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Clinton Bows to Big Labor on Obamacare

Democratic frontrunner endorsed a major change to Obamacare backed by a large coalition of influential unions.

AP
• September 29, 2015 4:35 pm

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Hillary Clinton revealed her support for rolling back a steep tax increase on so-called Cadillac insurance plans that would have ensnared many benefit packages negotiated by labor groups. The New York Times reports:

Mrs. Clinton’s campaign aides informed Randi Weingarten, the president of the American Federation of Teachers, of her intentions in the last few days, according to a senior official with the labor group. The union made an early endorsement of Mrs. Clinton in July.

Many of the union’s members would be affected by the Cadillac tax, which imposes taxes on pricey employer-based coverage plans whose premiums exceed $10,200 a year for individuals and $27,500 for families. The tax is imposed on employers, who can avoid it by reducing benefits to their workers. Its purpose is to help rein in health care costs over all.

The so-called "Cadillac Tax" has been in big labor’s crosshairs for several years, and the Obama administration has delayed its implementation in the past. A coalition of unions, small business groups, and lawmakers of both parties have slammed the tax as "regressive." Terry O’Sullivan, president of Laborers International Union, went so far as to call for Obamacare’s repeal if the 40 percent tax were not lifted.

"This is not a tax on high end health plans. This tax will hit … middle and working class families," he said. "This tax is a kick in the face to every hardworking, blue collar, and middle class family in the country."

O’Sullivan has been an opponent of certain aspects of Obamacare since it passed. He told the 2013 AFL-CIO convention that "if the Affordable Care Act is not fixed and it destroys the health and welfare funds that we have all fought for and stand for, then I believe it needs to be repealed." He stuck by that statement on Tuesday.

"Yes, but I think it can be fixed," he said in response to a Washington Free Beacon inquiry about repealing the massive healthcare overhaul. "We’ve been frustrated by this entire process and its impact on the hardworking Americans that we represent."

The Clinton campaign has spent the last several weeks trying to woo big labor following the rise of Sen. Bernie Sanders (I., Vt.) and amid rumors about the prospective candidacy of Vice President Joe Biden, both of whom have traditionally enjoyed union support. While Clinton has secured early endorsements from six unions, three of the nation’s largest—AFL-CIO, Service Employers International Union, and the American Federation of State, County, and Municipal Employees—have delayed endorsements in order to better gauge their members about the quality of the field.

The tax is set to go into effect in 2018.