Meeting Today Signals Beginning of End – Battle or Fizzle?

The floor of the state House.

By Erik Smith

Staff writer/ Washington State Wire

OLYMPIA, May 17.—Finally, after all these weeks of nothing, it looks like something is going to pop on workers’ comp in the next few days. It has to.

            A nine-week impasse between House Democratic leaders and everyone else in the Washington Legislature has to be resolved before lawmakers go home. It might be a fizzle, it might be a modest compromise, or it might be one of the darndest battles you’ve ever seen on the House floor. But something has to happen.

            And whatever it is, lawmakers say it is likely to be set in motion by a meeting today in the governor’s office.

            “It’s like, stay tuned,” said Sen. Janea Holmquist, R-Moses Lake. “It sounds like the Republicans at least will hold firm. No budget without workers’ comp.”

            Meanwhile, House Speaker Frank Chopp says the bill will pass over his dead body.

            An Outstanding Issue

            Maybe it won't come to that. But pressure is building as the Legislature nears the end of its current special legislative session. It is hard to predict when budget writers in the House and Senate will announce an agreement on a 2011-13 spending plan. On Monday, the word was they had reached an impasse and state officials were talking about the unthinkable – a never-before-seen July 1 shutdown of state-government offices. It is just as possible that agreement could be reached in a few days –Gov. Christine Gregoire is demanding a deal by the weekend. Whenever a deal is reached and lawmakers pass a budget, they can call it a session and go home.

            What no one knows right now is whether workers’ comp will stand in the way of the exit doors. In ordinary times it is the kind of issue that puts most lawmakers to sleep. This year it has become the biggest business-and-labor issue of the session, and when the two biggest contributors to political campaigns start duking it out, the Legislature pays attention.

            To sketch things quickly, business wants to give injured workers the option of lump-sum settlements, also known as “compromise and release.” Right now, the state-run insurance system offers only pensions. Workers would likely take the deal in droves, as they have in 44 other states. They would save the state big money, because the payouts would be about 80 percent of the pension amount. Long-term liability could be cut by a billion or so in the first two years alone. That would translate into lower payroll taxes for employers and workers, at a time when Washington rates are skyrocketing and other states are standing still.

            It also would make the state system more of an actuarily-sound insurance program, as it is elsewhere, and less of a social-service program that emphasizes injured-worker benefits over fiscal stability. There you have the problem. Labor hates that idea.

            The Senate passed a bill early in the session, with support from both Democrats and Republicans. It also has support from moderate Democrats in the House. But Democratic leaders in the House have taken the side of labor, and they say they aren’t about to let the measure go through. There have been plenty of headlines in recent days as awareness of the impasse has grown, but nothing has really changed since the beginning of March.

Here’s What’s New

Chopp, who rarely makes himself available for questions from the press, granted an interview to the Seattle Times last week. No way, no how, he said. Nothing doing. Most of his caucus takes the side of labor, so he does, too. “There is major opposition to the concept of compromise and release within our caucus,” he said. “It’s overwhelming opposition to it.”

And no speaker would ever bring a bill to the floor if the majority of his caucus opposes it, he said. “I don’t remember any speaker doing that, Democrat or Republican.”

What it means, though, is that a minority of House members are blocking the entire body from voting on the issue. There are nine moderate Democrats who have signed on to the latest business-backed settlement bill, HB 2109. If they vote with the 42 Republicans, that’s 51 – a majority of the House. But such things rarely happen.

So now come the threats: Moderate Democrats are said to be threatening to withhold their votes on the budget unless Chopp allows a vote on the worker-comp bill. Whether it’s idle talk, nobody knows. But in the Senate, Republican votes are needed to pass the budget, and they’re starting to say the same thing. That threat might be taken a bit more seriously.

            Governor Offers Compromise

            Gregoire is trying to break the logjam with a compromise proposal. Her new plan would allow settlements only for workers over age 55 who have outside income. It’s essentially the same modest proposal she offered early in the session, with a few differences, plus a few cuts in benefits. Over the long haul, it doesn't save as much as settlements-for-everyone – $1.2 billion over four years, versus $1.7 billion in HB 2109. Nor does it offer the sweeping structural overhaul business is seeking. And it should be noted that the business measure avoids cuts in benefits.

Gregoire said last week she can support the big settlement bill but it isn’t “politically tenable,” acknowledging the big problems getting it through the House. Labor is concerned about the 21-year-old who might settle a claim for big bucks and then blow the whole wad, she said. But she warned, “If we don't do something, we are looking at a system today where the trajectory financially is impossible to sustain.”

            It’s not clear whether labor and Chopp will support a compromise, either. So right now the big question is whether business and labor will split the difference and go for the compromise, do nothing, or fight it out to the death.

            Meeting Today Will Set Stage

            House and Senate negotiators meet with the governor again today, and the players say this meeting is one of the most important of the session. Democratic leaders had a chance to talk things out over the weekend. By the time they finish this afternoon, “we will know pretty well where people are staked out,” said state Rep. Cary Condotta, the House Republican point-man on the issue.

            He’s predicting the House Democratic leaders won’t budge. And if they aren’t going to compromise, everyone else might as well hold firm, too. “That’s why I say we’re either going to go for the full play or no play, and I think it will happen faster than we can imagine.”

That means the pressure will be on the Democratic moderates in the House – will they dare vote against their leaders?