AFL-CIO Head Urges Paying For Health Care With Tax On Rich

By Corey Boles

WASHINGTON (Dow Jones)--The head of the largest group of U.S. labor unions urged congressional lawmakers to support an excise tax on the rich to pay for sweeping health-care legislation, saying that a tax on generous health-care plans would "drive a wedge between the middle class and the poor."

Richard Trumka, president of the AFL-CIO, said in a speech Monday that lawmakers should implement the proposed payment method outlined in the House version of the health-care bill, rather than that in the Senate version that would tax so-called "cadillac" health-care insurance plans.

"The tax on benefits in the Senate bill pits working Americans who need health care for their families against working Americans struggling to keep health care for their families," he said. "This is a policy designed to benefit elites."

Trumka spoke at the National Press Club in Washington D.C., shortly before he went to the White House for a meeting with President Barack Obama. He said he would raise his concerns at that meeting.

Toward the end of his remarks, Trumka was cut off by the moderator of the panel, USA Today reporter Donna Leinwand, after he ran over the allotted time.

The White House has said it favors a tax on generous health-care insurance plans to pay for the expansion in care.

Labor unions oppose the proposed Senate tax for the health-care overhaul because they say many of their members, who have traded higher wages for more comprehensive benefits packages, would be penalized by it.

Trumka said the labor movement would continue fighting for the House version of the legislation until a bill is signed into law. The House bill would levy a surtax on couples with incomes of $1 million a year or more and individuals with incomes of $500,000 or more.

House and Senate Democratic lawmakers are locked in negotiations over their differing versions of the health-care bill. One of the key differences is how to pay for the several-hundred-billion-dollar measure to extend health-care insurance to people who can't currently afford it.

Trumka also called on lawmakers to create an independent consumer financial regulatory body as part of an ongoing overhaul of the regulatory framework for the industry. The effort to redesign the regulatory landscape of the financial system is held up in the Senate where lawmakers are trying to reach a compromise on how to proceed.

The question of whether to create a new agency with a specific mandate to protect consumers is one of the major outstanding issues in those talks.

He also said Congress should impose a tax on financial transactions to fund federal government efforts to create jobs in the private sector. This proposal appears to have largely fallen out of favor in Congress, not least because it could lead to a competitive disadvantage for U.S. financial firms, unless the levy was implemented by other countries as well.

Trumka predicted that legislation allowing workers to organize labor unions more easily, dubbed "card check," would be passed in the first quarter of 2010.

The bill has been one of the highest priorities of the labor movement under the Obama administration. It has been stalled in Congress because it isn't clear that it has enough support in the Senate.