How about a new estate tax paid only by union members?

That’s fair, isn’t it?

The White House, the Democratic congressional leaders, and representatives of Big Labor have reached an agreement to give the unions broad exemptions from the excise tax on health care plans.

Wall Street Journal’s account cuts right to the chase. From “Unions Cut Special Deal on Health Taxes“:

Democratic negotiators acceded to union demands for a scaled-back tax on high-end health-insurance plans, exempting union contracts from the tax until 2018, five years beyond the start date for other workers.

The deal helped Democrats clear a key hurdle, but the break for organized labor added to the pressure to find new revenue to pay for their health bill, which is designed to give coverage to tens of millions of uninsured Americans. Negotiators were considering increasing the financial hit on drug makers, nursing homes and medical-device makers, according to people familiar with the discussions.

Apparently union backing is seen as so critical to passage that everyone else is supposed to carry their weight. But we’d count “drug makers,  nursing homes and medical-device makers” as more important to the quality of the U.S. health care system than political clout of the SEIU, UAW or AFL-CIO.

• New York Daily News, “White House entices Big Labor to back struggling health care reform legislation“
• Seattle Times, “Obama, unions agree to modify high-cost health-benefit tax“
• New York Times, “Accord Reached on Insurance Tax for Costly Plans“
• Fox News (blog), “Labor Effusive With Praise for Excise Tax Deal“
• The Hill, “White House, Dem leaders give concessions to win labor’s support“

ABC News reports on the White House negotiations with Congressional leaders that now seem set to give big labor an exemption from the Senate’s proposed excise tax on high value insurance plans. Included is a comment from White House spokesman Robert Gibbs:

Obviously the president met a few days ago with representatives from labor unions all over the country who are a concerned about the structure of the tax impacting their working men and women. The president has obviously a strong desire to see a bending in the cost curve for health care. But while at the same time not impacting working men and women. Those meetings have taken place in order to find some sort of compromise that does not impact working men and women, while at the same time takes responsible actions to ensure that the amount of money that people are paying for health care, that we change the direction of that.

Our emphasis. Maybe it’s just inartful phrasing, but one could read into Gibbs’ comment: If you are represented by a union, you are a working man or woman. If not, impact away!

The Heritage Foundation’s Morning Bell started the day with a good review of all the breaks for organized labor stuffed into the health care bill. The post concludes:

Big Labor’s high wages and inflexible work rules have already bankrupted our nation’s once proud automobile industry. Across the country, their early retirement and exorbitant pensions are bankrupting states. The health insurance excise tax was once the signature health care spending cost cutter of Obama’s entire health care plan. Now it has been gutted at the altar of Big Labor power. The big loser in all of these cases is you, the American taxpayer.

From The Washington Post’s 44 blog, Lori Montgomery reports, “White House, unions reach deal on taxing insurance coverage“:

The White House has reached a tentative agreement with labor leaders to tax high-cost health insurance policies, sources said Thursday…The deal would temporarily exempt union health plans from a significant surtax on unusually generous health policies plans, giving union leaders time to negotiate new contracts, according to sources familiar with the talks.

Hat tip Daniel Foster, The Corner, who cites a report from CNN’s Steve Brusk that the deal would delay taxes on health-care policies for union members, state and local workers until 2017.

At Kausfiles, Mickey Kaus had suggested that the President might win labor’s support for the excise tax on high-value plans by promising to help pass some form of Employee Free Choice Act passed. But that’s a difficult promise to keep politically.

Labor will just have to be satisfied with getting everything else it wants.

UPDATE (1:30 p.m.): Politico, “Source: Tentative deal on Cadillac plans“

Daniel Foster at National Review’s The Corner has more on labor’s drive to be exempted from the excise tax on high-value health insurance plans:

Look for Obama and Congressional Democrats to the expand the union carve-out to cover a  swath of the “middle-class” (the universal solvent of American politics), so they can camouflage this massive giveaway to a pet constituency.

And who pays instead? Investors. The Chicago Tribune reports, “Health Plan May Tax Investors“:

WASHINGTON – Democratic congressional leaders, intensifying the healthcare drive in marathon White House talks Wednesday, are considering a new strategy to help finance their plan — applying the Medicare payroll tax to apply for the first time not just to wages but to capital gains, dividends and other forms of unearned income.

The idea’s political advantages are threefold: It could placate labor leaders who bitterly oppose President Obama‘s plan to tax high-end insurance policies that cover many union members. It could help shore up Medicare’s own shaky finances. And the new tax would fall primarily on affluent Americans not the beleaguered middle class. But the concept also carries political risks: Many older Americans, one of the nation’s most potent voting blocs, could see their tax bills rise because they often depend on savings and investment income in retirement.

No doubt, but here’s the salient objection:  Taxing investment discourages investment. How can any politician seriously argue that legislation will encourage jobs-creation when it increases taxes on the capital necessary to create those jobs?

Earlier post here.

Philip Klein reacts to the news of a possible exemption for labor unions from the excise tax on high-value health care plans. (See earlier post.) From The American Spectator, AmSpecBlog, “Report: Dems to Grant Special Exemption to Unions on “Cadillac Tax”:

If this policy is adopted, it would mean that there could be two Americans receiving the exact same benefits, but one American may be taxed and one wouldn’t, and the only difference would be one of them being a member of a union. This is unseemly and unfair, even by the standards of Obamacare. It has nothing to do with policy-making. It’s simply an outright bribe to a constituency that has contributed handily to Democratic campaigns.

Should have seen it coming.

From National Journal, Congress Daily (subscription), “Unions Tentatively Strike A Deal Regarding Excise Tax.”

Unions tentatively struck a deal Tuesday to exempt collectively bargained healthcare plans from a tax on high-cost plans expected to be used to help raise revenue for the healthcare overhaul.

AFL-CIO President Richard Trumka, Service Employees International Union President Andy Stern and United Auto Workers President Ron Gettelfinger met with House Speaker Pelosi Tuesday, a day after labor leaders met at the White House to express their opposition to the excise tax.

So that’s why Andy Stern has gone to the White House so often. He keeps getting rewarded for the visits.

Supporters of the government health-care bills will sell union acquiescence to a modified excise tax as a political victory, moving the legislation closer to passage. But it could very well do the opposite. A union carve-out will reinforce the public’s perception that the health care bill isn’t about improving individual coverage, but is rather is a cynical effort expand government control of care at any cost. If supporters have to gut one provision at the demands of a special interest, this time labor, then gut away! As long as it passes.

For a roundup of this news and other developments, see Kaiser Health News, “‘Cadillac’ Tax Deal In The Work.”