Universal Health Care... How?

The Obama administration has managed to collect some concessions from hospital groups and drug companies, to the tune of over $200 billion in savings over ten years. This is nothing to sneeze at, but it still leaves the lion’s share of the proposed legislation searching for funding. Setting a requirement for employers to pay a fee to help cover uninsured employees takes another bite out, leaving hundreds of billions still to be found.

The Democratic leadership has brought up two major ideas fill that gap:

1. taxing the medical benefits of higher earners
2. a surtax on those who make more than $280,000 a year.

After some early indications otherwise, the proposal to tax medical benefits seems to be dead in the water. Support in the Senate dissolved when several polls put the opposition to such an idea among the public at around 59%. Unions, many of whom have negotiated higher benefits in lieu of higher pay over the last few years, were especially vocal in their opposition, which assured the proposal would lose enough support among democrats to block its passage.

It’s unclear whether the surtax proposal has enough support to make it through the senate either. Polls show people’s potential opposition of higher taxes to fund better coverage has been mixed. However, about 60% of those polled are for taxing those making over $280,000 a year to fund reform, lending weight to the surtax proposal. Charlie Rangel, who proposed the surtax plan, is expected to introduce the legislation Monday, but comments by several influential Senate Democrats suggest its chances of passage may be slim.

Dick Durbin, the second-ranking Democrat in the Senate (and Obama’s Blackberry buddy), has come out saying that the proposal is unlikely to pass. Kent Conrad, prominent member of a moderate group of Democratic Senators that would have to support any proposal entirely to block a filibuster, has said that he thinks the senate is heading in a direction other than controversial ideas like these two proposals. If these two senators are correct, and no other major solutions are being offered, then what options are left?

Passing a reform bill of this magnitude was not expected to be a walk in the park. Reforming a massive and labyrinthine system – with interests holding considerable clout and an opposition bent on stopping a public option – would be difficult even if the Democrats had a few more seats in the Senate. So far, Obama has been fairly hands off in his approach to working with congressional leaders on legislation. He seems to favor dealing out broad strokes of what he’d like to see in a bill that he would sign. This time he’s going to have to put more skin in the game and put some of that political capital to the test. If he can’t push either of these two funding proposals pushed through the Senate, he will have to explore other options.

Read on about some of those options in my next post, How TO pay for Health Care Reform.

This certainly turns the tables on the notion that unions are somehow “anti-business.”

From USA Today:

STERLING HEIGHTS, Mich. — The United Auto Workers union will own 55% of a restructured Chrysler LLC and its retiree health care trust will get a seat on the board if union members vote to approve contract concessions this week.

Chrysler stock could even be traded publicly again, as there are mechanisms for the UAW to sell shares to fund the health care trust.

Factory-level union leaders voted unanimously Monday night to recommend approval of concessions that union President Ron Gettelfinger said would help keep the automaker out of bankruptcy.

A summary of the revised Chrysler-UAW contract says that Italian automaker Fiat Group SpA eventually will own 35% of a restructured Chrysler, with the remaining 10% stake divided between the U.S. government and secured lenders, mostly banks and hedge funds.

Up is down, black is white, dogs and cats living together…

Honestly, I think this could actually turn out rather well because the union obviously has increased interest in making sure the business stays afloat and is profitable.

We shall see…

This one is sure to ruffle some feathers, but Obama is signaling that he’s more than willing to find common ground on this issue and I have to say it’s a relief to hear. Especially since this seems to be the last thing we should be focusing on right now.

From Ambinder:

Wash Post: The Employee Free Choice Act – a timing question and a substance question: in terms of timing how quickly would you like to see it brought up? Would you like to see it brought up in your first year? In terms of substance, the bills that you talked about in your floor statement on the Employee Free Choice Act problems with bullying of [inaudible] people want to join unions. Is card check the only solution? Or are you open to considering other solutions that might shorten the time?

Obama: I think I think that is a fair question and a good one.

Here’s my basic principal that wages and incomes have flatlined over the last decade. That part of that has to do with forces that are beyond everybody’s control: globalization, technology and so forth. Part of it has to do with workers have very little leverage and that larger and larger shares of our productivity go to the top and not to the middle or the bottom. I think unions serve an important role in that. I think that the way the Bush Administration managed the Department of Labor, the NLRB, and a host of other aspects of labor management relations put the thumb too heavily against unions. I want to lift that thumb. There are going to be steps that we can take other than the Employee Free Choice Act that will make a difference there.

I think the basic principal of making it easier and fairer for workers who want to join a union, join a union is important. And the basic outline of the Employee Fair Choice are ones that I agree with. But I will certainly listen to all parties involved including from labor and the business community which I know considers this to be the devil incarnate. I will listen to parties involved and see if there are ways that we can bring those parties together and restore some balance.

You know, now if the business community’s argument against the Employee Free Choice Act is simply that it will make it easier for people to join unions and we think that is damaging to the economy then they probably won’t get too far with me. If their arguments are we think there are more elegant ways of doing this or here are some modifications or tweaks to the general concept that we would like to see. Then I think that’s a conversation that not only myself but folks in labor would be willing to have. But, so that’s the general approach that I am interested in taking. But in terms of time table, if we are losing half a million jobs a month then there are no jobs to unionize. So my focus first is on those key economic priority items that I just mentioned.

I think he’s sending a pretty clear message to Democratic lawmakers to not demagogue this issue, especially since there are more important things to do. And honestly, I know Dems are trying to front load this legislative season with all of the pet projects they’ve had on the back burner for 8 years, but this one seems like it could easily be defeated…so why now?

More as it develops…

Looks like all that money and influence peddling won’t stop Dems from pushing this hot button issue off to the side for a while.

From WSJ:

It hasn’t been much noticed, but the political ground is already shifting under Big Labor’s card-check initiative. The unions poured unprecedented money and manpower into getting Democrats elected; their payoff was supposed to be a bill that would allow them to intimidate more workers into joining unions. The conventional wisdom was that Barack Obama and an unfettered Democratic majority would write that check, lickety-split.

Instead, union leaders now say they are being told card check won’t happen soon. It seems the Obama team plans to devote its opening months to important issues, like the economy, and has no intention of jumping straight into the mother of all labor brawls. It also seems Majority Leader Harry Reid, even with his new numbers, might not have what it takes to overcome a filibuster. It’s a case study in how quickly a political landscape can change, and how frequently the conventional wisdom is wrong.

Paradoxically, it’s Mr. Reid’s bigger majority that is now hurting him. In 2007, he got every Democrat (save South Dakota’s Tim Johnson, who was out sick) to vote for cloture. But it was an easy vote. Democrats like Mr. Pryor knew the GOP held the filibuster, and that Mr. Bush stood ready with a veto. Now that Mr. Reid has 58 seats, red-state Democrats in particular are worried they might actually have to pass this turkey, infuriating voters and businesses back home.

The thing about this legislation is it’s not addressing any immediate need, nor does it even seem fair to the normal voter…so why tackle it now? Because the unions threw money at the problem? Looks like they could be in for a rude awakening.

Obama and the Dems need to focus on issues that affect every single American and not waste time on passing legislation that will allow unions to potentially strong arm folks. It just doesn’t make any sense.