May 31, 2014
While the Senate struggles to find 60 votes to overcome procedural hurdles to move forward their unpaid for two year extension of tax loopholes, the House is intent on making major loopholes permanent, again without paying for them.
This Thursday the House Ways and Means Committee will take up a new series of loopholes including the biggest of them all: “bonus depreciation.” This little loophole permits companies to write down the cost of equipment and capital investment on a shortened schedule. It was enacted as a temporary stimulus measure during the Great Recession. Economic analysts can find no appreciable stimulus qualities in this policy, yet companies are campaigning hard to make the tax break permanent. The cost — $290 billion over ten years.
Bonus depreciation is to be added on top of the other loopholes that they are working on like the “Active Financing Exception” that lets General Electric pay no federal taxes. These and other “extenders” that the House Committee wants to make permanent would blow a permanent hole in the deficit at about $600 billion.
Budget watchers point out that this is just about identical to the amount of deficit reduction achieved in the year end budget deal. This budget cutting deal was reached on the premise that our deficit was an emerging national crisis. Now we forego those deficit gains in tax cuts to the corporations? What is our policy really?
Campaign Finance Reform
Efforts to convince the Securities and Exchange Commission to require the disclosure of expenditures by publicly held corporations on political campaigns and lobbying, got a major boost this week when Teamster President James Hoffa weighed in with the full support from the Teamsters. Public support for this SEC action already has exceeded 800,000 comments to the agency, by far the most comments the commission has received on any policy. Advocacy groups, including the Alliance, urge affiliates to add their comments. We want to hit the one million mark as soon as we can.
Here’ a crib sheet on how to comment from Public Citizen:
Go to SEC target email address: , Subject line: Comment on File Number 4-637. Insert and send this message from the Alliance for a Just Society website:
There is plenty happening on the ACA benefits front.
The Administration has announced that it will allow employers who sponsor heath plans to cap certain benefit costs. This would be done through a process called “reference pricing.” The employers would survey the costs that providers are charging for certain medical treatments and then establish a specific “reference” price which they will pay for say a knee replacement or a certain generic drug. Supporters of the program believe that it will be a major tool in cutting down the cost growth in health care.
Consumer advocates worry that the patients will get caught in the middle. Out-of-pocket costs under the ACA are limited by law. However, costs for therapies that exceed the referenced price are not included in the out of–pocket limits. (Want to learn more? See: http://www.kaiserhealthnews.org/Stories/2014/May/28/What-You-Should-Know-About-Reference-Pricing,)
There is another effort underway to cut benefits for some under the ACA. A bill intended to ease the way for what is called ex-patriot insurance would lift away the ACA benefit protections for these policies has already passed the U.S. House. To make this bill even worse, all Lawful Permanent Residents (read green card holders) are swept into the definition of “ex-patriot” by the bill. Consumer and immigration advocates, including the Alliance, are working to change this bill in the Senate.
If the trend here were not ominous enough, Karen Ignagni, the leader of the American Health Insurance Plans (AHIP), has announced that the next big push from the insurance moguls will be to allow insurers to provide reduced benefit plans through the exchanges.
A couple of months ago the President asked his Homeland Security Secretary to do a comprehensive review of deportation policies. This week that review was put on hold, to the dismay of immigration reform advocates. Your seasoned Daley Weekly journalist is not so sure that this is bad. This move puts the pressure directly on Speaker Boehner and takes away the excuse the Speaker has been using that the Administration will ignore whatever law Congress might enact. Let’s hope this maneuver works.
Michigan has enacted legislation to raise the minimum wage over four years to a mere $9.25 an hour. This is an effort by Republican Governor Rick Snyder and the Legislature to undercut a ballot proposition that would raise the minimum even higher.
In the meantime, the Seattle City Council is poised to pass a $15 minimum wage on Monday that will increase the wage floor over several years, beginning in April 2015 for large employers. The Alliance released a policy report last week “Reversing the Trend” that show how the plan narrows the increasing gap between minimum wage and a living wage.
While efforts to pass federal minimum wage legislation appear stalled in the Senate, there is another debate emerging over an aspect of this issue.
Remember that back in September the Department of Labor proposed rules that would extend minimum wage laws to cover home health care workers who are employed by agencies. There is mounting pressure on Secretary of Labor Thomas Perez to delay the application of these rules beyond January 2015 when they are slated to take effect.
Remember how AHIP, the health insurance lobby, secretly slipped over a million dollars to the NFIB to bring suit against the ACA? On May 26 the New York Times featured a story showing how more and more insurance companies are planning to offer plans in the exchanges next year. It is a pretty extensive list – Anthem Blue Cross in New Hampshire; Harvard Pilgrim Care in Massachusetts, United Health Group in Washington State; Cigna into five new states; Assurant Health now in exchanges rather than out; etc. (Read more at: http://www.nytimes.com/2014/05/26/your-money/health-insurance/insurers-once-on-the-fence-plan-to-join-health-exchanges-in-15.html?nlid=51755350&src=recpb&_r=0.)Kind of underscores the perception that these folks are totally amoral.
As expected, the Senate Finance Committee has voted to confirm the nomination of Sylvia Mathews Burwell to become Secretary of Health and Human Services. Eight Republicans joined all 13 Democrats on the Committee in endorsing Burwell, who is expected be confirmed by the full Senate next month.
The House will be out the week of June 2nd and then in session the rest of the month. The Senate will be in session until June 30th when they break for the 4th of July. What will they be doing for a whole month?
Federal Minimum Wage Vote Blocked
April 30, 2014
The U.S. Senate was unable to proceed to a vote on the proposal to raise the Federal Minimum Wage to $10.10 due to a filibuster by Republicans today.
The test vote was 54 for and 42 against – it needed 60 votes to go ahead. Four didn’t vote. Tennessee Senator Bob Corker was the only Republican vote for the cloture motion. No Democrats voted against it. There will be more votes on this issue as time goes on.
Interesting news on the Immigration Reform front. As you recall, House Speaker John Boehner took a mocking tone about his own caucus in a speech to his Ohio Congressional constituents. According to local press reports Boehner told a group of local business leaders: “I’ve had every brick and bat and arrow shot at me over this issue just because I wanted to deal with it. I didn’t say it was going to be easy.” At the same time Rep. Peter King, outspoken Republican from New York, in a letter to the Speaker, has endorsed immigration reform that includes a path to citizenship.
A new petition was filed last week with the SEC seeking a rule requiring disclosure of political money by publicly traded corporations. The new wrinkle this time is that there now is an analysis showing that voluntary disclosure by corporations is not working very well. Anyone who wants to read the new petition can find it here: http://www.sec.gov/rules/petitions/2014/petn4-637-2.pdf
Little of the news on the tax front is good. The Senate Finance Committee is processing their “extenders” bill as though it were just a routine matter to extend billions in offshore loopholes.
On Tuesday the House Ways and Means Committee picked up six of the worst corporate loopholes and voted to make them permanent rather than to vote on them every year or so. There was a minor victory when Ways and Means Democrats voted against this effort.
Unlike Unemployment Insurance, no effort has been made to pay for these tax breaks.
A vote may come as early as this week on the Senate Floor on their version of this debacle.
Last October your Daley Weekly reporter wrote a blog for Alliance for a Just Society about the prospects for a Grand Bargain. Among other issues this little essay noted, given that the nation was several Trillion dollars short on retirement savings, the proposals to cut Social Security were pointing in exactly the wrong direction.
Last month, retirement security suddenly became a major national issue – even though many politicians seem to be largely oblivious to this emergence. Broad-scale opinion polling indicates this issue as either the first or second issue on the minds of the voters.
Social Security advocates are fighting in the Congress against closure of branch offices and the decision not to provide Social Security recipients with periodic written notices of their benefit levels.
There are a couple of developments on the benefits front that should be noted.
Representative Rick Larsen, a Washington state democrat, is planning soon to introduce a bill increasing Social Security benefits and paying for it by lifting the cap that stops the collection of Social Security taxes at $113,700 (2013).
Sometime early in May, New York Representative Nita Lowey (D), will introduce legislation to provide increased benefits as a “caregiver credit.” The credit is intended to overcome lifetime income deficiencies for those who spend parts of their lives caring for others – and thereby lose income that is important for their benefit levels when they become Social Security eligible.
Oregon Senator Jeff Merkley (D) has started using his position as Chair of the Senate Subcommittee on Economic Policy to hold hearings on this seminal issue.
Even Republican Budget Guru Paul Ryan (WI) seems to have backed away from previous proposals to privatize Social Security.
Watch for this trickle to become a flood.
Spring fever hits D.C. with the recess and the coming of the flowers.
April 18, 2014
ACA Enrollments Grow
The enrollments in the exchanges now have topped 8 million, well above original target. The Administration also has announced that 35 percent of the enrollees are under age 35. Enrollments in California exceeded 1 million and New York is over 900,000.
One important note out of California on enrollments. California officials report that some 60 percent of those who enrolled did so with help from an assistor or navigator. Only 40 percent navigated the website alone, and even these people tended to seek out help from trusted sources of information, like call centers.
Some ACA Enrollments Still Open
This is just a little reminder that there are some special provisions in the ACA related to enrollments. Even though the normal open enrollment period closed at the end of March, there are some opportunities for enrollment for particular populations:
· Enrolled Native American tribal members;
· Those eligible for Medicaid, even if the state is not an expansion state;
· Those experiencing life-changing events like a new baby or a new job.
There also are some states that have extended their enrollment periods for their own exchanges.
A new report from the Central Budget Office has reduced the estimated cost of the ACA because premium charges are lower than previously anticipated. The cost will be lowered by $109 billion between now and 2024.
This is good news for the ACA but there are some down sides. Part of the premium savings is related to narrower provider networks and lower payments to providers.
CBO now estimates that Medicare spending in 2020 will be $137 billion lower than it thought in 2010, a drop of 15 percent; Medicaid spending will be $85 billion, or 16 percent, lower; and private health insurance premiums are expected to be about 9 percent lower
Anyone wanting to peek at the report can find it here: http://www.cbo.gov/sites/default/files/cbofiles/attachments/45231-ACA_Estimates.pdf.
Rumors are circulating in D.C. that some significant members of the Republican Caucus have started searching for a way to move comprehensive immigration reform forward in the House. Watch for this effort to intensify as the polls continue to show that House elections have become competitive, especially in areas with significant numbers of Latino voters. The math here is simple – the Republicans will be unable to walk back the antagonism they have created with women, and the African American vote isn’t coming. So calming the anger of the immigrant sympathizers may be the only place that they can turn.
Just when you were getting used to the U.S. Constitution – now comes the news that the Tea Baggers have decided that it needs to be changed. ALEC, the right-wing funded advisor to state legislatures, is supporting an effort to call a convention under Article V of the U.S. Constitution.
The declared purpose of this effort is to enact a Balanced Budget Amendment.
Article V is a hitherto unused provision that permits the legislatures of (presently) 34 states to force the Congress to establish a Constitutional Convention. Amendments adopted by such a body would require ratification in 38 states, either by the legislatures or by ratification conventions.
One tiny little problem – there appears to be no way to limit the subject matter of such a Convention, so even the Heritage Foundation and the John Birch Society are opposed to this process. Nevertheless, there is a resolution to make the Convention call on the march in the Wisconsin State Legislature with the backing of such enlightened organizations as the Wisconsin Chamber of Commerce and the National Federation of Independent Businesses.
Watch for a chance to get in on this exciting undertaking coming to your state soon.
A rumor circulated in D.C .last week that Kathleen Sebelius, the resigning Health and Human Services Secretary, is considering a run for the U.S. Senate from Kansas. She served there as both Insurance Commissioner and Governor. Sebelius denies that she will run.
There will be an opening on the Democratic side of the Senate Finance Committee after the election due to the fact that West Virginia Senator Jay Rockefeller is not running again. Whoever replaces him may affect the ideological balance in the Finance Democratic Caucus.
Both Houses of the Congress are in recess until April 28.
April 11, 2014
The emergency extension of unemployment benefits passed the Senate Monday evening with 59 votes. Now it goes to what is euphemistically known as an “uncertain fate” in the House.
Budgets and More Budgets
The House passed the Ryan Budget on Thursday with just two votes to spare. This budget cuts taxes for the wealthy, cuts social insurance programs, and repeals the Affordable Care Act, among other things. The vote was 219 to 205.
Two other budgets were voted on and defeated. Ranking House Democratic budget writer, Representative Chris van Holland, put out a proposed budget for 2015 that largely balances because it includes immigration reform with its economic growth and revenue benefits. This follows on the heels of the budget put out earlier by the Progressive Caucus Budget.
Legislation to raise the federal minimum wage to $10.10 over three years may be voted on in the Senate this week. It is unclear if there are 60 votes to proceed.
The economy added 192,000 jobs in March and the unemployment rate remained at 6.7 percent. One interesting sidelight to this is that employment among those over age 55 actually fell by 133,000, suggesting that the Affordable Care Act may be having an effect by permitting folks in this group to leave employment because they no longer fear a loss of health care coverage. While all this is hopeful news for some, the projections are that at the current rate the U.S. will not reach full employment until 2020.
A survey done for the Robert Woods Johnson Foundation shows that Affordable Care Act enrollments include 5.7 million previously uninsured consumers. The uninsured rate dropped a full 2.7 percent since the ACA opened for business last September.
The outliers, as might be anticipated, are the states that have refused to expand Medicaid. The states that have expanded Medicaid saw an uninsured rate of 4 percent, while the rate fell only 1.5 percent in the refusing states. Anyone wanting to explore this new survey information in depth may do so at: http://hrms.urban.org/quicktakes/changeInUninsurance.html.
Wall Street Speculation Tax Redux
Release of a book titled “Flash Boys” about the abuses of high -peed traders has revived interest in a proposal to add a small tax to help curb this practice and to raise badly needed revenues. Versions of the Financial Transaction Tax have been introduced in both Houses of the Congress.
The Senate failed to reach closure on the Paycheck Fairness Act. It needed 60 votes and only got 53. This bill provides for enhanced enforcement of pay equity for women and permits employees to share information about their pay rates, something prohibited by companies in order to prevent women from discovering that their pay is less than men doing the same work.
It looks like the Senate will vote on the tax extender package after the coming recess – some time shortly after the April 28. It’s unclear what amendments might be permitted, but the Finance Committee package reauthorizes virtually all of the loopholes, including those permitting substantial corporate tax avoidance by placing resources offshore.
If that’s not bad enough, the rumor out of the House is that the Republicans may try to make these “extenders” permanent without paying for them. This would not only let the offshore folks off the hook, it would lower the overall cost of their version of tax reform. This would let them lower tax rates on the rich more easily. Timing in the House may not be soon, but may come as late as the post-election lame duck session.
Basic Health Option
States that are considering the Basic Health Option under the ACA should be aware that the U.S. Department of Health and Human Services has published final rules for this program. A clear and useful summary of the rule may be found on the Health Affairs Blog.
The Congress will go on spring break starting Monday and lasting until April 28.