Dems cave to unions on 'Cadillac tax'

The 40 percent excise tax on what have come to be called "Cadillac" health-care plans would exempt collective-bargaining contracts covering government employees and other union members until Jan. 1, 2018

In another major concession to labor, the value of dental and vision plans would be exempt from the tax even after the deal expires in eight years, negotiators said.

Under the plan to help fund health-care reform, the tax would kick in for plans valued at $8,900 or more for individuals and $24,000 or more for families.

That's slightly higher than the $8,500 and $23,000 thresholds in the bill passed by the Senate last month.

The threshold will be even higher for certain plans with many older workers and women -- a move to benefit unions with a high proportion of female membership, sources said.

New York labor leaders -- who had initially campaigned against the Cadillac tax, favoring instead a surcharge on the wealthy -- said they are thrilled.

"We can live with it. We have an agreement that nothing will be taxed until 2018," crowed George Boncoraglio, regional president of the Civil Service Employees Association.

Officials said the deal was thrashed out over more than 15 hours of negotiating at the White House that ended after midnight Wednesday.

Powerful unions were well-represented around the bargaining table.

Participants included AFL-CIO President Richard Trumka and Andy Stern, head of Service Employees International Union; Anna Burger, head of Change to Win; and the leaders of unions representing teachers, government workers, food and commercial workers, and electricians.

What possible justification can there be for this sweetheart deal except the exercise of naked political power by labor unions? What is so special about unions that they should be exempt from a law that will affect other, less politically connected Americans?

The Democrats are going to have to scramble to come up with another $60 billion in "savings" or the bill will be skewed out of balance even more than it is now. But don't worry. The Democrats have plenty of smoke and mirrors left in their gunnysacks and will fake as much in savings as they have to in order to get reform to the finish line.

Hat Tip: Ed Lasky