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  Obama Reportedly Tells Union Leaders He May Compromise on "Cadillac Plan" Tax  
 

This morning's newspapers have few details on Monday's meeting between top labor leaders and President Obama regarding the Senate's proposed tax on "Cadillac" health benefits, among other issues related to healthcare reform. None of last night's network newscasts reported on the meeting. Only the New York Times (1/12, A13, Stolberg, Greenhouse) has quotes from an anonymous administration official hinting that the President intends to offer a comprise to his union supporters, though even the Times' report lacks specifics on what form such a deal might take. Obama "told union leaders at a private White House meeting...that he remained committed to taxing high-cost insurance policies as a way to drive down health costs," but "he also signaled that he was willing to amend the proposal to 'make this work for working families,' a senior administration official said." According to the Times, Obama "and the union officials used Monday's session to search for a sort of compromise, said a union leader who was briefed on the discussion." The anonymous union official "said it was clear that there would be some sort of excise tax in the final bill, but that the president 'threw out some new concepts' in how it might be designed." Rep. Joe Courtney (D-CT), "who has been leading opposition to the tax on high-cost health plans, said he did not see any path to imminent compromise."

 

        The AP (1/12, Werner) describes the labor leaders as "irate," and reports that AFL-CIO president Richard Trumka "said there was a frank discussion at the nearly two-hour White House meeting with about a dozen heads of the country's biggest labor unions." Trumka also "warned that Democrats risk catastrophic election defeats similar to 1994 if they fail to come up with a health bill labor likes." Trumka "stopped short of saying labor would actively oppose the bill if it included the tax." Harold Schaitberger, president of the International Association of Firefighters, "made similarly threatening remarks in a statement Monday."

 

        The Washington Post (1/12, A3, MacGillis), the Washington Times (1/12, Haberkorn), The Hill (1/12, Bolton, Bogardus, subscription required), and Reuters (1/12, Morgan, Colvin) also cover the story.

 

        Application of Medicare tax to investment income proposed. The Wall Street Journal (1/12, A4, Vaughan, Meckler, subscription required) reports Congressional Democrats are mulling a proposal to increase taxes on investment income by making it subject to the Medicare payroll tax. The projected revenue would be used to pay for the President's healthcare reform plan. The proposal is said to be part of a potential deal that would restrict the Senate's excise tax on high-value health insurance packages. Sen. Chuck Grassley (R-IA), an opponent of the idea, is quoted as saying, "If Democratic leaders want to increase Medicare taxes, the revenue should go to Medicare...not for other government spending."

 

        Union leaders said to prefer national exchange over state plan. The Los Angeles Times (1/12, Nicholas) reports that the union leaders "also told Obama that the healthcare 'exchanges' envisioned in the bill, intended to help many Americans buy insurance policies, should be national in scope -- not state-based -- so as to provide more competition for the insurance industry."

 

        WPost calls potential compromise on tax threshold "a mistake." The Washington Post (1/12), in an editorial, calls the Senate's proposed tax "one of the most...sensible aspects of health reform." According to the Post, "The attraction of the tax is that it raises money to pay for health reform -- about $150 billion from 2013 to 2019 -- while simultaneously making health reform less costly, by reducing the over-consumption of healthcare. Union leaders strenuously oppose even this change." The Post also says that "the most likely compromise on the tax would raise the threshold even higher, for everyone," but "that would be a mistake" because "it would reduce the impact on controlling costs and drain badly needed revenue; a $26,000 threshold would bring in about $100 billion less through 2019 than the existing $23,000 level."

 

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