LOS ANGELES (YBH.ME) – On Friday White House Press Secretary Robert Gibbs defended Barack Obama’s $60 billion union carve out, saying that “we believe the agreement in the structure is fair.”
Robert Gibbs: $60 billion union giveaway is "fair."
It was announced late last week that the so-called “Cadillac” tax on comprehensive health plans would be deferred for union members and government employees until 2018, while regular private sector workers would be subject to the tax starting 2013. Conventional wisdom holds that once in place deferments of this type are difficult to expire.
Unions gave Barack Obama over $60 million during the 2008 election cycle.
Transcript of Robert Gibbs and ABC’s Jake Tapper discussing the union carve out:
Q If I can just follow up on a question I asked yesterday? Now that the details of the deal with the labor unions have been made public, why is it fair for individuals who have so-called Cadillac plans that have been negotiated through collective bargaining agreements to be exempt until 2018 from the proposed excise tax, whereas those who might be in the exact same situation but are not part of labor unions — even if they want to be and their company resisted, or many they’re in right-to-work states — why is it fair for one group to not get a tax and others to –
MR. GIBBS: I would say this. I’ve asked to see what numbers they can run. We’re talking about an exceedingly small number of people I think that the premise of your impact would impact.
Q It’s a big tax, though, 40 percent.
MR. GIBBS: Well, it’s a 40 percent tax on the insurance company for the excess of their policy over the threshold, right? So the new threshold is at $24,000, right? So –
Q But if it wasn’t a big deal, the labor unions wouldn’t have pushed so hard to be exempt from it until 2018.
MR. GIBBS: No, I understand. What I’m just — it’s not a 40 percent tax. It’s a 40 percent tax above a threshold on an insurance company, not on an individual or a family.
Q Well, I meant it’s not an inconsiderable tax.
MR. GIBBS: I would say that obviously there is — just like there is for the insurance fee, just as there are for fees on manufacturers and other businesses, there’s a phase-in for this fee over a five-year period of time, just as there is, again, on — the administration did not believe it made any sense to treat business and industry and insurance companies different than they treat workers.
Q Just to follow up on that, Robert, in terms of labor unions, the final negotiations seem to be basically the President, Democratic leaders, labor unions, in private rooms here at the White House negotiating. How does that square with the President’s promise to put these negotiations in public?
MR. GIBBS: We discussed this, I think, two weeks ago.
Q I know you discussed it before, but now we’re actually seeing it playing out. It’s basically labor unions saying, we want this, and there’s no other stakeholders at the table.
MR. GIBBS: Ed, again, I’d refer you to the transcript a couple weeks ago.
Later, another reporter picks up where Mr. Tapper leaves off:
Q I didn’t quite get your answer to Jake’s question. Are you — were you trying to suggest that union members did not get a special arrangement with this — with the health care deal that occurred, that they don’t get — that their plans don’t have a special benefit by delaying the tax until 2018?
MR. GIBBS: Well, only if you consider that — only if you think the insurance industry fee that phases in between 2011 and 2017.
I alluded to this yesterday, Keith. There are — as there are in a lot of big pieces of legislation, there’s a transition period for how things are done. There’s a fee on medical device manufacturers that is phased in over a seven-year period of time between 2011 and 2018. There’s an insurance fee that’s phased in on the insurance industry between 2011 and 2017. These plans — the tax also — there’s a phase-in period of five years for this tax, as well.
Q So you’re saying it’s comparable to what these other terms are.
MR. GIBBS: I’m saying we are treating workers just as industry, business and the insurance industry are being dealt with.
Yes.
Q Some workers — the union workers.
Q The ones that aren’t in the unions.
MR. GIBBS: Well, again, we discussed the very slim number of people that that would involve.
Q Aren’t all these essentially gifts by the President to special interest groups?
MR. GIBBS: No.
Q I mean, isn’t this — didn’t what we have in the White House was very typical negotiations with a special interest group, which is the unions –
MR. GIBBS: No. Keith, we have transition periods for how different things are treated in the bill. There’s a transition period in dealing with the insurance industry and in dealing with another — a number of phases that — of aspects that have to be phased in as a part of this bill.
Q So essentially now union officials got their pound of flesh, too, in the bill by acting as a special interest –
MR. GIBBS: If you have an answer to the question –
Q I mean, the President promised not to let special interests into the White House to influence legislation. Isn’t that what happened here?
MR. GIBBS: No.
Q The question is, is it fair that some are exempted and some are not, even if the number of those who are not exempted in those initial five years is a slim number?
MR. GIBBS: We believe the agreement is structured in a way that is fair, just as it is fair to other aspects of the bill that have to be phased in.
Opinion
Uniongate: The Straw That Broke Obama’s Mandate
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John Romano is the publisher Yes, But However!, the lead singer of the rock band The Sugarmen, a political correspondent for BBC Radio London and a and a serial web entrepreneur. Oh, and his nickname is Johnny Rome, has been for 15 years.
