Unions Push Obama Hard Against the Idea of a Health Insurance Tax

From the AP: Labor leaders irate over a proposed tax on high-value health insurance plans met with President Barack Obama on Monday to express their frustration over his support for the levy. Some labor officials have warned Democrats of political fallout for backing the tax.



The president of the AFL-CIO, Richard Trumka, said there was a frank discussion at the nearly two-hour White House meeting with about a dozen heads of the country's biggest labor unions. Earlier in the day Trumka delivered a broadside to Obama and Senate Democrats who are planning to pay for overhauling the nation's health care system with a tax on insurance plans that union leaders fear could hit their workers.


Trumka warned that Democrats risk catastrophic election defeats similar to 1994 if they fail to come up with a health bill labor likes.


"A bad bill could have that kind of effect – a place where people sit at home" – as happened in 1994, when Democrats lost 54 House seats and eight in the Senate, costing them control of Congress, Trumka told reporters.


The head of the International Association of Firefighters, Harold A. Schaitberger, made similarly threatening remarks in a statement Monday. "The president's support for the excise tax is a huge disappointment and cannot be ignored. If President Obama continues to support it and signs a bill that includes the excise tax on workers, we will hold him accountable," said Schaitberger, who was not among the attendees at the White House meeting.


The AFL-CIO's Trumka made his remarks before delivering a speech in which he bashed the tax proposal in the Senate's health overhaul bill, contending that it "drives a wedge between the middle class and the poor."


"The bill rightly seeks to ensure that most Americans have health insurance. But instead of taxing the rich, the Senate bill taxes the middle class by taxing workers' health plans – not just union members' health care; most of the 31 million insured employees who would be hit by the excise tax are not union members," Trumka said hours before going to the White House. "This is a policy designed to benefit the elites."

A news round-up of Monday's White House-Unions Meeting from Bill Scher at Campaign for America's Future:

WH hints at compromise over health insurance tax after union meeting. NYT: " President Obama told union leaders at a private White House meeting on Monday that he remained committed to taxing high-cost insurance policies as a way to drive down health costs. But he also signaled that he was willing to amend the proposal to 'make this work for working families,' a senior administration official said."

LAT on possible compromise: "Democratic negotiators are exploring a possibility that would not eliminate the tax entirely, but raise the threshold at which it applies in order to ensure that more middle-income Americans are spared. To make up the lost revenue, Democrats might boost the Medicare payroll tax on high-income Americans."

"The union presidents declined to discuss the meeting when it was over," reports Bloomberg.

Earlier in the day, AFL-CIO President warns Dems of consequences if bad bill is passed. AP: "Trumka warned that Democrats risk catastrophic election defeats similar to 1994 if they fail to come up with a health bill labor likes. 'A bad bill could have that kind of effect – a place where people sit at home'"

"Firefighters Rip Obama For Breaking Campaign Promise Over Cadillac Tax" reports TPMDC.

W. Post/Fortune columnist Allan Sloan comes out against the tax: "But if you look at the actual workings of the plan, you come away far less impressed. You discover that more than 80 percent of the money it raises would come from individuals paying higher income, Social Security and Medicare taxes -- not from soulless employers and insurers. You also discover that the biggest portion of the money comes from people who make less than $200,000. That's not exactly rich -- especially not for those of us in high-cost areas on the East and West coasts."

OurFuture.org's Richard Eskow knocks tax supporters for admitting uncertainty: "People are saying that the so-called Cadillac tax 'might fall flat" and 'has real problems.' And those are its defenders. I can't remember any new policy in recent history whose own advocates had so many complaints with its design."

Unions also pushing for a single national health insurance exchange, reports LAT.

The Treatment's Jonathan Cohn explains the benefit of a national exchange: "[The fear is] individual states won't manage their exchanges aggressively enough--either because the people put in charge lack the expertise or the political officials overseeing them are in the pockets of the health care industry. (Believe it or not, industry lobbyists frequently have even more sway at the state level.) In addition, exchanges will likely be responsible for administering subsidies to people who need help buying insurance. But the subsidies will be coming from the federal government, which means states won't have as much incentive to manage the use of those subsidies wisely. The best counter-argument to the national argument is that state officials would be in a better position to negotiate contracts, since they'll have a much sharper feel for the local markets ... But that's not an argument against national exchanges so much as it is an argument for allowing states to opt out of the national exchange--and to take over management--once they've demonstrated ability to do the job on their own. And the House plan already includes such a provision ... Understood properly, the House plan doesn't actually require all states to be part of the national exchange. It merely sets a high standard for what the exchanges should do--and allows states to handle the job as long as they can meet that standard. That's exactly how it should be."

CQ reports insurance lobby fighting to block national exchange: "“'he House feels very strongly these state exchanges won’t work,' said Rep. Diana DeGette, D-Colo. 'Some states would opt out. You couldn’t get uniform national benefits. The sense I had is that the House is going to stand firmly for its position that we need a national exchange.' ...insurance companies, state insurance commissioners and many centrist Democrats prefer the Senate plan [for 50 state exchanges], saying it leaves more discretion in the hands of local officials ... Robert Zirkelbach, a spokesman for America’s Health Insurance Plans, the industry’s trade association, said a national exchange would duplicate or make unnecessary the work of the [state] insurance commissioners."

HCAN's Jason Rosenbaum makes case for House employer mandate: "...the Senate provisions would incentivize large employers to cut hours for employees or provide the cheapest health care possible to avoid the fine."

Krugman criticizes FireDogLake for charging economist Jonathan Gruber for conflict of interest. FDL's Jane Hamsher demands Krugman apology.

Politico suggests Senators are more optimistic than House members of reaching deal before State of the Union.

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