Labor Pains: Because Being in a Union can be Painful

Health Care Reform: Unions seek exemption from excise tax at the expense of their reputation

It appears that labor leaders and government officials have reached a compromise on excise taxes, according to the New York Times. The details are not fully clear yet, but FoxNews has reported the following:

A senior Democratic official speaking on background told Fox News that the threshold for exemption would be raised from $23,000 to $24,000 per family but would remain the same at $8,500 for singles with high-value plans. Dental and vision plans would be removed from that calculation, however. State and local workers and union members are exempted until 2017. A Democratic source with close union contacts said labor leaders are not particularly happy with the tentative deal, but are much less angry than they were at the previous plan.

The chatter in the last few days that been that unions might convince the Administration and Congressional Democratic leadership to exempt collectively-bargained health insurance plans from paying the excise tax, the majority of plans over the threshold.  It’s a deal that would increase the cost of the health care legislation.  While the compromise announced today doesn’t go as far as the one that’s has been bandied about, it will be interesting to see what its final form really is. Unions exempt until 2017? What’s to say that the exemption doesn’t get an permanent extension.

Why on earth should union insurance be exempt with state and local workers (many of whom are union), while the rest of us with expensive plans pay the price?

If indeed collectively bargained health insurance plans are exempt from the excise tax for the next 7 years, former SEIU staffer Michael Whitney who now blogs over at FireDogLake says it could be very, very bad thing for unions in the short and  medium term.  It only proves that unions are guided by “blind self interest.” And it may jeopardize the public willingness to swallow EFCA. The “deal” that FDL is talking about below, for the record, on the union excise tax exemption sans the 2017 caveat, but I’d say the principle holds.

From FireDogLake:

If unions take this “deal,” if the labor movement decides to fold and exempt themselves from the excise tax, they fulfill one of the worst of stereotypes of labor unions: blind self interest.  By abandoning the nonunion middle class and protecting only their own, the labor movement is throwing any hope of future relevancy out the window.

The ideal of unions is to organize the unorganized, to protect the unprotected.  Sure, unions should fight for their members, no question.  But in the biggest public policy and political fight of a generation, unions simply cannot exempt their members from the dangerous excise tax and call it a day. And if Rahm does come through on his end of the deal – a vote on the Employee Free Choice Act – expect unions to be very much on their own in that fight if they sell out on health care.

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