During the UAW-Detroit 3 contract talks this autumn, it was clear early on that the adversaries weren't the least bit concerned about the looming Cadillac tax in the Affordable Care Act.
In background conversations with union and company leaders, they were confident that the provision requiring big surcharges on rich private health plans wouldn't be around when it was scheduled to phase in in 2018.
And so they were right. The just-announced $1.1 trillion federal omnibus spending bill headed for passage delays the Cadillac tax two years. There's a good chance it will never be implemented.
But how did they know? Because the UAW and Detroit 3 don't just read political tea leaves, they stir them.
As the labor negotiations were progressing, I asked a good source why the parties could ignore the Cadillac tax when better than half of the Detroit 3's combined 140,000 hourly workers would have been subject to a $10,200 annual surcharge for singles or $27,500 for families.
After all, nobody in industrial America has richer health insurance than UAW autoworkers, who pay no premiums, no deductibles and share in only 6% of their healthcare costs.
But Detroit 3 executives were so unconcerned that they would have to foot the massive Cadillac tax during the four-year contract that they negotiated big raises and bonuses that will cost each an additional $500 million annually for labor.
My source was blunt. “If Hillary (Clinton) is elected president next year, the UAW will see to it that the Cadillac tax is killed. If it's a Republican, Detroit 3 executives will handle him.”
Wow. Talk about simple.
Republicans are already leaning against much of the Affordable Care Act and would like to see it rolled back or eliminated in many quarters. And the UAW with its voting bloc and millions in campaign contributions have outsized influence in any national election campaign.
So, yes, the Cadillac tax is officially endangered. We know because the auto industry can't wait to tow it to the junkyard.
