The Pennsylvania AFL-CIO held a round table discussion on health insurance reform at noon today in Harrisburg. Michael Fedor and Jake Long of the Central PA Area Labor Federation called out Democrats who are voting to tax union benefit plans and those Members of Congress for whom Labor supported, for voting against workers. Citing candidate Barack Obama’s opposition to taxing health care benefits during the presidential campaign Labor is upset that now the Senate bill would tax these plans once their value reaches $23,000/year. Jake Long cited the benefits at Hershey Foods where he led that union for many years. The family plans there cost Hershey $17,000 per year. Assuming no future cost controls (since the bill is sorely lacking them) and a 10% annual increase in premiums they will meet this tax threshold in just four years. These aren’t “Cadillac” plans being affected but average worker’s plans which were negotiated at the cost of wage increases over many years.
The AFL-CIO sees this as a betrayal by Democrats whom they worked hard to elect. They told their members to support, vote for and volunteer for Obama because John McCain was going to tax their benefits. Now it appears President Obama will if he signs this Senate bill.
Remember that candidate Obama campaigned on rolling back the Bush tax cuts for the rich to fund health care reform. Now all we’re left with is health insurance reform and instead of taxing the rich he would tax working people. Unions negotiated contracts centered on health care benefits for decades and conceded wage increases in order to gain good plans. Working families surrendered wages for these benefits and now they face being taxed on their value. Labor, rightly so, feels betrayed. “This violates the social pact agreed with over the course of negotiations” said Long. “Now they are being asked to bear the brunt of health care reform. Obama is making the wrong choice by making workers pay for this reform. We won’t be silent on this and we won’t roll over.” Mr. Fedor said “This is the watershed moment, if you do this on the backs of workers and don’t hold the insurance companies accountable then they’re doing it wrong and we’ll hold them accountable.”
Those are strong statements and officials, especially Democrats, must seriously consider what they’re doing with this legislation. We already saw an abysmal turnout in November from Democrats angered and frustrated by the gutting of real health care reform. Now, if Labor opts to withhold support and funds from Democrats there could be very serious consequences come November 2010.
I asked specifically about two Democratic Congressmen from Pennsylvania who voted against the House bill. They are Tim Holden and Jason Altmire. Some of that conversation was off the record but suffice it to say the AFL-CIO was instrumental in both Districts and they may opt to sit out those campaigns in 2010. For Altmire and Holden this could be disastrous.
Another anomaly of the Senate bill which was pointed out by Jake Long was the contradiction of the funds for Nebraska negotiated by Sen. Ben Nelson. In return for his vote the public option was discarded but he also obtained hundreds of millions in federal funds for his state’s Medicare and Medicaid recipients. Both are publicly funded government plans. If Sen. Nelson is so against public plans isn’t this gross hypocrisy?
Real health care reform is at the top of Labor’s legislative agenda along with the Employee Free Choice Act. If Democrats pass a bill taxing union health benefits it can be assumed that the AFL-CIO will stop supporting their candidates. If you’ve ever worked on a campaign in Pennsylvania you understand how critical their assistance is for winning. I asked if Labor would recruit or fund primary opponents to Holden and Altmire. That’s when the conversation went “off the record.”
I’m calling for the stripping of the mandate from this bill. Nothing about it is good. It simply is a massive transfer of public funds to private industry with few safeguards. Serious health care reform is paramount because we face catastrophic economic paralysis if we do not. Currently premiums are rising at about a 20% annual clip. Some are less, many far more. For now let’s go with the 20% figure. This means in five years (or so) your health insurance premium will double. If you are paying $1200/month now (the average) this means in 2014 you’ll be paying $2400. In another five years (actually more like 3 with compounding) $4800. These types of increases have been happening all along which is why we are where we are. Now imagine what happens economically when Americans no longer have any discretionary income. No money for anything but housing, food, energy, clothing and health care.
Imagine. No consumer economy, few new cars, no new TV’s, video games, computers, iPods, toys or anything else. All your discretionary income and, probably, much of your other income, will go towards government mandated health insurance. Going to private, for profit companies whose consultants and lawyers will continue imagining creative new methods to deny you care. That’s our future. Stripping this mandate the same way we stripped the public option and/or Medicare buy in makes this a Patients Bill of Rights bill and then we can begin from scratch on a real solution.