When millions of blue-collar workers were leaning toward John McCain during the 2008 campaign, labor unions moved many of them into Barack Obama’s column by repeatedly hammering one theme: Mr. McCain wanted to tax their health benefits.
But now labor leaders are fuming that President Obama has endorsed a tax on high-priced, employer-sponsored health insurance policies as a way to help cover the cost of health care reform. And as Senate and House leaders seek to negotiate a final health care bill, unions are pushing mightily to have that tax dropped from the legislation. Or at the very least, they want the price threshold raised so that the tax would affect fewer workers.
Labor leaders say the tax would hit not only wealthy executives with expensive health benefits, but also many rank-and-file union members who have often settled for lower wage increases in exchange for more generous health benefits.
The tax would affect individual insurance policies with annual premiums above $8,500 and family policies above $23,000, which by one union survey would affect one in four union members.
The House bill does not contain such an excise tax, and many House Democrats oppose adding it to the combined House-Senate legislation. But the tax is a critical revenue component in the Senate’s bill. If the bill does too little to cover its costs, it might be defeated. Many economists support the tax, saying it will help hold down costs.
With labor groups warning that the tax will infuriate a key part of the Democratic base — union members — President Obama has agreed to meet with several top labor leaders on Monday to address their concerns and try to defuse their anger. The group includes the presidents of the A.F.L.-C.I.O., Teamsters and the steelworkers’ and service employees’ unions.
But whether the tax is negotiable remains unclear. Not only has Mr. Obama specifically endorsed the idea, but the White House and Senate leaders see the tax as pivotal in paying for the health care overhaul and addressing runaway health care costs.
Many Democrats and union officials fear that if both sides dig in on the issue, it could create a rift between the White House and labor — with some union leaders hinting they might lobby aggressively against the entire health care bill if it contains such a tax.
Union leaders have repeatedly warned the White House about the strong rank-and-file dismay, which could hurt the Democrats in Congressional elections this fall, especially in battleground states like Ohio, Pennsylvania and Wisconsin.
Ron Gay, an AT&T repairman in Youngstown, Ohio, who spent much of the summer of 2008 urging co-workers to vote for Mr. Obama, said, “If this passes in its current form, a lot of working people are going to feel let down and betrayed by our legislators and president.”
The Congressional Budget Office estimates that 19 percent of workers — or about 30 million employees — would be affected by the tax in 2016. Economists say most of them would be nonunion, although it is organized labor that has the lobbying clout to take a stand.
In recent days, labor’s strategy has become clear. Unions are urging their members to flood their representatives with e-mail messages and phone calls in the hope that the House will stand fast and reject the tax. The A.F.L.-C.I.O., a federation of nine million union members, has declared next Wednesday “National Call-In Day” asking workers to call their lawmakers to urge them not to tax health benefits. The International Brotherhood of Teamsters is urging members to tell their representatives that “such a tax is simply a massive middle-class tax hike that this nation’s working families should not be forced to endure.”
Many Democrats fear that enacting the tax will hurt their re-election chances.
“This would really have a negative impact on the Democratic base,” said Representative Joe Courtney, Democrat of Connecticut, who has enlisted 190 House Democrats to sign a letter opposing the tax. “As far as the message goes, it’s a real toughie to defend.”
While union leaders would prefer killing the tax, some say privately that they could live with it if the threshold is lifted to $27,000, say, or $30,000. They argue that many insurance policies above $23,000 are typical of the coverage in high-cost areas like New York or Boston, or policies that cover small businesses or employers with older workers.
According to a union survey, one in four members would be hit by a $23,000 threshold, but only one in 14 if the threshold were raised to $27,000.
White House officials, however, voice concern that raising the threshold that much would lose $50 billion of the $149 billion in revenue that the tax is expected to generate over 10 years.
Sunday, January 10, 2010
Health overhaul bill facing court challenges
It now appears that some form of a health care bill will be passed unilaterally by congressional Democrats. But the fat lady has yet to warm up. Key provisions in the bill could be unconstitutional and need to be challenged. It could be a close constitutional call, as there are arguments on both sides.
Those who framed and ratified the Constitution intended to create a system of enumerated powers where all powers not specifically delegated to the federal government remained with state and local governments, and the people. Defenders of the individual mandate, requiring all Americans to have health insurance, cite the taxing power of the 16th Amendment and the commerce clause as the enumerated powers for this mandate.
In 1994, the Congressional Budget Office (CBO) opined: “The mandate requiring all individuals to purchase health insurance would be an unprecedented form of federal action. The government has never required people to buy any good or service as a condition of lawful residence in the United States.” But the CBO is a budget office, not a legal office issuing a historical statement about policy.
Individuals not carrying health insurance will be fined and possibly subjected to other penalties by the Internal Revenue Service. However, Congress has been careful not to call this a “fine,” but rather a “tax,” permissible under the 16th Amendment that authorized the federal income tax (“the Congress shall have power to lay and collect taxes on incomes, from whatever source derived”).
Such a tax would be discriminatory against individuals without health insurance, but defenders would counter that a graduated, discriminatory income tax schedule has been in effect since 1913, with those in higher-income tax brackets paying more taxes at a higher percentage rate. Hence, the 14th Amendment's equal protection clause may or may not be applicable to the individual mandate.
The 5th Amendment's takings clause may also be operative in that the government is, in a very real sense through the individual mandate, taking the individual's private property, in the form of his or her income, to buy insurance.
The commerce clause was initially intended by the framers to free up interstate commerce, specifically trade among the 13 Colonies, which had erected trade barriers. Following the New Deal and the Supreme Court-packing scandal, federal courts frequently defined the commerce clause as permitting regulations governing all commercial activity, far beyond the scope of interstate trade.
However, several recent decisions have revived some limits on the clause, such as United States v. Lopez. In this 1995 case, the Supreme Court held the commerce clause does not authorize a federal law banning guns in local school zones.
Critics of the Senate health care bill have also argued that the bill violates the equal protection clause by legislating unequal treatment among the states. Several “sweetheart” deals were arranged to secure passage of the bill — for example, the so-called “Cornhusker Kickback” in which the state of Nebraska was given a permanent waiver for any expanded state Medicaid costs mandated by the bill. Poor states will subsidize this discriminatory bailout.
But defenders of the bailouts will counter that state earmarks have been business as usual for decades by both Democrats and Republicans.
Even if Congress passes a health care bill on the grounds that it passes constitutional muster under the equal protection clause, the takings clause and the commerce clause, Congress does not have the final say: The courts do. We learned this from Marbury v. Madison, where the Supreme Court ruled an act of Congress unconstitutional. The courts today could indeed rule portions of the health care bill in violation of the 14th and 5th Amendments and/or the commerce clause.
The bill must be challenged in court. Forcing Americans to buy a certain private-sector product is an overdose of big government that may be toxic to the plain meaning and intent of the Constitution.
Those who framed and ratified the Constitution intended to create a system of enumerated powers where all powers not specifically delegated to the federal government remained with state and local governments, and the people. Defenders of the individual mandate, requiring all Americans to have health insurance, cite the taxing power of the 16th Amendment and the commerce clause as the enumerated powers for this mandate.
In 1994, the Congressional Budget Office (CBO) opined: “The mandate requiring all individuals to purchase health insurance would be an unprecedented form of federal action. The government has never required people to buy any good or service as a condition of lawful residence in the United States.” But the CBO is a budget office, not a legal office issuing a historical statement about policy.
Individuals not carrying health insurance will be fined and possibly subjected to other penalties by the Internal Revenue Service. However, Congress has been careful not to call this a “fine,” but rather a “tax,” permissible under the 16th Amendment that authorized the federal income tax (“the Congress shall have power to lay and collect taxes on incomes, from whatever source derived”).
Such a tax would be discriminatory against individuals without health insurance, but defenders would counter that a graduated, discriminatory income tax schedule has been in effect since 1913, with those in higher-income tax brackets paying more taxes at a higher percentage rate. Hence, the 14th Amendment's equal protection clause may or may not be applicable to the individual mandate.
The 5th Amendment's takings clause may also be operative in that the government is, in a very real sense through the individual mandate, taking the individual's private property, in the form of his or her income, to buy insurance.
The commerce clause was initially intended by the framers to free up interstate commerce, specifically trade among the 13 Colonies, which had erected trade barriers. Following the New Deal and the Supreme Court-packing scandal, federal courts frequently defined the commerce clause as permitting regulations governing all commercial activity, far beyond the scope of interstate trade.
However, several recent decisions have revived some limits on the clause, such as United States v. Lopez. In this 1995 case, the Supreme Court held the commerce clause does not authorize a federal law banning guns in local school zones.
Critics of the Senate health care bill have also argued that the bill violates the equal protection clause by legislating unequal treatment among the states. Several “sweetheart” deals were arranged to secure passage of the bill — for example, the so-called “Cornhusker Kickback” in which the state of Nebraska was given a permanent waiver for any expanded state Medicaid costs mandated by the bill. Poor states will subsidize this discriminatory bailout.
But defenders of the bailouts will counter that state earmarks have been business as usual for decades by both Democrats and Republicans.
Even if Congress passes a health care bill on the grounds that it passes constitutional muster under the equal protection clause, the takings clause and the commerce clause, Congress does not have the final say: The courts do. We learned this from Marbury v. Madison, where the Supreme Court ruled an act of Congress unconstitutional. The courts today could indeed rule portions of the health care bill in violation of the 14th and 5th Amendments and/or the commerce clause.
The bill must be challenged in court. Forcing Americans to buy a certain private-sector product is an overdose of big government that may be toxic to the plain meaning and intent of the Constitution.
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