UPDATE: Unions Upset Over Health Care to Lobby Congress
UPDATE: After a two hour meeting with President Obama Monday evening, unions are moving ahead with plans for an all out lobbying blitz on Capitol Hill Wednesday. Union leaders are disappointed with the path health care reform has chosen, especially a likely proposal to include a tax on high cost insurance plans, also known as “Cadillac” plans.
The SEIU is joining with other community and patient advocate groups to tell Congress that health care must be affordable.
PREVIOUS REPORTING: Just hours before the meeting withe President Obama, head of the AFL-CIO, Richard Trumka, bashed the current proposal to pay for health care reform. Speaking at the National Press Club in Washington, D.C., Trumka said “the Senate bill from our point of view is inadequate” and that it “does not deserve the support of working men or women.”
The Senate health care bill pays for reform by an excise tax on high cost insurance plans. The bill says an individual plan costing more than $8,500 or $23,000 for a family of four will receive a 40% tax. A study by the unions say that will impact one out of every four union workers. As a bargaining tool, union leaders often negotiate robust health care plans in exchange for higher wages.
Twelve leaders of organized labor are meeting with President Obama to express their concern. But convincing the President otherwise might be difficult. Yesterday on ABC’s “This Week”, Christina Romer, President Obama’s Chair of the Council of Economic Advisers, said the President has been “convinced by experts across the ideological spectrum that say this is one of those things that genuinely slows the growth rate of costs.”
The Obama administration has impetus for its stance to support the excise tax because the liberal leaning economic think tank, the Center for Budget and Policy Priorities, released a report in November that says the excise tax is a “sound way to pay for health reform.” The report says the tax will help control the rising cost of health care because employers will formulate health care plans to avoid the excise tax, which will result in higher incomes for employees, and the health care industry will look for more efficient ways to deliver care.
Romer seemed to leave a little room for minor alterations to the proposal. She said President Obama is “always open to — you know, there are design issues here. He’s going to be continuing to — to work with the Congress to say, are there ways to — to make it work better.”
One compromise being loosely discussed is raising the threshold from $23,000 to $27,000 for a family of four. The union says that would impact far fewer people, only 1 out of 14 workers. But that would shave off $50 billion of $150 billion to pay for the health care reform.
Democratic members of the House of Representatives are largely opposed to the excise tax on health care plans. Instead they prefer the provisions in their bill: a 5.4% tax on the individuals making $500,000 per year or couples earning $1 million dollars per year.
Democrats point to a report released by the Joint Committee on Taxation (JCT) that says by 2016, 19%, or 30 million, working Americans will be impacted by the excise tax because of inflation. House Democrats call it a middle class tax hike. Though that same study says that most people will be able to re-negotiate their health care plan to avoid the excise tax.
Democrats are facing tough re-elections in 2010. Loosing union support by taxing their health care could add to Democrats election-year problems. Trumka refused to say if he would call on his members to oppose health care reform if the excise tax is included.
Meanwhile, House Democrats are huddling in a conference tomorrow to discuss the negotiations with the Senate. The House fears that the Senate bill will largely stay in tact. Senate Democratic aids tell News Junkie Post that there will be few changes to the Senate bill.
For an audio version of this story visit, FSRN.org