Union leaders sneer at tax on benefits

WASHINGTON (PAI) – Union leaders praised Senate Majority Leader Harry Reid, D-Nev., for crafting a comprehensive 10-year $849 billion health care revision bill but blasted his inclusion of a tax on workers’ health insurance to help pay for it.

In statements, AFL-CIO President Richard L. Trumka, the Steelworkers and Teamsters President James Hoffa all struck that theme. Hoffa came the closest to a position – which Trumka stated before – that if the tax survives, labor would walk away from health care reform legislation.

Reid unveiled the bill on Nov. 18. The legislation includes some sections that unions strongly support, notably a “public option:” The government-run company to compete with the private insurers, cover millions of the uninsured and help curb rising health care costs.

But Reid also kept the tax on so-called “Cadillac” plans – those worth more than $8,500 to an individual and $23,000 to a family – to help pay for health care. And union leaders responded that workers, union and nonunion, would get hit and hurt by that tax.

Reid’s bill “moves us closer to the historic goal of health care for America – high quality, affordable health care for all,” Trumka said. It “takes the strongest steps yet to bring down costs. But the bill is not perfect,” because of the tax on workers health insurance, Trumka declared. The bill also doesn’t order employers to offer insurance.

“A tax on working families’ benefits is the wrong way to finance health care and we will work hard to eliminate this provision” he added.

Trumka made clear that labor prefers the House-passed version of health care, which has both a strong public option and no tax on workers’ health care. The House bill taxes millionaires, instead. Reid’s plan also has a smaller tax on millionaires – a surcharge on their Medicare tax payments – which Trumka praised.

Hoffa was more direct about what would happen if the tax on workers’ health insurance survives the rest of the way. “This provision is really a massive tax increase on the middle class. It is naive to think that insurers won’t pass this tax directly on to workers,” he said. “This tax will fall on one-third of Americans in 10 years. We’re pleased the Senate is moving forward on health insurance reform we so desperately need, but not at the expense of middle-class wage earners.”