Labor Pains: Because Being in a Union can be Painful

Unions Get Exemption From Healthcare Tax

The Wall Street Journal‘s Kimberley Strassel highlights yet another example of unions exerting disproportionate amount of influence on the policymaking process. In this case, it’s healthcare.

Unions have already targeted Senator Ron Wyden with negative ads for his proposal to remove the tax subsidy for employer provided health benefits. So what does Senator Max Baucus of Montana, the chairman of the Senate Finance Committee do to avoid the firestorm?

Mr. Baucus officially floated his plans for a tax this week, only with a surprising twist: His levy will not apply to union plans, at least for the duration of existing contracts. In other words, Mr. Baucus intends to tax the health-care benefits only of those who didn’t spend a fortune electing Democrats to office. Sen. Ted Kennedy, who is circulating his own health-care reform, has also included provisions that will exempt unions from certain provisions.

We’re not taking a position on the various healthcare proposals. But there’s something to be said about creating a specific exemption for unions. Why else would there be an exemption other than fear of political retribution?

The union carve-out is designed to allay the fears of many Democrats who remain outright hostile to a tax on health-care benefits, whether out of principle, political fear or union solidarity. Much will depend on the union reaction, which might remain ugly. Manufacturing unions in particular view their health-care benefits as sacrosanct, and even a delayed tax is still a tax.

It should be troubling for everyone to see such a blatant act of favoritism  for the unions. It’s also an obvious sign of how the unions can squeeze legislators with  their vise-like grip in the public policy process.

Categories: Center for Union FactsEFACNews