AFSCME’s Make America Happen Campaign achieved an important victory in the fight to stabilize hemorrhaging state budgets and help those hard hit by the economy when the Senate passed the American Workers, State, and Business Relief Act of 2010 (H.R. 4213), by a bipartisan vote of 62 to 36. The bill will save state budgets an additional $26.7 billion in FY 2011 as well as prevent the long-term unemployed from losing unemployment benefits and health care. Senator Ben Nelson (D-NE) was the lone Democratic Senator to vote against the bill. Republican Senators Kit Bond (MO), Susan Collins (ME), Lisa Murkowski (AK), Olympia Snowe (ME), David Vitter (LA) and George Voinovich (OH) voted for the bill. Although the House passed fiscal relief for states in December, the House and Senate must pass an identical jobs bill before the additional state fiscal relief is signed into law. Final passage of a jobs bill may be complicated by the fact that some of the financing in the Senate-passed jobs bill may overlap with proposed financing for health care reform, nevertheless, AFSCME is lobbying to complete action on the jobs bill before Congress recesses for its spring recess.

State Fiscal Relief. The bill provides states with much needed additional fiscal relief by extending for six months the increased federal assistance for state Medicaid programs made available through the American Recovery and Reinvestment Act of 2009 (Recovery Act). The Recovery Act funds have been vital in helping states close budget gaps and preserve Medicaid eligibility. This funding lifeline for states however, is scheduled to end December 31, 2010, mid-way through most states’ 2011 fiscal year budgets when state economies will still be in crisis. States will receive $25.5 billion through the increased federal share for Medicaid costs and will also receive a $1.2 billion reduction in required payments to the federal government to fund part of the Medicare prescription drug program.

Unemployment Insurance and COBRA Subsidies. The bill also extends through December 31, 2010 extended federal unemployment insurance benefits, eligibility for the 65% COBRA subsidy for health care coverage after job loss, and the $25 per week supplement to state unemployment benefit payments.

Tax Provisions. In addition, the Senate-passed legislation extends dozens of expired tax breaks through December 31, 2010, which costs approximately $34 billion over 10 years. Several of these tax extenders benefit state and local governments, including the deduction of state and local general sales taxes (costs $1.8 billion) and the additional standard deduction for real property taxes (costs $1.5 billion).

Preserving Access to Medicare Services. The bill also reverses a scheduled 21% payment cut for doctors who provide services through Medicare.