Week Ending December 20, 2019
Congress passes end-of-the-year budget deal and recesses until January.
- Congress Avoids a Government Shutdown
- Tax on Worker and Retiree Health Benefits Repealed
- House Passes Bill to Suspend Cap on Federal Deduction for State and Local Taxes
- Federal Employees to Receive 12 Weeks Paid Parental Leave
- USMCA Passes
Congress Avoids a Government Shutdown
Congress passed all 12 appropriations bills that were packaged into two minibus bills. Combined, the spending packages provide $1.37 trillion in funding for fiscal year (FY) 2020, a full three months after the start of the fiscal year. President Donald Trump is expected to sign the legislation before the continuing resolution (CR) expires today and avoid a government shutdown. The combined package adds almost $50 billion in new spending and makes a variety of important policy changes. The deal rejects many spending cuts proposed by the Trump administration.
- Domestic and International Minibus, H.R. 1865: This package includes eight appropriations bills: Labor-Health and Human Services-Education, Agriculture, Energy and Water Development, Interior-Environment, Legislative Branch, Military Construction-Veterans Affairs, State-Foreign Operations, and Transportation-Housing and Urban Development. These agencies and programs would receive about $540.4 billion in discretionary funds, including new money for many domestic priorities for education, housing, infrastructure and more. This package passed 297 to 120 in the House, and 71 to 23 in the Senate.
- National Security Minibus, H.R. 1158: This package contains four appropriations bills: Defense, Commerce-Justice-Science, Financial Services and General Government, and Homeland Security. It provides agencies $860.3 billion and includes increases for many programs. This package passed 280 to 138 in the House, and 81 to 11 in the Senate.
What You Need to Know: This end-of-year spending package also includes a set of tax extenders, including one that repeals the 40% tax on high-cost health insurance plans that was part of the Affordable Care Act (ACA). It provides a 3.1% salary increase for federal employees and $1.37 billion for the border wall, the same amount as in FY 2019 but significantly less than the $5 billion requested by the president. Below are the top-line spending levels with some specific allocations that benefit programs that are important to AFSCME members:
- Agriculture-FDA: $23.5 billion in discretionary funding ($183 million above the fiscal 2019 level). The funding levels for vital food and nutrition programs are:
- Supplemental Nutrition Assistance Program (SNAP): $67.89 billion in mandatory funding, a $5.7 billion decrease from FY 2019.
- Child Nutrition Programs: $23.6 billion in mandatory funding. This is $474 million above FY 2019.
- Supplemental Nutrition Program for Women, Infants, and Children (WIC): $6 billion, the same as in FY 2019.
- USDA Critical Infrastructure: $1.45 billion for rural water and waste program loans, and more than $545 million in water and waste grants for clean and reliable drinking water systems and sanitary waste disposal systems.
- Commerce-Justice-Science: $73.2 billion ($9 billion increase). This provision includes $425 million in election security grants and $7.6 billion for the Census Bureau. Other program funding levels are:
- State and Local Law Enforcement Grants: $3.28 billion, an increase of $245.5 million compared to FY 2019. This includes: $547.2 million for Byrne JAG and $340 million for the Community Oriented Policing Services (COPS).
- Patrick Leahy Bulletproof Vest Partnership Grant Program: $27.5 million.
- Interior-Environment: Almost $36 billion ($437 million increase).
- New Funding at Environmental Protection Agency (EPA): $43 million in new funding for EPA and partner agencies for scientific and regulatory work and cleanup assistance for per- and polyfluoroalkyl substances (PFAS), which is needed to establish drinking water and land cleanup standards.
- Clean Water and Drinking Water State Revolving Funds: $2.77 billion, which is equal to the 2019 enacted level and $782 billion above the president’s budget request.
- Labor-HHS-Education: $184.9 billion ($4.9 billion increase).
The Department of Labor received $12.4 billion in discretionary funding, a $291 million increase from FY 2019 levels. Funding for key programs under the DOL are:
- Workforce Innovation and Opportunity Act: This workforce training and employment services program received $2.8 billion, $30 million more than FY 2019.
- State Unemployment Insurance: $2.54 billion has been granted to states to assist individuals who lost their jobs.
Health and Human Services was funded at $94.9 billion, which is $4.4 billion above FY 2019 spending levels. Funding for health programs are:
- Loan Repayment Program Targeted to the behavioral health treatment workforce: This new program was given $12 million.
- Medicaid Disproportionate Share Hospitals: Congress blocked cuts to Medicaid payments to disproportionate share hospitals for five months.
- Behavioral Health Clinics: Congress approved additional funding for Certified Community Behavioral Health Clinics through May 22, 2020.
- Community Health Centers: Congress extended funding for these centers through May 22, 2020.
- Puerto Rico Disaster Mitigation: The package contains policies designed to force the Department of Housing and Urban Development (HUD) to release vital disaster mitigation funding for Puerto Rico, which has been delayed for nearly two years.
- Federal Medicaid Assistance Percentage (FMAP): This package increases the FMAP to 76% for Puerto Rico through fiscal 2021. However, if Puerto Rico fails to meet certain program integrity requirements, these FMAPs could be lowered. This package funds $2.62 billion for Puerto Rico for FY 2020 and $2.72 billion for FY 2021. These amounts could be increased by $200 million if Puerto Rico adopts a physician services reimbursement floor.
The Department of Education received a total of $72.8 billion. This is $1.3 billion above FY 2019 levels. Education funding levels are:
- Title I Grants: The bill includes $450 million for schools that serve low-income students. This is a $450 million increase from FY 2019 spending levels.
- Individuals With Disabilities Education Act (IDEA): $410 million for students with disabilities.
- Title II: Funds for professional development increase by $76 million.
- Title IV Student Support and Academic Enrichment Grants: An increase of $40 million, and afterschool funds increase by $28 million.
- Child Care and Development Block Grant (CCDBG) and Head Start: Funding for both programs increases by $550 million. That increase also includes $193 million for cost-of-living-adjustments for Head Start.
- Pell Grants: The maximum annual award increases by $150 to $6,345 per student.
- State and Foreign Operations: $54.7 billion ($467 million increase).
- The East-West Center in Hawaii: $16.7 million, the same funding level as FY 2019. AFSCME lobbied for a higher level. Trump’s budget request would have zeroed out the program.
- Transportation-HUD: $74.3 billion in mandatory funding ($3.2 billion increase).
The Department of Transportation would receive $86.2 billion, which is $324 million below FY 2019 spending levels. Funding levels for transportation programs are:
- National Infrastructure Investments: TIGER and BUILD grants programs would receive $1 billion, $100 million above the 2019 enacted levels to help ensure parity between urban and rural awards.
- Federal Highway Infrastructure Programs: $2.2 billion in discretionary funding, $1.1 billion below the 2019 enacted level, including funding for a risk-based bridge rehabilitation and reconstruction program.
- Federal Transit Capital Investment Grants: $2 billion, $575 million below the 2019 enacted level to be used for investments in heavy rail, commuter rail, light rail, street cars, buses and rapid transit.
- Transit Infrastructure Grants: $510 million, $190 million below the 2019 enacted level; the funding includes $75 million for low- and no-emission buses, and $8.5 million for areas of persistent poverty.
- Airport Improvement Grants: $400 million in discretionary spending, $100 million below the 2019 enacted level.
The Department of Housing and Urban Development received $49.1 billion, $4.9 billion more than FY 2019 levels:
- Public Housing Operating Fund: $4.459 billion, which is $104 million below last year. This reduction, while below AFSCME’s request, is $1.6 billion more than the administration’s proposal, which would have severely harmed public housing residents, units and workers.
- Public Housing Capital Fund: $2.869 billion, which is $94.9 million above last year. Trump’s request to zero out the program was rejected, but more is needed for public housing capital modernization.
- The Self-Sufficiency Program: Flat-funded at $130 million, with $80 million for Family Self-Sufficiency (FSS), $35 million for ROSS, and $15 million for Jobs Plus.
- The Rental Assistance Demonstration (RAD): No funds for FY 2020, which is the same as last year.
- The Community Development Block Grant (CDBG): $3.4 billion, which is $100 million more than last year. The administration proposed to eliminate CDBG formula funding.
The appropriations package includes additional must-pass policy, such as:
- Miners Pension Fix: The funding package includes the Bipartisan American Miners Act of 2019, which would shore up retirement benefits for tens of thousands of coal miners. This provision also extends health retirement benefits to miners hurt by coal company bankruptcies that took place in 2018 and 2019. Without this relief, 92,000 coal miners’ pensions and the health care benefits for 13,000 miners would have been at risk.
- SECURE Pensions: Also included in the funding package was the Setting Every Community up for Retirement Enhancement Act (SECURE Act) which closes loopholes and makes it easier for small business employees, home-care workers and part-time workers to save for retirement. This measure would remove the maximum age limits on retirement contributions, formerly capped at age 70 1/2. It would also raise the age to 72, from 70 1/2, by which investors are required to draw on their accounts.
- Family First Transition Act (FFTA): This program helps states implement the Family First Prevention Services Act, which seeks to help children stay at home instead of entering foster care. FFTA provides states and municipalities $500 million in transition funding, sets aside additional funding for states with expiring demonstration projects, and phases in the requirement that 50% of a state’s reimbursement must be for “well supported” programs.
Tax on Worker and Retiree Health Benefits Repealed
The harmful 40% tax on employer-sponsored high cost worker and retiree health benefits will soon be repealed. This tremendous victory for AFSCME, labor and health care advocates will save working families more than $200 billion over the next 10 years and additionally help preserve workers’ health benefits.
- Repeal Included in Budget Deal: The House voted this week to repeal the 40% tax as part of the bipartisan budget package that keeps the federal government open beyond Saturday.
- AFSCME Led Lobbying Effort: AFSCME helped lead lobbying efforts for more than a decade to reject this troubling 40% tax, which encourages health insurers and employers to reduce workers’ health benefits and increase workers’ deductibles, copays, and coinsurance. Repealing this tax will help make health care expenses more affordable and remove a dangerous threat to Americans’ health care benefits.
What You Need to Know: Repeal will benefit many AFSCME members, especially those in communities with high health care costs, because when we collectively bargain for a new contract, management will have less incentive to propose cutting member health benefits. Furthermore, this tax disproportionately burdens older workforces and female-dominated occupations, like nurses and teachers and librarians, and thus repeal will provide relief to many groups of AFSCME members.
House Passes Bill to Suspend Cap on Federal Deduction for State and Local Taxes
The House voted 218 to 206 to approve the Restoring Tax Fairness for States and Localities Act (H.R. 5377), which would help state and local governments maintain their financial stability and continue providing vital public services to all residents. Specifically, H.R. 5377 would suspend for two years (2020-2021) the temporary $10,000 cap on the federal income tax deduction for personal state and local taxes (SALT), including payments for income tax, sales tax, and property tax. For 2019, it would increase the SALT cap from $10,000 to $20,000 for persons filing a joint tax return. However, a successful last-minute amendment would limit the cap increase to filers with adjusted gross income below $100 million.
- Reduces Tax Burdens: These improvements would reduce the corresponding burdens on state and local governments created in the 2017 Trump-Republican Tax Cuts and Jobs Act, which for the first time capped the 100-year-old federal itemized tax deduction for taxpayers’ SALT payments. H.R. 5377 fully offsets its costs – mostly by returning the personal top marginal federal income tax rate to 39.6% from 37%.
- Increases Deductions for Certain Professional Expenses: H.R. 5377 also would strengthen workers’ federal income tax deduction for eligible professional expenses. Although only educators are currently eligible, H.R. 5377 would extend this deduction to first responders (e.g. law enforcement officers, firefighters, paramedics or emergency medical technicians, including corrections officers). H.R. 5377 also would raise this tax deduction from $250 to $1,000.
What You Need to Know: The federal government has a long history supporting state and local government investments in vital public services and infrastructure. AFSCME supports H.R. 5377 because it would help strengthen federal support for these state and local government efforts. Trump has threatened to veto the bill should it pass the Senate and be sent to him.
Federal Employees to Receive 12 Weeks Paid Parental Leave
Nearly all federal government employees will soon be able to receive 12 weeks of paid parental leave to care for their new children. This is a huge win for federal workers and the biggest expansion of federal workplace benefits in decades. After last week’s successful House vote, the Senate voted overwhelmingly to approve the House-Senate package of defense and security policies that includes this paid parental leave provision. Trump is expected to sign the broad package (National Defense Authorization Act (NDAA), S. 1790) into law soon.
- Family Friendly Benefit: This benefit allows nearly every civilian federal employee to take 12 weeks paid parental leave to care for their newborn, newly adopted, or new foster placed child. This new paid benefit otherwise mostly parallels existing guidelines covering parental leave under the Family Medical Leave Act (FMLA).
- AFSCME Support: At last week’s press conference with congressional champions and allied labor unions, AFSCME President Lee Saunders said, “If you serve the nation as a federal employee, you should be able to spend that time at home, without compromising your family’s economic security. … And we will continue to lobby for laws at the state and federal level that give all working people the right to take time off to take care of their families.”
- Effort to Expand Federal Workers’ Paid Leave Already Underway: Congressional champions and allied labor unions are already discussing options to ensure federal employees also receive 12 weeks of this type of paid leave for family caregiving and self-care. There is also interest in extending the parental leave benefit to all federal employees, since some employees in certain agencies like Federal Aviation Employees (FAA) and other were not covered by the provision.
What You Need to Know: This pro-family paid parental leave provision will be available starting October 2020 to an estimated 2.1 million federal government employees. AFSCME appreciates the dedicated work of House Oversight Committee Chairwoman Carolyn Maloney (D-N.Y.), the long-time champion of this provision, and Armed Services Committee Chairman Adam Smith (D-Wash.) for working to include this provision in the NDAA package. AFSCME also appreciates the dedicated work on this issue of Sen. Brian Schatz (D-Hawaii), who has been the Senate sponsor of this provision.
The House passed 385 to 41, the U.S.-Mexico-Canada (USMCA) trade agreement, also known as NAFTA 2.0. The implementing bill (H.R. 5430), passed out of committee unanimously by voice vote.
- Updated Trade Agreement: Although the USMCA agreement is not perfect, it is an improvement from the original NAFTA that went into effect in 1994. This updated agreement provides rules for competing in the digital economy and specifies enforceable protections for workers. It also will increase wages in Mexico, implement environmental standards, and eliminate a drug patent protection that would lead to high drug costs.
What You Need to Know: Senate Majority Leader Mitch McConnell (R-Ky.) has said that the Senate will take up the USMCA bill next year after the conclusion of the impeachment trial.