Unions agree to tax on Cadillac health plans – but not really (Update)

When I read the headline of the Washington Times piece, I was surprised, but certain I must be missing something. I read the full article and the truth comes out within one paragraph in the middle of the story.

Thanks to Gateway Pundit for the link, and welcome new readers. Major news outlets started picking up this part of the story last night. Big news today.

Update 2: Many are reporting today the extension is not only til 2015 or 2016, but 2018. Sweetness & Light.

I wrote about this subject earlier today, convinced there was no way union leadership would allow Democrats and President Obama’s administration to tax the high-cost health care benefits provided to union workers. The headline in the Washington Times caught my eye, and the story begins…

The White House has reached a tentative agreement with union leaders to tax high-cost medical plans, one of the final obstacles in the way of President Obama’s health care remake, officials said Thursday.

Details of the agreement were not immediately available. The tentative deal was expected to be presented to congressional leaders Thursday as negotiators try to wrap up an agreement on core elements of the sweeping legislation as early as Friday.

What? How could this be? How could the unions just bend over and take it with all of the funding provided to Democrat candidates. Heck, just two days ago the unions threatened the White House they would stop support of candidates and any administration who pushed the health care benefits luxury tax.

Oh. They didn’t. The congress-critters are going to run to the microphones soon and announce a deal has been cut and those union benefits will be taxed just like other benefits but they will be lying. Back to the Times’ story.

Under that scenario the tax wouldn’t hit until union contracts were renegotiated, delaying its impact on most union health plans until perhaps 2015 or 2016. There was also discussion of lessening the impact of the tax in high-cost regions of the country, where insurance premiums cost more, by imposing the tax on a sliding scale.

Everything is negotiable in Washington D.C. and the politicians simply bought time to buy public confidence in their crappy health care plan. They have five years or more to figure out a way to ensure the unions get paid off in some other way – maybe with card-check or maybe by demanding all state and federal contract jobs must be staffed with union membership exclusively.

Union leaders will be able to sell this to the membership by letting them know they have plenty of time to negotiate to ensure the tax will not come out of their pay or benefits – wink, wink, nod, nod.

Will those of us who have non-union derived health care benefits be able to delay paying our 40 percent tax on health care benefits for five or six years? Some how I doubt it.

Look, if you want to tax income, I don’t see an issue with taxing the benefits you get at the same rate the take-home pay is, but this crap just proves there is way too much power centralized at the federal level and money talks. Yes, you can buy a politicians vote … we know it … we see it almost every day.

What should we do about this America?

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Steve McGough

Steve's a part-time conservative blogger. Steve grew up in Connecticut and has lived in Washington, D.C. and the Bahamas. He resides in Connecticut, where he’s comfortable six months of the year.


  1. pauldow on January 14, 2010 at 5:15 pm

    In related news, the federal government announced that members of unions and government employees may travel 85 MPH on the nation's highways. All other citizens must obey posted limits.

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