AFSCME LEGISLATIVE REPORT March 7, 2008

[Omaha Steve]

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

AFSCME LEGISLATIVE REPORT
March 7, 2008

In this issue:

* Budget Resolutions Pass House and Senate Budget Committees
* House Passes Mental Health Insurance and Genetics Non-Discrimination Bill

Budget Resolutions Pass House and Senate Budget Committees
This week, the House and Senate Budget Committees both approved their respective Budget Resolutions, which should advance to House and Senate floor votes. Both plans reject President Bush's budget plan domestic program budget cuts. Moreover, compared to President Bush's proposed budget for domestic, annually-appropriated programs, the House plan adds $22 billion and the Senate adds $18 billion. Although the plans share similarities on spending and both project surpluses by 2012, there are differences on taxes, offsets for new spending or tax cuts (PAYGO), and additional economic stimulus.

On spending, compared to President Bush's proposed discretionary budget, the Senate plan adds $8.8 billion for education and training, $4.4 billion for health, and $3.9 billion for transportation. The Senate also adds $441 million to the Child Care Development Block Grant (CCDBG) and $300 million to Head Start. The Senate rejects the President's proposed cuts of $932 million to the Community Development Block Grant (CDBG), $599 million to Community Oriented Policing Services (COPS), and $705 million to Homeland Security state formula grants.

Neither plan raises taxes. The House plan allows Congress to pass a one-year "patch" to the Alternative Minimum Tax (AMT) and calls for full offsets to pay for it through budget reconciliation, which requires only a majority of Senate votes rather than the 60 votes needed to overcome a filibuster. In contrast, the Senate plan assumes Congress will pass a one-year $62 billion AMT patch without offsets. The House supports offsets for extending some of the 2001 and 2003 tax cuts, including the lowest income tax bracket, the so-called "marriage penalty", and the child tax credit. In contrast, although Senate Budget Chairman Kent Conrad (D-ND) says he supports these goals, he intends to offer a floor amendment to use the projected surplus to extend $300 billion of these tax cuts. The House and Senate plans both assume the tax cuts expiring in 2010 will not be renewed and incorporate these post-2010 revenues. In fact, the House Budget Committee voted 21-16 to reject Ranking Republican Paul Ryan's (R-WI) amendment to reduce revenues by $683 billion over five years to cover extending the expiring tax cuts.

Although the House plan does not address additional stimulus, the Senate plan recommends $35 billion for a stimulus bill without offsets, including state fiscal relief. The Senate's plan also includes the costs of extending the moratoria on several key Medicaid regulations and the State Children's Health Insurance Program (SCHIP) directive of August 17, 2007. It also provides $1.325 billion in Medicare savings achieved from reducing current subsides for insurance companies to offer a private alternative to Medicare, which is more costly and erodes traditional Medicare. The combination of additional spending on stimulus, health care administrative provisions, and Medicare improvements are mutually reinforcing and could provide states and localities with some fiscal relief.

The House and Senate Budget Resolutions both create several "reserve funds" related to specific programs, which enable Congress later in the process to increase funding if the increases are fully paid for. For example, both the House and Senate created a deficit neutral $50 billion reserve fund for SCHIP. The House created 17 of these deficit-neutral funds, including Child Support Enforcement, County Payments Legislation (this timber-related funding is important to northwestern states), Trade Adjustment Assistance (TAA) and Unemployment Insurance (UI) Modernization, Medicaid (focused on Medicaid regulations and transitional medical assistance), Medicare, and infrastructure investment. The Senate created many similar funds.
(Marc Granowitter- [e-mail])

House Passes Mental Health Insurance and Genetics Non-Discrimination Bill
By a vote of 268-148, the House passed the Paul Wellstone Mental Health and Addiction Equity Act of 2007 (H.R. 1424), which would require most group health insurance plans to provide comparable coverage, or parity, for mental and physical illnesses. The bill would not require plans to cover mental health care, but those that already do would not be allowed to set higher co-payments or limits on the number of visits to doctors than are applicable to medical care for physical conditions. The estimated cost to the federal government is $4.3 billion over 10 years. This cost is offset by increasing the rebates that pharmaceutical companies must provide to state Medicaid programs to 20.1 percent from December 31, 2008 through January 1, 2015. The Senate passed its version of mental health parity legislation (S. 558) in September 2007. The Senate bill would allow insurers and plans to charge higher co-payments and limit visits for some mental health conditions. Both the Senate and the House bills maintain current law that allows state and local self-insured health plans for their employees to opt out of these requirements. The Bush Administration strongly opposed the House bill and supported the Senate-passed mental health parity bill.

Language from the Genetic Information Non-Discrimination Act of 2008 (H.R. 493), was attached to the House bill, which would prohibit companies, unions or insurers from discriminating or making business decisions using data from genetic tests.

A conference to hammer out differences between the Senate and House mental health bills faces significant obstacles, as Senate lawmakers are threatening to block a conference.
(Linda Bennett- [e-mail])

Click here to join the AFSCME e-Activist Network: http://www.unionvoice.org/afscme/join.html

AFSCME Department of Legislation
Phone: [phone] or 800/732-8120
Fax: [phone]
E-mail: [e-mail]
Website: http://www.afscme.org/
Produced by Union Labor