Labor Leader Warns Dems on Health Care

The president of the AFL-CIO, irate over a proposed tax on high-value health insurance, warned Democrats Monday they risk catastrophic election defeats similar to 1994 if they fail to come up with a health bill labor likes.

"A bad bill could have that kind of effect a place where people sit at home" as happened in 1994, when Democrats lost 54 House seats and eight in the Senate, costing them control of Congress, AFL-CIO president Richard Trumka told reporters.

He made the remarks before delivering a speech in which he bashed the tax proposal in the Senate's health overhaul bill.

"The benefits tax in the Senate bill pits working Americans who need health care for their families against working Americans struggling to keep health care for their families," said Trumka, who was among about a dozen labor leaders who met with President Barack Obama at the White House Monday afternoon. "This is a policy designed to benefit the elites," Trumka said.

Despite the criticism, Trumka stopped short of saying labor would actively oppose the bill if it included the tax. Trumka said bringing Americans health care reform "is too important for us to get this close and then say we quit."

Obama supports the tax on what he calls "Cadillac" health insurance plans, arguing it's a way to control spending on health care services, one of his goals for his health care overhaul. Trumka and other labor leaders prefer the approach taken in the House health care bill an income tax increase on people earning over $500,000 a year.

That dispute is one of the sticking points between House and Senate Democrats as they work to reconcile health legislation passed by each chamber. They're looking for a product that Obama could embrace and sign into law in time for his State of the Union address sometime next month.

With Obama behind the Senate tax approach the final bill is likely to include it in some form, though White House spokesman Robert Gibbs indicated Monday that Obama was open to adjusting the tax so it would affect fewer people. Gibbs said that would be discussed at Monday's labor leading meeting.

As passed by the Senate the 40 percent tax would be levied on employer health plans worth more than $8,500 for individuals and $23,000 for families.

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Since Trumka became the new head of the AFL-CIO last year, he has warned Democrats they could no longer take union voters for granted. He hammered on that theme Monday, arguing that labor couldn't mobilize voters to prevent the 1994 Democratic losses because then-president Bill Clinton, a Democrat, had supported the NAFTA free trade agreement and other policies opposed by labor.

"Politicians who think that working people have it too good too much health care, too much Social Security and Medicare, too much power on the job are inviting a repeat of 1994," Trumka said. "Our country cannot afford such a repeat."

Trumka vowed that organized labor would fight "with everything we've got to win health care reform that is worthy of the support of working men and women."

But organized labor must walk a tightrope in its criticism of the bill. Unions are among Obama's strongest supporters and have spent millions in grass-roots lobbying to garner support for his health overhaul plans.

Besides including the insurance tax, the Senate bill leaves out a new government-run coverage plan to compete with private insurers, another goal for organized labor. Still, unions have not suggested they would work to block final legislation that omits their top priorities.

Trumka called the White House visit "friends meeting friends to try and work through these problems."

The basic goals of the bills passed by the House and Senate are the same: extending coverage to more than 30 million uninsured Americans over the next decade by expanding Medicaid and imposing a new requirement for almost everyone to purchase insurance. Insurance industry practices such as denying health coverage to people with preexisting health conditions would be banned, and federal subsidies would help lower-income people buy insurance.