Health Reform’s Union Problem
Tim Fernholz observes that the Senate version of health reform has a big problem with Big Labor:
But there is a broader political problem: The single largest source of revenue to fund health care reform — $215 billion — is an excise tax on insurers for health-care plans that cost more than $8,000 for individuals or $21,000 for families, which is in turn linked to inflation. The average cost of an employer-provided family health care plan is $13,375; according to The Center for Budget and Policy Priorities, 90 percent of family plans in 2013 will have premiums below $21,000. But A significant bloc of Congressional Democrats — 156 representatives — and their allies in the labor movement are opposed to this provision, largely because unions have often forgone wage increases in favor of protecting their workers’ benefits, leaving them more vulnerable to any costs passed on to employers by insurance companies. Here is the letter [PDF] they sent to Speaker Nancy Pelosi. [...]
One thing is for certain: Labor is serious about stopping the excise tax — so much so that new AFL-CIO President Richard Trumka has made leaving it out a necessary condition for his coalition to support the bill.
I understand why some unions see this stance as serving the interests of their members. But the reality of the matter is that Trumka is just wrong on the policy merits here. There’s no good reason for the tax code to privilege compensation taken in the form of health insurance over compensation taken in the form of money. And Max Baucus structured the phase-out of that tax subsidy in a thoughtful way that will be progressive in the short- and medium-term and non-disruptive to the vast majority of people’s lives. The excise tax also makes the bill genuinely deficit neutral, as opposed to the kind of semi-fake deficit neutrality* of the House version of the bill.
One might say that the larger political problem for the Democratic leadership is that earlier this year they proved themselves pathetically unable to deliver on labor’s key priority—the Employee Free Choice Act. That was an issue where union leaders were right on the merits, and the objective significance of the issue to the interests of union members and union leaders alike was much larger. Had Democratic leaders delivered on Employee Free Choice they would be in a very strong position to ask the AFL-CIO to just eat something it finds mildly unpalatable in the broader interests of making progressive governance work. But they didn’t. And it looks to a lot of folks like they barely even tried.
The House bill is structured a bit like this:
In other words, surpluses in the early years make up for deficits in the later years. But since time doesn’t actually stop when the CBO ten-year scoring window expires, what you’re left with is legislation that worsens the long-run fiscal outlook. That’s not really so awful since it basically just means that you’ll need to change the law sometime in the next ten years, and the law will definitely be changed in the next ten years anyway. But I’d say it’s definitely worse than the more robust form of deficit neutrality given by a bill that includes a revenue source which grows over time in line with costs.
55 Responses to “Health Reform’s Union Problem”
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October 8th, 2009 at 11:24 am
I thought it was funny that dems sold the tax on “cadillac plans” by basically equating them to the golden parachute crowd then found out that most of those plans belong to union workers. Rhetoric, meet fact.
October 8th, 2009 at 11:29 am
Shocking that MY comes out anti-union.
It’s a non-starter because the excise tax will disproportionally attack coal miners and dock workers, whose very expensive health plans are paid by their employers.
It seems like the cadillac plans are driven by people who own Pintos. Taxing the poor to pay for health care is dumb.
Also, where do you get the idea that the costs of the House bill increase over time?
October 8th, 2009 at 11:32 am
“Had Democratic leaders delivered on Employee Free Choice they would be in a very strong position …” to welcome their new Republican masters at the mid-terms. EFCA in its original form was awful, just a way to stack the deck in favor of unions that even union members didn’t think was fair.
Big Labor’s problem is bloat and lack of ability to change. Once they reach a large enough size, they drag down the companies their members work for, drag down the local economies, and drag down the country. Unions aren’t progressive – they just try to move resources from non-members to members. Even the Democratic leadership sees this, and no longer is at the union’s beck and call. Those who still see Big Labor as the foundation of the Democratic party need to wake up. They are part of the past, and the Democratic party doesn’t need their support to win elections of pass progressive legislation.
Health care reform is health care for all Americans, and this is deadly posion to unions who used health care plans as a primary tool for gaining membership. If workers don’t need a union to get health care benefits, then the worker will be even less interested in joining a union than they already are.
October 8th, 2009 at 11:36 am
“There’s no good reason for the tax code to privilege compensation taken in the form of health insurance over compensation taken in the form of money.”
What? I thought punishing bad behavior and rewarding good behavior was a crucial part of MY’s worldview.
For instance, MY supports in taxes on soda not only because it will raise revenue, but also because it will encourage people to drink less soda. Same with cigarettes.
Well, in this case, workers can do two things a few things with their money. If they just get it as cash, they can spend that cash on terrible things like soda, cigarettes or books written by Glenn Beck. Or tey can spend it on healthcare.
Why not use the tax code to encourage them to spend more of the money on health care, and less on foolish consumer goods?
October 8th, 2009 at 11:36 am
This statement is true. And it should be remembered when talking about the trajectory of wages over the last 30 years.
October 8th, 2009 at 11:38 am
Big Labor’s problem is that it caves too often to people like Matt Y that essentially hate the very idea of unions. They should stick to their guns and do whats right by their members, the Democrats didn’t give them EFCA, they don’t owe the Democrats jack shit.
As for the Retard in Austin, anyone who think American unions are too big is a fucking moron who lacks any credibility on this issue whatsoever.
October 8th, 2009 at 11:38 am
A glibertarian techie bitching about labor. How original.
October 8th, 2009 at 11:40 am
Sam, how about the Government doesn’t tell me what I can put in my fucking body, eh? You so-called “liberals” start talking like that, and you’re majority is going to go right up on flames.
If there’s one thing that can split a huge chunk of voters away from you, it’s the nanny state. You won’t even give us healthcare and you think you have the right to tell us what we can and can not do?
October 8th, 2009 at 11:40 am
Unions are an interest group. Unions exist to serve the interests of their members.
Why this behavior is so befuddling to Yglesias and Ezra is really beyond me.
You don’t have to agree with them but you shouldn’t act surprised or put out when they act in the interests of their members. That’s what they’re supposed to do.
The labor movement, particularly the UAW, fought for decades for universal healthcare and it got them nowhere. You can forgive them for being a little gun shy about the excise tax proposal which, by design or by accident, targets the hard fought benefits of their members. Given the over-whelming mediocrity of the healthcare “reform” being debated right now I can’t say that I blame them. Put together a better plan and maybe the won’t try so hard to hold on to what they have.
The “blame the worker first” approach from Yglesias is pretty nauseating. Perhaps Matt could talk about teachers unions and education policy today too?
October 8th, 2009 at 11:41 am
This is just more of CAP shilling for plutocrats.
Taxing high incomes is a viable alternative to taxing employer plans – and it doesn’t violate the pledge of not affecting existing plans.
After all the reverse-Robin Hood moves like doubling taxes on social security it is better to tax high incomes.
October 8th, 2009 at 11:42 am
Miles, earlier comment, should get his facts straight. People pay for their own coverage in a stupid way; they let their employers decide what plan to choose and pay for it with money earned by the employees. Employers get to hold it over the employees’ heads that leaving their job means leaving their benefits which aren’t portable even if you’ve paid into the plan for 30 years without using it.
Eliminating the tax subsidy is the path to decoupling health insurance from employer groups. This is a goal we all should share. Labor is only shooting itself in the foot by opposing this. Who the hell is explaining the economics and policy to these guys?
October 8th, 2009 at 11:43 am
Whoa… this is just dead wrong, and labor’s right.
If you were to say, “we’re going to tax benefits to raise some money for HCR”, that is one thing.
However, by establishing a cap, you are essentially:
1) giving a ton of leverage to employers in negotiations (RE: HC coverage levels)
2) discriminating based on cost (old age, profession-related health hazards…)
3) and, saying the gov wants people to have less health care benefits.
It’d be one thing to tax all health benefits at 2.5%, it’s another to tax 10% of benefits at 25% — which by its nature becomes discriminatory. And, it is potentially a big hit to folks often making little, but having solid health coverage.
Why should a group of white collar workers (say accountants) not get taxed on the same ben’s as truck drivers? that is basically what will happen, they aren’t even picking this apart by coverage levels — but costs. It’s the worst of all options in taxing benefits.
October 8th, 2009 at 11:50 am
Health care reform is health care for all Americans, and this is deadly posion to unions who used health care plans as a primary tool for gaining membership. If workers don’t need a union to get health care benefits, then the worker will be even less interested in joining a union than they already are.
How do you explain Europe?
October 8th, 2009 at 11:54 am
People in industrial unions might actually need those really good plans. I am an AFSCME member with Kaiser so it will not change much for me but if I were a miner, steelworker, or in the building trades I would certainly hope my union would fight the tax.
October 8th, 2009 at 11:55 am
Bottom line, we’re not talking about investment bankers here. Most union members would greatly benefit from living in a society with robust social insurance and enhanced economic security for working people.
The maddening short-sightedness of labor in this country is, er, maddening.
October 8th, 2009 at 12:06 pm
Wouldn’t nearly everyone but the owners of sweatshops, pawn stores and payday loan outfits benefit from living in a society with robust social insurance and enhanced economic security for working people?
October 8th, 2009 at 12:18 pm
There is nothing magical about the money raised by taxing HC plans. It doesn’t make the Baucus plan any more deficit neutral than any other revenue source. There are many places in the tax code that could be reformed. So, why such consternation about labor looking out for their benefits? Something tells me that employers will not raise wages to make up the difference.
October 8th, 2009 at 12:25 pm
“Sam, how about the Government doesn’t tell me what I can put in my fucking body, eh?”
Actually, that’s my position. What I am asking is why, in MY’s worldview, it is good and proper for the government to punish some consumption and not other consumption at the cash register, but not to make this same distinction when it comes to the paycheck. Why is it good to say, “We are going to tax cigarettes so you buy fewer,” but not OK to say, “We are going to forego taxes on healthcare so you buy more of it”?
October 8th, 2009 at 12:30 pm
Tell that to the auto-workers in Detroit. Would they prefer a non-union job at Toyota and not get laid off, or a union job at GM while the company goes bankrupt? Health Care needs to be solved at the nationally level, not by greedy labor leaders trying to funnel money to their members at the expense of the rest of society.
I’m not always anti-union – they played a critical role in the early 20th century, and are still useful in many industries, especially hazardous/dangerous industries like mining. But most of the bigger, older unions, particularly in education and manufacturing, are doing far more bad than good and the quicker the Democratic party can wean themselves of them the better.
Yes, that is true. And I don’t blame union members for grabbing all they can. Just stop thinking of these groups as progressive entities key to the egelatarian future. They are relics of our industrial past.
I am too ignorant on Europian unions to offer a clever retort, sorry. Perhaps their unions aren’t corrupt, company destroying, crime-ridden cesspools of nepotism and laziness? If so, good for them!
October 8th, 2009 at 12:30 pm
I wonder if there has been a good analysis of how various health care proposals would affect union health plans. The major contributors to the high cost of these plans are low (no) copays, no annual limits on benefits received, and no lifetime limits on benefits received. These are all proposed to be part of an eventual reform bill. That would push premiums up for other plans, but the union plan costs would be relatively unaffected. The measures in the reform bill to control costs, such as closer adherance to MEDPAC guidelines, would tend to reduce premiums equally across the board. This would cause the costs of union and non-union plans to tend toward convergence. The difference that would remain would be the percentage paid by the employee, about 25% of premium cost.
It is hard to weigh the different factors accurately, but it is possible that union members will not be hit nearly as hard as Trumka thinks they will.
October 8th, 2009 at 12:39 pm
We don’t want people to buy more insurance; we want more people to buy insurance. The “uninsured” problem is really a medical costs problem. Extravagant health insurance plans push costs up because people get unnecessary procedures. Uninsured people push costs up because they get care inefficiently. If we want to create “good behaviour” via taxation, we should make some insurance tax-free, but too much insurance taxable, which is the suggestion at hand.
October 8th, 2009 at 12:43 pm
First? I think Matt is blaming the worker about 28th or so.
October 8th, 2009 at 12:43 pm
Part of me understands why the unions would be opposed to the tax but part of me is also befuddled. Wouldn’t the excise tax just create another opportunity for union leadership to open collective bargaining negotiations?
Wouldn’t have unions put out clauses in labor agreements for this sort of thing?
October 8th, 2009 at 12:50 pm
largely because unions have often forgone wage increases in favor of protecting their workers’ benefits
I’ve never been able to understand why they do that. They trade cash now for the promise of benifits in the future – when the future comes the firms that promised those benifits end up bankrupt. Why don’t they just demand cash upfront?
October 8th, 2009 at 12:52 pm
“The major contributors to the high cost of these plans are” the dangers inherent in such jobs as coal mining, steel work, and underwater repair.
Since those jobs are almost guaranteed to have more work-health needs, insuring people in those fields costs more.
This tax doesn’t hit investment bankers, it hits the lower middle class. If we exempted union members from the tax, or only taxed benefits if they were above $100,000 of income, then it’d be good. As it stands, like much of Baucus’ legislation, it sucks.
Matthew in Austin, go work construction. Do it as a day laborer, then do it as a union member. Then opine, hipster scumbag. Also, I realize that you’ve never been involved in a successful political campaign, but SEIU gave Obama the nomination, then AFL-CIO and SEIU gave him the national win.
October 8th, 2009 at 1:00 pm
No, the labor movement has made concession after concession to neo-liberal democrats and have gotten jack-shit for it in return. If I were involved in the leadership of the labor movement I would deliver a very simple message to the leadership of the Democratic party. No Labor help on anything or any short sacrifices by the labor movement until the Democrats get card check through.
October 8th, 2009 at 1:06 pm
The idea that there are only two types of workers, day laborers and union members, is the key to your ignorance. The majority of Americans are neither. They work hard without union membership and do just fine. And these days, injustices to specific classes of workers are most efficiently handled by government legislation, not by funneling money under the table to organized crime union overlords.
You think Obama wouldn’t have beat McCain/Palin without the ALF-CIO and SEIU endorsement? You are delusional. Sure, a union endorsement might give one Democrat an edge over another in a primary, but they aren’t necessary at all in the general election. So there is no reason to favor union special interests in a national health care plan. They don’t deserve special treatment – and I don’t think Obama is going to give them any.
October 8th, 2009 at 1:23 pm
There are only two types of workers – those who who can spend company time in internet comment sections and those that can not.
October 8th, 2009 at 1:23 pm
The link between employment and healthcare is one of the reasons we haven’t seen real wage increases since 1973. The unions aren’t actually doing themselves any good in the long run.
October 8th, 2009 at 1:30 pm
No, Matt, you asshole, you are wrong on the policy merits. First, healthcare funding should not have to come from taxing benefit packages. It should come from a straight taxation on wealth, not health benefits. That is the meritorious policy.
Second, asking middle class workers to see their policies hit, which they earned in lieu of wage increases, is non-starter. A You are really a gaping asshole with no life experience. How can you, privileged son of Dalton and Harvard, bemoan people wanting to hold onto good healthcare policies that earned them. I bet CAP has a pretty good package, but you get book deals and a nice salary so taking a loss for you is inconsequential. Taking a hit on healthcare is not so great when you are not making that much money.
October 8th, 2009 at 1:41 pm
Precisely the point: Wages will not be returned to the workers by taxing plans. So you are no diminish the countervailing power of workers and actually hurting their net gain financially. There are so many other ways to pay for healthcare. Only timid neoliberals are afraid of actually hitting heavy earners. Why dont we raise income tax or capital gains? Hmmm? Inquiring minds want to know. Additionally, there is a conflict of interest here for CAP, who lobbies on behalf of the Obama administration. Labor should not move an inch until the Democrats improve this bill by at least bringing in a public option or including pay or play. Until then, Trumka – a former mineworker whose dad died of black lung – should stay the line. He knows the importance of quality and comprehensive healthcare for dangerous poorly remunerative work. Many here do not.
October 8th, 2009 at 2:08 pm
Matthew in Austin,
You are a pig ignorant motherfucker. The notion that unions are all corrupt and ineffective is just bullshit. There is far greater corruption and criminality in corporate America than there is in unions. (Unions are also incredibly heavily regulated.)
The reason that employers fight unions so viciously is because unions actually produce for employees in terms of better wages, benefits and working conditions. That, by the way, is empirically verifiable — look at wage differentials and availability of pension and health benefits at unionized employers versus non-union employers.
As to the notion that the law and government protect workers better than a union, you are out of your small mind. The incredible degree of law breaking among America’s non-union corporate criminals is staggering, whether it be the failure to pay overtime, pay wages timely, not misclassify employees as independent contractors, etc. Moreover, virtually all non-union employees are employees at will, meaning they can be fired for any reason (or no reason) at any time. They have no protection in the workplace whatsoever.
October 8th, 2009 at 2:09 pm
generation policymakers biological below emit 2004 product future
October 8th, 2009 at 2:11 pm
Right, keep going the Union bashing. Dont think of copying that stupid Northern Europeans, continental European conservative style is the way to go, let the lower middlce class pay for the poor and leave the rich alone with that common peoples problems.
October 8th, 2009 at 2:12 pm
capita movit major agricultural
October 8th, 2009 at 3:01 pm
Wouldn’t nearly everyone but the owners of sweatshops, pawn stores and payday loan outfits benefit from living in a society with robust social insurance and enhanced economic security for working people?
query: I think there are some benefits that would be derived by just about everybody, sure. But it depends on how large the safety net is, and how it’s funded. You could certainly make the argument that, say, a business executive making $600,000 per year might not see a net benefit from a Denmarkization of the US if that meant his/her after tax income dropped by, say, a hundred grand as a result. I mean, it’s not as if such a person typically lacks good healthcare or housing or schools or a secure retirement under the US status quo…
But this situation doesn’t describe many union members. I don’t blame anybody for trying to preserve the contents of his wallet, mind you, I just hope in this case it doesn’t derail reform.
October 8th, 2009 at 3:16 pm
We have a winner in the “Dumbest Fucking Statement of the Day” contest:’
You know, like weekends. Or Social Security. Or OSHA. Or immigration reform. Or the minimum wage.
October 8th, 2009 at 3:19 pm
Alas, we’re not talking about European-level “robust social insurance” under any of the current proposals. It seems like the Finance plan would (1) very likely take money out of the pockets of at least some union members, (2) provide them with at best a modest benefit, but (3) give a larger and more certain benefit to health/insurance companies.
Sounds like change we can believe in.
October 8th, 2009 at 3:22 pm
“I’m not anti-union, I just consider all of their leaders to be organized-crime overlords.”
Dear Editor,
As a lifelong member of the Democrat Party, I’m concerned that Barack HUSSEIN Obama won’t be as strong a candidate in the fall against war hero Senator John McCain as the She-Beast, Hitlery.
Sincerely,
Ima Democrat
PS – I’m not against unions.
October 8th, 2009 at 3:22 pm
No, the reason employers fight unions so viciously is that through strikes, unions can demand that an employer increase its costs (through higher wages and benefits) until the employer is no longer profitable and goes out of business. That is what happened in Detroit. Now you have an entire state in unemployed poverty. Thank you unions.
The proper solution is to create an even playing field across all companies by a federally mandated health care plan, federally mandated minimum wage, federally mandated paid overtime for workers under a certain wage, etc. Individual unions negotiating their own sweetheart deals while driving American manufacturing out of business needs to become a thing of the past.
As for the main discussion – clearly taxing wealth is the proper way to pay for this, not taxing the middle class. I was just baiting pro-union reactionaries for fun. But seriously, a union member with salary of $70,000 and benefits of $20,000 should be taxed at the same level as a non-union member with a salary of $80,000 and benefits of $10,000. I think that is MY’s point, and I agree.
October 8th, 2009 at 3:24 pm
completely absent from the argument you’re responding to, and made up by Matt in Austin, because he can’t answer the argument that was actually made.
I think he very well might not have beaten them without the AFL-CIO and SEIU organizing, advocacy, and turnout operation, and money – but yeah, endorsements don’t mean much anymore.
October 8th, 2009 at 3:29 pm
We have a runner-up:
Right, that’s what happened in Detroit. Exactly. If only our auto industry had no unions, they’d be like Mercedes, or BMW, in their union-free prosperity.
October 8th, 2009 at 3:29 pm
But remember, I’m not anti-union!
No way I’M a fanatical worker-hater who’s posing as something I’m not on an internet comment thread.
October 8th, 2009 at 3:47 pm
You could certainly make the argument that, say, a business executive making $600,000 per year might not see a net benefit from a Denmarkization of the US if that meant his/her after tax income dropped by, say, a hundred grand as a result. I mean, it’s not as if such a person typically lacks good healthcare or housing or schools or a secure retirement under the US status quo…
Yeah, but does he pay more or less than a hundred grand for them? A fragmented system leaves a lot of efficiency on the table.
The bigger benefit from the rich point of view, though, is what good education, mental health services, and rational, adequately-funded anti-addiction programs do to the crime rate. They’re actually far more effective than the simpleminded “hire half the population to lock up the other half” approach. The benefits of this to Mr. High-Value Robbery And Burglary Target are hard to put into dollar figures, but pretty considerable.
October 8th, 2009 at 3:57 pm
joe from Lowell, try taking a deep breath before you hit “submit”, and you may be able to get all your thoughts into a single post next time.
Regarding Detroit unions, I was comparing them to Toyota in American, not auto-makers in Europe. I stated that clearly in an earlier post.
Regarding me being a union hater, that is true after unions get beyond a certain size. In smaller, or more dangerous industries, or in labor forces that ignored by their government representatives, unions can do a lot of good. But for large, mature, well established sectors of our society (auto manufacturing and education most specifically), I thin the unions do far more harm than good. I think I’ve been pretty clear on that throughout this thread. But go ahead with your reactionary liberal Rush Limbaugh impersonation and keep changing my arguments to suit your world view. It won’t change the fact that Obama thinks as much of your precious Big Labor as I do.
October 8th, 2009 at 4:04 pm
Thrilling. And the fact that unionized automakers like BMW and Mercedes do just fine demonstrates that the difference between Toyota and GM is not the unions. As does the experience of anyone who’s ever driven their products. But pretending that the Chevy Citation would have put them on a rock-solid footing, if only it had been built by non-union labor, certainly is a compelling argument.
October 8th, 2009 at 4:10 pm
I believe that you’re overestimating the costs involved – I’d need to see an actuarial table to be convinced – but it would be a good area for a compromise. The costs involved for professions are well documented by actuaries working for insurers. Adjusting the value of the benefit to eliminate the cost directly due to the risk of the work would be a good idea. If the costs are still very high, hit the insurer with the tax. One problem with this might be that investment banker suddenly becomes the most unhealthy profession in the world, but I think we could deal with crap like that.
I was wrong earlier. While the things I stated are big contributers to the high premiums, they are not the biggest.
First, the amount paid by the employer is high because it tends to be a higher percentage of the premium. That is the biggest contributer to the benefit size.
There is another big reason for the high premiums on union plans – age.
Union shops tend to be older than most workforces, due to greater job security. You don’t get fired for being older like you do in non-union shops. While individuals in a group don’t pay based on their age (usually), the insurer will charge the group as a whole based on the ages of the workers. Since many strong unions bargained for insurance for early retirees who are not yet eligible for medicare, the effect of this on the premiums can be very large. Young UAW workers would have their plans taxed because they’re in the same group plan as pre-medicare eligible retirees.
As a compromise, I would suggest that any plan’s value should be indexed so as to avoid taxing for age. If all of your workers are 50+ years old, your group benefits will be expensive. If they’re all in their 20s, the group health plan will be cheap. Further, if I’m a healthy 25 year old working at a place with mostly 50 year olds, my health plan will be more valuable than the exact same plan I’d get if my co-workers were all 25. Taxing based on that is crazy.
The surtax on expensive plans should be for luxury, not costs due to risk or age. However, if we do something like index the benefit value for job-risk and employee age, we should lower the threshold a little.
October 8th, 2009 at 4:19 pm
Because when we raise these taxes blue-collar workers vote Republican.
October 8th, 2009 at 4:33 pm
I think health care is an exception to that. If the public actually sees our national healthcare nightmare coming to an end, I think the higher taxes will be accepted. That is what we all assumed we would get from Obama – higher taxes, and national health care. No one thought it would be free.
This is one of the very few times Democrats can get away with raising taxes and not getting kicked out of office. Better do it while we still can!
October 8th, 2009 at 4:41 pm
Why dont we raise income tax or capital gains?
Because (a) that doesn’t have the effect of reducing the growth of health care costs and (b) the amounts raised don’t grow faster than the growth of health care costs.
October 8th, 2009 at 7:58 pm
Really?
People want more programs and less spending. They want lower deficits and lower taxes. I’m pretty sure many people belonging to both parties think enormous amounts of benefits can be had for free.
October 8th, 2009 at 10:14 pm
[...] Screw Workers Have I mentioned I don’t like unions? This is why!: One thing is for certain: Labor is serious about stopping the excise tax — so much so that new [...]
October 8th, 2009 at 11:48 pm
Because (a) that doesn’t have the effect of reducing the growth of health care costs and (b) the amounts raised don’t grow faster than the growth of health care costs.
Really, you could not raise the money for health care cost through other means of taxation and policy. So if we were to provide a) a public option with +5 Medicare rates, b) pay or play mandate, c) taxation on wealth, d) preventative medicine and a other medical reforms, we would not be able to reduce costs nor pay for the program? Hmmm.
Additionally, a tax on wealth for the purposes of health care provision is utilized all over the world, so I’m not sure how that is insufficient. If you are purely talking about the Ways and Means surcharge, then technically you are correct. But the Baucus bill merely has a cheap price tag. It does not reduce ordinary citizens health care expenditures and is likely to increase them. Further, it does not cover anyone and merely shifts costs to the consumer at a greater clip. So if the goal is to produce a cheap bill, Baucas’ is fine. But if it is to produce an effective bill that tackles the root issues – the cost to ordinary American’s, I think we are on a different page. Were the neoliberals are going with there third wayish nonsense, im not sure.
October 8th, 2009 at 11:55 pm
Here’s my take on the matter.
The issue that Matt is ignoring here is that there is nothing that assures that the deferred compensation of forty years is actually going to wind up in the pockets of actual workers. That compensation was won at a time when unions were much, much stronger they are now – in the current climate, they’re likely to lose all of it.
October 10th, 2009 at 12:28 am
[...] Matthew Yglesias discusses health reform’s “labor [...]