A congressional compromise will postpone implementation of Obamacare’s so-called Cadillac tax for two years thanks to a rare bipartisan push during negotiations for a year-end budget and tax package that passed on Dec. 18.
The reprieve, which delays collection of the tax on high-cost health plans until 2020, was supported by a broad coalition ranging from unions–including the IBEW–to the U.S. Chamber of Commerce.
As written, the Cadillac tax is one of the funding and cost-control mechanisms for Obamacare, setting limits of $10,200 per individual and $27,500 per family on the costs of health care plans before applying an onerous 40 percent excise tax on benefits that exceed them.
Proponents, including the White House, argued that limiting the use of such high-cost plans was the only effective way to curb overuse of the health care system, but union families who have been sacrificing wage increases in favor of better health care for years will be disproportionately affected.
“Delaying the Cadillac tax was an important victory for our members,” said International President Lonnie R. Stephenson, “but it’s just the first step. We’re going to continue to work toward the elimination of this tax so our members can keep the benefits they’ve worked so hard to earn.”
Earlier in December, members of the Senate showed overwhelming support for a full repeal of the tax, but with a veto threat from the president, a two-year delay was the best outcome available to lawmakers.
Also making it into the spending bill was a long-delayed permanent fix to expand and fund aid for 9/11 first responders and construction workers who were among the early clean-up crews at ground zero in lower Manhattan. A large number of those workers, many of whom are union members, fell seriously ill as a result of their time spent inhaling toxic substances in the wake of the attack.
Just as important to working people, however, were some of the items not included in the nearly $2 trillion budget and tax package.
Two proposals aimed at labor failed to make it into either bill: one that attempted to roll back the National Labor Relations Board’s August decision imposing new joint employer standards, and another that attempted to undo a proposed Department of Labor fiduciary rule that would require stricter standards for retirement plan investment advisors.
The joint employer ruling was particularly important to temporary or fast food workers, who will be able to negotiate not just with individual staffing agencies or franchise owners, but with their much larger corporate organizations like McDonalds or Amazon.
A third proposal also failed to make it into either of the final bills that would have spelled trouble for the massive Clean Lines energy project on the verge of approval in the Midwest. The 700-mile high voltage transmission line aims to move abundant wind power on the Great Plains to major load centers on the East Coast, creating many IBEW jobs in the process.
As with any compromise, however, not all news was good news when the final details of the deal became public.
House Democratic leaders expressed disappointment with the inclusion of a controversial giveaway to big oil in the tax portion of the package. The repeal of the 40-year-old crude oil export ban, which the IBEW opposed, found its way into the final text thanks to a concerted effort from Senate Majority Leader Mitch McConnell.
The repeal of the export ban could have a disastrous effect on American oil refining, an industry that employs thousands of IBEW members. Minority Leader Nancy Pelosi called the provision “immoral” and Democratic Whip Steny Hoyer said Democrats “ought to reject” the tax package, calling it “extraordinarily irresponsible.”
The spending portion of the deal also included a massive expansion of the H-2B guest worker program, which allows companies to import low-skill foreign workers for temporary or seasonal work in agriculture, landscaping, restaurants and the travel industry, to name a few. The provision, sponsored by Maryland Democrat Barbara Mikulski on behalf of her state’s seafood industry and opposed by unions, would quadruple the number of visas for such workers in 2016. A recent Buzzfeed News investigation revealed the myriad problems with the program, which kills American jobs and often leads to the mistreatment of foreign workers.
Nevertheless, both bills sailed through Congress before lawmakers left town for an extended holiday break. President Obama admitted, “I’m not wild about everything that’s in it,” but indicated he would sign the two-part package into law before departing Washington for his annual Christmas trip home to Hawaii.
Photo used under a Creative Commons license from Flickr user Ron Cogswell.