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EDITORIAL: Obama’s $59 billion giveaway to unions

- The Washington Times - Monday, January 18, 2010

Democrats didn't learn their lesson from the public outrage over vote buying. Sen. Ben Nelson, Nebraska Democrat, and Sen. Mary Landrieu, Louisiana Democrat, are still reeling from fallout over the hundreds of millions their states will get for a deal to buy their votes for the government health care takeover. If $400 million for those two senators generates so much anger, public outcry over a $59 billion special deal President Obama cut with unions on Thursday should be deafening.

Repeatedly throughout his presidential campaign, Mr. Obama promised that health care negotiations would be carried on C-SPAN precisely to prevent these types of special-interest favors. There is no logical public policy justification for why union workers should be exempt from paying the 40 percent tax on individual health insurance plans that cost $8,900 or more until 2018 when everyone else with the same insurance must pay the tax. Non-unionized American workers, who pay higher insurance simply because of existing health problems - or because they live in high-cost places such as New York, Los Angeles, Chicago or Miami - are not going to be so fortunate.

It is unconscionable that $59 billion will be extracted from taxpayers and others to subsidize labor unions. The Obama administration and Congress are now planning on taking $15 billion more from hospitals and $10 billion more from pharmaceutical makers to cover part of this fortune. But there is no reason hospital and drug costs should go up to subsidize unions.

This transfer of wealth to unions has become part of a pattern. Over the last year, the unions have been given a long string of massive wealth transfers. Take the government forcing GM and Chrysler bondholders to forfeit their legal right to be the lead creditors so that auto unions could get large shareholdings in both companies through bankruptcy. Similarly, the stimulus package placed all sorts of restrictions on how the money could be spent, requiring that much of the spending go only to unionized workers.

In 2008, one of Mr. Obama's most highly used campaign TV ads relentlessly attacked Republican candidate John McCain's proposal to tax health insurance benefits provided by companies to employees. It was an unfair attack. Mr. McCain's proposed elimination of employer deductibility for health insurance was merely being replaced with individual tax credits. Mr. Obama's taxes aren't offset by any such credits.

Mr. Obama is struggling with record-low approval ratings. The president should understand that legislation shouldn't get passed simply because lawmakers and some interest groups can be purchased with billions in taxpayer funds. If the president has to pay that much to buy critical votes, his policies don't have the genuine support of the people. Eventually, Democrats will pay a price for that.