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The Unions and Obamacare

9:25 AM, Sep 17, 2013 • By SPENCER COWAN
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The news that union leaders were pushing the White House for a unilateral Obamacare “fix” should have come as no surprise, given President Obama’s repeated disregard for the rule of law.  However, single-handedly extending premium subsidies to union members who already have generous, tax-exempt health insurance benefits would have taken the administration’s lawlessness to a new level—a level to which the administration has now announced that even it isn’t willing to go. 

Richard Trumka speaks to an AFL-CIO gathering in 2009.

Richard Trumka speaks to an AFL-CIO gathering in 2009.

Big labor is beginning to recognize, like the rest of the nation, that the administration’s signature legislative act is a nightmare.  But rather than call for a full-scale repeal of Obamacare, union leaders demanded special treatment for their members—at the expense of the American taxpayer and the separation of powers.

As D. Taylor, president of the hospitality union Unite Here, told the New York Times this month, “our members are the exact type of people that Obamacare was supposed to take care of.” And in July, Taylor, Teamsters president Jimmy Hoffa, and United Food and Commercial Workers president Joseph Hansen demanded preferential treatment in a letter to Democratic leadership, writing, “our employees will treated [sic] differently and not be eligible for subsidies afforded other citizens.  As such, many employees will be relegated to second-class status…” 

Union leaders were audacious—if not downright laughable—for demanding taxpayer subsidies for their members’ tax-exempt, multi-employer “Taft-Hartley” plans.  Indeed, subsidies were never intended for individuals with access to affordable employer-sponsored insurance.  Even the Democratic-controlled Congress dared not carve out an exemption to channel subsidies to “Taft-Hartley” plans when it passed Obamacare in 2010.  The added expense of providing subsidies to union members with Taft-Hartley plans, some $187 billion over ten years, would have pushed the total ten-year price tag for Obamacare above the $1 trillion threshold, even with all the accounting gimmicks that masked the full cost of the law.

It’s not only union members who are ineligible for subsidies—union plans are also ineligible.  Under the law, only plans that guarantee enrollment for any applicant are eligible for subsides.  But because Taft-Hartley plans are exclusive to union members and their dependents, they fail to qualify as subsidy-eligible plans.

The law was apparently no deterrent to union leaders, who seem to believe that their backing of President Obama warrants special favors for their declining membership base.  Anticipating that the White House may unilaterally accommodate the unions’ demands, Sen. Orrin Hatch (R–Utah) and Rep. Dave Camp (R–Mich.) urged Treasury secretary Jack Lew to “reverse course, treat all American workers fairly and comply with the law.”  Moreover, Sen. John Thune (R–S.D.) introduced legislation that would “make it abundantly clear” that premium subsidies cannot flow to Taft-Hartley plans. 

The fact that members of Congress had to remind the White House to follow its centerpiece legislation underscores the administration’s record of disregarding the law.

The unions have thus far been silent on the White House announcement rejecting their demand for preferential treatment, which itself is suspicious.  The sheer brazenness of their demand suggests that the unions' silence will not last forever.

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