui (D-CA), a leading Democratic proponent of PNTR, predicted that only about 70-80 House Democrats would support PNTR. The waning Democratic support was made even clearer as leading opponents of PNTR released a "switchers" letter signed by over 25 House Democrats. The majority of the signatories have supported annual renewal of "normal trade relations" status for China, but will oppose a permanent extension. Both sides agree that if the vote is delayed beyond the end of May and closer to Election Day, the number of opponents is likely to grow.

The U.S. Housing and Urban Development Department (HUD) sent a report, "Rental Housing Assistance – The Worsening Crisis," to Congress which finds that a record 5.4 million low-income families are in need of housing assistance due to a shrinking number of affordable rental units. HUD Secretary Andrew Cuomo urged the Congress to approve a series of initiatives that President Clinton requested in his proposed 2001 budget to increase the supply of affordable housing.

While the administration is requesting a modest boost in funding for the Public Housing Operating Fund from its current level of $3.135 to $3.192 billion, and adding $50 million to the FY 2000 level of $575 million for the HOPE VI program for severely distressed public housing, it is actually proposing to reduce the Public Housing Capital Fund for modernization from its FY 2000 level of $2.9 billion to $2.74 billion. Meanwhile, the administration has requested $690 million for 120,000 new rental assistance vouchers, $1.2 billion for homeless grants and $1.65 billion for HOME program grants.

Co-sponsors of the House and Senate Government Pension Offset Reform bills (H.R. 1217 and S. 717), an AFSCME lobbying priority, are increasing with the House bill having 218 signatories and the Senate bill with 18 co-sponsors.

Currently, under the Government Pension Offset (GPO), two-thirds of a public pension is offset against the Social Security spousal benefit if retirees are receiving a public pension from work not covered by Social Security. This legislation would repeal the GPO for public pension recipients whose combined public pension and social security payment is less than $1,200 per month.

H.R. 1000, the bill to reauthorize programs of the Federal Aviation Administration (FAA), was presented to President Clinton on March 28, 2000 for his signature. The President is expected to sign the legislation that gives whistleblower protections and Merit System Protection board (MSPB) coverage to FAA employees.

AFSCME sent a letter to Senate Majority Leader Trent Lott (R-MS) expressing serious concern over his legislative proposal (S. 2285) that would repeal the 4.3-cent federal fuel tax. His measure would also suspend the remainder of the 18.4 cents-a-gallon federal tax for the rest of the year if gasoline prices reach $2 a gallon between now and December 31. AFSCME cited the loss of over $20 billion in federal highway and transit dollars and $3.8 billion in Airport and Airways Trust Fund losses as reasons to oppose the bill. While the stated intent is to lower gasoline prices, our letter points out that there is no guarantee that repeal of the fuel taxes would lower gas prices since previous decreases in the fuel tax have not been passed on to the consumer. The Clinton Administration's effort to persuade OPEC to increase production did, however, result in an OPEC vote to raise production.

The House defeated an amendment that would have dismantled an agreement reached by the Clinton Administration and the Governor of Puerto Rico on the use of the Island of Vieques, Puerto Rico as a weapons training range. The amendment was defeated by a vote of 183-232 and was offered to the fiscal 2000 supplemental spending measure (H.R. 3908) by Rep. Tillie Fowler (R-FL). The amendment would have prevented the use of funds for a referendum so that Puerto Rican citizens can voice their opinions on the use of Vieques as a training range. Also, the amendment would have prevented the use of any funds until live fire training has been resumed on the Vieques range. The Fowler amendment also attempted to prevent the citizens of Puerto Rico from peacefully protesting near the facility.

• AFSCME Weekly Report Archive