The Union “Cadillac” Tax Sweetheart Deal

Just when you thought you couldn’t be more cynical about the health care bill.

As I have said before, there wasn’t a lot of hope the same administration that ignored the rule of law in granting unions priority over Chrysler bondholders was going to offend them on the “Cadillac” tax.

We’ve seen the “Louisiana purchase” giving Senator Landrieu hundreds of millions for her vote, only to be upstaged by Ben Nelson’s Medicaid deal for Nebraska. Then the Democratic leadership claimed the $250 billion Medicare physician fee problem didn’t have anything to do with health care reform. Add to that a “robust” Medicare commission that can’t touch doctor or hospital costs. Or, how about six years of benefits under the bill and ten years of taxes. Or, counting $70 billion from the new long-term care program as offsetting revenue to help pay for it.

Now, the unions and public employees are going to be exempt from the “Cadillac” excise tax on high cost plans until 2018.It will be interesting to see how proponents, or should I say apologists, for this health care effort spin the latest. I would just ask that you please, please, please, not call this mess health care reform.

There is an important election on Tuesday in the Bay State that looks to be
focused on the Democratic health care effort. This kind of stunt may just be enough to push it over the edge.

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16 replies »

  1. Margalit,
    You obviously realize the Republicans were not invited to the negotiations at the White House. They would have blown the whistle on the illegal dealings.
    I aim to be funny, with a message.

  2. At the end of the day, the only difference between a Democrat and a Republican is the name of the party, otherwise, dealing with a jackass who just hee haws and refuses to budge, or a lumbering pachyderm who just plods over anything in its path.
    This deal making is sickening, and any moderate, open minded voting citizen has to be offended to just put the other party in control to neutralize the power mad behaviors of those in the majority in DC. Well, I don’t know about you, but I don’t like pendulums, as all they seem to do is swing back and forth, and just clock you if you aren’t paying attention to the forward motion towards you!
    This is health care deform, folks. And it shows me how ironic and annoying things have deteriorated so I have to root for a Republican to win an election to hopefully stop this madness as set.
    Maybe we should start the Hippocratic Party, with the foremost agenda being “First do no harm”. That would exclude most Republicans and Democrats with their extreme rhetoric and agendas for cronies and special interests. Let’s just hope one of these two parties don’t change their name to confuse voters, like to the Hippocritical Party. Oh, that’s right, we have it now, it’s called Republocrats! I.e., the bozos in DC now!

  3. I agree again with Margalit regarding the attachment of healthcare benefits to employment among unionized auto workers.
    I am not adequately familiar with the dynamics of the auto industry to know which factors most contributed to the demise of GM and Chrysler at least.
    No question however that the extraordinarily high USA cost of medical services combined with a grossly inefficient private healthcare insurance industry contributes to a cost burden for any manufacturer with a predominantly USA-based workforce that puts that manufacturer at a material disadvantage to a competitor with a predominant workforce in another country where comparable medical service/funding costs are significantly lower.
    In general in regard to the issue of healthcare benefits in auto companies, I had hoped that someone among Democratic or Republican political powers=that-be had taken the opportunity given several years ago when GM was still a going concern under Rick Waggoner when Mr. Waggoner was repeatedly bringing up the issue of healthcare costs at GM.
    While GM was publicizing that issue and receiving much media attention for it – regardless of whether it was self-serving to top management or not – public awareness could have been focussed on the very negative consequences of attaching healthcare insurance to employment.
    Politically there was a golden opening to at least try to marshal support from business for detachment of healthcare insurance from its direct responsibility to a single payer/insurer scheme that business would ultimately fund along with its employees at a significantly lower cost than under the current scheme of employment-based healthcare insurance.

  4. Margalit,
    No of course I don’t think health care costs were a major cause for the auto industry failure, however irresponsible management of the associated costs for pensions and health care certainly did not help. I agree with decoupling, but please, lets make it an even playing field, tax all plans or none.

  5. “Hoi polloi”: typical elitist drivel. You didn’t sneer at “the people” so much when you thought they were with you. Now the tide has turned, and you are the “extremist.”

  6. Dr. Motew, you don’t seriously think that health care costs are the major factor that caused the auto industry collapse, do you?
    Anyway, all the more reason to decouple health care from employment…..
    Let businesses do business and let the Secretary of Health and Human Services take care of human services, such as health.

  7. Let’s see how we can trace this one.
    1. Union ‘Cadillac’ health plans and pensions.
    2. Collapse of US automobile industry.
    3. Bail out of US automobile industry.
    4. Support for union ‘Cadillac’ health plans.
    5. ?
    Agreeing (only for the sake of argument) with the idea of GOP obstructionism …the best response the Dems have is to exploit our political system?
    Some weird logic going on here.

  8. Margalit’s comment is the most applicable in regard to Mr. Laszewski’s standard advocacy of supplier interests, any in fact that he presumably can attract as clients to his consulting work, as is represented by his current column.
    brimcmike’s commentary also accurate and praiseworthy.
    Republican Congress members could have played a positive role in healthcare reform legislation and easily prevented the kinds of deals that Mr. Laszewski cites which the Democrats in the Senate are forced to strike to make any progress on a bill.
    Surprising in my estimation that neither of the two remaining Republican moderates in the Senate from Maine were unwilling to strike a deal and in return improve the Senate Finance Committee bill, something that either or better, both, could have done. Current cost structure of financing and medical services delivery and escalation in costs remain more or less in place in both the Senate and House bills. Vast room therefore for any politician to make a positive contribution to reducing those costs, rather than the opposite.
    Who is archon14 to make the typical nitwitted, extreme-rightist comment such as this “your adversary is the producing classes, and they aren’t going to embrace soviet-style ‘reform’ now or ever.”?
    It is this kind of ludicrous statement that one hears again and again from almost all Republican Congress members, not to mention hoi polloi on television and in Internet venues. Despicable lies that have so far done much damage to an attempt at reforming an abysmally-operating system that is the USA healthcare system.

  9. MD as HELL, you are very funny!
    Actually more of a light brown, but almost blond. I guess I do deserve that question.
    Why on earth would I assume that it is possible for a Republican to consider the issue at hand for what it is and how it affects the people and vote accordingly? After all, it is standard procedure that when you are the minority party your only goal in Washington is to become the majority party as soon as possible and by all means necessary.
    My only defense here is that our President was also under the impression that reaching across the aisle in this matter was a distinct possibility, but hey, maybe he is blonde too…..

  10. “Perhaps the American people have learned a lesson about giving total control to only one party.”
    Yes, the Corporate Party.
    Generally brimcmike hits the nail on the head but today not all unions (professional ones included) are run with benevolent intentions for either society or their dues payers. The early fight for social justice by unions is something in the far, far, past.
    “Forty-eight years working for a company and my benefits are cut with the actions of one Congress…”
    Forty-eight years of tax free benefits – entitlement mentality?

  11. Right you are there is no reform in any of this, it is merely expanding coverage for the Democratic power base and additional costs for everyone else with those costs continuing to escalate far more than general inflation.
    My former employer has largely announced it intention to drop my prescription coverage if the new tax on the Part D rebate become law. I am only one of millions of people likely affected in the same way. My costs are going way up when this legislation passes.
    Forty-eight years working for a company and my benefits are cut with the actions of one Congress that has no idea what it is doing. What a sad state of affairs for all Americans.
    Perhaps the American people have learned a lesson about giving total control to only one party. Then again probably not.

  12. Your adversary is the producing classes, and they aren’t going to embrace soviet-style “reform” now or ever.
    Sometimes I almost wish the “progressives” had managed to pull off “public option,” with provider reimbursements tied to Medicare rates.

  13. It’s only “class warfare” when the lower classes fight back. People wanting a self-interested cut of the action is fine as long as they’re not unionized working stiffs.
    My bias: I am a working class kid who did well in school, avoided jail and prison, was lucky enough to coat-tail on white male privilege, and who finally earned an M.D. My colleagues who, more times than not, originate through no fault or merit of their own from middle-class, professional-class and upper-class families, while often nice-enough, and sometimes not, operate from an all-too unquestioned point-of-view, value structure and moral sensibility that presupposes the status quo and affirms the trajectory of the corporate economy/policy process. In short, what’s in it for me and how do I maximizes my cut? There is no paying attention to the man behind the curtain. The Great and Terrible Oz has spoken! So, off we go towards procedure-heavy, and/or subspecialty practices to cash in before the game changes, regardless of need, benefit or evidence.
    In the late 19th and through the mid-20th centuries, unions, union organizers, and organizing workers braved over-reaching power, intimidation, coercion and violence to organize in the first place. Unions obtained for average working people a 40-hour, 5-day work week, vacations, work-place safety, workers’ comp, etc. In their absence was an unimaginable, unending round of drudgery, exhaustion and danger, without remedy or respite.
    Salaried, management personnel have benefited from the extension of these protections to them as well. If you have a weekend, you can thank unions. If you have a vacation, or benefits, including health insurance, retirement, etc., or if you work in a work place that doesn’t routinely amputate, decapitate, eviscerate, crush, suffocate, immolate, poison, infect or otherwise disable you or your co-workers, you have unions to thank for that, too.
    “Unions caused the downfall of American competitiveness,” etc. is a part of the moving metric of the Conservative movement’s well-oiled, well-trained, well-financed ubiquitous Big Lie Media Machine and Echo Chamber of which Reaganomics, and its progeny of Deregulation, Union-Busting & Tax-Cuts Fix Everything Zombie Army.
    It’s all a bunch of empirically discredited quasi-religious dogma. We’ve done everything we were told to do to fix things from the late 1970s – we cut taxes, we deregulated, we union-busted. Just look at what we got: an unprecedented wealth gap, out-sourcing, a real estate bust, a jobless recovery, and The Great Recession – an objectively foreseeable, labyrinthine economic melt-down of staggering proportion with a bail-out finagled and engineered to leave the average, over-worked, under-paid, under-insured and aging work force holding the bill. The whole sham is disastrous and confusing enough to divert attention and buy time for an arrogant, greedy, entitled bunch of robber-barons to make good their escape with the loot.
    By a long, intentional, well-thought-out path, starting with late-night AM talk radio shows uniformly massaging discontent, dismantlement of equal-time on public airwaves, followed by hegemony of mass media markets, then the 24-hour-news-cycle, the continuous spewing of ruthless misinformation, and unswerving exploitation of divida-et-impera, Nietzschean morality wedge-issues, we’re right back to the 1880s-1910s. Only we were sweet-talked, tricked and conned into this predicament making it less of a robbery and more of an embezzlement. The way you unquestioningly take on the Republican/management/professional/investor class bias is telling. Expected frankly, but still telling.

  14. Hmmm… Maybe, just maybe, if Republicans would have tried in earnest to work with the administration on health care reform, instead of using it as a grand opportunity to destroy a President from the opposing party, maybe it wouldn’t have been necessary to make so many ill conceived compromises….