Hillary Parts Ways With Obama on 'Cadillac Tax'

This could persuade large labor groups to endorse her.

Hillary Clinton has struggled to explain how her potential presidency would differ from Barack Obama’s time in office, but The New York Times reports that she is about to break ways with the current president by opposing the so-called “Cadillac tax”—a key component of Obamacare.  

According to the Times, Clinton aides tipped off American Federation of Teachers President Randi Weingarten on the candidate’s opposition to the tax several days ago. The AFT, one of the nation’s largest teachers’ unions, has already endorsed Clinton in her run for president.

It is no coincidence that Clinton’s proposal to eliminate the “Cadillac tax”—which starting in 2018 will incur an additional large tax on employers who provide high-cost health care plans to their employees – was brought first to union reps.

As the Daily Caller explains:

The Obama administration and many health economists support the tax on the belief that beneficiaries of the plans are apt to incur more medical services, thus driving up overall health care costs. One of the major goals of Obamacare — and the Cadillac tax — was to drive costs down.

But unions generally oppose the Cadillac tax because they often negotiate for better health care benefits in lieu of salary increases. Under Obamacare, beginning in 2018, employers will be taxed at a rate of 40 percent on plans with annual premiums that exceed $10,200 for individuals and $27,500 for families.

What’s more, Clinton is facing a real fight to win union support over her number one rival for the Democratic nomination, Vermont Senator Bernie Sanders. The Times speculates that this move could help persuade other large labor groups to endorse her.

But first Clinton will have to explain how she will cover the deficit created by eliminating the Cadillac tax amidst the already murky financing of Obamacare. For now, her proposal may be grabbing headlines but it is notably short on specifics.