In what is becoming a typical pattern for the Obama administration, right wing opponents of some of his initiatives (like reappointing Bernanke) are finding common cause with progressives, an alliance that seemed unthinkable a mere year ago.
While the left is generally behind the health care reform bill, support is far from universal. And a key group is about to throw a spanner in the works. Unions are not happy about the bill. From the New York Times:
….. 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.
Yves here. My understanding of the politics is that the final bill is going to pretty much have to resemble the Senate bill, but the unhappiness of the House rank and file, in combination with union opposition, would change the calculus. Back to the article:
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…
But whether the tax is negotiable remains unclear…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….
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…Many Democrats fear that enacting the tax will hurt their re-election chances.
Yves here. And the proposed compromise, of raising the ceiling, may be deemed to be too costly, since it would cut the tax receipts by more than one third. And note that even though the tax falls on employers, the unions expect it to be passed through to employees via plan selection:
…. union officials say the tax will cause employers to push higher co-payments and deductibles onto their employees.
Yves here. It has hit the point that some people are admitting that the legislation is seriously flawed, but contend it can still get the ball rolling in the right direction. As one correspondent wrote:
Look the bill is awful. We all agree.
But the idea that it would start political battles to get better is not dotty. The history of entitlements after Social Security, which kept generating whole new programs and vast new support even in the forties gives some promise.
Yves here. The problem is that this is not the 1940s and 1950s, a time of rising prosperity and much greater social cohesion than now. And the awfulness of the bill matters.
Contrary to what some would like to believe, it does not establish a right to health care. It establishes a duty to buy health insurance. Those are not at all the same. There is no assurance in this bill that insurers will not deny coverage or delay payments as they do now, and no provisions to deal with the strain on the system (likely de facto rationing) when millions of now-uninsured can afford at least some level insurance. The health care version of the now-standard Obama bait and switch tactic could lead not just to curtailment of the new plan, but could easily become the poster child for an even bigger push to cut other entitlement programs, even ones that are functioning well.