February 17, 2009

• Congress Passes $789.5 Billion Economic Recovery Package
• Recovery Bill Offers Tax Relief to Retirees and Working Families
• AFT Campaign Generates Broad Support for Recovery Package
• Temporary Change to IRA Law May Affect Many Seniors
• Kourpias To Step Down as Alliance Leader
• Medicare Advantage Premiums Rose by 13 Percent This Year
• The Secrets of Eating for Your Age
• Save on Pet Care with AFT +
• On the Lighter Side: New Stock Market Terms
• Quote of Note: Why the Employee Free Choice Act Matters
• Web Site of the Week: http://www.aarp.org/realrelief

CONGRESS PASSES $789.5 BILLION ECONOMIC RECOVERY PACKAGE
On Feb. 13, the U.S. House and Senate approved a compromise $789.5 billion economic recovery package. Despite concessions on tax cuts and spending required to draw enough votes in the Senate to pass the bill, President Obama secured many of his highest priorities in the legislation, including substantial increases in education, healthcare and funding for states. The bill also significantly bolsters financing for unemployment benefits and food stamps. 

Senate Republicans, with support from budget hawks, including Sen. Joe Lieberman (I-Conn.), inserted $70 billion in relief from the alternative minimum tax, a measure better suited to separate legislation. To include the AMT in the stimulus package-and stay beneath a self-imposed $800 billion spending limit-lawmakers abandoned far more effective measures, such as aid to states for education and healthcare. The president's budget request, which is not subject to filibuster requiring 60 votes to end, will be the administration's next effort to address education and state funding.

Among other health provisions, the compromise stimulus package will:

• Provide federal subsidies for health insurance under COBRA that would cover 65 percent of the cost of premiums for as long as nine months for recently laid-off workers and impose income eligibility limits for the subsidies. The compromise stimulus package does not include a provision that was in the House version which would have allowed states to expand Medicaid coverage to recently unemployed workers.
• Add $19 billion for healthcare information technology, with bonuses for physicians and as much as $11 million for hospitals for the implementation of electronic health records; physicians and hospitals must implement EHRs by 2014 or face the loss of Medicare reimbursements.
• Distribute $87 billion in additional federal funds for state Medicaid programs. The Medicaid program funds more than half of all long-term care costs.

"The American Recovery and Reinvestment Act," said AFT president Randi Weingarten, "is a win for hard-working Americans and is especially important for our children. The final bill will bring a much-needed jolt to our economy by providing immediate relief to states to help create and save jobs. While we would have preferred that no cuts were made to the earlier House bill, the final bill provides an unprecedented level of funding to help states avoid draconian cuts to public education, healthcare and other public services."

In addition to the healthcare investments, the bill includes:

• $53.6 billion for the State Fiscal Stabilization Fund, which can be used for avoiding cutbacks, preventing layoffs, funding school modernization, or for other education-related purposes in K-12 and higher education;
• $13 billion for Title I;
• $12.2 billion for IDEA;
• $15.6 billion for Pell Grants;
• $24.8 billion for qualified school construction bonds;
• $2 billion split between Head Start and Early Head Start;
• $2 billion for the Community Childcare Development Block Grant;
• $3.95 billion for job training.

RECOVERY BILL OFFERS TAX RELIEF TO RETIREES AND WORKING FAMILIES
The recovery bill cuts taxes for more than 95 percent of working families. For 2009 and 2010, the measure will provide a refundable tax credit of up to $400 for working individuals and $800 for working families. This tax credit will be calculated at a rate of 6.2 percent of earned income, and will phase out for taxpayers with adjusted gross income above $75,000 ($150,000 for married couples filing jointly). The bill also provides a one-time payment of $250 to retirees, disabled individuals and SSI recipients receiving benefits from the Social Security Administration, Railroad Retirement beneficiaries, and disabled veterans receiving benefits from the U.S. Department of Veterans Affairs. Government retirees who are not eligible for Social Security benefits will also get a one-time refundable tax credit of $250 in 2009.

AFT CAMPAIGN GENERATES BROAD SUPPORT FOR RECOVERY PACKAGE
As the final version of the American Recovery and Reinvestment Act moved through Congress and to President Obama for his signature, the AFT and its thousands of activists, who have been mobilized through the union's "Fight for America's Future: It's Dollars and Sense" campaign, can take credit for pushing their elected officials to make significant new investments in education, healthcare and other vital public services. Since the Fight for America's Future was launched less than a month ago, AFT members have sent more than 30,000 letters and e-mails to Congress. And when the recovery bill was sent to a House-Senate conference committee last week, 600 members placed calls in just 24 hours, after they were urged to contact their senators and representatives. One of the most popular campaign events was "Unity Day" on Feb. 10, when AFT members across the country showed their support for the recovery plan by wearing blue to work. The AFT already has received 150 Unity Day photos from members.

Last October, AFT president Randi Weingarten testified on behalf of the AFT before the House Ways and Means Committee stressing the need for public investment in tough economic times. The AFT took the campaign to the public and to opinion leaders, as well. A series of banner ads on popular blogs sparked 15,000 visits to the Fight for America's Future Web site. A series of print ads also appeared in popular Capitol Hill publications widely read by members of Congress and their staffs. A Feb. 4 lobby day brought more than 40 AFT leaders from 20 states to Washington to meet with senators. The campaign now will shift to the states, where there will be battles over state budgets and how best to use the recovery act money that soon will be flowing to the governors and to local districts. In the past four weeks, some 1,500 members have signed on as e-activists, so they will be able to continue working to support important AFT activities and priorities.

TEMPORARY CHANGE TO IRA LAW MAY AFFECT MANY SENIORS
As part of the Worker, Retiree and Employer Recovery Act of 2008 signed on Dec. 23 by then-President Bush, retirees will not have to take mandatory withdrawals from their IRA accounts during 2009. The law also waives required minimum distributions in 2009 from retirement plans such as 401(k)s, 403(b)s and certain 457(b)s. The distribution rules also apply to traditional individual retirement accounts and IRA-based plans.

KOURPIAS TO STEP DOWN AS ALLIANCE LEADER
George J. Kourpias, president of the Alliance for Retired Americans since its inception in 2001, announced Feb. 11 that he will be retiring from the organization. Barbara J. Easterling, the former secretary-treasurer of the Communications Workers of America, is expected to be named the new president by a vote of the alliance's executive committee on Feb. 19. "It has been a tremendous honor to help grow and lead a progressive army of grass-roots retirees. We have fostered lifelong activism among union and community leaders, and I believe our collective voice has made a difference," Kourpias said. Under his tenure, the Alliance for Retired Americans developed into a 3.5 million member organization, which was a leader in stopping then-President Bush's plan to privatize Social Security. In the 2008 presidential elections, alliance activists were mobilized in key battleground states to highlight the stark contrasts between Barack Obama and John McCain on Social Security and Medicare. On Election Day, 72 percent of union retirees voted for President Obama. Prior to becoming alliance president in 2001, Kourpias served as president of the National Council of Senior Citizens. A member of the International Association of Machinists for 56 years, he served eight years as its president.

MEDICARE ADVANTAGE PREMIUMS ROSE BY 13 PERCENT THIS YEAR
Premiums for Medicare Advantage plans provided by Humana, Health Net and almost 200 other health insurance companies rose by an average of 13 percent in 2009, more than five times the 2008 increase according to an analysis by Avalere Health, a healthcare research and advisory firm. In January, Democrats signaled their intent to scale back MA plans, which receive 13 percent more than traditional Medicare plans, according to the Medicare Payment Advisory Commission. President Obama cited MA as an example of programs that don't work, adding that it doesn't make people on Medicare healthier. Congressional Democrats have pledged to cut $50 billion in federal subsidies to the MA program, a position strongly supported by the AFT. In addition, overpayments to MA plans cost every Medicare recipient an additional $2 to $3 per month in higher premiums, even though only about one in four is enrolled in an MA plan. Former Centers for Medicare and Medicaid Services administrator Thomas Scully, who helped design the MA program under former President Bush, said that he did not consider the premiums excessive.

THE SECRETS OF EATING FOR YOUR AGE
Eating is one of life's pleasures, especially when shared with friends and family. People generally eat more when they are sharing a meal with family and friends than when eating alone. Nearly 50 percent of seniors don't consume enough high-protein foods, and only around 32 percent eat the recommended five servings of fruits and vegetables each day. Resistance training does much more to keep muscles strong than endurance exercises like walking or swimming. Learn the secrets of eating for your age, and make sure you get the nutrients that can add vitality and years to your life. Click on http://www.agingresearch.org/content/general/detail/1025 and see what you might not know about yourself and eating for your age.

SAVE ON PET CARE WITH AFT +
AFT + member benefits now offers two kinds of pet care savings: pet insurance and Pet Assure veterinary care savings. Pet insurance includes a variety of plans for your family's dog or cat. For plan specifics or for a quote, click here or call 866/473-7387. Pet Assure veterinary care offers 40 percent off monthly premiums to AFT members and allows you to save 25 percent off your bill at participating veterinarians. All pets are covered, even exotics and horses. Coverage includes: preventive care, shots, surgery, X-rays, lab work, medications and more. Best of all, there's no paperwork to complete. Your savings come directly in your veterinary bill. For more information or to enroll, click here or call 888/789-7387.

ON THE LIGHTER SIDE: NEW STOCK MARKET TERMS

• CEO: Chief Embezzlement Officer
• CFO: Corporate Fraud Officer
• Bull Market: A random market movement causing investors to mistake themselves for financial geniuses
• Bear Market: a 6- to 18-month period when the kids get no allowance
• Value Investing: The art of buying low and selling lower
• Broker: What my financial planner has made me
• Standard & Poor: Your life in a nutshell
• Market Correction: The day after you buy stocks
• Cash Flow: The movement your money makes as it disappears down the drain
• Institutional Investor: Past-year investor who's now locked up in a nuthouse
• Profit: An archaic word no longer in use.

QUOTE OF NOTE: WHY THE EMPLOYEE FREE CHOICE ACT MATTERS
"We cannot have a solid, stable retirement unless we have a solid, stable middle class. And unions are key to that middle class. Union workers are three times more likely to have a defined-benefit pension plan than non-union workers. And union workers are five times more likely to have health insurance than non-union workers."

George Kourpias, President
Alliance for Retired Americans
Feb. 11, 2009

WEB SITE OF THE WEEK: http://www.aarp.org/realrelief
Real Relief, a newly launched AARP site focuses on jobs, job training and financial issues, such as money management. It offers job-hunting strategies, a list of employers that AARP considers friendly to older workers, listings of job openings with age-friendly hiring practices and links to other job search Web sites targeting workers age 50 and older.

Contributors and sources: Bill Cunningham, Lauren Luchi, Sam Lieberman, Norm Swenson, New York Times, Washington Post, Wall Street Journal, Boston Globe, Philadelphia Inquirer, Associated Press, Bloomberg News, BNA Healthcare Daily Report, CQ Today, Alliance for Aging Research, Alliance for Retired Americans Friday Alert, Kaiser Health Policy Report. Frank Stella, editor; Laura Baker, copy editor; Paula Dutko, design