Image provided by: University of Oregon Libraries; Eugene, OR
About Northwest labor press. (Portland , Ore.) 1987-current | View Entire Issue (June 21, 2013)
Chained CPI still threatens future Social Security COLAs By SCOTT BLAU Unfortunately, the idea that the ‘chained CPI’ will reduce the nation’s deficit has not gone away. The chained CPI is a proposed tactic to decrease the value of cost of living allowances (CO- LAs) that are added to Social Security checks and also to benefits for disabled veterans and their survivors. It has been sold as “only a small ‘technical adjust- ment’ to the cost of living allowance that doesn’t really amount to anything.” That is easy for a political pitchman to say. But COLAs, by their nature, keep reflecting and magnifying what has happened to them in the past. Once the formula for a COLA reduces its value, the original reduction is repeated and increased as the years go by. In plain terms, the chained CPI is a bene- fit cut. And it is one that keeps on cut- ting. Those who scoff that this adjust- ment is small have not tried to live on the budget of an average Social Secu- rity recipient. That average benefit is currently around $12,000 per year. So every dollar that comes through a COLA increase makes a difference in the life of a senior. Of course, the irony of this fight over the CPI is that Social Security does not contribute to the nation’s deficit. A cut to Social Security would not decrease the deficit at all. The So- cial Security Trust fund was set up to be separate from our nation’s regular budget. There has been a concentrated political effort to merge the two in the public’s mind. It is part of a long-term plan to weaken support for Social Se- curity. There are two Oregon congres- sional representatives who are support- ing the chained CPI: Republican Rep. ... Labor braces for impact of Obamacare (From Page 1) panies selling individual coverage on the exchanges. In the exchanges, insur- ance companies have to take all com- ers, and are barred from denying cover- age based on “pre-existing condi- tions.” To compensate them for any losses that might cause, the government is creating a “reinsurance” pool, funded by $20 billion in taxes that will be levied on all group health plans over a three-year period. The tax will be $63 per covered individual for the first year, and four-fifths of that amount will go to pay for the reinsurance program. Lastly, large businesses (more than 50 employees) that don’t provide insur- ance will face a tax penalty of a little under $2,000 a year per full-time worker. But they face no penalty for not providing insurance to part-time work- ers. That gives large employers a pow- erful incentive to reduce hours to less than 30 a week — particularly if their employees are low-wage, and thus would qualify for subsidized coverage on the exchange. But again, that won’t be the case with large unionized employers — if they’re locked into multi-year collective bargaining agreements under which they provide health benefits to part-time workers. United Food and Commercial Work- ers spokesperson Tim Schlittner said those union employers are going to feel increased competitive pressure to drop coverage for part-timers. If that hap- pens, those workers will be able to get coverage on the exchanges, but benefits won’t be nearly as good. “Now, that will obviously be subject JUNE 21, 2013 to the negotiations at the bargaining table,” Schlittner said, “and we’re going to work to ensure we get the best health care possible for our members. But we want a level playing field, and we want to get rid of this incentive that’s driving companies to drop coverage.” For some union employers, there’s more to come. Starting in 2018, the government will levy a 40 percent ex- cise tax on so-called “Cadillac” health plans: Any employer or health insurer that offers a plan that costs more than $10,200 a year for an individual or $27,500 for a family would pay the tax on any amount exceeding that thresh- old. The expectation is not that the tax would actually be collected. Rather, any employer faced with throwing away 40 cents on the dollar would take whatever measures needed to lower premiums. They would do that by low- ering benefits. With labor locked out of Oba- macare’s benefits, and forced to pay its costs, some labor leaders are getting vo- cal. On April 24, Roofers Union Presi- dent Kinsey Robinson called for repeal, or complete reform, of the law. Con- cerns expressed by his union about cer- tain provisions of the ACA have been totally ignored, Robinson said in a press statement: “These provisions jeopardize our multi-employer health plans, have the potential to cause a loss of work for our members, create an un- fair bidding advantage for those con- tractors who do not provide health cov- erage to their workers, and in the worst case, may cause our members and their families to lose the benefits they cur- rently enjoy as participants in multi- employer health plans.” Premiums for family coverage pro- vided by union health trusts averages about $16,000 a year, said Randy De- Frehn, executive director of the Na- tional Coordinating Committee for Multiemployer Plans (NCCMP) — a trade association for the union trusts. That works out to over $7 an hour for a full-time employee, DeFrehn said, and it’s a labor cost that has to be covered when an employer contributing to these plans is head to head in a competitive bidding situation. President Obama’s promise to labor — if you like the health plan you’ve got now, you can keep it — “is simply not true for millions of workers,” said UFCW President Joseph Hansen, who’s also chair of the Change to Win labor federation, in a May 20 op-ed in The Hill newspaper. “All we want is equality — where our plans are treated the same as for- profit insurers,” Hansen wrote. “We’d be open to a legislative fix, but ulti- mately this is the administration’s re- sponsibility. They are leading the regu- latory process. It’s their signature law.” As many as 20 million people — union workers, retirees and dependents — get health insurance through union- affiliated multi-employer trusts, says NCCMP’s DeFrehn. For two years, DeFrehn’s group pushed the Obama administration to interpret the law in such a way that the union health trusts could be deemed “qualified health plans” in the exchange — so that par- ticipating small employers could re- ceive the tax credit. But DeFrehn told the Labor Press his group has given up on that approach, having gotten NORTHWEST LABOR PRESS nowhere. Instead, NCCMP is now readying a proposal to let union health plans rede- fine eligibility — dropping lower-in- come individuals from coverage — so that they would be eligible for the sub- Greg Walden and Democratic Rep. Kurt Schrader. Walden is in lock-step with the House leadership on this is- sue. No big surprise there. And Schrader is still attempting to bridge the political divide in Washington, D.C., by putting the chained CPI out there in order to make a deal. The Oregon Alliance for Retired Americans would like to demonstrate our opposition to the chained CPI in coordination with a planned action by the national On Tuesday, July 2, the Alliance for Retired Americans is mobilizing peo- ple in 40 cities across the country to form “Human Chains Against the Chained CPI.” In Portland, the Oregon ARA will rally at Terry Schrunk Plaza across from City Hall starting at 11:30 a.m. The national day of action will showcase the broad base of Americans who support protecting and enhancing retirement security, not dismantling So- cial Security inch by inch, ARA said. (Editor’s Note: Scott Blau is presi- dent of the Oregon Alliance for Retired Americans. This article appeared in the Alliance’s June newsletter.) sidized coverage on the exchange. Em- ployers could still contribute to pay for the employee share of the premium purchased on the exchange, just not through the trust. DeFrehn said that proposal is still under consideration, but time is running out. The exchanges open in just over 100 days. PAGE 9
