THE TREATMENT SEPTEMBER 23, 2009
Senate Finance Committee Chairman Baucus released his modified mark to the reform bill yesterday afternoon, indicating concessions that he is trying to make toward Olympia Snowe as well as recalcitrant Democrats like Jay Rockefeller. Among the amendments is a higher threshold for the proposed excise tax on so-called "Cadillac plans," which will be raised from $8,000 to $8,750 for individuals and from $21,000 to $22,000 for families. This falls well below what Rockefeller, Schumer, Kerry, and other Dems asked for in their original amendment ($9,800 for individuals and $25,000 for families), so it's not clear whether this will be enough to satisfy Democrats from states (like New York) where premiums are costlier than in the rest of the country.
Certainly it doesn't seem like enough for the unions whose have been pushing legislators like Rockefeller to oppose such taxes, as many of their generous benefit packages would qualify as taxable Cadillac plans. Such costs directly hit groups like coal miners, who buy high-priced plans because of the heavy health risks they face on the job. That’s the reason that United Mine Workers of America, for example, is opposed to excise taxes across the board. Union members "have given up a lot of wage increases over many years to get that health care that they just so richly deserve," Phil Smith, the UMWA communications director, said yesterday. "Had we known this was coming down the pike, we would have taken the money." Though Smith "didn't have any numbers" for how much their members' benefit plans were typically worth, he made it clear that they weren't willing to negotiate on the issue.
Another amendment that Rockefeller has introduced would exempt high-risk workers from the excise tax altogether, which would surely help assuage his union base. Baucus has yet to incorporate such a change into the bill, which the amendment says will be offset by a 35 percent cap on itemized deductions. But while Rockefeller will surely go to bat for the unions during mark-up this week, there’s a lot more that he’ll also be hoping to change in the bill. (“I have a lot of amendments,” he told the committee yesterday with a laugh.)
In addition, Rockefeller has given indications that he is, in fact, willing to bargain and make tradeoffs to get more of what he wants. For one thing, his own excise tax amendment actually raises the tax on Cadillac plans from 35 percent to 40 percent across the board, presumably to help pay for the higher threshold. Such a move indicates that he, along with other skeptics of the Baucus bill, could accept such incremental concessions in order to keep the ball rolling--and the unions may have better luck applying their clout once the bill gets out of the Finance Committee.