When the 108th Congress convened in January, there was little pomp but a lot of circumstance. With an already full docket left over from the 107th Congress and a projected

$147 billion deficit, the 108th Congress had new business to address, too--the Bush administration's $670 billion tax-cut proposal.

Referred to as an economic stimulus, the tax cut would further decrease revenue collections at the federal level. Such a decline would be reflected in state budgets. After all, nearly one quarter of every dollar spent by state governments comes from the U.S. government.

"The [federal] deficit is not something we should be worried about right now," because it is a stimulus to the economy, says Marcia Howard, director of Federal Funds Information for the States. Rather, the issue to be focused on is cuts. Howard predicts pressure for cuts will center on federal grant programs, like Medicaid, which account for 19 percent of the entire federal budget.
 

Unfinished business

Initiatives that were center stage during the 2000 election cycle--a prescription drug benefit for seniors and patients' rights--are on the agenda for the new Congress, as well as reauthorization of welfare, also known as Temporary Assistance for Needy Families.

When the new Congress revisits welfare reform, AFT Public Employees will oppose efforts to create "superwaivers" that would allow states to waive the rules for how program money is spent. The union also will fight against upping work requirements in the absence of adequate supports for education and child care.

Meanwhile, the union is keeping a watchful eye on Medicaid funding. Many states have or are considering proposals that would reduce eligibility for this program. The union supports a temporary increase of at least $10 billion in federal reimbursement rates to states for Medicaid matching funds.

AFT Public Employees also is ready for a battle over Internet taxation. The union supports state efforts to collect sales taxes on products sold on the Internet and will oppose a continuation of the federal ban on such collections, which is set to expire Nov. 30, 2003.

At press time, two measures had already been introduced in the 108th Congress regarding Internet taxation. The first, offered by Sen. Ron Wyden (D-Ore.) and Rep. Christopher Cox (R-Calif.), would "indefinitely extend the existing moratorium on new and discriminatory Internet taxes." The second, introduced by Sen. George Allen (R-Va.), would "permanently ban taxes on Internet access, as well as taxes on Internet transactions by multiple jurisdictions, and discriminatory taxes that unfairly target Internet transactions"--e-commerce.

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