Washington Report: Updates From Capitol Hill

Obama Signs Jobs Bill, Declaring It A First Step
President Barack Obama signed into law on Thursday the HIRE Act, which provides incentives for businesses to hire unemployed workers and receive funding for infrastructure projects. It also allows small business owners to accelerate depreciation on equipment for purchases of up to $250,000.

In a Rose Garden ceremony attended by lawmakers and business owners, Obama warned that the HIRE Act was just a first step and that greater participation from the private sector would be required. “Government can’t create all the jobs we need or repair all the damage that’s been done by this recession,” he said. “We can help to provide an impetus for America’s businesses to start hiring again. We can nurture the conditions that allow companies to succeed and to grow.”

The $17.5 billion act, which the Senate passed on Wednesday with the support of 11 Republicans, has been criticized for focusing more on tax breaks than job creation. “I think they’re right, but I’m not against anything that could get more people working,” said Rep. Keith Ellison (D-Minnesota), who attended the bill signing ceremony. “It’s a good thing, but not nearly enough.” Ellison added that the Local Jobs Act, of which he is a primary sponsor, “is the right bill.”

Other critics have said that the provision to exempt payroll taxes through the end of 2010 for employers who hire workers who’ve been out of work for at least two months is not a big enough incentive to hire. Not so, says Charles Baker, president and CEO, MCB Lighting & Electrical in Owings, Maryland. He is preparing to hire 80 employees who will earn $76 per hour for an upcoming project in California.

“The payroll tax burden for that is a significant dollar amount for me. Multiply it by 80 and that’s a lot of money a week. But this almost allows me to hire another five people for the same dollar amount,” said Baker. “It’s a tremendous incentive, and since I do government contracting, it also gives me a competitive edge.”

Rep. Emanuel Cleaver (D-Minnesota), who co-chairs the Congressional Black Caucus jobs taskforce, said the CBC is not ready to relent on its push for legislation that more closely targets the communities many represent. “Issues for the minority community always seem to be a step down the line. When will we be the first step?” he asked.

White House Begins Education Reform
The Obama administration sent to Congress this week a blueprint for reform of the Elementary and Secondary Education Act (ESEA). It essentially would overhaul the controversial No Child Left Behind, the ESEA legislation that former President George W. Bush touted as a significant contribution by his administration to education reform. But NCLB was roundly criticized by lawmakers, educators and states for being punitive and focusing too narrowly on testing.

In testimony this week before both House and Senate education panels, Education Secretary Arne Duncan said that the Obama administration’s blueprint centers on three primary goals: raising standards; rewarding excellence and growth, and increasing local control and flexibility while maintaining the focus on equity and closing achievement gaps. It also aims to ensure that by 2020, all high school students graduate prepared to compete and succeed in college and/or the workplace. Under the Obama proposal, schools that are making the most progress will be rewarded. Underachieving schools that improve student performance will receive credit if they still missed their targets. In addition, teacher and principal performance will be measured and held accountable to certain standards.

Rep. Robert Scott (D-Virginia), a member of the House Education Committee, said that Congress must

work with the administration to not only identify problems but also prescribe solutions. For African American communities, the most important goal is closing the chronic achievement gap between white and black students through such measures as equitable funding, qualified teachers, and equal access to the same resources that enable high-performing schools to soar. In fact, Scott says, denying minority students an equal educational opportunity and allowing the achievement gap to continue for so long is a constitutional violation of Brown v. Board of Education. “When people say it costs a little more [to close the gap], well, we’ve been there before. Special needs students are [legally] entitled to a ‘free and appropriate education,’ and ‘we can’t afford it’ is not a defense.”

HHS Secretary Discusses Impact of Healthcare Reform for Blacks and Small Businesses

By most accounts, the healthcare reform bill that Congress is expected to pass in the next few days is by no means a panacea. There’s no public option, it doesn’t sufficiently rein in costs, and its impact on the deficit will be felt for years. But if Congress fails to pass a bill, warns Health and Human Services Secretary Kathleen Sebelius, the implications for minorities–already overrepresented among the nation’s uninsured–could be even costlier.

First, she noted in a roundtable discussion with black reporters at the White House this week, prohibitive rate increases are forcing more and more people out of the market. In the past 10 years, premiums have doubled, and Sebelius estimates that at the end of the next 10 years, the average policy could cost as much as $30,000. She recounted an insurance company representative telling a congressional panel that profitability trumps keeping customers. African Americans, she added, also disproportionately suffer from chronic diseases and other health conditions that push them into a high-risk pool. “So a

larger percentage of minorities are going to be on the wrong end of the puzzle in a market that is unattainable or unaffordable and there’s, frankly, nothing that stops that,” Sebelius said.

Small business owners also often feel squeezed in the marketplace, she added. Without the bargaining power of larger firms, they face the highest rates from providers, doctors, and drug companies. If even one of their employees becomes seriously ill, their rates will jump up.

Reform legislation will enable small businesses to become part of an exchange that will enable them to negotiate competitive rates, and their lower wage employees will get direct subsidies to help pay for coverage. Sebelius also said that there’s a new provision under the bill being considered that will require insurance companies in the small-group market to adhere to a medical loss ratio that, with the exchange, would prevent end-of-year surprise rate increases.

“They’ll have to spend at least 80% of what they take in on health benefits and only allow 20% to go to profit, overhead, and administrative costs,” said Sebelius. “If they don’t make that medical-loss ration, they’ll have to rebate money, which will prevent this extraordinary differential we see in the market with jacked up rates.”

Getting to Yes
With less than 48 hours to go before the U.S. House of Representatives votes on the Senate healthcare bill, Democratic leadership was still furiously whipping up votes to get the 216 needed for passage.

According to Rep. G.K. Butterfield (D-North Carolina), a designated vote counter, members were wavering for a variety of reasons. They included the abortion language in the bill and the employer mandate, which some lawmakers are arguing is too stringent and will affect employers’ profitability. “I don’t buy the argument but it’s one some moderates are making,” Butterfield said. “At the end

of the day, leadership is going to be able to reconcile all of these concerns and get a bill. Right now we’re right on the mark, but I’m confident that by Sunday afternoon we’ll have maybe two or three more than the 216.”

Rep. Bobby Rush (D-Illinois) is one Democrat who’s leaning no because a provision in the Senate bill that would have extended an outpatient prescription drug discount program to hospital inpatients has “disappeared” from the version being considered by the House. Rush said it would save $1.7 billion over 10 years and help millions of people struggling to pay for prescription medicine. His stand has caught the attention of President Obama, who Rush said called him this morning. “The president called me this morning and said he’s going to look into it and get back to me,” said Rush. “It’s the only thing holding me back.”

Butterfield said that some carrots are being given out in exchange for much-needed votes, but leadership is also wielding a few sticks when necessary. “This is about more than one member’s particular interests. It’s about fixing a broken healthcare system that disproportionately affects African Americans, poor people, and working families,” Butterfield said. “I know that Speaker Pelosi has explained to members, particularly those from safe districts, that they need to step up to the plate and join Barack Obama and the Democratic majority.”

But as Rep. Henry Cuellar (D-Texas), an undecided member from a pretty safe Texas district, told a scrum of reporters today, “At the end of the day, when we take a vote, Obama is not going to be out there supporting and running my election. It’s going to be up to me to decide on my own if this is in the best interest of my district.”