HR Magazine: State of the Union address touches on the workplace

If the State of the Union address on Feb. 2 is any indicator of the Bush administration's legislative agenda for the coming year, then workplace issues--other than Social Security--might not be very high priorities.

In a speech that lasted about an hour, President Bush spoke for approximately two minutes on health care reform. While employers and HR professionals consistently rank the high cost of health care as their No. 1 concern, the president provided only a broad overview of a plan to reduce the spiraling cost of health care for employers and employees.

"I ask Congress to move forward on a comprehensive health care agenda with tax credits to help low-income workers buy insurance, a community health center in every poor county, improved information technology to prevent medical errors and needless costs, association health plans for small businesses and their employees, expanded health savings accounts, and medical liability reform that will reduce health care costs and make sure patients have the doctors and care that they need," Bush said.

The ideas that the president listed for health care reform should be familiar to anyone who followed the issue throughout his first term. The president has been a strong advocate of individuals taking more control over their health care decisions. This concept has been a key component of his administration's goal to promote an "ownership society."

The creation of association health plans is another component of the Republicans' plan to reform health care. Just hours before the president delivered the address, Rep. Sam Johnson, R-Texas, introduced the Small Business Health Fairness Act, H.R. 525, which would authorize creation of association health plans so that small businesses could band together and purchase health care insurance at lower costs for their workers. Several Democrats were co-sponsors.

The president believes that medical liability reform can reduce health care costs and increase the number of practicing health care providers. His idea of liability reform extends beyond the health care arena, though. The president advocated stronger protections from lawsuits for employers, although he provided only sketchy details.

"To make our economy stronger and more competitive, America must reward, not punish, the efforts and dreams of entrepreneurs," Bush said. "So, we must free small businesses from needless regulation and protect honest job creators from junk lawsuits."

The president mentioned reforming federal job training programs to "help 200,000 get the training they need for a better career" and to strengthen America's community colleges. He briefly touched on an immigration reform proposal that could make it easier for workers from other countries to find jobs in the United States.

"We should not be content with laws that punish hard-working people who want only to provide for their families and deny businesses willing workers," Bush said. "It is time for an immigration policy that permits temporary guest workers to fill jobs that Americans will not take," but without amnesty for illegal aliens, he said.

Security in Retirement Sought

After a quick and fairly broad outline of these key workplace issues, Bush focused on Social Security reform, which he has stated repeatedly is the key objective of his second term. The president made it clear that his reform effort would focus on fixing the system permanently and ensuring the retirement security of millions of U.S. workers.

The president hinted that his administration might be open to options such as increasing the retirement age and reducing benefits for some recipients--ideas originally put forth by others. However, he stated that raising payroll taxes was not an option.

Outlining his ideas for reforming the retirement system, the president focused on the "ownership society" aspect again by touting the advantage of creating individual retirement accounts and allowing workers to divert part of their Social Security payroll tax money into these accounts. The president has pushed the idea before; he attempted to set up a test program for the accounts during his first term.

While he did not specifically mention pension reform in the speech, the president has proposed several ideas that would go hand-in-glove with changes to the Social Security system, allowing employers to increase contributions to pension plans during strong economic times and protecting the solvency of the Pension Benefit Guaranty Corp.

"Our goal here is greater security in retirement, so we will set some careful guidelines for personal accounts," the president said. "And we'll make sure this plan is fiscally responsible by starting personal retirement accounts gradually and raising the yearly limits on contributions over time."

The president's plan for Social Security reforms drew the sharpest criticism from Democrats, who said the president was gambling with the future of the U.S. workforce. Senate minority leader Harry Reid, D-Nev., said the proposals would amount to "a 40 percent cut in Social Security benefits." He added that Democrats will fight to close any loopholes and to end tax breaks that encourage U.S. employers to move jobs overseas.

Although both parties claim that they are ready to work together and find bipartisan solutions to problems, the sharp response from the Democrats to the president's Social Security proposals and their continued criticism of the administration's policies in Iraq could signal another year of contentious debates and political wrangling in Congress.

Online Resources

For more information about SHRM's positions on proposed legislation, visit www.shrm.org/government.

BILL LEONARD IS SENIOR WRITER FOR HR NEWS.