Embedded With Organized Labor:: The Poison Pill In “ObamaCare” That Helped Kill Labor Law Reform

Embedded With Organized Labor:: The Poison Pill In “ObamaCare” That Helped Kill Labor Law Reform

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Abstract:
Embedded in the Patient Protection and Affordable Care Act of 2010 was a poison pill for labor. It took the form of an excise tax on higher-cost, job-based medical coverage—the so-called “Cadillac health plans” negotiated by unions themselves. This deadly political booby-trap became a major organizational distraction and resource drain during a key phase of labor's health-care campaign. Instead of mounting a broad fight for expanded social insurance, unions were forced to wage a frantic defensive struggle against taxation of worker benefits. The “Cadillac tax” backed by Barack Obama was so redolent of John McCain's own stance on health care during the 2008 presidential campaign that it produced a “working class revolt” in Massachusetts. There, a Republican opposed to the excise tax defeated the Democratic Senatorial candidate running for the late Ted Kennedy's seat in January 2010. When the Democrats' lost their filibuster-proof “super-majority” in the Senate, the already controversial Employee Free Choice Act (EFCA) became the first political casualty of “ObamaCare.”


In 2008, organized labor spent more than US$300 million electing Barack Obama and other Democrats in a costly bid to end eight years of Republican rule that was extremely damaging to workers.1 The Service Employees International Union (SEIU) was the largest single financial contributor to this multi-union campaign, reinforcing its claim to have “the most effective political program of any international union.”2 By election day, more than US$85 million SEIU dollars (including 20% of the national union's total budget) had been poured into electoral politics. Thousands of AFL-CIO and Change To Win union volunteers and staffers were deployed in key “battleground states” to help Obama defeat John McCain, an Arizona Republican who backed right-to-work laws and other anti-union measures. The potential gain justifying this huge investment of union resources was Obama's commitment to “taking up the two top items on labor's agenda—legislation to make it easier for unions to organize workers, known as the Employee Free Choice Act (EFCA) and health care reform.”3 Few knew at the time how fatally entangled these two priorities would become.