Salt of the Earth: Legislative update August 1999

In session: legislative update
August 1999

Your taxes at work?

Congress adjourned for Recess on August 7th. It will resume business in Washington on September 7th. This month is a critical time to talk to your Senator and Representative at home about their impending votes on the federal budget, which is supposed to be decided by September 30th.
Congress continues to debate deep cuts in social programs while voting to provide costly tax breaks primarily benefiting the wealthy. This month long recess is an opportunity to ensure that Congress hears loudly from constituents. Below is a summary of the overall status and 4 major areas affecting the federal budget.
OVERVIEW: There are 13 Appropriation Bills. None have been voted into law as of this date. The spending caps (legal limits on what Congress can spend) are so restrictive that Congress is unlikely to gain sufficient votes to make the drastic cuts that they require. At this point, the option of raising spending caps is politically unappealing. The only alternative for funding programs is so-called "emergency spending," which allows for circumventing the spending caps by tapping into the budget surplus.
THE TAX BILL: The House and Senate reached a compromise on a tax cut bill that will cost $792 billion over the next decade. It will benefit the wealthiest taxpayers the most, providing two-thirds of its tax cuts to the best-off tenth of all taxpayers. Under this plan, the richest 1 percent will get more than $46,000 per year in tax breaks. For a thorough analysis of the bill, see Citizens for Tax Justice.
Supporters says the money needed to pay for the proposed tax cuts will come from the projected federal budget surplus. The existence of this surplus depends upon severe cuts in discretionary social spending. Congress voted for the tax bill by a margin of 221 to 206 in the House and 50 to 49 in the Senate.

Housing program cuts proposed

The House Appropriations Committee approved the HUD-VA bill on July 30th. The House bill cuts the Community Development Block Grant (CDBG) program, Homeless Assistance, and Public Housing, and other crucial programs. These cuts come at a time when over 9 million very low-income households pay more than half of their income for housing. The Senate HUD-VA bill proposes to cut housing programs by 13.3 percent. The bill will not be voted on until after Congress returns from recess, after which time both bills will go into House-Senate Conference Committee before a final vote.
LOCAL FACT: Topeka, Kansas would lose $325,700 in CDBG funds if the Senate version passes in its current form. To find out what your city or state would lose in CDBG funds, visit the National Priorities Project. Its report "CDBG at Risk: Compromising our Communities" shows the loss in CDBG funds between 1980 and 1999 for all 989 entitlement cities. State-by-state information on the loss of CDBG monies compared to the increase in poverty rates over the same period of time is also available.

Is there an F-22 in your future?

Both the House and Senate passed their own versions of the Pentagon bill prior to Recess. Each totaled $263 billion, a $14 billion increase over last year's Pentagon budget. The bill will go to Conference Committee after recess and be put to a final vote sometime in September. The F-22 fighter jet program is the most controversial piece of the Pentagon budget. The most costly of all the fighter jet programs, the original estimated cost per fighter of $35 million has now risen to $200 million each. The House bill cut funding to the F-22 program by $1.8 billion; the Senate bill kept the program fully funded.
Currently, there is intense lobbying by Defense Secretary William Cohen, Lockheed-Martin (the defense contractor building the jets) and President Clinton to restore funding in the Conference version of the bill.
LOCAL FACT: The F-22 fighter jet program would cost the people of Topeka, KS $18.7 million. To find out what the fighter jet program would cost your city or state, see NPPs report "Choices That Matter: Federal Decisions and Your Hometown", available online at the National Priorities Project
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Medicare

Clinton's Medicare reform plan, unveiled last June, is aimed at shoring up the program's finances in anticipation of the large numbers of Baby Boomers who will begin retiring in 2008 and providing the elderly with prescription drug assistance. Experts project that Medicare funds will dry up by 2015 unless the system changes. Clinton's plan calls for setting aside 15 percent of the federal budget surplus for the Medicare Trust fund, an estimated $795 billion over 15 years that is expected to extend Medicare's life through 2027.
The drug assistance portion of the plan would allow patients to pay a monthly premium that would provide partial coverage for prescription drugs. Currently Medicare only pays for medicine beneficiaries receive while in the hospital. Under the proposal, patients who opt for the new prescription drug assistance would pay $24 per month beginning in 2002 (eventually increasing to $44 by 2008). The government would then pay half the cost of the individual's drugs, up to a limit of $1,000, rising to $2,500 in 2008.For people with incomes below 135 percent of the poverty level ($11,000 for individuals or $15,000 for couples), Medicare would waive the monthly premium and the 50 percent co-payment. People with incomes between 135 percent and 150 percent of the poverty level also would qualify for a premium subsidy.
In light of the projected budget surplus, Clinton seems to be keeping an eye to the future. "Are we going to squander this money ... (or) pay off our debts to our families, not only to our parents and grandparents but to future generations?" he asked.
Father Tom Joyce of the Eighth Day Center for Justice in Chicago sees the reform plan as a positive step, but while he supports the Medicare system Joyce said it should be folded into a more comprehensive health care system. "The proposal by Clinton to expand prescription drugs to senior citizens' coverage is good and it's popular with seniors, but I'm not too sure about his others ideas of shoring up the system. I'm not sure the system can be shored up," Joyce said. "I think we need a comprehensive system that pulls health care away from employment."

Patients' Bill of Rights
Debate will ensue July 12 in the Senate on both parties' versions of the Patients' Bill of Rights. First introduced by Senate Minority Leader Tom Daschle (D-SD) more than two years ago, a final vote on the measure is scheduled for Thursday, July 15. The Democrats' bill (S. 6) emphasizes access to care including: assurance that individuals' plans cover emergency care; direct access to ob/gyn care and services for women; and a protection against the disruption of care because of a change in plan or a provider's network status. Here are a few other issues the bill proposes:

* Health plans must maintain patients' confidentiality by safeguarding the privacy of individually identifiable medical information and records.
* Patients should be able to appeal, within their health plan, decisions to deny, delay or otherwise ov3rrule doctor-prescribed care and have appeals addressed in a timely manner.
* It would prohibit plans from gagging doctors so that consumers are made award of all their treatment options.

The Republican bill (S. 300) focuses on federal tax code, calling it the "primary cause of rising costs and bureaucratic control." Republicans propose:

* To help more Americans get tax-preferred savings accounts, which they can then use to pay routine medical bills in conjunction with a high-deductible health insurance policy to cover against catastrophic expenses.
* Allows those with flexible spending accounts (FSAs) to retain up to $500 of any unused balance in their FSA at the end of the year and to carry it into the next year.
* Moving up a tax deduction increase for self-employed individuals from 60 percent to 100 percent of their health insurance costs from their taxable income by 2000. This deduction is already planned for 2003.

(The reports above were compiled from briefs issued by the National Priorities Project and the 8th Day Center for Peace and Justice and reporting from Salt of the Earth)

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