White House, Unions Reach Deal on 'Cadillac Tax'

Agreement clears one of the biggest obstacles to final bill
By John Johnson,  Newser Staff
Posted Jan 14, 2010 3:22 PM CST
Senate Majority Leader Harry Reid speaks outside the Senate chambers in this file photo.   (AP Photo/Mannul Balce Ceneta)

(Newser) – The White House has struck a deal with unions on how to tax generous health insurance policies, one of the last major sticking points in crafting a final bill. Few details are available on the agreement over the so-called "Cadillac tax," but President Obama is expected to visit House Democrats later today to sell it, reports the Los Angeles Times.

Before the deal, the legislation would have imposed a 40% tax on family plans above $23,000 and individual plans above $8,500. Unions were irate, arguing that they have long foregone raises in exchange for better benefits. The compromise likely changes the numbers so fewer union members pay the tax, which is a major source of revenue for the overall bill.

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