More on the possible union carve-out from the Senate’s excise tax on high-value health care plans. The Washington Post mentions the possibility in its story today about President Obama’s meeting with Congressional leaders.

Obama last week endorsed one of the Senate’s most contentious revenue-raising provisions: a 40 percent excise tax on high-cost insurance policies that is deeply unpopular among labor unions and many House members.

A small group of labor leaders met separately with administration officials on Wednesday to try to find ways to lessen the impact of the tax on union members. Meanwhile, House leaders have signaled that they might be willing to accept the tax on high-cost insurance plans — set by the Senate at $23,000 for family coverage — if the threshold were raised to about $25,000. The lost revenue would be replaced by some version of a tax on the wealthy, which the House prefers.

So we go back to the House’s supposed “millionaire tax,” which is misrepresentation as marketing. Veronique de Rugy in the latest Reason magazine compares the tax to the horrible AMT and points to the far-reaching, jobs-killing effect of tax.

[Many people classified as millionaires aren’t millionaires at all. Out of the 300,000 or so joint tax filers earning more than $1 million, about 90 percent have small business income. That’s because 75 percent of America’s small businesses are structured as pass-through entities and pay their business taxes at the individual level. So the $1 million isn’t going into those individuals’ pockets; it’s money they use to run their businesses. To avoid the new tax, those businesses would have to adopt a new structure and start paying the complicated corporate income tax.

As income taxes increase on very productive people and small businesses, they will be less willing to hire or keep employees.

This "compromise" thus brings us the worst of both worlds in taxation.

We appreciated the high-quality snark on the issue from The Daily Caller:

Unions could be exempt from insurance-plan tax, bad weather, reality -- According to the AP, Obama met with union leaders on Monday and discussed the possibility of "exempting or delaying health plans covered by collective bargaining agreements from being subject to" a tax on high-cost insurance plans. But private unions aren't the only ones--unionized government employees with "Cadillac plans" could also be exempt. Looking at it all, one wonders how, exactly, we'll pay for the new healthcare bill: Union plans are off limits, so is an increased income tax on high-income earners, and massive subsidies for individual plans seems like something everyone with a Rayburn building mailing address can agree on, if only to stave off being tarred and feathered by their constituents. Who said that unions are a thing of 21st century? Really, who said that?

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.”

From today’s Financial Times, “Union boss loses patience with US reform delays“:

Andy Stern, the powerful head of the Services Employees International Union, will push US senators for a vote on far-reaching reform of labour laws in “spring”, even if Democrats plead for delay and even if he has to accept a compromise.

Mr Stern, who White House records reveal was the most frequent visitor to Barack Obama in the first months of his presidency, expressed frustration at the time taken on Capitol Hill to pursue the administration’s agenda, which includes a divisive Employee Free Choice Act. [EFCA]

Stern is among a group of top union leaders who meet with President Obama in the White House today to talk about health care and the Senate bill’s excise tax on high-value insurance plans. Amanda Carpenter of The Washington Times tweets a good question: “Unions going to WH today–any possibility of a deal on EFCA in exchange for acceptance of caddy tax?”

Probably not. President Obama has not put serious political muscle behind passing card check, as far as we can tell. Given the current political/electoral dynamics in the Senate — the key EFCA battleground — it’s hard to see him really pushing this horribly unpopular measure. If jobs are the byword of 2010, turning control of more jobs-creating businesses over to labor unions is a definite campaign loser.

Oh, and did you know that Stern is not a registered lobbyist? And isn’t his refusal to register actually an admission of the lack of his influence, despite his many, many visits to the White House?

Addendum: In other SEIU news, the union is a major player in a “week of action” to promote expanded immigration, part of the Reform Immigration FOR America (RI4A) coalition. Odd to see a group representing union workers advocating for an increase in labor supply, pushing down wages for their members…unless the goal of political power takes precedent over representing their members.

And good for them.

From The Washington Post, “Union leaders step up fight against excise tax“:

Federal employee union leaders threw the second of a one-two punch at a Senate plan to tax health insurance premiums on Tuesday, saying it would mean significant benefit cuts and higher health costs for workers.

The presidents of the American Federation of Government Employees, the American Postal Workers Union and the National Association of Letter Carriers joined with the Communications Workers of America, which is leading organized labor’s effort to defeat the proposed excise tax on premiums.

Here’s the news release, “Federal Unions Release Two Reports on the Detrimental Impact of the Senate Excise Tax on FEHBP Health Plans“:

WASHINGTON – Two reports released today by federal unions found that the so-called “Cadillac” tax on higher-cost health plans contained in the U.S. Senate health care bill would actually affect average plans like those under the Federal Employees Health Benefits Program (FEHBP). The reports suggest that the excise tax would result in significant health benefit cuts and shifting of costs to employees, as plans try to avoid the tax.

Many manufacturing companies would also be affected.