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The switch on May 24 of Sen. James M. Jeffords (Vt.) from the Republican party to being an independent who caucuses with the Democrats put those differences into sharper focus. As a result of the November 2000 election, the Senate was deadlocked 50-50. By law, the Senate majority leadership went to Republicans since Republican Vice President Cheney serves as president of the Senate and may vote in a deadlock. However, Jeffords' switch gave Democrats the edge, and they took majority leadership.
For organized labor, while fully supporting the president on the war against terrorism, the Bush administration's and the Congressional Republican leadership's anti-worker actions during 2001 spoke much louder than their words.
Here is a review of the major issues important to working families that were raised in Congress and by the White House in 2001 and what to expect in the election year of 2002.
Budget and taxes
In January 2001, Bush's budget proposal set forth his agenda of paybacks to his wealthy campaign contributors. Passed by Congress in April, the GOP-crafted $1.6 trillion tax cut which some say will really cost closer to $2.6 trillion delivered most of the benefits to the wealthy, according to AFL-CIO and independent economic analysts. Average Americans got a "tax rebate" of $300.
The AFL-CIO charged that, by giving away those billions, Bush blocked any hope of a meaningful Medicare prescription drug program and, in fact, "raided the Medicare trust fund" to pay for the tax cuts.
The Economic Policy Institute estimated that Bush's proposed cutbacks in social programs would mean a loss of 70,000 Head Start enrolles; 125,000 students in after-school programs; 60,000 child care slots; 630 drug enforcement agents; 1,830 FBI agents; services for 195,000 dislocated workers; and training for 125,000 young workers. The administration also proposed cutting federal health care programs for the uninsured by 86 percent from $120 million to $20 million a year.
By January 2002, the White House and Congressional Budget Office announced that the nation's projected 10-year budget surplus of $5.6 trillion has plummeted to $1.6 trillion.
The White House projected a $106 billion deficit for this year from the $127 billion surplus in 2001 that it inherited from the Clinton administration. With this new deficit representing 2.3 percent of the nation's overall economic output, The Washington Post reported that it was the biggest decline from a surplus since 1952 when the United States was at war in Korea.
At a Senate Budget hearing in January 2002, Sen. Deborah Ann Stabenow (D-Mich.) compared the budget shift to Enron the bankrupt energy trading corporation that allowed its executives to take away millions of dollars while employees lost their pensions and their jobs. "The top 1 or 2 percent of the public will get major tax cuts paid for by the retirement earnings of Social Security and Medicare by the majority of Americans," Stabenow said.
Further riling organized labor, in his budget proposal put forth in January 2001, Bush cut important worker programs in the Labor Department budget, including money for safety and health and wage and hour law inspections and investigations. One of the programs that was phased out provided the grant for the GCIU and for other unions to train members in safety and health.
The economy
Following traditional Republican marketplace economic theories, Bush's tax cut was supposed to stimulate the economy. However, stocks continued to plunge on Wall Street and unemployment mounted during 2001.
Bush inherited an unemployment rate of 4.2 percent in January 2001. By August, the rate had risen to 4.9 percent. By December, it was 5.8 percent, with 8.3 million people out of work. The Bureau of Labor Statistics also reported that the number of mass layoffs in December and the number of people involved were the second highest for the month since the bureau began the data series in 1995.
The AFL-CIO noted that between September and December of 2001, some 768,000 people exhausted their unemployment benefits.
In response to these developments and their escalation after Sept. 11, the White House and Congress began developing a so-called economic stimulus bill in the fall of 2001.
On Oct. 24, the Republican majority in the House passed by a 216 to 214 vote a stimulus bill that largely followed Bush's plan. The AFL-CIO charged that the $100 billion House bill was "bloated" with new tax cuts and tax breaks for the wealthy and corporations that were four times greater than the benefits for workers, who by Republican rhetoric, were supposed to be the beneficiaries.
According to the Congressional Budget Office, the bill's corporate tax provisions, including a 15-year retroactive repeal of the alternative minimum tax for corporations, would mean that IBM would get $1.4 billion and another 13 big companies would each get more than $100 million in tax refunds. The AFL-CIO noted that Americans in the top 1 percent of income brackets would get tax refunds averaging about $27,000.
"Republicans suggest that giving corporations money will keep them from cutting back on workers," said Robert Borosage, co-director for Campaign for America's Future, at a press conference denouncing the House bill. "But Congress just handed the airlines $15 billion and they proceeded to lay off 140,000 workers," he said.
Meanwhile, the Democratic-led Senate developed a $67 billion stimulus bill that included unemployment benefit extension for jobless workers whose benefits have run out and health care coverage for unemployed workers.
The worker-friendly Democratic Senate bill was blocked by Republicans, who then called Senate Majority Leader Thomas A. Daschle (D-S.D.) an "obstructionist" because he refused to consider a bill that did not include the benefits for workers. Daschle made a last-ditch attempt before the December recess to get Senate approval to extend unemployment benefits but that was blocked by Republican leader Trent Lott (R-Miss.).
In January 2002, just before Congress adjourned for the previous session, Daschle made another attempt at compromise with a bill that included some of the Republican-sought tax breaks for business investment and the Democratic-sought unemployment benefit extension, tax-rebates for low-income families that didn't qualify for last year's rebate, and $5 billion in aid to state Medicaid programs to help state governments struggling with large budget deficits. Left out of the bill were the larger Republican-sought tax breaks for big business and the Democratic-sought subsidy to help unemployed workers pay for health care coverage.
However, the bill failed on Jan. 29 when a Republican parliamentary maneuver required a 60-vote super-majority and the bill came up three votes short. The issue is expected to come up again in this session of Congress.
Trade and fast track
In his State of the Union address in January 2002, Bush again asked Congress to pass "trade promotion authority," the administration's new catch phrase for "fast track." This authority would allow the president's representatives to negotiate trade agreements that could only be voted up or down by the Senate with no amendments.
Labor, environmental and other groups as well as 65 percent of Americans, according to a poll by University of Maryland researchers oppose giving the president this authority because it provides no guarantees for the protection of worker rights or the environment.
As they successfully did to defeat fast track in 1997 and 1998, the AFL-CIO, its affiliates, and allied groups again mounted grassroots lobbying campaigns when the fast track bill came before the House last year. But the House passed the bill on a 215 to 214 vote on Dec. 6. According to union lobbyists, the House Republican leadership got the vote through intense pressure on their colleagues, including threats to take away committee posts and election support.
If fast track is approved in the Senate, where it may come up for a vote in the spring, Bush would be free to seek a Free Trade Area of the Americas (FTAA) treaty that would extend the North American Free Trade Agreement (NAFTA) with Canada and Mexico throughout South America and the Carribean.
Bush and other proponents of the treaty claim such free trade agreements produce more jobs "by selling to new markets," as he put it in his State of the Union address.
It sounds good, but according to a report from the Economic Policy Institute, NAFTA after seven years in operation eliminated over 766,000 jobs in the United States and 276,000 jobs in Canada. Although Maquiladora employment grew in Mexico over the decade, wages and incomes fell in Mexico between 1991 and 1998 under NAFTA.
GCIU Vice Pres. Lawrence Martinez, who chairs the General Board Legislative Committee, noted that Mexican government leaders recently indicated they may seek a lower minimum wage because the already low-wage Maquiladora plants along the U.S.-Mexico border can't compete with the even lower-wage Chinese factories. "Is that sick?" Martinez asked. "Many Mexican workers already can't afford running water, and they are being asked to take wage cuts. Where will it end?"
Social Security and pensions
In May, Bush made a start on his campaign promise by appointing a commission to study Social Security. With all 16 members named to the group in favor of some form of privatization, it was no surprise in December when the commission announced it had come up with three ways to turn the national safety net retirement program into private investment accounts.
According to the AFL-CIO and other analysts, Wall Street would be the big winner and workers the big losers in any privatization scheme. Stock brokers and investment firms would collect commissions whether stocks, bonds or other investments rise or fall. But the recent performance of the stock market reduced the value of many Americans' 401(k) pension accounts to less than half.
Democrats and Republicans alike in Congress are considering changes in pension plans and 401(k) plans following the pension scandal at Enron. When that company went bankrupt, so did some 11,000 Enron workers' 401(k) plans that were largely made up of the company's stock. The company prohibited employees from trading its contributed Enron stock until after the age of 50.
Meanwhile, as AFL-CIO Secy.-Treas. Richard L. Trumka noted in congressional testimony, Enron executives were dumping their company stock. Enron "is a story of people so shameless and greedy that literally as the bankruptcy papers were being drawn up, they were still passing out what remained of the firm's cash to themselves $55 million on the last working day before they filed for Chapter 11," Trumka said.
Gephardt called for giving "people more control over investments and greater protection against corporate mismanagement" in his Democratic response address.
Martinez said it is unlikely that Social Security privatization schemes will come up for a vote before the November elections. "Legislators know that voters know about the Enron and stock market situations," he said. "They know that to go back to voters to ask for privatization of Social Security would be their undoing."
"The election in November 2002 may very well determine whether Social Security will continue to exist as a national program," Martinez said. "That's one of the many reasons why all eligible GCIU members and their families need to register and vote."
Safety and health
Bush began his term of office by supporting the first-ever congressional repeal of an Occupational Safety and Health Administration standard – the ergonomics standard that organized labor and health professionals had sought for more than a decade. While employer groups applauded the action, the AFL-CIO estimated that it will cost hundreds of thousands of workplace injuries, including carpal tunnel syndrome and other repetitive stress injuries, each year.
In June, Labor Secy. Elaine Chao rejected the proposal to require employers to separately report musculoskeletal injuries as part of a workplace injury recordkeeping rule scheduled to go into effect in 2002. The proposed rule had been opposed by the U.S. Chamber of Commerce and other business groups.
In April, the Bush administration budget phased out safety training programs, including the GCIU's, and reduced money for workplace safety inspections.
Worker rights and appointments
At the beginning of his term, Bush issued executive orders that eliminated job retention protections for "working poor" employees, primarily women and immigrants, of service contractors in federal buildings; abolished labor-management partnerships for federal workers; and curtailed project labor agreements on federally funded construction projects. Another executive order required federal contractors to post notices telling workers they don't have to join unions or pay union dues not related to collective bargaining.
Federal courts overturned the orders involving project labor agreements and the anti-union notices, but the administration announced it will appeal both rulings.
In December 2001, Bush repealed the federal responsible contractor rule that required companies to comply with federal labor, safety, civil rights, consumer, tax, antitrust, and environmental laws to be eligible to obtain federal contracts. The rule also banned contracts from using government money for anti-union activities.
In January 2002, Bush issued an executive order that stripped several hundred Justice Department workers of their union representation.
When the Senate took up campaign finance reform legislation, Bush pushed for so-called "paycheck protection" in the bill in the Senate, which the AFL-CIO said would severely restrict union members' participation in the political process by singling out their payroll deductions for political action. The Senate defeated the "paycheck protection" amendment in March.
Bush used recess appointments to name two employer attorneys to the National Labor Relations Board, giving the board a pro-management tilt.
Health care
The House and Senate both passed patients rights bills – long-sought by labor, consumer and physicians groups – during the summer. As demanded by Bush in a veto threat, conservative Republicans and employer, insurance companies and health maintenance organizations, the House bill was more restrictive of patients' rights to sue HMOs and demand quality care.
In his State of the Union address, Bush again mentioned patients' rights, but analysts assume any version acceptable to him would have to include these restrictions.
Three times – the most recent in August 2001 – Bush delayed the implementation of patients' rights regulations for low-income patients in the Medicare program. The rules were to have gone into effect April 19, 2001.
On a Medicare prescription drug program that unions say is badly needed as the cost of drugs have soared, the White House did include a $190 billion proposal in its Fiscal 2003 budget without providing details. In September, Bush made a proposal that the AFL-CIO called "flimsy," "unaffordable for most seniors," and providing "too little for too few." Only seniors earning less than $11,300 per year would have been fully subsidized, and the proposal would have turned the money over to the states instead of running it at the national level.
Gephardt also called for a Medicare prescription drug program. However, given the limitations set by the budget deficit and how far apart Democrats and Republicans have been on the issue, it is uncertain whether the goal can be reached.
Education
In one of the brighter bipartisan notes at the end of 2001, Democrats and Republicans reached a compromise on a bill that overhauled federal education policy, and Bush signed it. The new law expands federal funding to schools by billions of dollars each year and targets poor students to receive most of the aid. It requires every public school student to take state-administered reading and math tests in grades 3 through 8. It did not include the labor-opposed private school vouchers that Bush and conservatives had sought.
Election reform
The AFL-CIO said the irregularities during the November 2000 election that left George Bush's victory in doubt should spur the Senate to take up election reform legislation. The federation said the issues include: the creation of accurate voter registration lists; allowing voters not on lists to cast provisional ballots; and the use of new voting technology that would tell voters if they had voted for too many candidates and would also allow voters, including language minority and disabled voters, to verify their votes before casting them.
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