Behind Closed Doors, Unions Win, You Lose

The Heritage Foundation
The Foundry: Conservative Policy News

Morning Bell: Behind Closed Doors, Unions Win, You Lose
Conn Carroll
January 14, 2010

Yesterday, President Barack Obama, Speaker Nancy Pelosi (D-CA), Majority Leader Harry Reid (D-NV) and nine other lawmakers met face-to-face for seven hours [1] to resolve differences between the House and Senate health care bills. At the same time these talks were going on, AFL-CIO President Richard Trumka, Service Employees International Union President Andy Stern and United Auto Workers President Ron Gettelfinger met with other Obama administration officials [2] in a separate room in the White House. This all comes after these same labor leaders met personally with Speaker Pelosi yesterday [3], and after they met face-to-face with President Obama in the White House on Monday [3]. Despite then candidate Barack Obama’s explicit promises to the American people [4],absolutely none of these meetings were open to the public or televised on C-SPAN. In fact, Politico [5] reports: “Those involved in the talks sought to keep details of their progress under wraps.”

And just what deals were Big Labor,the leftist majorities in Congress and the Obama administration making behind closed doors? How to pay for President Obama’s likely $1 trillion [1] health care plan without raising taxes on one of the President’s most loyal constituencies: labor unions.
Specifically, Big Labor reportedly has struck a deal with health care negotiators to exempt union members from the 40% excise tax [3] on high-priced health insurance premiums. By some estimates, the tax would hit one in four union members [6]. Now Big Labor will get all of the big government health care spending they always wanted, but they will not have to pay for it.

And Obamacare’s Big Labor handouts don’t end there. The legislation also sets aside $5 billion to subsidize the costs of employer health benefits for early retirees. As Heritage fellow James Sherk notes [7], few nonunion employers, of course, pay pension and health benefits for workers to retire at 55. And then there’s the small business exemption from the employer mandate for businesses with less than 50 employees. At first this applied to all small businesses, but after aggressive lobbying by Big Labor,non-unionized construction businesses were unexempted. Big Labor lobbyists explicitly admitted [8] they wanted to use Obamacare’s job-killing employer mandates as a competitive advantage to drive non-unionized firms out of business [9].

So where does the White House and Congress propose to regain the revenue lost from exempting unions from the health care excise tax? The people who fund job creation: investors. The Obama administration wants to apply the Medicare payroll tax not just to wages but to capital gains, and for the first time ever, to dividends and other forms of investment income [10]. This tax will hit seniors the hardest [11] since many of them live off their dividend and interest income, in addition to their pension and Social Security checks. But it also hurts us all since high taxes on capital gains,dividends, interest and business income increase the cost of capital, thus depressing investment at the very time the economy needs new investment to grow and create jobs.

Big Labor’s high wages and inflexible work rules have already bankrupted our nation’s once proud automobile industry. Across the country, their early retirement and exorbitant pensions are bankrupting states. The health insurance excise tax was once the signature health care spending cost cutter of Obama’s entire health care plan [12]. Now it has been gutted at the altar of Big Labor power. The big loser in all of these cases is you, the American taxpayer.

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6 Responses to “Behind Closed Doors, Unions Win, You Lose”

  1. PATRIOT Says:

    So what if Union leaders met with members of Congress and the President? This isn’t the first time in history that union heads have met with Congress or a President. Unions represent hard working people, not wealthy people. When bushy was president he only met with representatives of the wealthy. when the neo-cons ran congress they only met with reps of the wealthy. Now we have leaders that are going to help the working man and y’all do nothing but complain. Why don’t y’all move to germany with nthe rest of the NAZI’S!!

  2. armageddonoutahere Says:

    Y”all get mighty nasty towards the middle of the month. S’matter did you
    use up all that welfare money and now y’all’s getting desperate ? Not to
    worry…Obama’s gonna reach into his stash and give you more. He’s your massa now so just do as he says and y’all will be rewarded. Y’all will get
    just enough to let y’all exist. So be a good freeloader …the working people will keep supporting y’all.

  3. PATRIOT Says:

    Armageddonoutahere your racism comes out in every single post you make. WELFARE=70% White people. So we can agree about those freeloading crackers getting off their lazy asses and getting a JOB!! See how great America really is that a Proud, educated, informed African-American can agree with a lonely, hate filled, uninformed, ignorant, white RACIST!!
    Keep posting your racist rants and I will continue to answer your racist topics/posts with truth and fact! Peace my brother!!

  4. Wanderant Says:

    Let’s review some facts here:

    Unions don’t represent hard working people – they represent sloths who due to their inability to perform, produce and compete, require unions to protect them and their jobs. The unions have made it nearly impossible to correct or fire unproductive workers and that is their main mission- aside from collecting dues to keep the union officers and their political agendas in power. Name ONE union (aka parasite) that ever made a contribution to the welfare of the host company or this nation’s well-being? Name one union state or industry that is in the black financially? Think Michigan. Ask Japan (especially the auto makers), China and India what they think about unions – as their economies surpass ours. Unions suck the lifeblood out of any venture as they were designed to protect the losers in a society. Think tick on dog.

    Again, for the mentally challenged, per capita (look up the definition Patsy), blacks and other minorities (hispanics, natives) are the majority of welfare recipients. The only reason that whites even register on the welfare rolls is due to the shear numbers of whites vs. non-whites in the US.

    Secondly, pride is a venial sin, so stop bragging about Obie’s pride. It is humility that is valued. In addition, his education is as a result of affirmative action (hardly something he EARNED) and the benevolence of his still-cloaked-in-secret financial and politically motivated benefactors. How exactly did he get his education at Harvard – who paid? Why are we still not privy to his school records? If he is such as genius, why are we not reading his great teachings on constitutional law and whatever else he is purported to have studied? Where is his masters thesis? Until he shares his wonderfulness with the rest of the world- for the betterment of all humanity, these claims are just hype and conjecture.

    Finally, you have succeeded in removing any true meaning or weight to the word “racist”. Thank you, it was a long time coming since it was so overused, abused and misused. Now, we can finally get down the basics of a good debate, which is just defining right vs. wrong. It goes kind of like this:

    Socialism/Communism WRONG.
    Capitalism/Freedom RIGHT.

  5. PATRIOT Says:

    Hard working Americans losing their homes and starving. WRONG

    Rich Americans born with a silver spoon in their mouth profiting off the backs of hard working Americans.

    Our GENIUS African-American President trying to level the playing field.

    Hows that for your basics of a good debate. Neo-con!!!

  6. Wanderant Says:

    Americans pigging out in the most obese country in the world (hardly starving) now finally losing a few pounds. Right.

    Dishonest Americans who tried to play the system put in place by the dishonest liberals and get their McMansions for free (no down payment, no jobs, no stake in the game), now finally losing them. Right.

    Hard-working Americans EARNING their silver spoons. Right.

    A CORRUPT Chicago-style Politician (talk about silver spoons!) taking from hard-working HONEST Americans to give to the dishonest and LAZY (incl labor unions) in this country (both American and not). Wrong.

    Resorting to name calling everytime you post because you know you have lost the argument before it even began. You decide….

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