It looks like the White House’s fragile alliance with labor unions for the health care bill is breaking apart.  The Communications Workers of America (CWA) has led the charge against the tax employer health care plans (aka Chevy Tax).  Now CWA is engaging in an open spat with the White House’s recent defense of the excise tax on its blog.

On the White House blog yesterday, Jason Furman promoted the Chevy Tax as a provision that workers should support, claiming it will result in a wage increase.

First, the health insurance reform bill being considered in the Senate does not raise taxes on families making less than $250,000 – in fact it is a substantial net tax cut for American families. The bill being considered represents a substantial net tax cut for middle income families. According to the independent Joint Committee on Taxation, the bill will provide nearly $450 billion in individual income tax cuts over the next 10 years.

Second, the excise tax levied on insurance companies for high-premium plans, the so-called “Cadillac tax,” will affect only a small portion of the very highest cost health plans – a total of 3% of premiums in 2013. The vast majority of health plans fall below the thresholds set in the Senate plan and would be completely unaffected by the provision. And those that are above the threshold would only face an excise tax on the generally small portion of the plan that exceeds the threshold. As a result, based on analyses by the Joint Committee on Taxation, only about 3% of premiums will be affected by this provision in 2013. In addition, the Senate plan provides special protections to plans held by workers in high-risk professions – like police and firefighters – as well as by those over 55.

    CWA is having none of it.  The union countered with its own report that the Chevy tax will affect a full quarter of health care plans, resulting in thousands of dollars in new taxes on middle class families.

    The CWA report tells a different story than a Dec. 16 White House blog posting by Jason Furman, Deputy Director of the National Economic Council.

    In fact, the new information from the Joint Committee on Taxation cited in the report shows that the tax will:

    * Affect 19 percent of workers with employer-sponsored health coverage in 2016;
    * Affect nearly 25 million households in 2019, including one-fifth of middle-class households making between $50,000 and $75,000;
    * Affect about 25 percent of health plans by 2019;
    * Cost affected households an additional $7,500 in taxes on average between 2013 and 2019, or more than $1,000 a year;
    * In 2019, cost affected taxpayers who are millionaires an extra $2,600 in taxes and those making between $50,000 to $75,000 an extra $1,100 in taxes, but the wealthy taxpayers’ income will be at least 13 to 20 times greater; and
    * Be a tax increase of 0.1 percent of income for those households affected that make more than $1 million a year and be a tax increase of 1.4 percent for those households affected that make $50,000 to $75,000.
    “This new data demonstrates irrefutably that the excise tax – which will result in reduced coverage and increased costs for our middle class families – is the opposite of reform,” said Larry Cohen, CWA President. “There are other options for funding reform, such as those in the House version of bill, which do not place the burden on middle class Americans. This new data shows that the excise tax is not one of them.”

    In another salvo from CWA on the Chevy tax, CWA and IBEW formed an unusual alliance yesterday with AT&T and Verizon to speak out against how the Senate bill pays for reform: on the backs of working people.

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