Politics Daily looks at the effects of the so-called “Cadillac tax” included in the Senate health care bill. Originally intended as a way to finance reform by taxing the type of expensive benefit plans enjoyed by Wall Street executives, studies show it would hit a lot of middle-class Americans — and likely result in drastic cuts to health benefits.

Beth Umland, the research director for the Mercer employee benefits consulting firm which released a widely-read study on this tax last week, says the impact would be felt across the board.

“Plans that trigger the excise tax are not necessarily generous plans,” she said. “Small employers offer significantly less-generous plans than large employers, but just as many small employers are going to trigger the tax.” Plans for workers in dangerous professions, like steelworkers, also have higher-cost plans because they experience more work-related health problems.

Unlike the Senate bill, the plan passed by the House pays for health reform with a surtax on people making more than $500,000, and House Democrats like Rep. Joe Courtney (D-CT) are determined to remove the Cadillac tax when the legislation goes to conference committee.

A senior Democratic House aide said this week that the choice by the Senate to pay for health care reform with an excise tax that could hit middle-class workers, as opposed to the choice of the House to tax the highest earners, represents a fundamental philosophical difference between the two chambers that could endanger the entire bill if it is a part of the final conference report.

“It would be a mistake to assume that we’re just going to rubber-stamp what the Senate sends us,” Courtney said. “All of us are going to be on the ballot in 2010. It certainly raises a big, red flag for people who are going out be campaigning soon.”

Read the full story.

During recent debate on the Senate floor, Senate GOP Leader Mitch McConnell (R-KY) said he had “not met one” person in his state who supports health care reform. He has now.

Dozens of local citizens gathered at Sen. McConnell’s Louisville office on Friday to deliver a petition with the names of over 1,000 Kentuckians with a simple message for the Obstructionist-in-Chief:

“Hey Mitch McConnell, I’m from Kentucky and I support health reform that gives us quality, affordable health care with the choice of a public health insurance option.”

Watch media coverage below from WDRB (FOX):

WLKY (CBS):

During a speech at the Brookings Institute Tuesday morning, President Barack Obama made it clear that restoring job growth and putting people back to work continues to be a top priority of his administration.

AFSCME President Gerald W. McEntee praised the plan:

“President Obama set out a bold initiative today to put Americans back to work. The President outlined an ambitious plan to build on the proven success of the American Recovery and Reinvestment Act to protect and create jobs and build a strong and vibrant economy. President Obama understands that the loss of a job is more than a statistic, it is a human tragedy. That is why his commitment to extending unemployment and health insurance for those who are out-of-work is so important. I was also pleased to hear the President’s commitment to ensure that state and local governments get the help they need to save the jobs of workers who are providing essential public services during this deep economic crisis. We will be working to help President Obama win this crucial fight for America’s families and communities.”

Among Obama’s proposals:

• Extending relief to those hit hardest by the economic crisis, including unemployment insurance and COBRA benefits.
• Incentives to homeowners to invest in energy efficiency for their homes.
• Incentives to small businesses to help them hire new workers, as well as using funds from the Troubled Asset Relief Programs (TARP) to increase lending to small businesses.
• Aid to states ands localities to help them provide needed services.
• Boosting funding to infrastructure projects, including rail, water systems, broadband networks, clean energy projects and bridges.

Read the full text of President Obama’s remarks.

Lovie Morant (right) listens as nurse Suzanne Delaney talks about health care reform. (Henrietta Wildsmith/The Shreveport Times)

Wearing medical scrubs with the slogan, “House Calls for Health Care,” AFSCME nurses took the case for real health care reform directly to the people of Arkansas, Connecticut, Indiana, Louisiana, Nebraska, and North Dakota over the weekend.

The nurses went door-to-door to encourage people to contact their senators in support of reform that would lower health care costs, expand coverage and keep the insurance companies honest.

AFSCME nurses have been leading the charge for health care reform this year. In addition to last weekend’s door-to-door effort, nurses also previously visited neighborhoods in Delaware, Maine and Ohio. They also starred in ads highlighting the desperate need nurses see for health care reform, as they serve on the front-lines of the health care crisis each day.

Check out some coverage from this weekend:

Arkansas

Local 965 University Union Voice: AFSCME Nurses Rally for Reform

KNWA News (video): Nurses Uniting for a Common Cause

Louisiana

The Shreveport Times: Shreveporters Sign Health Care Reform Petition

The AFL-CIO has launched a new TV ad that sends a clear message: “Pass Health Care. Don’t Tax Health Benefits.” The ad, which started running in key markets around the country over the weekend, emphasizes that taxing benefits will lead companies to cut benefits and will shift cost burdens to families that can’t afford it. It urges Congress to pass health care reform all Americans can afford.

The Senate’s health care bill would set a tax on health plans worth more than $8,500 per year for individuals and $23,000 per year for families. For workers in high-risk occupations, for retirees 55 or older and for residents in the 17 highest-cost states, the bill would tax plans worth more than $9,850 for individuals and $26,000 for families.

This would amount to an enormous tax on workers’ health care benefits, one that would grow rapidly, as insurers increase premiums by an equivalent amount. It would shift health care costs onto the backs of workers—including many of the most vulnerable workers—without bringing down the cost of health care.

Read more on the AFL-CIO blog.

An independent study released this week finds that the excise tax on higher-cost health plans would adversely impact the middle class by shifting more costs to workers.

Nearly two-thirds of employers say they would make changes to their employees’ health coverage to avoid the so-called “Cadillac tax” included in the Senate bill, taking steps like these:

• 75 percent would raise deductibles or copayments to bring down premium costs.
• 40 percent would add a lower cost health plan as an alternative.
• 19 percent would terminate employer contributions to health or flexible savings accounts.

Another 23 percent of employers say they would maintain current coverage but pass the costs of the tax along to their employees.

Read the complete study on the Kaiser Health News website.

Across the country this holiday season, Main Street is being starved while Ebenezer Scrooge and his Wall Street friends are feasting.

Just a year after our economy plunged to terrifying depths, the financial tycoons who caused the crash are reaping enormous wealth as a result. They are receiving extraordinary bonuses as 10.2% of Americans are unemployed, states are being forced to cut critical services and 8.1 million homes are at high risk of foreclosure.

David Weidner at MarketWatch just released a devastating list of facts and figures contrasting those who are starving with those who are feasting this season. Here are a few lines (check out the whole thing):

• Wall Street bonus pool estimate for 2009: $140 billion
• Combined budget deficit estimate for 50 states in 2010: $142 billion (Read this blog post on Wall Street bonuses.)
• Average bonus at Goldman Sachs Group Inc. (NYSE:GS): $550,000
• U.S. median income: $50,740
• Total bailout funds committed by the U.S. government and Federal Reserve to Wall Street and auto industry: $1.1 trillion
• Cash committed to helping homeowners refinance mortgages under the Making Home Affordable act: $50 billion
• Number of mortgages that are eligible to be modified by Bank of America: 990,628
• Total mortgages eligible for modifications actually modified by B. of A. through Nov. 10: 136,994
• Number of bank lobbyists in Washington: 2,370
• Amount spent by financial industry lobbyists this year through Oct. 26: $334 million

At this critical time in our nation’s economy it is unacceptable for Wall Street to grow richer because of a problem they caused and we all sacrificed to fix. We know exactly who deserves to get coal in their stockings this Christmas.

As state and local governments slice and dice their budgets – making mincemeat of critical public services – it’s the poorest among us who bear the heaviest burden. That’s because working families and the unemployed depend on those services the most. Yet all kinds of public services (like libraries and social service agencies) are shrinking or being eliminated because of this economic and jobs crisis.

It doesn’t need to be that way. A new report, “Who Pays? A Distributional Analysis of the Tax Systems in All 50 States” by the Institute on Taxation and Economic Policy, suggests that the wealthiest among us are not carrying their fair share of the tax burden.

The reason, as the report points out, is that sales and property taxes take a bigger bite from low- and middle-income families than they do from the wealthy. For the rich, income taxes are more significant. But in states with either no income tax or flat income tax rates (including Florida, Washington and Illinois), the disparity is great. And it’s just unfair.

“The harsh reality is that most states require their poor and middle-income taxpayers to pay the most taxes as a share of income,” says Matthew Gardner, lead author of the report.

That’s why lawmakers seeking solutions to their budget crises need to spread the tax burden equitably. Those with the highest incomes should pay their fair share. This report points the way.

Want to know more? Download a fact sheet for your state. If you want to know how to use the report in your own tax reform efforts, please contact AFSCME’s Research and Collective Bargaining Services Department: (202) 429-1215.