The American Spectator : The Spectacle Blog : More Details on Obama's Big Bribe to Big Labor

Text Size

The Spectacle Blog

More Details on Obama's Big Bribe to Big Labor

By Philip Klein on 1.14.10 @ 3:37PM

Brian Beutler has new details on the deal aimed at bribing big labor into supporting the health care bill at the expense of all other workers.

He writes:

The Obama administration and organized labor have reached a tentative agreement on the so-called Cadillac tax on high end health insurance plans, signaling that Democrats may soon be able to resolve their differences over how to finance health care reform.

Unions had opposed the measure, which, as originally designed, would have imposed a 40 percent excise tax on insurance policies that cost more than $23,000 for families, and $8,500 for individuals, indexed just above inflation.

Under the terms of the proposed deal, the threshold for families would be raised to $24,000, and would exempt certain benefits like vision and dental, according to a Democratic source.

Collectively bargained plans would be exempted until 2017, to provide workers with a real opportunity to renegotiate their benefits packages, which were designed under current law and exempted from taxation.

Of course, everybody else with "Cadillac" plans also negotiated them during a period when they weren't taxed, but they won't have until 2017 to renegotiate. They'll be subject to the new tax.

Back when he was taken seriously as a politician, John Edwards used to talk about there being two Americas. Well it turns out, that's a good description of life under President Obama. If you're part of one America, you have to pay a tax if you receive generous health benefits. But if you're part of the other America that has contributed handily to Democratic campaigns and has access to the White House, you can receive those same benefits without paying a tax.

UPDATE: Back when this idea was being floated last June, liberal health care blogger Ezra Klein agreed that it was unfair. Here's what he wrote on his Washington Post blog:

I see the short-term appeal of the proposal. It retains most of the revenue and neutralizes an important source of opposition. But it's pretty crass. The benefits won by workers in collective bargaining agreements are no more sacrosanct than the benefits negotiated by an individual worker when he settled on the terms of his job. And it's not hard to see the dangers of the (accurate!) attack that "Democrats want to tax your health benefits -- unless you join a labor union that donates mainly to Democrats." The last thing you want when levying a new tax is to make it look like an unfair new tax, or a new tax that mainly benefits your favored special interests. Like everyone else, union members -- particularly those in the aging industries that offer the best benefits -- have much to gain from health-care reform. It's not crazy to ask them to help pay for it.

UPDATE II: Via Twitter, Ezra Klein replies that, "I don't love this solution, but I wasn't talking about it in June. That was about exempting union agreements, not time...i.e. leaving union benefits out altogether is a lot worse than giving them a few years to renegotiate."

While exempting union benefits altogether may indeed be worse, the time element doesn't change the basic unfairness. The bottom line is that unions will get special treatment, for no other reason than their ties to the Democratic Party. If, say, the tax were designed to only affect those making more than $200,000 per year, at least there would be some argument that liberals could make based on progressive taxation and protecting the middle class. But this isn't based on income, nor does it have a policy rationale. It's pure special interest politics.

To his credit, while I was updating this post, Ezra added on Twitter that, "I agree that this is pure special interest politics. I've not been on the union's side on this fight!"

View all comments (14) | Leave a comment

Franklin| 1.14.10 @ 6:18PM

How can the unions even dream that this "deal" will stand? Don't they know it will never happen?

Ron| 1.14.10 @ 6:39PM

Exactly who is going to stop it? The Republicans don't have the votes or backbone and the Democrats don't seem to care one iota about what a majority of Americans think about this package. The Republican party should be spending whatever it takes to saturate this country with the message that this cannot be allowed. All we hear from them is whining that they weren't included in the process. 13 state AG's had to make a stink about the Corn-husker kickback. Where were the Republicans in the Senate? Again, if I may ask, who do you think is going to stop it?

Franklin| 1.14.10 @ 8:54PM

I don't think anyone is going to "stop" it (putting the deal in the bill).

But I do think that if the bill passes there will be so many lawsuits regarding all the deals (and even the bill itself) that the deal with the unions won't stand.

I could be wrong, but I believe in the conservative movement. I lived thru the '60s and the passion and resolve of the Tea Party participants is stronger than any flower child I've ever seen.

Ron| 1.15.10 @ 2:20AM

I was in high school in the late 60's and joined the Army in 73. The draft ended in 72, so I wasn't angling for a sweetheart deal. I remember the 60's and 70's quite well.

What I'm really worried about is the number of Federal courts that wouldn't dream of overturning these laws. The only court I have any faith in at all is the SCOTUS. And God forbid, one of the conservative justices retires/dies, it would be open season on conservative ideals. What does it say about our state of affairs when the only recourse conservative voices have is a court challenge? Conservatives have virtually no representation in Congress or the White House. The best we can do is to sue. God help us.

Ron| 1.15.10 @ 2:27AM

I tried to remember exactly when the draft ended but couldn't recall an exact date. I did a little research and is appears that it ended June 1973. I joined the following month when I became of age. I didn't realize I was so close.

Susan| 1.15.10 @ 2:37AM

Commenters are wondering who's going to stop the disparate treatment of most of America? I will answer that question and, in so doing, I do not intend to sound sarcastic.

No one is going to stop any of this insanity. No one, that is - except for us. The Republicans don't have the numbers and, quite frankly, they're either too exhausted from dealing with all of this idiocy, or they just don't have the collective "will" to do anything about it. After all, the resounding joke here is that the Republicans in Congress, like the putrid Democrats, are exempt from partaking of this lovey healthcare bill. Really - it makes me feel like I live on a different planet as I remind you that certain "favored" or "special" people have fruit to eat while those not identified as "special" by Obama get to eat only dung. In case you're wondering: we would be the "dung" eaters.

Yeah, there will be even more lawsuits filed - even more to add to the hundreds or thousands that have already been filed - you know, the lawsuits that go unmentioned. And what, pray tell, shall we expect in that regard from our illustrious Attorney General, Eric Holder? To make room for the new unmentioned lawsuits, will the unmentioned lawsuits that have already been filed simply disappear? Will America's top law enforcement officer dismiss all of these unmentioned, unknown, lawsuits based upon his findings that are beyond legal, unrealistic, petty, and irrelevant? Or, will the new, emboldened Eric Holder simply dismiss all of the cases citing no reasons at all?

My point here is that Holder has already repeatedly acted in the ways that are exactly like the aforementioned; in all cases, this would be Holder acting outside of the law.

It is frightening to think that the Rule of Law is no longer applicable. But, it is not. Holder, with a blessing from his boss, has guaranteed this fact by virtue of setting his own precedent. Can we expect Eric Holder, an anti-law creature, to suddenly show his respect for the law? I think not.

Now, there is no one that we can trust or count on; we can only rely on ourselves. We, the citizens, are the ones that must act.

Ken| 1.15.10 @ 8:21AM

G.R.I.P. = GET RID of INCUMBENT POLITICANS. The politicans or SCUM as I would call them on both sides do not give a rats ass about John Q. Public until we vote them out. If the new ones do the same vote them out too! We keep doing this and eventually we will end up with politicans who give a shit.

Kyle| 1.15.10 @ 11:35AM

Could this be a 14th amendment issue (pardon my ignorance if I'm way off course here)? I don't understand how this administration and congress can so openly and brazenly write legislation that favors the democrat special interest groups while giving the finger to everyone else in the country. I pray to God that the AGs who were looking into the legality of the cornhusker kickback are able (willing) to take action that will stop this bill dead in its tracks.

David| 1.15.10 @ 12:44PM

I thought paying taxes was our patriotic duty. I thought protesting unreasonable taxes and spending made one a "tea bagger." Does protesting taxes for Obamacare make the unions part of the tea party movement? Or, does having direct access to the oval office make the unions just concerned citizens.

Doug| 1.15.10 @ 7:10PM

So much for unifying America.....this administration has not only widened the gap between democrat and republican, but it has pitted State against State (Nebraska, Louisiana, Connecticut receiving tax benefits at the expense of the remaining States), union workers against non-union workers that receive the same benefits, corporations that eat at the public trough against corporations that stand on their own, the wealthy who are to suffer the burden of all these new taxes versus the average citizen...etc., etc. A divided house will fall...and we are becoming more and more divided.

bobby b| 1.16.10 @ 2:35AM

We're all going to protest mightily that we don't get the same exemption as do the unions, and someone somewhere, in response, is going to form some sort of insurance cooperative, open to all and offering high-end but non-taxed health plans for sale through some little definitional quirk in the Health Care bill.

And we'll all celebrate and feel like winners until we realize that we've just all joined the Public Option.

'Cuz, that BO, he's crafty like that.

Smitty| 1.16.10 @ 12:30PM

Sorry, not impressed by TOTUS; Obama is a backbencher who has voted present his whole life.

There are a heck of a lot more of US than THEM.

brett h| 1.19.10 @ 1:46AM

**Seems funny to me that unions can get a tax exemption, but the military members aren't exempt from paying Federal Taxes (yes, there is a combat zone exemption) unless their lives are in "conceivable" danger. Was Fort Hood a combat zone? How about the USS Cole? Unions, back off.