Unions Tentatively Strike A Deal Regarding Excise Tax

Unions tentatively struck a deal Tuesday to exempt collectively bargained healthcare plans from a tax on high-cost plans expected to be used to help raise revenue for the healthcare overhaul.

AFL-CIO President Richard Trumka, Service Employees International Union President Andy Stern and United Auto Workers President Ron Gettelfinger met with House Speaker Pelosi Tuesday, a day after labor leaders met at the White House to express their opposition to the excise tax.

House and Senate Democratic leaders are to meet with President Obama this morning at the White House to discuss health care. House Ways and Means Chairman Charles Rangel said he hopes there could be an agreement on the excise tax as early as today after the White House meeting, but then conceded: "That's stretching the word `hope.' "

Exempting collectively bargained plans would appease unions that often offer expensive health plans in lieu of higher wages. The deal could also help Obama avoid breaking his promise not to tax those earning less than $200,000. Obama recently expressed a preference for the excise tax.

The excise tax could further be tweaked to ensure Obama's promise is kept for non-union workers as well.

Rep. Lynn Woolsey, D-Calif., said she plans to hold a briefing today to remind negotiators that CEOs of non-union companies also are against the tax.

Rep. Raul Grijalva, D-Ariz., co-chairman of the Congressional Progressive Caucus, said the deal was not enough to bring him on board to support the excise tax on high-cost plans.

"It's setting up a divide-and-conquer situation here where some people are going to feel they're paying for other people, and they're all working," Grijalva said. "That politically is possibly the most dangerous thing Democrats can do is create that division."

House Rules Chairwoman Louise Slaughter indicated leadership was already working on a compromise with the Senate on its excise tax language.

"Even before today when they all met, we were talking about some kind of way we can come to an agreement on changes and maybe somehow we can pay for it other ways," Slaughter said.

Leaders have discussed raising the threshold on the Senate's excise tax to affect higher cost plans -- and potentially make up the revenue gap with an expanded Medicare payroll tax, beyond what is already in the Senate overhaul bill, that could increase the rate and for the first time apply to investment income as well as wages.

Rep. Anthony Weiner, D-N.Y., said leadership has talked about an expanded Medicare payroll tax.

"But it was only mentioned in the context of these are some of the things that are on the table," he said. "And there was this evolving idea of making the tax only apply to non-earned income," such as dividends.

Slaughter said she did not expect to reach a deal on a final overhaul bill this month. "It will probably be February now when we get finished with it," she said.

Meanwhile, Republicans who say they are upset over the continuing closed-door nature of the talks are planning to file a discharge petition today to force a House vote on a resolution requiring public access to the House-Senate negotiations on the health reform bill.

The "Sunshine Resolution" was introduced by Rep. Vern Buchanan, R-Fla., in October. He and Minority Leader Boehner will file the petition.

"With so much at stake, any conference committee or meetings held to determine the content of sweeping national health care legislation should be held in full public view, not behind closed doors," Buchanan said in a statement Tuesday.