Reid and Pelosi Pushing For Repeal of Cadillac Tax

November 7th, 2015

The Hill reports that the top-two Democrats in the Congress are moving repeal the Cadillac Tax. This is huge news!

Senate Minority Leader Harry Reid (D-Nev.) and House Minority Leader Nancy Pelosi (D-Calif.) are working behind the scenes to repeal one of the most controversial taxes in ObamaCare, multiple sources tell The Hill.

Reid and Pelosi have been talking since the spring with President Obama about repealing the “Cadillac tax” on employer healthcare benefits, a senior Democratic aide confirmed on Friday.

“Point is, they both want to get this done,” the Democratic aide said.

Opponents of the 40 percent excise tax on high-cost health plans believe 2015 is their last, best chance to get the provision repealed before presidential politics grind the legislative process to a halt.

With just two months left in the year, sources say the most ideal option for Democrats is attaching repeal to the package known as “tax extenders.” The cost of the extenders bill is typically not offset, making it an attractive vehicle for ending one of ObamaCare’s biggest revenue generators.

Reid and Pelosi have not settled on a plan and are leaving their options open, the aide said, adding that the work on ending the tax could carry over into next year.

“It is clearly a commitment for the Democratic leadership,” AFL-CIO lobbyist Tom Leibfried said in an interview in his downtown office Friday. “We think there’s a real chance to get this done, as big a lift as this is.”


The biggest obstacle is the President:

Aside from the question of how to pay for repeal, the Democrats’ biggest roadblock is the Obama administration.

The tax on high-cost insurance plans is at the heart of Obama’s strategy to contain costs across the marketplace. Health officials and economists close to the law are dead set against abandoning the tax, which they argue should nudge employers and employees toward cheaper insurance plans with less waste.

Last month, Obama’s top economic adviser, Jason Furman, called the tax “perhaps the single biggest leverage we have on health costs in the private sector.”

“That’s very disappointing and frustrating for us, but at some point, [the administration] can count too, and they can see that we have over a majority in the House in one form or another,” Rep. Joe Courtney (D-Conn.), the sponsor of a Cadillac tax repeal bill, said of Obama’s opposition in an interview last month.


And will Republicans go along with it?

To get Republicans to the table, Leibfried said Reid and Pelosi might have to agree to the repeal of the medical device tax — another unpopular funding mechanism for the healthcare law that many Democrats oppose.

While Republicans are also on the record opposing the Cadillac tax, it is Democrats who are increasingly taking the lead on repeal, in part due to intense pressure from allies in the labor movement.


The CBO budget neutrality of this law was always a sham. I hope the Republicans demand far more concessions than the medical-device tax, which frankly, makes very little difference in the grand scheme of things.