Obama, Democrats Compromise On ‘Cadillac’ Tax, Eager To Move Past Health Bill

A push to overhaul the nation’s health care system has cleared another hurdle.

Leaders of organized labor say they’ll go along with a plan to tax so-called “Cadillac” health care policies, after winning concessions designed to shield middle-class families.

The breakthrough came just as President Obama was preparing to address House Democrats, many of whom were skeptical of the Cadillac tax.

“Today we’re on the doorstep of accomplishing something that Washington has been talking about since Teddy Roosevelt was president. And that is reforming health care and health insurance here in America,” Obama said.

The president and his negotiating team have been working long hours, trying to bridge differences between the House and Senate versions of the health care bill. Obama endorsed the Senate’s idea of taxing high-cost policies, as a way to rein in costs and help pay for expanded health care coverage.

Labor leaders threatened to oppose the entire health care bill if such a tax were included – a potentially embarrassing setback for the president.

Union leaders dropped their opposition under a compromise that raises the price tag at which an insurance plan would be subject to the tax – from $23,000 to $24,000 for a family policy, for example.

The deal also provides a grace period for insurance plans that are part of collective bargaining agreements, and protections for workers whose insurance costs more because of their age, sex or high-risk professions.

All those adjustments mean the tax would raise less money for expanding health care coverage. But House Speaker Nancy Pelosi was happy that a deal was made.

“It just says that we are making progress to get closer to reconciling the House and Senate bills,” Pelosi said.

Negotiators hope to have at least a framework of a House-Senate compromise by this weekend, so budget analysts can go to work on a cost estimate. For all the progress they’ve made, though, Democrats are not exactly in a celebratory mood.

“Believe me. I know how big a lift this has been,” Obama told House Democrats.

Obama says he reads the polls, and catches the occasional story on cable TV showing sinking public support for the health care plan. He promised to stand behind his fellow Democrats, in the same way they’ve stood behind him.

“The reality is they have a shared political fate,” said congressional scholar Thomas Mann of the Brookings Institution. “And Obama has to make the case that they’ve got to stick together. Because divided they will all almost certainly fail.”

Obama expressed confidence that voters will like the health care plan better once it’s signed into law, and they can see for themselves what it does – and doesn’t do.

“If the Republicans want to campaign against what we’ve done by standing up for the status quo and for insurance companies over American families and businesses, that is a fight I want to have,” he said.

But many Democrats in the House and Senate are eager to put the health care fight behind them, and go to work on the issue that’s uppermost in voters’ minds: jobs.

Obama agreed: “We are going to have a sustained and relentless focus over the next several months on accelerating the pace of job creation because that’s priority number one.”