I got as an email today so will post it all. Good details.
Unions for Single Payer HR676
to me, News
show details 10:38 AM (2 hours ago)
http://www.nytimes.com/2010/01/09/business/09union.html?hpwNY Times
January 9, 2010
Unions Rally to Oppose a Proposed Tax on Health Insurance
By STEVEN GREENHOUSE
When millions of blue-collar workers were leaning toward John McCain
during the 2008 campaign, labor unions moved many of them into Barack
Obama’s column by repeatedly hammering one theme: Mr. McCain wanted to tax
their health benefits.
But now labor leaders are fuming that President Obama has endorsed a tax
on high-priced, employer-sponsored health insurance policies as a way to
help cover the cost of health care reform. And as Senate and House leaders
seek to negotiate a final health care bill, unions are pushing mightily to
have that tax dropped from the legislation. Or at the very least, they
want the price threshold raised so that the tax would affect fewer
workers.
Labor leaders say the tax would hit not only wealthy executives with
expensive health benefits, but also many rank-and-file union members who
have often settled for lower wage increases in exchange for more generous
health benefits.
The tax would affect individual insurance policies with annual premiums
above $8,500 and family policies above $23,000, which by one union survey
would affect one in four union members.
The House bill does not contain such an excise tax, and many House
Democrats oppose adding it to the combined House-Senate legislation. But
the tax is a critical revenue component in the Senate’s bill. If the bill
does too little to cover its costs, it might be defeated. Many economists
support the tax, saying it will help hold down costs.
With labor groups warning that the tax will infuriate a key part of the
Democratic base — union members — President Obama has agreed to meet with
several top labor leaders on Monday to address their concerns and try to
defuse their anger. The group includes the presidents of the
A.F.L.-C.I.O., Teamsters and the steelworkers’ and service employees’
unions.
But whether the tax is negotiable remains unclear. Not only has Mr. Obama
specifically endorsed the idea, but the White House and Senate leaders see
the tax as pivotal in paying for the health care overhaul and addressing
runaway health care costs.
Many Democrats and union officials fear that if both sides dig in on the
issue, it could create a rift between the White House and labor — with
some union leaders hinting they might lobby aggressively against the
entire health care bill if it contains such a tax.
Union leaders have repeatedly warned the White House about the strong
rank-and-file dismay, which could hurt the Democrats in Congressional
elections this fall, especially in battleground states like Ohio,
Pennsylvania and Wisconsin.
Ron Gay, an AT&T repairman in Youngstown, Ohio, who spent much of the
summer of 2008 urging co-workers to vote for Mr. Obama, said, “If this
passes in its current form, a lot of working people are going to feel let
down and betrayed by our legislators and president.”
The Congressional Budget Office estimates that 19 percent of workers — or
about 30 million employees — would be affected by the tax in 2016.
Economists say most of them would be nonunion, although it is organized
labor that has the lobbying clout to take a stand.
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.
White House officials, however, voice concern that raising the threshold
that much would lose $50 billion of the $149 billion in revenue that the
tax is expected to generate over 10 years.
Those officials and Senate leaders argue, moreover, that unions are wrong
to fight the tax, saying that it will hold down health costs and that
money employers save on health premiums will ultimately go to higher
wages.
Some experts say the tax’s main effect would be to deter insurers from
continually raising premiums. “This is a tax on insurance companies, not
on workers,” said Erin Shields, an aide to Max Baucus, Democrat of
Montana, who is chairman of the Senate Finance Committee and a chief
sponsor of the excise tax.
“Health care costs are rising much faster than inflation,” Ms. Shields
said. “Imposing this tax will help hold down costs because it will give
employers an incentive to find a plan that falls beneath the threshold and
will give insurers an incentive to offer the best possible plan below the
threshold.”
Ms. Shields defended Mr. Obama, saying the excise tax he backs is far
different from Senator McCain’s proposal. Mr. McCain called for
eliminating tax breaks for employer-sponsored health benefits, replaced
with a tax credit to help consumers obtain health insurance, Ms. Shields
said.
She added that the measure Mr. Obama supports would tax only that part of
a family policy above the $23,000 threshold — which would be taxed at a 40
percent rate.
But union officials say the tax will cause employers to push higher
co-payments and deductibles onto their employees. They argue that a fairer
way to generate revenue would be to embrace the House bill, which imposes
an income tax surcharge on couples earning more than $1 million.
Neither the House nor the Senate would seem to have much wiggle room on
the issue.
Senator Ben Nelson, Democrat of Nebraska, has said he would oppose any
bill containing the House’s surtax. His vote was crucial in enabling
Senate Democrats to reach the 60 votes needed to pass the health bill over
a potential Republican filibuster.
The House bill, meanwhile, passed by only a five-vote margin, and at least
three Democrats who voted for it — Mr. Courtney, Phil Hare of Illinois and
Carol Shea-Porter of New Hampshire — have said they would oppose a final
bill if it contained an excise tax like the Senate version.
Jonathan Gruber, a Massachusetts Institute of Technology economist,
predicted the excise tax would raise workers’ wages from 2010 to 2019.
“There are many academic studies showing that when health costs rise,
wages fall,” he said. “In the mid- and late 1990s, when we got health
costs under control, wages rose nicely.” But he added that other factors
could have also lifted wages during that period.
Leo W. Gerard, president of the United Steelworkers, scoffed at arguments
that by restraining health costs, the tax would lead to higher wages.
“The people who are promoting this tax say companies will make up for this
with higher wages,” Mr. Gerard said. “These people who say that have never
been at the bargaining table. It doesn’t work that way.”
Robert Gleason, chairman of the Pennsylvania Republican Party, said Mr.
Obama had made an about-face that would badly hurt the president and other
Democrats. “You remember when the first President Bush said, ‘Read my
lips, no new taxes,’ and he raised taxes and he went down to defeat,” he
added. “This is the same thing.”
Michael P. James, a 57-year-old steelworker with the Timken Company in
Canton, Ohio, campaigned for Mr. Obama and is seething about the tax.
“I don’t think we should be penalized by this bill,” Mr. James said. “The
president would be going back on his word. If he goes ahead and passes a
bill with the excise tax, I won’t be able to support him again.”
David M. Herszenhorn contributed reporting.
Distributed by:
All Unions Committee For Single Payer Health Care--HR 676
c/o Nurses Professional Organization (NPO)
1169 Eastern Parkway, Suite 2218
Louisville, KY 40217
(502) 636 1551
Email: nursenpo@aol.com
http://unionsforsinglepayerHR676.org01/09/09
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