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Undernews is the online report of the Progressive Review, edited by Sam Smith, who covered Washington during all or part of ten of America's presidencies and who has edited alternative journals since 1964. The Review, which has been on the web since 1995, is now published from Freeport, Maine. We get over 5 million article visits a year. See for full contents of our site

January 15, 2010


In what may be the first time that labor unions have agreed to such a massive cut in their own members' benefits, Obama and the union chiefs have agreed to institute a less drastic version of the spuriously named "Cadillac health plan" excise tax.

According to the NY Times:

[] Under the bill passed last month by the Senate, the federal government would have imposed a 40 percent tax on the value of employer-sponsored health coverage exceeding $8,500 a year for an individual and $23,000 for a family. The tax would have taken effect in 2013. White House officials, Democratic Congressional leaders and labor unions said Thursday that they had agreed to an increase in those thresholds to $8,900 for an individual and $24,000 for a family. Moreover, they said, starting in 2015, the cost of separate coverage for dental and vision care would be excluded from the calculations.

In addition, they said, health plans covering state and local government employees and collectively bargained health plans would be exempt from the tax until 2018. This transition period addresses the concerns of schoolteachers and other public employees who have denounced the tax.

For people in certain high-risk occupations, including police officers and construction workers, thresholds would be higher: as high as $27,000 for a family. []

People using these plans - including many working class families - would be hit with a $5 billion annual additional bill.

This 40% excise tax will be higher than the top federal income tax bracket which is 35% for income over $372,950.

As for the "Cadillac" libel, the NY Times put that to rest last September:

[] The supposedly Cadillac insurance policies include ones that cover many of the nation’s firefighters and coal miners, older employees at small businesses - a whole gamut that runs from union shops to Main Street entrepreneurs.

Although the national average premium is currently $13,375 for a family policy, according to the Kaiser Family Foundation, many are much higher than that - particularly in high-cost parts of the country.

Nationwide, about one in 10 family insurance plans would be subject to the new excise tax, according to the Center on Budget and Policy Priorities, a liberal-leaning policy and research group.

The tax would be levied on insurers - or on employers that act as their own insurers. Either way, the tax would very likely be passed along to workers in even higher premiums than they pay now. But if insurance premiums continue to rise faster than inflation, as they have for years, many more people’s policies could end up setting off the luxury tax in coming years. []

Note also that "health plans covering state and local government employees and collectively bargained health plans would be exempt from the tax until 2018."

That allows eight years for inflation in healthcare costs to dump many more people into the exorbitant excise tax category.

In other words, Obama, the Democrats and labor union leaders are conspiring to hit many working class workers - and many more in years to come - with an excessive tax bite and the media isn't saying a mumbln' word.

But the corrupt nature of the measure doesn't end there. Increasingly, Congress and the White House have been writing legislation that won't go into effect for some years to come. For example, the Obama 40% excise tax on worker health plans over a certain size won't be effective for many until 2018. Obama, even if he's reelected would be two years gone, many congressional leaders would have retired, and the media will have totally forgotten the cause of the misery.

While it might be difficult to get the Supreme Court to rule that effectively co-opting a future president's and Congress' right to pass legislation during their tenure was unconstitutional, by any common sense rule, it is. The president and Congress are in office for their terms. . . and absent reelection, that doesn't include 2018. While future officer holders can, of course, change such legislation, it is already clear from current examples that they are unlikely to do so.

It can also be argued that this assault affects only a small number of people. But if it works on them, there is no reason something similar might not work someday on you. You have been warned.



Anonymous Anonymous said...

Not a single labor leader can be found among the bow-taking grinners or back- patting slogan mumblers currently waddling around D.C. cheerfully hoodwinking the unwary by posing as "labor chiefs".

Of course it "says so"... spelled out right there in sparkly sequins on the pointy little party hats strapped tight for life under their abundant chins.

They are an appalling crew , from Rich " Mr. Melodramatic" Trumka, the one time coal miner's champion turned latter day bellowing thespian all the way to the hapless well-dressed boobs who claim to lead the the several Building Trades unions. Over 100 years of their near-sighted vision and union construction workers still don't have even ONE paid sick day off in a year , not to mention zero contractual protection from every conceivable form of illegal employer discrimination .

These clowns are exactly what the Insurance Industry's doctor ordered when it comes to administering poison to the wage -earning 98% ... no surprise they caved in to the bastards .

- John A. Joslin ,Detroit ( IBEW, ex-UAW )

January 17, 2010 2:42 PM  
Anonymous Anonymous said...

I just want to thank John J above for that excellent comment.

If I had designed the universe, people who abuse and/or betray labor would spontaneously combust.

January 18, 2010 12:20 PM  
Anonymous zorathrusta said...

"spontaneously combust" or just continue to be the lost loveless derelect souls they are. They haven't exactly pulled themselves up by their intellectual and spiritual bootsraps in the quest for enlightenment, but what they hell, they're famous and they're on tv.

January 19, 2010 9:04 PM  

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