Unions Win! Health Care Costs To Rise Even Higher.

This is a reprint from The Morning Bell (The Heritage Foundation)

01/14/2010

Behind Closed Doors, Unions Win, You Lose

Yesterday, President Barack Obama, Speaker Nancy Pelosi (D-CA), Majority Leader Harry Reid (D-NV) and nine other lawmakers met face-to-face for seven hours to resolve differences between the House and Senate health care bills. At the same time these talks were going on, AFL-CIO President Richard Trumka, Service Employees International Union President Andy Stern and United Auto Workers President Ron Gettelfinger met with other Obama administration officials in a separate room in the White House. This all comes after these same labor leaders met personally with Speaker Pelosi yesterday, and after they met face-to-face with President Obama in the White House on Monday. Despite then-candidate Barack Obama's explicit promises to the American people, absolutely none of these meetings were open to the public or televised on C-SPAN. In fact, Politico reports: "Those involved in the talks sought to keep details of their progress under wraps."

And just what deals were Big Labor, the leftist majorities in Congress and the Obama administration making behind closed doors? How to pay for President Obama's likely $1 trillion health care plan without raising taxes on one of the President's most loyal constituencies: labor unions. Specifically, Big Labor reportedly has struck a deal with health care negotiators to exempt union members from the 40% excise tax on high-priced health insurance premiums. By some estimates, the tax would hit one in four union members. Now Big Labor will get all of the big government health care spending they always wanted, but they will not have to pay for it.

And Obamacare's Big Labor handouts don't end there. The legislation also sets aside $5 billion to subsidize the costs of employer health benefits for early retirees. As Heritage fellow James Sherk notes, few nonunion employers, of course, pay pension and health benefits for workers to retire at 55. And then there's the small business exemption from the employer mandate for businesses with less than 50 employees. At first this applied to all small businesses, but after aggressive lobbying by Big Labor, non-unionized construction businesses were unexempted. Big Labor lobbyists explicitly admitted they wanted to use Obamacare's job-killing employer mandates as a competitive advantage to drive non-unionized firms out of business.

So where does the White House and Congress propose to regain the revenue lost from exempting unions from the health care excise tax? The people who fund job creation: investors. The Obama administration wants to apply the Medicare payroll tax not just to wages but to capital gains, and for the first time ever, to dividends and other forms of investment income. This tax will hit seniors the hardest since many of them live off their dividend and interest income, in addition to their pension and Social Security checks. But it also hurts us all since high taxes on capital gains, dividends, interest and business income increase the cost of capital, thus depressing investment at the very time the economy needs new investment to grow and create jobs.

Big Labor's high wages and inflexible work rules have already bankrupted our nation's once proud automobile industry. Across the country, their early retirement and exorbitant pensions are bankrupting states. The health insurance excise tax was once the signature health care spending cost cutter of Obama's entire health care plan. Now it has been gutted at the altar of Big Labor power. The big loser in all of these cases is you, the American taxpayer.

No real surprise here! Unions once had their place in America. Now they're out to screw you as hard as Obama intends to.