Obama meets with union leaders to discuss health-care reform

By Alec MacGillis
Washington Post Staff Writer
Tuesday, January 12, 2010

President Obama sought on Monday evening to assuage organized labor's misgivings about the health-care overhaul, even as several key union leaders warned that the bill's final outlines could severely dampen their enthusiasm for the Democratic ticket in this year's elections.

Obama invited 10 labor leaders to the White House to discuss the negotiations aimed at reconciling the Senate and House bills, which are not heading in organized labor's direction in the three areas that it had identified as priorities. The final bill will not include the House's government-run insurance plan, or "public option"; it will probably include the Senate's new tax on high-cost health plans that could affect many union members; and its penalties for employers who do not provide insurance coverage will probably be closer to the more lenient terms in the Senate bill.

Three hours earlier, AFL-CIO President Richard Trumka said in a hard-edged speech at the National Press Club that discontent with the final bill, when combined with a general perception that Obama and Congress have been insufficiently populist in responding to the recession and financial crisis, could demoralize his members. The risk, he said, was a replay of the Democratic blowout in the 1994 elections, when, after the passage of NAFTA and other disappointments to unions, "there was no way to persuade enough working Americans to go to the polls when they couldn't tell the difference between the two parties."

"Now, more than ever, we need the boldness and the clarity we saw in our president during the campaign in 2008," he said.

Trumka stopped short of his September threat that the AFL-CIO might not support the final bill -- after all, he said, labor has been seeking health-care reform for decades. But individual members could sit on their hands. "A bad bill could have that kind of effect," he told reporters. "People could stay home. It could suppress votes."

Organized labor played a crucial role in the 2008 election, turning out members in key states such as Ohio and Pennsylvania where many nonunion, working-class voters resisted Obama. Though Obama has pleased unions on several fronts, he has done little to push labor's biggest priority, the Employee Free Choice Act, which would make it easier for workers to organize.

In 2008, Obama rallied union members' support by repeatedly attacking a proposal by Sen. John McCain (R-Ariz.) to lift the tax exemption for employer-provided health benefits. Now, the White House is strongly supporting the Senate provision to tax benefits above a certain value, $23,000 for a family plan and $8,500 for an individual one.

Supporters argue that such a tax would slow the growth in health-care costs by shifting people into less generous plans, and that it would also lift wages. Opponents note that the tax will fall on many plans that are expensive not because they are lavish "Cadillac plans" but because of an employer's location or the age of its workforce.

Unions prefer the House approach, an income tax surcharge on families earning more than $1 million.

Although firefighting is one "high-risk profession" exempted from the tax, firefighters union head Harold Schaitberger said he was still strongly against it. "It's terrible policy and absolutely disastrous politics," he said. "This is failed promises. We went out and worked hard to deliver our membership [in 2008] . . . . This is a political nightmare for the midterms."

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