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Dems Enhance Cadillac Tax--Will Labor Unions Defect From Health Care Reform?

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Newscom

Why is that important? Because health care inflation is so high, insurance premiums tend to rise more quickly than CPI-plus-one-percent, meaning that, over time, more and more high-end plans would be subject to this tax. That results in major cost savings, but it also means more employer-provided benefits will be taxed as time goes on. Now that they've lowered the index to general CPI, the incidence (and the savings) will be even greater still.

That's part of the reason why AFL-CIO President Richard Trumka went to the White House yesterday for an unscheduled meeting, and why he's meeting with his AFL's executive council later today. However, this change is not expected to upend AFL's support for the legislation.

About The Author

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Brian Beutler is TPM's senior congressional reporter. Since 2009, he's led coverage of health care reform, Wall Street reform, taxes, the GOP budget, the government shutdown fight and the debt limit fight. He can be reached at brian@talkingpointsmemo.com