union concessions vs. a continuation of subsidized Cadillac coverage

From the headline in the C-J, one would surmise that the unions had given up a lot.

After all, taxing fringe benefits would be painful-- if not accompanied by a concomitant reduction in income taxation. (That said, it would end the subsidy on health insurance-- what turns out to be, easily, the biggest problem in health care/insurance).

But if you're going to tax them, tax them equally, right? Nope. Unions want additional union-friendly legislation-- this time, not taxing benefits, or at least, their benefits.

Here's the AP article by David Espo and Sam Hananel (hat tip: YahooNews)...

In a major breakthrough, union leaders bowed Thursday to White House demands for a new tax on high-cost insurance plans as part of landmark health care legislation taking final shape in intensive negotiations....

As we'll see shortly, "bowed" is a bit strong. Perhaps a courtesy curtsy-- or more accurately a kick in the teeth to American (non-union) workers.

The tentative agreement on the tax, which included significant concessions by the administration...

This is the flip side of the true coin: "significant concessions" by Obama...Translation: Unions didn't give up much!

The president has told lawmakers he wants the tax on high-cost plans included in the legislation to help rein in costs. But that position courted conflict with labor leaders who fear exposing their membership to higher taxes...

In a significant victory for unions, the 40 percent excise tax would not apply to policies covering workers in collective bargaining agreements, state and local workers and members of voluntary employee benefit associations through Dec. 31, 2017....and would exclude the value of dental and vision coverage....

A union official familiar with the details said the tentative agreement would raise the threshold on insurance policies subject to tax from $8,500 in the Senate-passed bill to $8,900 for singles and from $23,000 to $24,000 for family coverage....

Originally, the tax included in the Senate bill was estimated to raise $149 billion through 2019. Trumka said the revisions would reduce that amount by $60 billion — money that negotiators would have to find elsewhere or else reduce the coverage in the legislation.

In other words, $60 billion comes from somewhere else-- to continue the extension of the subsidy to members of labor market cartels.

While the tax would be applied to high-cost plans, the Congressional Budget Office has said its principal impact would be to prompt consumers to purchase lower-value coverage...

A key point in understanding the benefit of the policy. By eliminating or reducing the subsidy, consumers would move toward "true" insurance-- for rare, catastrophic events-- what would be much less expensive. In turn, this would distort the market for health care and health insurance far less.

The WSJ editorialists bring clarity to the issue-- as usual:

Democrats seem impervious to embarrassment as they buy votes for ObamaCare, but their latest move makes even Nebraska's Ben Nelson look cheap: The 87% of Americans who don't belong to a union will now foot the bill for a $60 billion giveaway to those who do....Everyone else with a higher-end plan will start to be taxed in 2013, but union members will get a free pass until 2018.

Ponder that one for a moment. Two workers who are identical in every respect—wages, job, health plan—will be treated differently by the tax system, based solely on union membership...

Meanwhile, the extra five-year dispensation gives labor lobbyists plenty of time to negotiate a permanent extension for the Democratic union base...