Legislative Updates

AFSCME LEGISLATIVE REPORT
August 1, 2008

In this issue:

• Senate Democrats Release Spending Bill
• State and Local Fiscal Relief and Medicaid Aid to States
• Senate Republicans Stall Tax Extenders Bill
• Congress Clears Higher Education Bill
• Housing Foreclosure Bill Becomes Law
• House Committee Votes to Reduce State and Local Bond Costs
• House Approves Equal Pay Legislation
• House Votes to Reauthorize E-Verify System
• FAA Collective Bargaining Legislation Introduced in the Senate

Senate Democrats Release Spending Bill

Senate Appropriations Committee Chairman Robert Byrd (D-WV) released a draft $24.1 billion fiscal year 2008 spending bill that he called a “stimulus supplemental.”  Consideration of the plan is expected in September.  The draft focuses on annually-approved spending programs, but other funding and tax provisions may be added when it is debated.  The draft does not include increased Medicaid funding to states, restoration of child support funding, and extended unemployment insurance benefits at this point, but it contains many significant funding increases to help states and localities continue delivering vital public services and modernize their facilities and infrastructure.  Some of the key funding provisions of importance to AFSCME are: $400 million for a one-year extension of the Secure Rural Schools Act; $215 million for public housing authorities to fund urgent safety, security and energy related needs; $250 million for employment and training activities for dislocated workers; $893 million for transit agencies to meet capital and operating needs for growing demand; and $3.6 billion for highway investments.  It also transfers cash into the highway fund to maintain solvency through FY 2009; $490 million for Byrne Justice Assistance Grants to support state and local police; $850 million for school repair and renovation;  $200 million for Environmental Protection Agency’s Clean Water State Revolving Fund to fund states with low-cost loans to reduce the cost of sewer projects; and $300 million for competitive grants to states and localities for innovative energy efficiency and renewable energy demonstration projects.
(Marc Granowitter- mgranowitter@afscme.org)

State and Local Fiscal Relief and Medicaid Aid to States

The House’s bipartisan Medicaid funding bill (H.R. 5268), which temporarily increases Medicaid funds to states by an estimated $13 billion, now has 130 cosponsors, 125 Democrats and five Republicans.  Speaker Nancy Pelosi (D-CA) has said she wants a stimulus package of at least $50 billion that is expected to contain additional assistance for states to pay for the soaring cost of Medicaid.  Recently, the National Association of Counties wrote a letter supporting H.R. 5268 which endorsed “efforts to enact this important legislation” and on July 22, AARP wrote to Speaker Pelosi and Minority Leader John Boehner (R-OH) in support of a second stimulus bill that includes enhanced Medicaid funding. 
(Marc Granowitter- mgranowitter@afscme.org)

Senate Republicans Stall Tax Extenders Bill

This week, the Senate voted 53-43 and 51-43, both along party lines, to reject moving to consider the $126 billion tax extenders bill.  Further consideration may take place in September.  The Senate’s tax extenders bill consists of two separate parts.  The first part is a fully paid for $57 billion amalgam of tax breaks for individuals and businesses with several renewal energy tax incentives.  The second part lacks offsets and costs $68.9 billion mostly for a one-year patch to the Alternative Minimum Tax (AMT).  While the AMT patch is considered must-pass legislation in order to avoid further AMT taxes on many middle-income taxpayers, the rest of the package is uncertain with mixed support. 
(Marc Granowitter- mgranowitter@afscme.org)

Congress Clears Higher Education Bill

On Thursday, Congress cleared legislation (H.R. 4137 – H.Rept. 110-803) overhauling federal support for higher education, sending the bill to President Bush for his expected signature.  The House voted 380-49; the Senate voted 83-8.  The bill increases the maximum Pell grant for low-income students from $5,800 to $8,000 a year by the 2014-2015 academic years.  The legislation also creates a $10,000 student loan forgiveness program for graduates to work in high-need, often low-pay fields, including early childhood education, child welfare, nursing, teaching and other public services.  The bill also tightens the regulation of private student loans, banning “sweetheart deals” between lenders and schools.  And, it contains several provisions aimed at keeping college costs down. 
(Fran Bernstein- fbernstein@afscme.org)

Housing Foreclosure Bill Becomes Law

The Senate voted 72-13 to approve the American Housing Rescue and Foreclosure Prevention Act (H.R. 3221), and President Bush signed it into law.  It provides potential relief to at-risk homeowners through Federal Housing Administration (FHA)-insured refinancing, increases FHA loan limits, reforms other FHA policies and creates a new strong regulator for Freddie Mac and Fannie Mae.  In addition, the bill grants $3.9 billion to states and localities to buy, manage, redevelop, and resell abandoned and foreclosed homes and residential properties.  This neighborhood stabilization fund is designed to help stem the decline in property values and increase the stock of much needed affordable housing.  It also establishes a new national Affordable Housing Trust Fund which is the first new federal housing production program in 18 years, and once fully operational, it is expected to generate $300 million annually to assist low-income households. 
(Marc Granowitter- mgranowitter@afscme.org)

House Committee Votes to Reduce State and Local Bond Costs

The House Financial Services Committee passed by voice vote the Municipal Bond Fairness Act (H.R. 6308.) which would require credit-rating firms to evaluate the risk of municipal and corporate bonds using the same scale.  They would have to base their ratings on the likelihood of repayment which is expected to raise the ratings of municipal bonds and thereby reduce the interest costs to states and localities. 
(Marc Granowitter- mgranowitter@afscme.org)

House Approves Equal Pay Legislation

By a vote of 247-178, the House approved the Paycheck Fairness Act (H.R. 1338.) which would make it easier for women to seek legal remedies when they suspect they have been victims of wage discrimination.  The bill makes it clear that men and women should be paid equally for equal work.  It also removes caps on the compensation a victim can receive from a discrimination lawsuit.  In addition, the legislation protects employees who share salary information from retaliation, and places the burden of proof on employers to prove that wage discrepancies between men and women are due to actual business reasons and not gender.  A companion bill in the Senate (S. 766) has not advanced. 
(Cynthia Bradley- cbradley@afscme.org)

House Votes to Reauthorize E-Verify System

On Thursday, the House voted overwhelmingly to reauthorize E-Verify for five years, a controversial government-sponsored employee verification system which permits employers to electronically verify the work authorization status of employees by matching information such as names and Social Security numbers against information in the Social Security Administration (SSA) and Department of Homeland Security databases.  The measure (H.R. 6633) passed by a vote of 407-2.  The vote was a rejection of a stronger measure sponsored by Rep. Heath Shuler (D-NC) that would have made participation in E-Verify mandatory and would permanently authorize it.  Critics of the program cite numerous incidents of employer misuse, hiring discrimination, and verification problems due to SSA database inaccuracies.  The Senate is expected to consider its E-Verify legislation in September. 
(Fran Bernstein- fbernstein@afscme.org)

FAA Collective Bargaining Legislation Introduced in the Senate

Sens. Frank Lautenberg (D-NJ) and James Inhofe (R-OK) have introduced the Federal Aviation Administration Employee Retention Act (H.R. 3416), legislation that will improve the dispute resolution process at the Federal Aviation Administration (FAA).  AFSCME represented employees at the FAA headquarters that have been without a collective bargaining agreement since early 2001 when the Agency refused to sign an agreement that had been reached by the parties’ negotiators and ratified by the employees.  H.R. 3416 will address the problems by establishing an impasse procedure in such cases. 
(Cynthia Bradley- cbradley@afscme.org)

 

AFSCME LEGISLATIVE BULLETIN

AFSCME Green Sheet (No. 7)

Rising Health Care Costs

August 7, 2008

 The increasing cost of health care is one of the biggest challenges facing working families, retirees and employers alike. 

 The factors that drive up the cost of health care are many. Among them – a large population of uninsured (nearly 500,000) and countless under-insured citizens costs us all when they don’t seek medical attention until costly medical intervention is necessary. Inadequate Medical Assistance payments to nursing homes, hospitals and other health care providers result in higher service charges imposed on the rest of us. Insurance companies that overcharge for insurance coverage and out-of-control hospital building and spending on fancy “hospital boutiques” also contribute to high health care costs. These are but a few of the drivers of costly health care that we all end up paying for, directly or indirectly.

 The High Cost of Health Care Hurts Public Employees

 Public employees, who largely enjoy good health care benefits, also are affected by the high cost of medical care, both at the kitchen table and at the bargaining table.  Time and time again, in bargaining, AFSCME members have given up pay raises to keep adequate health care benefits. A medical inflation rate of 10% a year far outstrips workers’ and employers’ ability to pay. 

 Severely constrained county and municipal budgets are hurting public employees, and the rising cost of health care is making a difficult situation even worse for us.  Local officials predict that 2009 will present the toughest budget challenges in decades.  The state budget picture is not much better – revenues are projected to fall short of commitments to the tune of some $1.6 billion in the next budget cycle (2009-2011).

 Health Care Reform Proposals Under Consideration at the State Capitol

 To solve this problem and protect our membership, AFSCME has been looking at various health care system fixes that have been advanced by Wisconsin lawmakers and Governor Doyle.  In addition, AFSCME is working with a coalition of like-minded organizations, such as the AFL – CIO , seeking health care reforms.

 To their credit, the Governor and some legislators are trying to do something positive and different about the health care problem, with the goal of ensuring that all residents have access to affordable, good quality health care services. 

 Last year Governor Doyle initiated a series of health care reforms including an expansion of the popular “BadgerCare” program, which provides basic health care services to families with limited income, under 185% of the federal poverty level ( FPL ).  His plan, known as BadgerCare Plus, expands access to families up to 200% of the FPL .

 Many legislators back comprehensive reform as a solution to the rising cost of health care.  Two distinct plans have been under consideration. One was drafted by the AFL – CIO and another was offered by David Reimer, former City of Milwaukee administrator and former state budget director under Governor Doyle.  

 The AFL – CIO plan, known as the Wisconsin Health Care Plan, would create an employment-based health care system for all working people. It would eliminate much of the costly bureaucracy built into our current health care delivery system. The WHCP would be funded with a tax on payroll.  We won’t attempt to explain the details of this plan in this Green Sheet. You can go to www.wisaflcio.org for details. 

 

The Reimer plan, known as the Wisconsin Health Partnership Plan, would cover all Wisconsin residents under the age of 65 but would maintain much of the infrastructure of the current system. It also would be paid for with a payroll tax.  See www.wisconsinhealthproject.org for details.

 Last summer, Democrats in the state Senate crafted their own plan, which they call Healthy Wisconsin, and inserted it in the 2007-09 state budget bill. It borrows from parts of both the Reimer and the AFL – CIO plans. Their plan proposes comprehensive coverage for all state residents and is also funded with a payroll tax. See www.wisaflcio.org details. 

 Healthy Wisconsin was not included in the final state budget but it was the subject of intense debate in the Capitol for months during the budget deliberations. The Senate held a public hearing on the plan last March and it is likely that the Senate will advance Healthy Wisconsin again next year. 

 Healthy Wisconsin is a bold initiative that Senate Democrats have been praised for and criticized for advancing.  Supporters hail Healthy Wisconsin for its comprehensive health care reforms. Critics claim that it would be costly and impose new taxes on employers.

 The Payroll Tax Matter

 Like the Reimer and the AFL – CIO plans, Healthy Wisconsin relies upon a payroll tax. Opponents of health care reform in any form highly criticize the payroll tax as too costly for employers.  Backers of health care reform say Wisconsin can no longer afford to do nothing about rising health care costs. 

 The fact is that employers, just like the rest of us, pay for rising health care costs, one way or another.  Employers who currently offer health insurance to workers spend an average of 15% of payroll for workers’ health care premiums, which is more than they would be expected to pay under a comprehensive plan like Healthy Wisconsin. Employers who don’t offer health insurance to their workers pay indirectly for a health care system that is dysfunctional and costly. 

 The detractors of the AFL – CIO , Reimer or Healthy Wisconsin plans focus solely on the payroll tax component of these plans while dismissing the possible savings and other benefits of health care reform.  They fail us all by criticizing plans that have been put forth while offering few solutions of their own to fix a health care system that is broken and falling far short of meeting the needs of our citizens.

 Health Savings Accounts Undermine the Health Insurance Benefits

  Some legislators in the Capitol take a completely different approach to deal with rising health care costs.  They support creating state tax breaks for health savings accounts, hoping that HSAs will encourage workers to save and make them better consumers of health care.

 HSAs have serious drawbacks for working people.  They pose long-term threats to the employment-based system of health insurance. HSAs don’t benefit workers who live paycheck to paycheck and lack the extra income to make contributions to a health savings account. They do nothing to improve the quality of health care or provide chronic disease management.  HSAs don’t address skyrocketing health care costs. Fundamentally, however, HSAs benefit the wealthy with tax breaks while encouraging employers to slash benefits for lower and middle-income workers. 

 How some legislators manipulate the issue to weaken our collective bargaining laws

 There is also another school of thought among some legislators about how to deal with rising health care costs as they affect local government budgets. These legislators support weakening Wisconsin ’s collective bargaining laws to take away the ability of unions to bargain good health care benefits for union members. This approach does nothing to reduce the cost of health care and is nothing more than thinly disguised union busting. This misguided thinking blames workers for high health care costs and aims to take away good benefits from some instead of working to improve health care access for all.

 AFSCME has vigorously fended off these union busting proposals, which were advanced in several different forms by Assembly leaders during the 2007-09 budget debates last summer.  Governor Doyle and many lawmakers stood firmly with us in support of maintaining Wisconsin ’s strong collective bargaining laws and these proposals were defeated. 

 Everyone  Deserves Quality, Affordable Health Care

 When the next Legislature convenes in January of 2009, AFSCME will continue to lobby with our coalition partners and work with friendly legislators and the Governor to bring about changes in the system to ensure high quality, affordable health care.  If we can achieve some systemic changes in our health system, things might ease up for our members at the bargaining table and improve health care access for us all. 

 This summer and fall, AFSCME members should ask candidates for state office whether they will pledge to work on comprehensive reforms to provide quality, affordable health care for all Wisconsin residents.