The Democrats have made it official, they are the party who picks the needs of the special interests over that of the middle class.

Under the deal announced by the AFL-CIO yesterday (neither Congress nor the White House had the guts to announce it first), union members will be exempted from paying the “Cadillac Tax” until 2008. To put it another way, the middle class will be paying taxes to fund the health insurance for union members, and illegal immigrants.

The effect of the Cadillac tax that no one in Congress or the mainstream media will talk about is how it will result in a major increased in taxes on the middle class. Within the first six years of the plan, 20% of families earning between $50,000 and $75,000 annually will be paying the Cadillac tax. Approximately 13% of the people in that income group are union members so the “unprivileged” 87% will be footing the bill for the rest. IBD Editorialized about it saying:

…..the president is about to make a blunder that rivals that of the first President Bush when he broke his “no new taxes” pledge in 1990.

The federal takeover of the nation’s health care system that Democrats are brewing up in Washington will have to be financed by someone. The administration wants to put it on the backs of the middle class in the form of a 40% excise tax on the value of health insurance coverage that exceeds $8,500 a year for individuals or $23,000 for families.

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The union deal helped Democrats clear a key hurdle, approval from their key special interest group, of course now they have to find a way to make up the money.Sources say negotiators were considering increasing the financial hit on drug makers, nursing homes and medical-device makers, all will be passed along to the consumer and will hit the middle class and seniors the hardes.

The tax on high-value insurance plans was included in the Senate’s version of the bill but not the House’s, and has been one of the main unresolved issues as Democrats work to combine measures passed by the two chambers late last year.
Unions, as well as many House Democrats, are fiercely opposed to the tax on “Cadillac” insurance plans, which they say will hit many middle-class workers and undermine benefits won by unions.

“The White House and congressional Democrats are picking one group of workers over another,” said Antonia Ferrier, spokeswoman for House Minority Leader John Boehner. “If this sounds discriminatory, well it is.”

Another revision to the plan made yesterday, as a gift to the Unions is the value of dental and vision plans would be exempt from the tax even after the deal expires in eight years, negotiators said.

Under the plan to help fund health-care reform, the tax would kick in for plans valued at $8,900 or more for individuals and $24,000 or more for families.

The threshold will be even higher for certain plans with many older workers and women — a move to benefit unions with a high proportion of female membership, sources said.

Participants included AFL-CIO President Richard Trumka and Andy Stern, head of Service Employees International Union; Anna Burger, head of Change to Win; and the leaders of unions representing teachers, government workers, food and commercial workers, and electricians.

Stern has been among the most frequent visitors to the White House over the last year, showing up more than 20 times, according to logs.

The POTUS backs the Cadillac excise tax, citing economists who say it would drive down costs by encouraging insurance companies to offer employers and workers a chance to buy lower-cost health plans to avoid the levy. Of course we now know that at least one of those economists was secretly being paid by the Department Of Health and Human Services.