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06_Latest News - January 2010

06_January 14, 2010
Union leaders say they're happy with health-care deal
By Alec MacGillis -

The country's top union officials spoke glowingly Thursday afternoon of the agreement they had reached with the White House and congressional Democrats to delay an excise tax that will target high-cost health insurance plans.

They also defended the deal against the charge, already being voiced by Republicans, that unions got a special deal for their own members.

Senate Democrats wanted the excise tax to pay for part of the expansion in health care coverage. Unions have opposed the so-called "Cadillac tax" because they argued that it would hit not only lavish plans for high earners but also the plans of many middle-class workers.

But Republicans noted that one element of the deal exempts only union members and state and local government workers until 2018 from a surtax on any health benefits that exceed a certain threshold.

Rep. John Kline (Minn.) called the deal a giveaway to labor. "This latest backroom maneuver is yet another example of how the administration and their enablers in Congress will cut deals with their special interest allies to impose a government takeover of health care," he said.

Challenged about the carve-out in a conference call with reporters, AFL-CIO president Richard Trumka denied that the deal represented a special deal for unions, noting that the other concessions in the agreement applied to all workers, whether unionized or not. The five-year exemption was needed, he said, to allow unions and their employers to renegotiate long-term contracts to move into lower-cost plans that would fall under the threshold for the tax.

"We think we've done a great job for all working Americans out there, and that includes union members," he said.

Trumka outlined the other concessions union leaders secured from the White House:

-- Raising the threshold at which family plans are taxed from $23,000 to $24,000 and for single plans from $8,500 to $8,900, with the threshold increasing annually at the rate of inflation plus 1 percent;

-- Further raising the threshold if health care costs grow faster than expected from 2010-2013;

-- Exempting dental and vision costs from the tax, beginning in 2015; and

-- Raising the threshold for plans that have significant numbers of women or older workers;

Union leaders fretted earlier this week that the tax on high-cost plans, if left unchanged, would depress enthusiasm among organized labor leading up to the 2010 midterm elections. But they voiced confidence Thursday that their members would embrace the health care legislation under the new terms.

"We will be able to motivate our members," said Trumka.

Anna Burger, head of the rival Change to Win coalition that includes the Service Employees International, Teamsters and several others, echoed Trumka. "The compromises we reached in the last 24 hours make a huge difference in making sure that workers who have good health care can hold on to their health care," she said.

The union officials said they were struck by the heavy involvement of President Obama in the talks the past several days, which included Trumka, Burger and five other union leaders.

Gerald McEntee, president of the American Federation of State, County and Municipal Employees, said Obama laid out in an initial meeting with union officials on Monday what he wanted in the legislation, including an excise tax strong enough to capture more high-cost plans over time. But he was otherwise "open-minded in terms of the things he would agree to," McEntee said.

In the subsequent days, White House aide Jim Messina served as the main conduit to the labor leaders involved in the talks, while Obama himself moved among different groups of senators and House members gathered at the White House.

"Everybody worked hard and diligently to find answers around this," McEntee said.




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