AFSCME Federal Legislative Report October 3, 2008

[Omaha Steve]

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

AFSCME LEGISLATIVE REPORT
October 3, 2008

In this issue:

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Senate and House Pass Combined $850 Billion Wall Street Bailout/Tax Extenders Bill
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Congressional Democrats Seek Longer Extended Unemployment Benefits
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Lame Duck Session Possible



Senate and House Pass Combined $850 billion Wall Street Bailout/Tax Extenders Bill



This week, the Senate voted 74-25 and the House voted 263-171 to approve a new combination package of the Wall Street bailout bill and numerous tax extenders (H.R. 1424). The bill would grant the Treasury Department up to $700 billion to spend on “troubled assets” (mortgages or mortgage related securities) and provide $150.6 billion in tax breaks. While Congress added some protections last weekend to the Bush Administration’s initial request for a $700 billion bailout with no oversight or judicial review, these protective provisions remain almost identical to the bill the House defeated on September 29th. The only substantive change increases FDIC deposit insurance on most bank accounts from $100,000 to $250,000 through 2009.



The bill still does not permit the Treasury to use the $700 billion to recapitalize troubled firms by buying equity stakes in them. It still does not help at-risk homeowners by changing the bankruptcy court process. And it still lacks corporate governance protections and reforms including stronger shareholder rights concerning CEO compensation and board membership.



The bill’s $150.6 billion tax provisions are partially offset by $43.5 billion in new revenue. The major provisions include a one-year $62 billion Alternative Minimum Tax (AMT) “patch,” $18.3 billion energy package, $8 billion for disaster relief, and additional tax breaks for businesses. The package also contains funding for two key AFSCME priorities: $3.3 billion for Secure Rural Schools and $3.3 billion for individual income tax deductions to offset state and local general sales taxes. The four-year extension of Secure Rural Schools will provide timber payments to local governments to fund schools and badly needed public services.



Although a majority of the House and Senate voted for their respective economic stimulus plans last week, efforts to add either one to the bailout-tax extenders bill were thwarted primarily due to opposition from most congressional Republicans and President Bush’s veto threats. This comes at at time when state and local governments are facing an unprecedented fiscal crisis. Layoffs and service cuts are occuring across the country – and now this is coupled with a major credit crunch. AFSCME will continue its lobbying efforts to secure federal aid to the states.
(Marc Granowitter – [e-mail])



Congressional Democrats Seek Longer Extended Unemployment Benefits



As new data was released on Friday indicating that employers had slashed payrolls by 159,000 jobs in September, House Democratic leaders were discussing a last minute strategy to pass a bill that would provide 20 additional weeks of unemployment benefits to unemployed workers in all states and 26 weeks in high unemployment states. The measure would provide much needed help to workers who will start running out of their 13 weeks of extended federal benefits beginning next week.



An effort by Senate Democratic leaders to move similar legislation the previous day was blocked by Senate Republicans even though the September decline was the largest in five years and signaled deepening economic troubles ahead.
(Nanine Meiklejohn – [e-mail])



Lame Duck Session Possible



As the House and Senate near the finish line on legislative work before adjourning for the November elections, there is talk of a possible “lame duck” session after the elections. Senate Majority Leader Harry Reid (D-NV) announced that the new senators’ orientation would be held November 17 – November 19, 2008, and that the organizing caucus for all Democratic senators will be held during the same time frame. Senator Reid has indicated that, if needed, the Senate could also be in session, with votes, during some or all of these days.



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