Obviously, the excise tax deal by which collectively bargaining health benefits get a special two-year exemption from the tax is a bit of a grubby interest-group compromise. Igor Volsky offers a case on the merits, but I think it’s clear enough that the merits weren’t the driving consideration here. So it is what it is. The main point is that the long- and medium-term cost-control potential of this move is 100 percent intact and the revenue needed to expand health insurance coverage to millions of additional people will still be raised.
That’s an extraordinary achievement. Throughout this process there’s been a certain fashionable cynicism about the idea that you can simultaneously control the growth of costs while expanding access to health care. But for all the thousands of provisions that this reform bill contains, nothing meets that objective in nearly as clear a way as phasing out the special tax subsidy for health insurance companies and using the funds thereby raised to provide insurance to working and lower middle class families. It’s a great idea.
But cynicism never ceased, Megan McArdle:
And so it looks like they may have reached a deal sooner than otherwise expected: unions get a special two-year exclusion from the tax.
Presumably, the unions plan to go back and get their exclusion extended every few years.
Ha ha ha — cynical, lying Obama administration, only pretending to implement a tough cost-control measure that serves the national interest even though neither unions nor insurance companies like it.
Tyler Cowen links to McArdle and adds:
Here is more detail. I suppose that would increase the rate of unionization…and increase union support for Democratic candidates, a win-win, no?
But look. Other than some kind of principle holding “if Barack Obama is doing it, it must be secretly bad” this is totally insane. How on earth are the unions supposed to get this extended every two years? Is the view that the GOP will never have a majority in the House or the Senate or control of the White House? Is the idea that the anti-union Democrats who killed the Employee Free Choice Act will have a conversion on the road to Damascus? Perhaps all sixty of the Democratic Senators who voted in favor of a version of this tax that did no favors to the unions whatsoever all had their fingers crossed behind their backs when they did this? In a system with as many veto points as we have in the United States, default rules matter. A lot.