Obama, Democrats Make Closed-Door Deal With Labor Unions on Final Health Care Bill

January 15, 2010 - 5:49 AM
Health talks in overdrive with Obama pushing
Nancy Pelosi

House Speaker Nancy Pelosi, D-Calif., speaks to reporters following the Democratic Leadership caucus retreat at the U.S. Capitol on Thursday, Jan. 14, 2010. (AP Photo/Pablo Martinez Monsivais)

Washington (AP) - President Barack Obama and congressional Democrats stand within days if not hours of striking final deals on historic health care legislation after key labor unions won concessions and pledged their support.
 
"We are on the doorstep of accomplishing something that Washington has been talking about since Teddy Roosevelt was president, and that is reforming health care and health insurance here in America," Obama told rank-and-file House Democrats on Thursday during a visit to the Capitol complex.
 
As he spoke, heads of the nation's leading labor unions were announcing a deal to resolve a highly contentious dispute over Obama's desire to tax high-cost insurance plans to help pay for the health legislation. Unions had objected strongly, saying union workers ultimately would pay the 40 percent levy, and House Democrats backed the unions.
 
But labor bowed to the White House demands after extracting agreements that would significantly soften the blow of the tax.
 
AFL-CIO President Richard Trumka said that, assuming the deal and other labor priorities hold, labor will be behind the final bill. "We will endorse it, and we'll do that proudly," he said.
 
With that, House Democrats appeared to be falling in line.
 
"The agreement with the unions has radically changed the politics on that issue," said Rep. Rob Andrews, D-N.J. "I think most members believe that the compromise will let us honor our promise not to tax middle-class people."
 
Dozens of issues still needed to be finalized to reconcile bills passed separately by the House and Senate, but several lawmakers said that in the wake of the deal on the insurance plan tax, they felt a logjam had been broken.
 
Racing to settle their remaining differences, House and Senate negotiators resumed marathon talks with Obama at the White House around 9 p.m. Thursday. The president left the Cabinet Room meeting shortly after 1 a.m. Friday and the session ended about 25 minutes later.
 
In a statement, the White House said "solid progress" was made toward a final package.
 
Lawmakers were aiming to reach agreement on core elements of the bill as early as Friday and dispatch a package to the Congressional Budget Office to evaluate, a necessary step before votes are cast.
 
"The president said he's going to stay as long as we need him," a weary Sen. Dick Durbin, D-Ill., said shortly before heading to the White House late Thursday. In recent days the pace has been intense.
 
Among the unsettled issues are how much Medicaid will be expanded -- the House-passed bill took it to 150 percent of the federal poverty level whereas the Senate bill increased it to 133 percent -- and the design of new purchasing marketplaces called exchanges where consumers will shop for and compare health plans that will have to meet government criteria. The House bill calls for national exchanges while the Senate takes a state-by-state approach, and negotiators were looking for a possible hybrid of the two.
 
The bills passed by the House and Senate before Christmas contain many similarities. Both would extend coverage to more than 30 million uninsured Americans over the next decade at a cost of about $1 trillion, with a new requirement for almost everyone to carry health insurance. They also would impose new requirements for employers and prohibit insurance companies from denying coverage because of pre-existing medical conditions. Lower-income people would get subsidies to help them buy insurance.
 
Democrats hope to reach a final compromise in time for Obama's State of the Union address, likely early next month. Once they do, they intend a vote first in the House, with a final showdown in the Senate. There, Majority Leader Harry Reid will need to corral 60 votes to clear the way for final passage.
 
The deal reached by unions and the White House would tax family insurance plans worth $24,000, up from the $23,000. The average employer-sponsored family plan cost $13,375 in 2009, according to the Kaiser Family Foundation. The deal also would delay the tax until 2018 for policies covering workers in collective bargaining agreements.
 
Trumka told reporters that beginning in 2017, all health plans -- union and nonunion -- would be permitted to seek coverage in the new insurance exchanges, but White House officials disputed that, saying the issue was not settled.
 
Originally, the high-value insurance plan tax included in the Senate bill was estimated to raise $149 billion through 2019. Trumka said the revisions would reduce that amount by $60 billion -- money that negotiators would have to find elsewhere or else reduce the coverage in the legislation.
 
Instead of the insurance plan tax, House Democrats had wanted to raise income taxes on people making over $500,000 a year and households over $1 million. Key Senate moderates balked at that, and Obama pushed for the tax on insurance plans instead, arguing it would help rein in spiraling health care costs by nudging workers into less pricey coverage.
 
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Associated Press writers David Espo, Sam Hananel, Ricardo Alonso-Zaldivar, Alan Fram and Andrew Taylor contributed to this report.