FEDERAL LEGISLATIVE REPORT April 4, 2008

[Omaha Steve]

Below are the top stories of the week from Capitol Hill.

In this issue:

* Senators Rockefeller, Snowe and Kennedy Introduce Legislation Providing Aid to States and Relief from Bush Medicaid Regulations
* House Committee Hears About Harm Caused by Recent Medicaid Regulations
* Trade Agreement Debate Looming
* House Subcommittee Hears How Private Medicare Plans Threaten Medicare's Future
* Senate Housing Foreclosure Bill Advances
* National Labor Relations Board (NLRB) Fails to Safeguard Workers Rights
* House Panel Approves Election Reform Legislation
* Paid Parental Leave Bill for Federal Employees Advances in House

Senators Rockefeller, Snowe and Kennedy Introduce Legislation Providing Aid to States and Relief from Bush Medicaid Regulations
Sens. Jay Rockefeller (D-WV), Olympia Snowe (R-ME) and Edward Kennedy (D-MA) introduced the Economic Recovery in Health Care Act of 2008 (S. 2819) on Thursday. The legislation would implement a one-year moratorium on regulatory changes to Medicaid and the State Children's Health Insurance Program (SCHIP) proposed by the Bush Administration and provide states with $6 billion in targeted fiscal relief through an increase in the federal Medicaid matching payments and $6 billion in targeted state grants. To qualify for the state fiscal relief, each state must meet specific criteria, including increased unemployment rates, increased food stamp participation and increased foreclosure rates. Fiscal relief is desperately needed because half the states are struggling to fill budget shortfalls totaling at least $39 billion in fiscal year 2009, and as the economy continues to deteriorate more states will fall into budgetary crisis for several years. As a result of the state budgetary crisis, millions of aging and disabled individuals and children will have their health care coverage cut or eliminated. Moreover, states in budget crisis are unable to help localities avoid cutting public safety, education, social services and health care due to local budget shortfalls from the precipitous drop in property tax revenues.

Medicaid spending represents 17 percent of states' general fund expenditures and is the largest component of state spending overall. Temporary state fiscal relief is needed to augment the current level of federal support for state Medicaid programs. Such support would help prevent states, which are bound to maintain balanced budgets, from being forced to take actions that would jeopardize the health care of millions of Americans. State fiscal relief is an effective and proven economic stimulus. Every dollar invested in state and local government will yield $1.36 in economic activity.

The legislation would extend existing moratoria and establish new moratoria on recent Medicaid regulations, which shift federal Medicaid costs on to states. The bill would block implementation of regulations to: limit federal Medicaid payments concerning public hospitals; eliminate funds for teaching hospitals used for graduate medical education; prohibit federal Medicaid funds for rehabilitative services provided as a part of foster care, adoptive services education or juvenile justice; eliminate federal Medicaid funds for administrative activities by schools, such as transporting school-aged children with disabilities; and reduce in Medicaid funds for targeted case management and outpatient clinic and hospital services. H.R. 2819 would also preserve state health care coverage for more low-income children by blocking implementation of a Bush Administration SCHIP directive to restrict state efforts to expand the program for working families.
(Linda Bennett- [e-mail])

House Committee Hears About Harm Caused by Recent Medicaid Regulations
The House Energy and Commerce Committee held a hearing Thursday on legislation (H.R. 5613) supported by AFSCME, which would establish a moratorium on seven Medicaid regulations recently issued by the Centers for Medicare and Medicaid Services (CMS) until April of 2009. According to the Administration, the regulations would "save" Medicaid $15 billion by reducing federal payments to the states. But witnesses testified the real cost to states could approach $50 billion and the regulations would reduce health care for poor school children, nursing home residents and pregnant women, among others. Even in a positive economy, forcing states to absorb these federal costs would strain state budgets; during the current economic downturn, such additional costs are devastating.

AFSCME has been advocating vigorously for the passage of H.R. 5613 and for fiscal relief for states in budgetary crisis. If you have examples of how the Medicaid regulations or your state's budgetary crisis are threatening AFSCME members and programs in your state, please contact Linda Bennett at [e-mail].

Trade Agreement Debate Looming
The Bush Administration has signaled that it plans to try to force a vote on the Colombia Free Trade Agreement by sending it to Congress as early as next week. The action will lead to a contentious debate on the politically sensitive issue of free trade that has been playing out in the presidential primaries. It already has set in motion a strenuous effort by organized labor to derail the agreement with Colombia which has had numerous human rights violations, including the murder of a number of trade unionists.
As part of a strategy to smooth the way for the trade agreement, the Administration has indicated that it would work with Congress on getting an extension of the Trade Adjustment Assistance (TAA) program to help workers who lose their jobs due to trade policies.. Some discussions, primarily with Senate Finance Committee Chairman Max Baucus (D-NY) and ranking member Charles Grassley (R-IA), have occurred over the last several weeks.

Any negotiations with the Administration are likely to weaken a bill introduced by Sen. Baucus, which already is weaker than a House bill approved last year with AFSCME's support. Among other matters, the Baucus bill lacks important provisions that are in the House bill, including a requirement that the TAA program not be privatized as previously proposed in draft Labor Department regulation and new resources for case management assistance for trade affected workers. The Baucus bill also includes a wage insurance program opposed by organized labor. Any negotiations with the Administration are likely to result in further weakening of the Senate bill.
(Nanine Meiklejohn- [e-mail])

House Subcommittee Hears How Private Medicare Plans Threaten Medicare's Future
On April 1, the Health Subcommittee of House Ways and Means Committee heard testimony on the 2008 Medicare Trustee report which confirmed that the subsidies to insurance companies to offer a private substitute to traditional Medicare are causing a harmful drain of Medicare's hospital trust fund. Medicare Advantage plans are private insurance plans offered to beneficiaries as a complete alternative to Medicare – they are not Medigap policies but a substitute for traditional Medicare. These private plans receive subsidies to cover not only the medical benefits for enrollees but marketing, administration, and profits as well. For every dollar spent for benefits under traditional Medicare, it costs $1.17 when a private Medicare Advantage fee-for-service plan provides the benefits. The additional cost is borne by taxpayers and premium hikes to all beneficiaries, even though only 20 percent of beneficiaries are enrolled in these private substitutes for Medicare. Reducing the government payments to Medicare Advantage plans would strengthen the solvency of the Medicare hospital trust fund and reduce Part B premiums for all beneficiaries by $3 per month. AFSCME continues to urge Congress to roll-back the subsidies to these Medicare Advantage plans and improve the Medicare program for all beneficiaries.
(Linda Bennett- [e-mail])

Senate Housing Foreclosure Bill Advances
Senate House and Republican leaders agreed on the outlines of a compromise package designed to reduce problems from the ongoing housing foreclosure and subprime mortgage crises. One provision provides $4 billion of Community Development Block Grant (CDBG) funds to states and localities to help rehabilitate or purchase foreclosed properties in order to subsequently rent or resell them, which should help stabilize neighborhoods and reduce potentially large drops in the values of neighboring homes and government property tax revenues. At least 25 percent of these funds must help households with incomes below 50 percent of area median income. More broadly, the package provides $10 billion of tax-exempt, private activity bond authority for refinancing or giving mortgages to first time home buyers and funds housing counseling to those at-risk of foreclosure. Unfortunately, the bill also grants a $6 billion tax break to homebuilders and other non-housing businesses by allowing them to carry back losses from 2008 and 2009 to offset income in the prior four years. While it also grants non-itemizers a $500 federal income tax deduction for local property taxes, this tax break is restricted to residents of local jurisdictions that do not increase taxes between April 1, 2008 through December 31, 2008, reducing federal revenues by $1.5 billion. The Senate voted 58-36 to table or to effectively defeat an amendment to allow bankruptcy judges to modify mortgages of a debtor's principal residence.
(Marc Granowitter- [e-mail])

National Labor Relations Board (NLRB) Fails to Safeguard Workers Rights
The Senate Appropriations Subcommittee on Labor, Health and Human Services, Education, and Related Agencies held a hearing examining whether the NLRB is effectively safeguarding worker rights. Starkly different views were presented by the Board's remaining two members: Chairman Peter C. Schaumber highlighted the NLRB's "impressive track record" while member Wilma B. Liebman admitted "the Board is not doing everything it can to protect workers rights" and noted "the loss of confidence in the Board and its process." A labor rights expert testified that an "NLRB election is 3,500 times dirtier than federal elections," citing the lack of equal access to voter lists for unions, "sham secret ballots," routine firing of pro-union employees, and mass anti-union meetings held by management.
(Andrea DiBitetto- [e-mail])

House Panel Approves Election Reform Legislation
The House Administration Committee approved legislation on April 2 that will provide reimbursements to states and localities that choose to convert back to paper-based ballot machines. The legislation (H.R. 5036), sponsored by Rep. Rush Holt (D-NY), would also reimburse states that choose to conduct manual audits or to hand-count this year's election results. H.R. 5036 would apply only to the 2008 elections. In addition, the committee approved legislation (H.R. 281) sponsored by Rep. Susan Davis (D-CA) that would eliminate some states' requirements that voters provide an "excuse" in order to vote by absentee ballot. Twenty-one states currently have such absentee ballot limitations.
(Cynthia Bradley- [e-mail])

Paid Parental Leave Bill for Federal Employees Advances in House
A House panel approved legislation (H.R. 3799) which would provide eight work weeks of paid parental leave and benefits to most federal and congressional employees for leave taken for the birth or adoption of a child. Rep. Carolyn Maloney (D-NY) introduced the legislation in the hopes of preventing federal employees from having to choose between their paycheck and their new child.
(Andrea DiBitetto- [e-mail])

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