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Obamacare Full of Favors for Big Labor

Posted By James Sherk On January 14, 2010 @ 8:09 am In Economics | Comments Disabled

Teamsters General President James Hoffa, left, UAW President Ron Gettelfinger, flank President Barack Obama

Candidate Obama campaigned as a fierce opponent of special interests that use their clout and connections to secure special favors from the government. As President, Obama has made it clear that he only objected to particular special interests getting handouts. Obama happily gives some liberal special interests loopholes and exemptions from the laws that affect everyone else.

The closed-door negotiations over the health care bill have made this clear. Unions strongly objected to the excise tax on “Cadillac” health plans. By some estimates the tax would hit one in four union members [1]. Union lobbyists pressured the White House to drop that tax. After a high-profile meeting between Obama and union lobbyists on Monday, the unions apparently have gotten what they asked for: the excise tax will not apply to collectively bargained health plans [2]. The tax that unions found so onerous will now apply to everyone but them.

What a deal. Unions want the health care spending, but they do not want to pay for it. Obama gave them just that. It also makes for a great recruiting pitch: join a union, get a tax cut.

That is just one of the many handouts unions get in the health care bill. It sets aside $5 billion to subsidize the costs of employer health benefits for early retirees. Few nonunion employers, of course, pay pension and health benefits for workers to retire at 55.

Or consider the small business exemption from the employer mandate for businesses with less than 50 employees. All businesses, that is, except construction companies. The costly employer mandate applies to any construction firm with more than four workers. Why would Congress kick small construction contractors when they are down? Because the construction unions asked Congress to [3]. They did not want their small competitors to get out from under the bill’s costs and gain a competitive advantage. What if those costs put small contractors out of business? That is just too bad.

Obama’s handouts for unions go beyond the health care bill:

• All that federal spending on public works construction projects? The President’s Executive Order on Project Labor Agreements reserves most of those jobs for union members.
• The Detroit bailout was bad policy in its own right. Now the pensions of union retirees at GM subsidiaries will get generous taxpayer top-ups [4] to prevent benefit cuts. The pension plans of nonunion retirees, however, will not get a cent.
• The law requires unions to partner with federal “green job” training programs. Union members will stand first in line [5] for the “green jobs” Obama talks about creating.

Time and again this administration has given unions privileges denied to other Americans. Perhaps this should not surprise. Organized Labor spent hundreds of millions of dollars electing President Obama and the current Congress. Now the President has given them a healthy return on their investment. Isn’t that the way Washington works?

It should not. Congress should write laws that apply equally to all citizens to promote the common good – not to pay off political constituencies. Obama promised to change politics as usual. We’re waiting to see if he’ll do that.


Article printed from The Foundry: Conservative Policy News from The Heritage Foundation: http://blog.heritage.org

URL to article: http://blog.heritage.org/2010/01/14/obamacare-full-of-favors-for-big-labor/

URLs in this post:

[1] one in four union members: http://www.nytimes.com/2010/01/09/business/09union.html

[2] the excise tax will not apply to collectively bargained health plans: http://www.washingtonexaminer.com/opinion/blogs/beltway-confidential/Unions-struck-a-deal-to-exempt-them-from-cadillac-tax-funding-health-care-reform-81354767.html

[3] Because the construction unions asked Congress to: http://www.foundry.org/2010/01/06/unions-using-obamacare-to-punish-small-business/

[4] generous taxpayer top-ups: http://www.nytimes.com/2009/10/27/business/27delphi.html?_r=4&partner=rssnyt&emc=rss

[5] Union members will stand first in line: http://www.law.cornell.edu/uscode/html/uscode29/usc_sec_29_00002916----000-.html

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