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    Unions and Free Market Activists Find Common Cause on Health Care, For Now

    07/02/2009

    President Obama has stepped up his rhetoric against the health care system, but fiscal deficiencies in his plan for a government take over have become increasingly apparent in recent weeks. Now, some on Capitol Hill are toying with the idea of taxing employee health benefits to subsidize the cost of government-provided care. But, as Americans learned during the collapse of GM, many union labor agreements provide extremely generous benefit packages to workers who are unlikely to support any proposal that might put their compensation at risk.

    To voice that growing concern, 30 different groups, from the Air Line Pilots Association to the United Transportation Union, have signed an open letter urging Congress to consider alternative sources of funding. Unfortunately for President Obama, they seem to make a case for keeping or expanding the current employer tax exemption rather than reducing or eliminating it.

    An excerpt:

    The President campaigned against eliminating the tax exclusion of health care benefits and the public overwhelmingly agreed with his position. It’s obvious the American people want health care costs lowered, not increased. They expect the Congress to make coverage more affordable, not less. Any result to the contrary may undermine their support for the program.

    Other vocally disaffected groups, including the Laborers’ International Union of North America (LIUNA), have negotiated a temporary cease fire with Senate Finance Committee Chairman Max Baucus, but this issue may yet be the silver bullet that brings down President Obama’s socialized medicine scheme. Without the support of unions, it is unlikely that many in Congress will be comfortable raiding employee benefits, and without raiding employee benefits it is unlikely they can find the necessary funding for such a massive new entitlement.

    However, though opponents of socialized medicine and union leaders agree on the need to preserve or expand employer tax exemptions, that probably will not remain the case. A grand bargain could still be struck between Congress and Big Labor to leave union benefits intact and just punish workers who lack the lobbying clout to defend themselves. Ironically, if that happens and union membership becomes the only way to protect health coverage, it may prove to be an even more effective recruiting tool than card check.