DPE 2000 Legislative and Public Policy Report

This report summarizes final action on those issues that comprised the Department’s public policy agenda for the year 2000


H-1B Guest Workers — As expected, the 106th Congress overwhelmingly approved legislation to expand the H-1B guest worker program less than two years after it had passed legislation to nearly double the H-1B caps. As a result of this latest action, the statutory limits on foreign guest workers will have been increased from a per year limit of 65,000 in 1998 to well over 200,000 this year. With an estimated 400,000 such alien workers already in the U.S., by the third year of the new H-1B program the number of these workers could exceed one million. In its rush to please the increasingly powerful high tech industry and their allies in the immigration bar, the Congress refused to await the results of a report from the National Academy of Sciences on high tech labor needs. Congress itself had mandated that this report be done in its 1998 legislation. At the same time, legislators also ignored a recent GAO study (see below) regarding indications of massive fraud and abuse within the H-1B program that have also been well documented in other congressional hearings and news stories.

Prior to the Senate committee “markup” on the bill, the DPE, AFL-CIO and CWA worked with Sen. Kennedy on a fallback proposal that would have lowered the increase in annual visas to 155,000, deleted the exemptions, expanded an existing requirement of no-layoffs by the petitioning employer from 90 to 120 days, significantly increased the fees for H-1B visas and made access to the worker re-training monies that would be generated by the visas fee more accessible for union-sponsored training programs. In addition, Kennedy’s proposal included a “carve out” provision whereby up to 60% percent of additional visas over and above the 115,000 cap would be reserved for workers with advanced degrees. While the DPE indicated its opposition to any increase in H-1B visas as being unjustified, if Senators were determined to move ahead, DPE lobbied them to support the Kennedy approach. Kennedy’s amendments encountered stiff Republican opposition and they were defeated by a vote of 10 to 8. (See Policy Letters.) However, every one of the Senate Democrats lobbied by DPE backed the Kennedy proposal. However, on the vote to report out S. 2045, all of the Democrats –except Kennedy and Feingold (D-WI)–voted to send it to the Senate for debate. The final vote was 16-2.

In the House, the GOP leadership made it clear at the start that anything the industry wanted was going to be fast-tracked. Promises were made to have it approved by the end of May. The Democrats –especially the bloc of so-called “new” Democrats–showed almost as much enthusiasm for going along. The opening gambit was a modest bill introduced by Judiciary subcommittee chairman Lamar Smith (R-TX) — a longtime skeptic of the alleged labor shortages in high tech. His bill included only a one-year increase in visas to 145,000 coupled with a host of labor protections and anti-fraud provisions. However, the “new” Democrats, led by Representatives Zoe Lofgren (D-CA), Cal Dooley (D-CA) and Jim Moran (D-VA) in an effort to court favor with the industry countered with their bill, HR 3983, an industry-backed proposal. HR 3983 increased visa allotments to 200,000 per year but contained no meaningful labor protections and transferred all visa-generated training funds from the Department of Labor to the Commerce Department. Efforts by the AFL-CIO, the DPE and several unions to moderate this proposal prior to its introduction fell on deaf ears. The so-called “New Dems” were later joined by a host of anti-labor Republicans including Texans Dick Armey and Tom DeLay as well as Rules Committee chairman David Dreier (R-CA) in cosponsorship of H.R. 3983. Meanwhile, the Chairman of the Federal Reserve Board, Alan Greenspan, who frets over possible wage-push inflation, endorsed expansion of H-1B as a means of increasing the labor pool to keep wages and benefits down.

Prior to subcommittee markup, Rep. Smith did an about face, jettisoned his earlier proposal and introduced HR 4227 which totally eliminated any limitation on the number of H-1B visas for three years while retaining some of his earlier safeguard provisions. The DPE opposed the increase in visas included in both the Smith and Lofgren bills but supported the safeguard provisions of HR 4227. (See policy letters.) However, during subcommittee and full committee deliberations, Smith’s proposed labor and anti-fraud protections came under criticism from some Democrats who apparently viewed them as inhibiting the high tech industry from achieving unfettered access to foreign guest workers. This led Smith to cosponsor an amendment offered by Rep. Sheila Jackson-Lee (D-TX) that weakened or eliminated some of these provisions. With bipartisan support, the amendment was then approved for action in the full House. In anticipation of House debate the DPE sent a letter to all House members outlining its position. (See policy letters.)

With both Republicans and many Democrats vying for industry approval, the Clinton Administration found itself in an increasingly untenable situation. Facing the inevitability of a likely veto-proof bill that would increase visas substantially, the White House—after unsuccessfully lobbying the “New Dems” to moderate their bill—outlined parameters of a package that would be acceptable to the executive branch. Earlier, representatives of the DPE, AFL-CIO, CWA and the AFT had met with White House staff to outline specific areas of concern which in part were reflected in the Administration’s package. While the Administration supported a visa increase to 200,000 they coupled it with the labor-supported Kennedy carve-out provision, a quadrupling of the visa fee to $2000 and more flexibility regarding the allocation of re-training funds derived from these fees.

Despite these efforts, the final legislation resembles most of what pro H-1B lobbyists were seeking. Making matters more difficult, efforts to focus on the need to reform the program were lost when several groups, including some AFL-CIO unions, raised an agenda of Latino-related immigration concerns. They insisted, with White House and Democratic congressional support, that they be made part of the final H-1B legislative package. These proposals delayed final action on H-1B, as they became an election year political battle between the GOP and the Democrats. Ultimately the Democrats backed off, unable to attach the Latino “fairness” provisions to the guest worker legislation. Meanwhile, efforts to gain H-1B programmatic reforms were largely ignored.

Key provisions of the H-1B legislation approved by Congress will:

  • Increase the existing 115,000 per year limit on H-1B “professional specialty” guest workers to 195,000 for each of the next three years and renewable for an additional three years;
  • Exempt all H-1B workers employed by colleges and universities and their “related activities”, as well as non-profit and government research organizations from all caps. For universities, such “activities” might include public broadcast facilities owned by them as well as theatres, publishing entities, hospitals, research facilities, etc.;
  • Expand the 115,000 visa limit for this past fiscal year in order to allow for a 30,000 to 40,000 visa backlog to be processed. In effect this retroactively raises the FY 2000 cap of 115,000 to well over 150,000. (In addition, since no action was taken regarding the 22,000 visas INS had erroneously approved in excess of the FY 2000 cap, for this past year H-1B visas will exceed 175,000);
  • Allow H-1B workers to change employers as soon as the new employer files a labor condition application (LCA) on their behalf instead of waiting for LCA approval by the Department of Labor as is currently required.

Regarding the higher education exemption, there is no estimate of the number of additional visas this exemption will permit beyond the new 195,000 cap. The range is anticipated to be 20,000 to 30,000. The concern is that the overall, year-to-year numbers under H-1B could easily approximate 30% of projected job openings in the professional occupations!

Finally it should be noted that the adverse effect of S.2045 would be felt far beyond just the high tech sector. As the DPE’s letter to the Senate opposing the bill stated: “The proposed legislation opens the door to a flood of guest workers seeking employment in almost any professional and technical occupation even though there has been no claim by anyone that a shortage exists in these other areas of employment. In fact, information provided by INS indicates that at least 50 per cent of those entering the country under the H-1B program are not involved in the information technology or high tech occupations.” (See policy letters.)

Following passage of S. 2045, the Congress passed separate legislation — H.R.5362 — to increase the H-1B visa application fee paid by employers seeking to hire a foreign guest worker from $500 to $1000. The DPE and AFL-CIO strongly supported this fee increase because it will substantially enhance the amount of targeted funds currently available through the Department of Labor (DOL) for retraining incumbent, U.S. high tech workers. The fee is expected to generate some $276 million annually of which $165 million would be allocated to workforce training grants administered by the DOL. H-1B grants are, pursuant to the umbrella 1998 Workforce Investment Act, made available through local Workforce Investment Boards (WIBs). In two rounds of grant funding announced since 1999, several unions including the CWA have co-ventured with local WIBs, community colleges and other partners to secure these H-1B training grants.

GAO Report — In 1999 at the request of Rep. Patsy Mink (D-HI), the U.S. General Accounting Office (GAO) undertook a study of the H-1B program. In the fall of that year DPE and AFL-CIO representatives met with GAO staff to suggest a number of key issues that should be the focus of this effort. The GAO issued its report in mid fall. Among other findings, the GAO report stated the following:

  • “Labor’s [U.S. Department of Labor] limited legal authority to enforce the program’s requirements and weakness in INS’ program administration leave the program vulnerable to abuse. Under the law, in certifying employers’ initial requests for H-1B workers, Labor is limited to ensuring that the employer’s application form has no obvious errors or omissions. It does not have the authority to verify whether information provided by employers on labor conditions, such as wages is correct.”
  • “There is not sufficient assurance that INS reviews are adequate for detecting program noncompliance or abuse.”
  • “… as the program currently operates, the goals of preventing abuse of the program … are not being achieved. Limited by law, Labor’s review of the LCA [labor certification application] is perfunctory and adds little assurance that the labor conditions employers’ attest to actually exist. Expanding Labor’s authority to question information on the LCA would provide additional assurance that labor conditions are being met.”

Although this report preceded final Senate action on S. 2045, the GAO findings were completely ignored by Congressional legislators. Thus the bill failed to contain any program reforms to correct these and many other H-1B deficiencies.

H-1B Workforce Studies — In the absence of any credible and objective data regarding whether or not a shortage of high tech workers exists, Congress in 1998 directed the National Academies — which includes the National Academy of Science and the National Research Council (NRC) — to undertake a study of high tech workforce needs as well as the treatment of older workers in the industry. The NRC, which provides science and technology advice to the federal government under a federal charter, began its work in the late summer of 1999. During its deliberations, DPE President Golodner addressed an Academy panel established to conduct its field hearings. In late October of 2000, after the Congress had acted to increase H-1B visas, the NRC released its study. While ambiguous in terms of specific findings relative to the existence of widespread high tech worker “shortages” the report acknowledged that “the labor market for these workers is unquestionably tight”. At the same time the report found that the “current size of the H-1B workforce relative to the overall number of IT professionals is large enough to keep wages from rising as fast as might be expected in a tight labor market.” And this finding was made even before the full effect of the 2000 legislation, which will nearly doubled the number of H-1B high tech workers, could be assessed. Regarding allegations of high tech industry discrimination against older IT workers, the NRC findings were inconclusive.


Independent Contractors — In 1999 legislation that had been recommended by the Department and refined by the AFL-CIO — HR 1525 — was introduced by Rep. Gerald Klezka (D-WI) and Rep. Amo Houghton (R-NY) to address the problem of employer misclassifications of workers as “independent contractors.” The key provision of the bill would simplify and reform the existing 20 factor common law test used by the Internal Revenue Service (IRS) to determine whether individuals are employees or independent contractors. To build momentum for this important legislation, the DPE, AFL-CIO and many DPE affiliated unions began a campaign to maximize House cosponsorship of the bill. Initially, fewer than a dozen legislators co-signed. As of the end of the 106th Congress, 101 House members had signed on including several Republicans. While the legislation was referred to the House Ways and Means Committee, no further action was taken.

Fair Labor Standards Act: White Collar Exemptions — In October 1999, the General Accounting Office (GAO) issued a report on FLSA white-collar exemptions. The report, which was circulated by the DPE to all of its affiliates, called on the Department of Labor to revise and modernize its regulations to better deal with the realities of today’s world of work and to narrow existing professional exemptions. In formulating its report, the GAO had met with labor representatives including the DPE. During these discussions, it was pointed out that the tests applied under FLSA regulations to determine white-collar/professional exemptions from coverage did not sufficiently restrict the assertion of exemptions (often illegally) by employers. In addition, since the DOL had not adjusted the “salary level test” since 1975, inflation had eroded the minimum salary for exempt professionals down to near minimum wage levels. Because of this, millions of workers who otherwise would be covered are now excluded from FLSA protection. The union representatives also argued that the duties test for executive and managerial employees had been weakened through court decisions, resulting in inadequate protections for low-paid supervisory workers. (See 2/1/2000 DPE Legislative Report for more details.)

Last May the House Education and Workforce Subcommittee on Workplace Protections held a one-day hearing on the GAO report. At the hearing, Nick Clark, Assistant General Counsel of the UFCW — a DPE affiliate — testified on behalf of the AFL-CIO. He noted that more Americans are working longer hours than ever and argued that the failure to update standards for white collar worker protections coupled with the inability of the DOL to enforce the law due to insufficient resources are contributory causes. T. Michael Kerr — the Department of Labor’s Wage and Hour Administrator —stated that it was “extremely unlikely in the short term” that the DOL will implement comprehensive revisions. Kerr pointed out that the law’s exemption of certain white-collar workers (especially professionals) is complex. In addition, the contentiousness surrounding the issue has increased because of major changes in the nature of a work force that has shifted from blue collar to white since the law was passed. This, he stated accounts “…for the obstacles faced by four successive administrations that have struggled…to achieve the kind of comprehensive reform that the GAO recommends.”

Fair Labor Standards Act (FLSA): High Tech Exemption — Not content with these gaping loopholes in the FLSA, high tech lobbyists and their congressional allies continued their efforts to further weaken 40 hour work week protections for computer specialists and other “high tech” workers. In 1999 the assault on FLSA protections intensified with a bill introduced by Rep. Rob Andrews (D-NJ). This legislation would add to the categories of already-exempted high tech workers by including among them all network and database analysts and designers as well as those who manage or train employees named in the exemptions. If passed this bill would exempt tens, if not hundreds, of thousands of additional high tech workers who currently receive overtime compensation.

In 2000, a GOP-sponsored House bill to increase the minimum wage over three years included the Andrews proposal even though there had been no congressional hearings on it. Despite strong opposition from organized labor and the Clinton Administration, the House passed the bill with these as well as other FLSA erosions included. As Congress moved towards adjournment, Republicans signaled their willingness to increase the minimum wage over two years but initially insisted on the erosion amendments. The AFL-CIO, DPE and several affiliates weighed in opposing the FLSA amendments. (See policy letters.) As a result, the White House and Hill Democrats led by Sen. Ted Kennedy (D-MA) and House Speaker Dick Gephardt (D-MO) held firm in their opposition against the FLSA rollbacks. Because of this, the GOP backed away from their demands focusing instead on tax breaks for business as the price for an increase in the minimum wage. However, end-of-session discussions to resolve the minimum wage impasse broke down and no final agreement was reached.

Collective Bargaining Rights for Health Care Professionals — Over the last decade restructuring and consolidation within the health care industry has resulted in the creation of managed care giants that have come to dominate local and regional markets. This concentration of economic power has positioned these entities to unilaterally dictate the kind and quality of health care provided to patients. Under these managed care systems, physicians — under the threat of losing a large share of patients that are covered by these plans — often have no choice but to sign “take it or leave it” contracts that hand over health care decision-making to these organizations. These contracts often give managed care insurers the right to deny reimbursement for needed care in order to pressure physicians and other health care professionals into providing only the lowest cost alternatives. Some of these contracts pay physicians to limit patient treatment, terminate doctors from plan participation without just cause and impose unilateral contract changes. Often these contracts violate professional and ethical standards.

To level the playing field and help health care providers regain control over patient care decisions, legislation — HR1304 — was introduced by Rep Tom Campbell (R-CA). His bill would provide a limited anti-trust exemption for organizations of health care professionals, including physicians, nurses and others, so that they could negotiate with managed care companies. Under the legislation, health care professionals who are either private practitioners or independent contractors could form associations to engage in collective bargaining with insurers regarding contract terms including those relating to patient care. The legislation was backed by AFSCME, AFT, the DPE as well as the American Medical Association. (See Policy Letters.) It was strongly opposed by the insurance industry, HMOs and much of the business community.

In late spring, the House Judiciary Committee recommended a compromise version of HR 1304 by an overwhelming 26 to 2 vote. The committee bill included additional provisions that:

  • Exempts Medicare managed care, Medicare+Choice and other plans covering federal workers;
  • Prohibits one group of health providers from negotiating a contract that limits any other group of professionals from doing work that they are licensed to do under applicable scope of practice acts and other regulations;
  • Requires the GAO to conduct a study on the impact of the law and report back both its findings and recommendations on extending the law, and
  • Sunsets the legislation after three years unless the Congress re-approves it.

After several starts and stops, the legislation finally made it to the House floor on June 30th where it was passed by an overwhelming 276-136 vote. However, no action was taken on the proposal in the Senate.

2002 Winter Olympics: Labor Standards and Worker Protections — In 1996 several DPE affiliates in the broadcast industry encountered a multitude of problems in dealing with the Atlanta Committee for the Olympic Games (ACOG). The controversy related to the hiring of broadcast technicians and the terms and conditions of employment for these and other broadcast and entertainment workers. The controversy arose over the ACOG’s handling of the global broadcast of the Atlanta Olympics (known as the “world feed”) to those countries who did not have their own broadcast teams in Atlanta. Despite efforts by the concerned unions to negotiate a fair contract or even a code of employment standards, the Committee stonewalled the unions and even misled government agencies in order to avoid hiring union workers. As a result of ACOGs duplicity and last minute stalling tactics, they were able to hire hundreds of foreign guest workers as broadcast technicians. Eventually, the Department of Labor (DOL), Immigration and Naturalization (INS), State Department and the White House all became unhappily involved in ACOG’s machinations. DPE led union efforts to untangle a sordid mess, which came to be viewed as typical of the way the Atlanta committee had operated.

To avoid a repeat of these problems at the 2002 Winter Olympics in Salt Lake City, the DPE — on behalf of its broadcast affiliates — contacted the DOL immediately after the 1996 fiasco expressing its concerns and offering to help avoid such a situation in the future. In 1999 the DPE and Broadcast affiliates met with representatives of the DOL, State Department and the INS to begin discussions on the 2002 Games. In mid-April, the DPE and representatives from AFTRA, IBEW and NABET-CWA met with representatives of the Salt Lake Committee (SLOC) and the DOL at a meeting called by White House staff. SLOC representatives were aware of the 1996 problems and expressed their interest in working with DPE and its affiliates to deal with these issues. In addition, the DPE has enlisted the assistance of the President of the Utah State AFL-CIO, Ed Mayne, a state senator who has also been named to oversee arrangements on behalf of SLOC for some of the events. As of this report, further discussions with SLOC representatives are anticipated.

On a related matter, in 1996 the DOL — in response to a letter from ACOG — issued an opinion letter exempting the Olympics from the Fair Labor Standards Act (FLSA) based on an interpretation that the games were a seasonal/recreational activity. At that time the DPE and affected unions protested the ruling to no avail. In late September, the DPE and attorneys representing the AFL-CIO and the IBEW met with DOL representatives to restate labor’s objections. DOL signaled a willingness to review the opinion letter and reconsider the interpretations that had been rendered. However, for reasons related to the statutorily-mandated “receipts” test related to income generated from such events, this could not be done until next fall — just months before the games begin in February.


The 35% audience cap — In August of 1999 the Federal Communications Commission (FCC) announced the relaxation of its regulatory restrictions on dual ownership of multiple TV and radio stations within a single viewing market. The promulgation of this new “duopoly” standard led to increased deregulatory pressures by some in the broadcast industry to seek relief from the FCC audience cap that currently limits station groups from reaching more than 35% of viewers nationwide. Two major networks — Fox and NBC — have begun a lobbying campaign to revise the audience cap upward. Under the FCC rule the cap applies to the potential audience that a broadcaster might reach. NBC and Fox would prefer that it only apply to the actual viewership. Meanwhile, a major rift developed within the National Association of Broadcasters (NAB), which is siding with its independent station owner members in opposing increases in the caps. The squabble pits the networks against local station owners and has already caused the disaffiliation of Fox and NBC from this powerful industry organization. For now, the FCC has indicated that it will stick to the current rule. Although legislation to increase the cap to 50% was introduced by Senate Commerce Committee Chairman John McCain (R-AZ), no legislative action occurred during the 106th Congress. However, in 2000 Fox Television filed suit against the FCC in an effort to overturn the audience cap rule.

Newspaper-broadcast cross-ownership — As part of its biennial regulatory review, the FCC said that it would retain its rule restricting newspaper-broadcast cross-ownership for now but announced it would be re-examining this rule to determine if it should be modified. The agency appears to be headed towards a relaxation of the standard. The FCC statement comes as another mega-merger — the $8 billion acquisition of the Times-Mirror publishing chain by the Tribune Company — was pending. If completed, this union would result in combined TV-newspaper ownership in the Los Angeles, New York and Hartford, Connecticut markets. The current FCC rule — if left unchanged — would require divestiture of some of these properties. On another regulatory front, the FCC decided to take no action on pending requests to relax its cable/broadcast cross-ownership rule barring a company from controlling a TV station and a cable system in the same market.

HDTV Standards — One of the latest developments in television broadcast technology is the advent of high definition television (HDTV). This advance in transmission capability promises viewing households highly improved image reception that vastly exceeds current television technology. In order to create a common technical standard for HDTV broadcast transmissions, the FCC approved the U.S.-developed, 8-VSB standard in 1996. A singular, core standard like 8-VSB is critical to providing the certainty that broadcasters, broadcast and receiver equipment manufacturers and consumers need in order for them to make the substantial investments necessary to implement HDTV service. However, despite the FCC’s decision, the Sinclair Broadcasting Company last year began a campaign to undermine the 8-VSB standard and substitute a technical standard devised in Europe. It is doing this by raising questions as to the technical capabilities of the 8-VSB standard. For now, the FCC has rejected Sinclair’s petition that the standards issue be re-opened but the agency indicated it would discuss the matter further.

The DPE joined with the CWA and the IUE in filing comments urging the Commission to “stay the course” with the 8-VSB standard. (See Policy Letters.) (The IBEW filed a separate statement.) The comments noted that “nearly two-thirds of American viewers can now receive the 8-VSB signal and that programming is increasing along with the sales of DTVs and DTV receivers.” Moreover, with the current standard the U.S. had established a valuable technological edge in digital video communications that was already being adopted by other nations in our hemisphere. In opposing the Sinclair petition, DPE argued that this progress would be placed at risk if the Commission were to re-visit the issue thereby creating uncertainty and doubt in the marketplace and among broadcasters and manufacturers alike. Given the extent and success of the HDTV transition to date, a change of standard would place the entire industry in jeopardy while wasting years of research, development and investment.

In early August, the House Commerce Subcommittee on Communications held a one-day hearing on the HDTV issue. The broadcast industry was taken to task for the slowness with which HDTV programming was being offered to the viewing public. For the hearing record, the DPE filed a copy of its FCC statement and urged the Subcommittee to maintain the current HDTV standard. (See Policy Letters.)

Corporation for Public Broadcasting — FY 2002 funding for CPB appears to be headed for an increase over the current fiscal year. Annual appropriations for public broadcasting, which are funded under the omnibus appropriations bill for the Departments of Labor and Health and Human Services, were increased for the next fiscal year in the House-passed spending measure from the current $350 million to $365 million — a 4.3% hike. During floor debate, Rep. Mike Oxley (R-OH) led an attack by right-wing Republicans to cut 1% or $3.65 million from the CPB allocation. His amendment was defeated by a lopsided 110-305 vote. Later, the Senate — approved appropriations bill recommended an identical amount of funding which was sustained in the final House-Senate conference report on the Labor-HHS bill.

Public Broadcasting licenses — In 2000 a holy war broke out between public interest advocates and the religious right over the issue of public broadcast license standards. The controversy arose during FCC consideration of a proposed “license swap” that would have resulted in Pittsburgh’s second most popular public TV station — WQEX — giving up its non-commercial, educational (NCE) license to a right-wing religious station. In exchange, the complicated transaction would then give to WQEX’s parent public station — WQED — the license from a commercial station that had been airing fundamentalist programming. WQED would then turn around and sell its new acquisition to Paxson Communications for a tidy profit. This proposal brought a firestorm or criticism from Pittsburgh viewers against allowing a religious broadcaster from taking over a NCE license. Under current FCC procedures for the granting of such licenses, non-commercial broadcast stations are licensed only to non-profit educational organizations upon a showing that the proposed stations will be used primarily to serve the educational needs of the entire community while advancing educational programming.

Despite opposition to the license swap, the FCC approved the transaction. However the agency also issued a guideline that under the public interest educational requirement, at least half of the programming had to be “primarily educational in purpose” and that programming “primarily devoted to religious exhortation (e.g. preaching), proselytizing or personal statements of belief, generally will not qualify as educational programming.” An outcry ensued from the religious right, which charged the FCC with attempting to censor religious broadcasting. Although the FCC later withdrew its guideline, legislation — HR 4201 — was introduced by Chip Pickering (R-MS) to eviscerate the public interest, educational licensing standard. Sen. Sam Brownback (R-KA) offered a similar bill — S. 2215 — in the Senate. With the strong support of GOP conservatives the House approved the bill by a 265 to 159 vote. The DPE joined with an array of other organizations under the leadership of Citizens for Public Broadcasting to fight the proposal in the Senate. In its letter to Senate members, the DPE condemned the bill as granting:

  • “narrowly focused, religious broadcasters preferential status to acquire a noncommercial educational (NCE) license without having to meet broad community educational service requirements. At the same time, H.R. 4201 vitiates public oversight regarding the programming aired by such broadcasters. In effect, the legislation would render meaningless the rights of citizens and groups to participate in the license renewal process and it impedes the FCC’s authority to review program content to assure that the NCE license holder is serving the broad public interest.” (See Policy Letters.)

The legislation failed to emerge from the Senate Commerce Committee and attempts to end run the committee and bring the bill directly to the Senate floor late in the session were stopped by Senators Kent Conrad (D-ND) and John Kerry (D-MA).


Copyright Protections for Recording Artists — In November 1999, during last minute congressional consideration of a Satellite Home Viewer bill, a so-called “technical amendment” was added to this legislation at the behest of the record industry. This amendment æ which had nothing to do with the underlying bill æ radically changed U.S. copyright law in order to deprive sound recording artists of the right to recover control over their musical creations.

Prior to the enactment of this amendment, performing artists who by contract transferred their sound recording copyright to a record company, had the right to terminate that transfer and reclaim ownership of their property after 35 years. For most artists, the 1999 amendment eradicated this termination right by adding sound recordings to the list of works that can be defined under law as “works made for hire” which do not have termination rights.

The origins of this special protection for sound recording artists date back to 1976 when the first substantive rewrite of U.S. copyright standards since the turn of the century was accomplished. Under study for over 20 years, the 1976 revision of basic copyright law was the product of years of debate, discussion and deliberations as well as some 35 studies by the U.S. Copyright Office. Among the carefully crafted compromises that were adopted were the Section 203 termination rights. Under this provision, Congress made a deliberate policy decision to provide termination rights to creators who typically suffered a disadvantage with purchasers of their works in part because it was impossible to determine a work’s value prior to its release. Musical artists æ especially those new talents negotiating their first recording contracts æ were exactly the kinds of authors that the law was designed to protect because they have so little bargaining leverage with the major recording companies and are so easily taken advantage.

However, these longstanding termination rights were erased when the 1999 amendment that defined sound recordings as “works made for hire” was added during a closed-door meeting of congressional staff members. It was later approved by lawmakers without any notice or hearings. Though the DPE did weigh in on their behalf, it was too late for Congress to reverse course.

Immediately following the opening of the second session, the DPE — in cooperation with AFTRA and the AFM — initiated a lobbying campaign to repeal the 1999 amendment. Background materials were prepared and key staff members of the House and Senate Judiciary Committees and Democratic leadership was briefed on the issue. (See Fact Sheets.) In May, the House Judiciary Subcommittee on Courts and Intellectual Property held a one-day hearing.

Facing a withering attack from a number of the nation’s foremost musical stars as well as the trade press and pressure from key members of Congress, the industry backed off and agreed to legislation that would restore copyright protections to sound recording artists. On September 6, subcommittee chairman Howard Coble (R-NC) and ranking Democrat Howard Berman (D-CA) introduced HR 5107 which reversed the 1999 action. In quick succession the bill was reported by the subcommittee two weeks later, the full committee on the next day and approved by the House under the expedited “suspension of the rules” process on September 19. In the Senate, with the support of Senators Orrin Hatch (R-UT), Pat Leahy (D-VT) and Ted Kennedy (D-MA) the House-passed bill was approved unanimously and later signed by President Clinton into law on October 27 as PL 106-379.


National Endowment for the Arts (NEA) — Although the federal budget is projected to be in surplus for the next several years, GOP members of the House Appropriations Committee again slashed funding for the NEA during committee deliberations on FY 2001 for the Department of Interior and related agency (including the NEA) appropriations. Although the Clinton administration had requested $150 million for 2001, the Committee cut funding back to the Fiscal Year 2000 level of $98 million — a 34% reduction from the Administration’s mark. When inflation is factored in, this allocation amounts to a funding cut below current year appropriations. During the full committee mark-up, Rep. Norman Dicks (D-WA) offered an amendment to boost funding by $27 million but it was rejected by a 25-33 vote. His second attempt to increase funding by $17 million was defeated by only four votes, 27-31.

During floor debate on the appropriations bill, right-wing Republicans renewed their diatribe against the NEA. But their game plan to hold down NEA funding almost came unglued. First, the House decisively rejected by a 152-256 vote an amendment by Rep. Cliff Stearns (R-FL) to slash NEA funding by $2 million. Then Rep Louise Slaughter (D-NY) — a longtime NEA champion — offered an amendment to cut some $22 million from another program in the bill to set the stage for her amendment to transfer these funds to the Endowments and the Institute for Museum and Library Services. To the surprise of anti-NEA forces, Slaughter’s amendment was approved by a razor thin 207 to 204 margin. This defeat sent House Republican leaders scrambling. Led by House majority whip Tom Delay (R-TX), the Republicans concocted a last minute blocking maneuver. Right before Rep. Slaughter was to offer her amendment to transfer the funds, which included increasing NEA monies by $15 million, Rep. George Nethercutt (R-WA) offered a proposal to put the money into the Indian health services. Over the protests of Democrats and some moderate Republicans, his amendment was approved by a voice vote.

On the Senate side, the Appropriations Committee reported a funding bill that, thanks to subcommittee chairman Slade Gorton (R-WA), increased NEA funding by $7 million to $105 million. On the floor, Sen. James Imhofe (R-OK) led the fight to cut NEA funding but his amendment to shift funding was defeated by a 73-27 vote. Once again the leadership of Sen. Gorton was critical. In conference, unlike last year when a Senate-passed $5 million funding increases fell by the wayside, House conferees led by Rep. Ralph Regula (R-OH) agreed to the higher Senate amount. However, the new money was specifically earmarked for the agency’s Challenge America grant program designed to bring the arts to small communities and other less frequently funded areas. The House and Senate later overwhelmingly approved the conference report, which was later signed into law by President Clinton.

National Endowment for Humanities (NEH) — Funding for this agency, which provides federal grant support for education, research, public service, artifact and document preservation related to the humanities, met a similar although less severe funding fate. While the White House had recommended a budget level of $129.4 for 2001, the House Committee — in its Interior Appropriations bill — cut it back to the 2000 level of $115.3 — an 11% reduction from the recommended level. During committee deliberations, Republicans defeated an amendment to restore $9.7 million to the NEH appropriation. On the floor, Rep. Slaughter’s amendment to increase funding for both Endowments was blocked. (See above NEA summary.) In the Senate, the Appropriations Committee reported a funding bill that increases NEH outlays by $ 5 million. The conference report sustained this level of funding.

Institute for Museum and Library Services — Even this relatively non-controversial and tiny federal entity did not go unscathed in the battle of the budget. Here again GOP budget cutters reduced the President’s budget request from $33.3 million to the 2000 mark of $24.3 million — a cut of some 27%. However, House-Senate conferees on the Interior appropriations agreed to a final funding level of $24.9.


E-Commerce Taxation — The explosion of retail sales over the Internet has raised a number of policy issues. According to one estimate, business-to-consumer (B2C) e-commerce retail sales, which were a paltry $1.5 billion in 1997, are projected to hit $184 billion by 2004. As these transactions–which are now free of sales taxes–grow, traditional “bricks and mortar” retail stores may lose customers, sales taxes traditionally collected at the register will dry up and state and local governments that benefit from those revenues may suffer. State and local governments are in the meantime held hostage by two Supreme Court decisions that prevented them from demanding that the catalogue sales companies collect the tax at the point of sale because the court viewed that as overly burdensome on interstate commerce. Since state and local sales taxes now comprise over 40% of their revenue base, the erosion due to increased e-sales is estimated to be $5 to $10 billion annually over the next three years. Over time, in addition to lost jobs in traditional retailing, sales tax revenue losses will skyrocket. This could have a catastrophic impact on state and local services and programs as well as public sector employment.

In an early manifestation of their eagerness to be e-friendly, Congress waded into the controversy in 1998. At the behest of the “dot-coms” it passed legislation to place a three-year moratorium on state implementation of any new Internet access taxes. In effect, this assured that e-commerce commodity sales would also continue to be tax-free in state and local jurisdictions that had not already done so. The measure also created a federal commission to report back to Congress on Internet tax policy in general. Chaired by Virginia’s anti-tax governor, James Gilmore, the Commission — dominated by high tech representatives — reported the recommendations of a majority of the Commission in mid-spring of this year. In doing so, Gilmore ignored a congressional mandate not to issue such a report in the absence of an agreement by two-thirds of the Commission members. Among the recommendations was a proposal to extend the current moratorium on access taxes for another five years even though the current moratorium does not expire for another year. In addition, it recommended a ban on any new state and local sales taxes during this time. The strategy of Governor Gilmore and the Internet industry is to acclimate the consuming public to e-commerce as a tax free zone so that it would resist any future efforts to allow for the imposition of state and local sales taxes. Of course, if this strategy succeeds, brick and mortar retailers will, justifiably, seek to end all sales taxes in order to level the playing field.

No sooner had Gilmore presented his recommendations than the GOP leadership rushed to the House floor H.R. 3709, which embodies his proposal to extend the tax moratorium for five years. With AFL-CIO pre-occupied with the China trade issue, the DPE took the lead in pulling together a working group of labor lobbyists to oppose this move. The Department co-signed with 13 other labor organizations including DPE affiliates, AFSCME, AFT, CWA, UFCW, UAW and SEIU opposing this legislation. (See policy letters.) The unions then coalesced behind an effort by Rep. William Delahunt to roll the moratorium back to two years. Amid growing bipartisan opposition, Delahunt’s amendment was barely defeated by a 219-208 vote. In the Senate, Commerce Committee Chairman Sen. John McCain tried to move quickly on the five-year proposal but objections by his committee colleagues slowed momentum. A group of bipartisan Senators led by Sen. Bryan Dorgan (D-SD) fashioned a counter-measure to extend the moratorium for a shorter period of time. The Dorgan proposal and restore state and local taxing authority provided these jurisdictions act to simplify their tax systems and rates so that the taxes could more easily be collected. However, the momentum behind the moratorium legislation collapsed as adjournment approached and no final action was taken on the House-passed bill.

AFL-CIO Internet Policy Working Group — Recognizing the fast pace of congressional consideration on a variety of legislation relating to the Internet and high tech, the DPE prevailed upon the AFL-CIO to convene discussions with its affiliates on these and other e-commerce matters. The Department later joined with the AFL-CIO Public Policy Department in cosponsoring a one-day policy symposium on the Internet economy and its impact on organized labor. Attended by over 60 union representatives, the session focused on several issues including e-commerce taxation, privacy, labor market impact, access, convergence in telecommunications, organizing and training strategies and union use of the Internet. The AFL-CIO has since established an Internet Policy Working Group to help the Federation and its affiliates develop appropriate policy on Internet-related issues. The DPE and several of its affiliates are participating. The first meeting was held in late June where the committee decided to focus its attention on three areas: public policy development relating to legislative and regulatory matters; employment impact of the ever-changing Internet economy, and; the Internet as a strategic tool for unions. The committee reviewed and discussed an outline of Internet policy issues and was briefed by Jeff Chester of the Media Education Center about the ongoing debate regarding the Internet broadband-high speed access debate.

A second meeting was held in July and the committee was briefed by Jamie Love of the Consumer Project on Technology regarding pending action on Internet domain names. The Internet Corporation for Assigned Names and Numbers (ICANN) had announced that it would be considering approval of the issuance of a new set of top-level domain names (TLDs) in addition to the suffixes such as dot.com, dot.gov, dot.org, etc. that are in common use on the Internet. Established by the U.S. Government in 1998, ICANN is an international body that is managing the transition from a government-sanctioned monopoly (under which a private company had exclusive control over the registry for TLDs) to a free market system. The AFL-CIO Internet committee agreed that the ICANN announcement offered an opportunity to the trade union movement to submit a proposal on behalf of a dot.union registration and recommended that the AFL-CIO team up with international union organizations to do so. Within three weeks a proposal was submitted on behalf of the AFL-CIO and more than a dozen international union federations by the International Confederation of Free Trade Unions (ICFTU). The proposal drew additional support from unions and other organizations around the globe and was strongly recommended to ICANN by its staff. Despite this, in November ICANN approved the issuance of half a dozen new TLDs but dot.union was not among them. It had been tabled on a five to five committee vote for further consideration. ICFTU and others are pressing ICANN for future adoption of this new TLD.