Grijalva On Exempting Union Health Benefits From Tax: Close, But Not Enough

This morning, I reported that leading labor officials and the White House had discussed the possibility of exempting collectively bargained health care benefits from a proposed tax on high-end insurance policies as a potential concession to secure union support for health care reform.

This evening, in an interview, Rep. Raul Grijalva–the influential co-chair of the Congressional Progressive Caucus–confirmed that the idea, though nascent, is indeed on the table. But though he believes the potential compromise is a step in the right direction, it’s still not enough to secure passage of a final bill in the House, where the so-called “Cadillac tax” remains extremely unpopular.

“Given the precedent of fire fighters and police, If there is a collectively bargained agreement on health care that that would be exempt: it’s a good step, but it still does not deal with the reality [that] we’re dealing with,” Grijalva told me. “As much as it’s an important gesture to labor, particularly the trades, it continues to be a problem about: [number one] how you’re going to administer that…number two I still think we’re still dealing with a fundamental problem of creating a real class conflict here between those people that are having to pay, through their taxes, health benefits for those people that have none.”There are other potential fixes on the table to, including raising the threshold on the tax, so it only covers really expensive policies, and indexing the tax to health care inflation, so it doesn’t ensnare more middle-class people over time. That would have to be paired with new funding sources to make up for lost revenue, and Democrats are currently considering a number ways to raise the money.

Grijalva says a combination of all the changes on the table could be enough to win his vote. But without those changes, he won’t support it, and he says it will be “hard, if not impossible,” for the bill to pass in the House.

“At this point, if we’re dealing with what we have in front of us, I’m not convinced this is history moving forward,” Grijalva told me. “Given the scenario you’ve just outlined, then perhaps it is a step toward history and many of us would be more inclined.”

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