Why Do So Many Shady Senators Want To Tax Working Families?

Remember when Democratic Senate Whip Dick Durbin said aloud what no one is supposed to even whisper-- that the banksters own the Senate? He wasn't using poetic license. So it shouldn't surprise anyone that when the Senate took up the House-passed healthcare reform legislation, one of the first things they've tried to do is take the financial burden off the very wealthy and put it onto the backs of the working middle class. The Republicans know they can always count on the worst of the corrupt DLC corporate lackeys like Tom Carper, Joe Lieberman, Blanche Lincoln, Ben Nelson, Mary Landrieu... that merry band of status quo defenders, when it comes to screwing over working families, especially if they can do it with a tiny cloak of subtlety.

In the case of the excise tax conservative are trying to use to pay for healthcare reform, the cloak is kind of threadbare. What they're trying to foist on the public as a tax on "Cadillac plans" for super-wealthy corporate executives is just a simple rip off of working families. It would impose a 40% tax on any benefits whose average costs exceeds $23,000 for a family-- $8,500 for an individual-- and that 40% would be imposed on the amount above the limit. It's a duplicitous way for the millionaires in the Senate-- most senators are millionaires and have no empathy for working men and women-- to raise $150 billion to look fiscally conservative without forcing their own class to pick up the tab. Like I said, the House bill includes a surtax on rich people; many in the Senate would rather tax working Americans. I reached out to a cross-section of Democrats running for Congress to get an outside the Beltway perspective on this.

I started with a former state senator from Savannah, Regina Thomas, who's running against Blue Dog and corporate shill John Barrow, who opposes healthcare reform and voted against it in committee and on the floor of the House-- although he did vote yes to one provision: the anti-choice Stupak Amendment. Regina has been stewing over the excise tax provision and when I asked her about it she was ready. "So these United States senators are looking to impose a 40% excise tax on $23,000 worth of benefits for a family... and they call that a "Cadillac plan" for the rich? It's working families they're taking this money from, people wit health problems who can least afford this kind of tax. These are the very Americans reform is supposed to help!

"We the people remember how the Government bailed out Big Business, after so many of their employees lost their 401K savings, their benefits and their Health Care. When will those senators think about bailing out the working poor, the backbone of our country-- the same people that this country and its principles were founded on, on the backs of men and women working hard to set aside something for their "golden years." With provisions like this the Senate is floating there will be no golden years. The sad part about this is-- if it remains in the Senate bill, which looks likely-- the House would have to try and change it in conference."
 
That's reason why working class districts like GA-12 should stop buying into slippery hucksters like Barrow-- another multimillionaire-- and start electing people who really represent their interests, like Regina. Straight across the country from Savannah, on the opposite coast, is California's 36th CD, where another working family heroine, Marcy Winograd, is running against the single richest member of the House, another Blue Dog, Jane Harman. Marcy, a longtime single-payer activist, has also been very worried about this provision and, like Regina, she hit the name right on the head:

The Senate's proposed tax on so-called "Cadillac health plans" is another move in the wrong direction if we want to rebuild the middle class. Since one of the overall purposes of health care reform should be to make access to a decent standard of living easier for all Americans, those who have achieved that level through the auspices of collective bargaining-- itself under dire threat in this country even in this modern age-- should not be disadvantaged or penalized because of the exercise of that right, with all the sacrifices that entails. I hope the Senate will reject this element of the bill as it moves through the process.

In fact, every candidate I spoke to in southern California was on the same page as Marcy. Up against David Dreier, L.A.'s absentee millionaire congressman from Kansas City, Russ Warner is urging Congress to focus on what the reforms are all about, "Amid all the debate over the details about healthcare reform," he told us, "our elected leaders must continually remind themselves of our mutual goal-- expanding access to affordable, quality healthcare for the American people. Any proposals that onerously shift the financial burden onto the middle class and working poor are unacceptable."

Bill Hedrick, running against the equally reprehensible GOP corporate shill, Ken Calvert, reminds us that the consequences of this bill will fall squarely on the families least able to afford it: "Just as the poorly designed Alternative Minimum Tax-- designed to tax the very wealthy-- now batters the middle class, I believe the excise tax on health care, as proposed, will hit the hard-won benefits of many working families. The excise tax must be scrapped."

Further south, Francine Busby, opposing ex-lobbyist Brian Bilbray in northern San Diego County, has already been campaigning on this theme. She told us she opposes "the Senate plan to tax benefits plans that often affect working and middle class families. In my discussions with teachers and firefighters it was clear that they had given up higher pay and other benefits to make sure that their families had the health insurance coverage that they needed. Taxing the health insurance benefits of middle class families is not an acceptable solution to lowering our nation's healthcare costs."

We also spoke with two Democrats running in pretty red districts, Joshua Segall in eastern Alabama and Doug Tudor in central Florida. Josh is up against a die-hard reactionary, Mike Rogers, who has always exclusively represented rich people and ignored ordinary working families. Josh's take on this, like most Democrats, is to point out that the whole reason behind healthcare reform is to assist hard-pressed working families. "There are a lot of people in this country who don't make a lot of money but part of their compensation is a better than average health plan. We shouldn't place a higher burden on these people, most of whom are teachers and blue collar workers. I don't remember the President campaigning on a middle class tax increase. The Wall Street bailout and this tax increase are bad for the middle class and make for bad economic policy." And Doug Tudor is right on the same page:

I am so disappointed in the Democratic-majority Senate’s continual pandering to the few senators who represent less than 1% of America’s population. Senator Max Baucus (DINO-MT) proposes to tax the working class health plans negotiated by our friends in Labor, even though the unions made painful concessions in wages and retirement options in order to get those health plans. He instead should immediately repeal the Bush-era tax cuts, return to the Clinton-era tax rates, and take a long, hard look at Roosevelt-era price controls. While he is at it, he should read Conyers/Kucinich HR 676, which would show him the way to true healthcare reform which provides better access, more efficient service, and universal coverage, while lowering costs along the way. If we could replace special-interest money with moral courage, we would have had single-payer healthcare decades ago, bringing us in line with the rest of the civilized world.

Help defeat Blue Dogs and replace them with progressive Democrats like Regina Thomas, Marcy Winograd and Doug Tudor.

The part of the country where this excise tax will probably be most destructive is in the Midwest-- economically hardest hit by Republican/Blue Dog trade policies that shipped manufacturing jobs overseas but with hard-won healthcare for union members. We spoke with two progressives running to replace Republicans in the Midwest, Jennifer Brunner, in Ohio's senate race, and Natalie Mosher, running in Michigan's 11th CD. Natalie doesn't miss a beat in explaining how important it is for the Senate to not impose this kind of tax on working families and how integral an issue it is for American recovery:

Proposals to tax health care premiums described as "Cadillac plans" distract us from the need to reform both our health care system and the health care insurance industry in the U.S.  We Americans have the means and ingenuity to make our health care system the greatest in the world.

Taxing health care benefits would encourage employers to scale back coverage in order to lower premiums. This wouldn't guarantee a decrease in premiums. Middle class families, like those in MI-11, will be hit hard under such a proposal. This should not be our desired outcome.

Many Michigan workers have agreed to salary cuts in order to retain health benefits. They should not be forced to sacrifice again. Similarly, Americans approaching retirement age will be hit by the tax because insurers automatically increase premiums as a policy holder grows older. Likewise, some Americans pay higher premiums just because they are no longer eligible for group rates, unlucky enough to be sick, or live in a uncompetitive market.

Americans would be served better by caps on insurance industry profits and premiums. Members of Congress who think raising taxes on middle-class Americans is a good idea should return to their districts and listen to their constituents. They are sacrificing day after day while Wall Street executives get Rolls Royce bonuses and the Pentagon continues to hand out even more Mazarati gold-plated no-bid contracts to those supplying the Iraq and Afghanistan Wars.

Jennifer is seeking to get right into the heart of the beast, where she would be working with Sherrod Brown to put a stop to this kind of unfair attack on the middle class. She understands how devastating a blow this would be for working families in Ohio:

Many union members and their families have agreed to wage and pay concessions in exchange for valuable health care benefits or to stave off decreases in those benefits. They have already “paid” for maintaining what should be a right to health care for themselves and their families. The bill should call for allowing people with existing health plans to keep them, period. By increasing the pool of insureds and improving preventive care, lower health care costs will be achieved and public dollars will be saved. In Ohio this has already been demonstrated in plans such as FrontPath Health Coalition in the Toledo, Ohio, area, a business and labor coalition that is a member-managed, community-based provider network that has undertaken preventive health initiatives. FrontPath provides a nurse practitioner at local union halls and incentives to members for undertaking preventive and cost saving measures in their health care. The excise tax is cheap political cover that will hurt Main Street Americans in the heartland and must be avoided. It creates just one more reason for stalemate on health care reform and can’t come soon enough.