Perdido 03

Perdido 03

Saturday, January 9, 2010

NY Times Says Unions Will Fight Obama's Excise Tax On Health Care Plans

According to the NY Times, the union heads who will meet with President Obama to discuss his health care reform will remind him that he once opposed his 40% excise tax proposal on employer-provided health care plans that will hit 1 in 4 union workers by 2013 and 19% of all workers (about 30 million) by 2016.

Obama refuses to remove the excise tax on employer-provided health care for a higher income tax on individuals making over $500,000 a year or families making over $1 million.

Apparently he feels his health care reforms should be funded on the backs of people making $30,000-$70,000.

During the 2008 campaign, he criticized John McCain for a similar proposal to raise taxes on employer-provided health care plans.

Now he supports that very proposal

Union leaders plan to tell him if this proposal is enacted as part of the health care reform, union workers will be demoralized and likely not come out to support Democrats in 2010.

Democrats are already expected to lose 30-40 House seats in the 2010 midterm elections, though they may lose only 1 or 2 in the Senate.

A 40 seat House loss would give the Congress back to Republicans.

Here is the tack unions are taking:

In recent days, labor’s strategy has become clear. Unions are urging their members to flood their representatives with e-mail messages and phone calls in the hope that the House will stand fast and reject the tax. The A.F.L.-C.I.O., a federation of nine million union members, has declared next Wednesday “National Call-In Day” asking workers to call their lawmakers to urge them not to tax health benefits. The International Brotherhood of Teamsters is urging members to tell their representatives that “such a tax is simply a massive middle-class tax hike that this nation’s working families should not be forced to endure.”

Many Democrats fear that enacting the tax will hurt their re-election chances.

“This would really have a negative impact on the Democratic base,” said Representative Joe Courtney, Democrat of Connecticut, who has enlisted 190 House Democrats to sign a letter opposing the tax. “As far as the message goes, it’s a real toughie to defend.”

While union leaders would prefer killing the tax, some say privately that they could live with it if the threshold is lifted to $27,000, say, or $30,000. They argue that many insurance policies above $23,000 are typical of the coverage in high-cost areas like New York or Boston, or policies that cover small businesses or employers with older workers.

According to a union survey, one in four members would be hit by a $23,000 threshold, but only one in 14 if the threshold were raised to $27,000.

The only problem with not killing the excise tax is that once it is enacted as part of the "reform," it will be difficult to ever get out. And the point of the excise tax is to make decent employer-provided health care to expensive for employers to continue to provide so that they either drop coverage for employees altogether or switch them to cheaper HMO's.

Can you imagine a Democratic president who has the official policy to raise taxes on middle and working class union members so that they are dropped from their employer-provided health care coverage rather than raise taxes on millionaires?

That's what we have with President Change You Can Believe In.

I'll tell you, the only change I can believe in is when he gets his lying ass kicked back to Chicago in 2012.


  1. thanks...many people, myself included, have either been too busy or confused by the issues until now when we realize our hard won benefits are being diminished every contract. We became teachers partly for the security, even when we knew the pay was low....we have exc that is being threatened. thanks again for the reports.

  2. Thanks for reading it. I'm hopping mad about this, and apparently so are the big unions like the AFL-CIO, the SEIU, etc. But not so much Randi and the AFT. Not a word from her or the teachers unions. Which makes me suspect she is willing to sell us out on the excise tax and hope we're too stupid to notice it. That's been her M.O. at the UFT, so I guess it's her M.O. at the AFT too.