This video is a bit dated; it was recorded on 12/1/09. At the time, I had been reading about criticism of the Senate proposal to tax “Cadillac” health care plans. Essentially, the idea is that when the government allows workers to enjoy excellent health care plans, and those plans aren’t taxed, over-consumption results. For example, instead of exercising and losing weight, the well-insured will see a doctor and get a (subsidized) prescription for Nexium. This drives up the cost of health care for everyone.

There’s merit to the argument, and over the long-term, taxing benefits will almost certainly “bend the cost curve downward”.

But… The people that enjoy these plans today – hundreds of thousands of union members – bargained away salary increases in exchange for better health care plans. These folks stand to be screwed – they weren’t counting on the government to come in and take money out of their back pocket in the form of higher taxes. It’s fundamentally unfair. And all things considered, it’s plenty weird that the Democrats – long-time allies of labor – would be perpetrators of this perceived injustice.

Anyway, I asked Senator Landrieu about the “Cadillac” tax vis a vis the House plan which would assess a special “millionaire’s tax” on the wealthy. Back on 12/1/09, she told me we may see versions of both taxes in the final bill. More recently, she’s joined with Senators Lincoln and Nelson to suggest that there isn’t much room for negotiation in conference; the Senate bill must remain largely intact.