Labor Pains

Jan 12, 2010 8:20am

Usually chatty labor folks are being fairly reticent after meeting with President Obama Monday afternoon to discuss a major issue of contention: the provision in the Senate health care reform bill that would impose a tax on insurance companies for so-called "Cadillac" health plans — as currently defined in the Senate bill, individual plans worth more than $8,500 and family plans worth more than $23,000.

One thing that can easily be discerned: no agreement was reached.

Many health care reform experts say taxing Cadillac plans is an important way to reduce health care costs, and President Obama has joined their ranks, even though during the campaign he seemed to oppose it, pointing out that many in organized labor have forsaken wage increases in favor of generous health care plans.

White House spokesman Reid Cherlin Monday evening put out a statement saying "the President and labor leaders had an exchange of views and had a productive discussion about their shared commitment to health reform that will lower health costs for American workers and their families, protect them from unfair insurance company practices, and enable employers to create jobs and raise wages.”  

A source familiar with the meetings tells ABC News that "the president reiterated his support for the excise tax but also reiterated his commitment to protect working men and women," perhaps an indication the president is willing to raise the threshold.

While the meeting was going on, International Association of Fire Fighters President Harold Schaitberger — who was not present — issued a statement saying that "The core political principle of this union is we support those who support us. If you make promises to us, we will hold you accountable. … In 2008, then-candidate Obama promised three things. First, he would not raise taxes on folks making less than $250,000 a year. Second, he vowed not to tax your health insurance benefits. Third, he promised that under his health reform plan that people would be able to keep their existing coverage.

"Now the administration is supporting a misguided excise tax on the premiums of some health plans that is in the bill passed by the Senate. This excise tax will affect many of the health plans covering our members. The Senate bill will either impose a tax on health care premiums provided to thousands of America's fire fighters, or to avoid the tax those benefits will be slashed."

Schaitberger said that "under this bill every special interest seemed to get something good – the insurance companies, the doctors, the drug companies all get something. But, in the Senate bill, many of our members who have sacrificed for years to build solid health plans to protect their families will get screwed."

Schaitberger's suggestion that the president is flirting with breaking a promise stems from campaign rhetoric such as then-Sen. Obama's speech in Newport News in 2008, when he said, "John McCain calls these plans 'Cadillac' plans. Now in some cases, it may be that a corporate CEO is getting too good a deal. But what if you're a line worker making a good American car like the Cadillac? What if you're one of the steelworkers who are working right here in Newport News, and you've given up wage increases in exchange for a better health care? Well, Senator McCain believes you should pay higher taxes too. The bottom line: the better your health care plan — the harder you've fought for your good benefits — the higher the taxes you'll pay."

Earlier today, ABC News asked White House press secretary Robert Gibbs if the president's current position in favor of this tax inconsistent with that campaign rhetoric?

"It's not inconsistent because what he was talking about is two fundamentally different things," Gibbs said. "Removing the tax deductibility of any part of your health care and capping for — taxing insurance companies that offer a health care plan in excess of a $23,000 limit, they're not in the same ballpark. They're not in the same state."

So will the president abide by basically what he said in the campaign, which is those workers who did negotiate so that they had better health care instead of wage increases, they would not be impacted?
"That's something they're going to discuss," Gibbs said.

– jpt

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