Labor Hammers Dem Senator Over Plan To Tax Health Benefits

The ad wars in the health care reform debate are beginning to heat up, even as key members of Congress plead for a détente until an actual bill materializes.

On Tuesday, The National Education Association, American Federation of State, County, and Municipal Employees (AFSCME) and the United Food and Commercial Workers entered the fray. The coalition put out a radio ad making the case for a public insurance plan and preemptively criticizing any proposal that would effectively tax employer health benefits to pay for reform.

Released in Oregon, the group also name names, going specifically after home state Democrat Sen. Ron Wyden for proposing a plan that would end effectively employer-based health care coverage and, in its place, bump up the (taxable) salaries earned by employees.

"The last thing we need is to pay more," goes the spot. "But Senator Ron Wyden would tax the health care benefits we get at work -- as if they were income. Taxing health benefits? That doesn't make sense. Tell Senator Wyden that Oregon families want quality, affordable health care -- not taxes on their health care benefits."


The radio ad, which is being accompanied by the website, http://www.stopwydenshealthtax.com, underscores a rare willingness among some in the labor community to go after traditionally sympathetic Democrats on health care. But it also comes at a time when health care industry stakeholders are beginning to exert their influence in the broader policy debate. The Washington Post reported on Monday that Blue Cross Blue Shield of North Carolina had begun a public message campaign aimed at killing a public plan for insurance coverage. Other groups, including Health Care for America Now and Rick Scott's Conservatives for Patients' Rights have also started writing large checks on ads (respectively) for and against more government involvement in the health care system.

The growing louder advocacy machine is, by all accounts, not a welcome development for those crafting health care policy on Capitol Hill. Senator Max Baucus, who is playing one of the key roles in the reform process, reportedly told interest groups to "cool it" before Congress produced an actual piece of legislation to debate.

As for the substance of the Oregon-based radio ad, Wyden's proposal does have admirers within the White House -- primarily because it achieves universal coverage with bipartisan support. It does not, however, seem likely to serve as a template for reform. Progressive groups and the president himself have both said they support a public plan for insurance coverage, something missing from the Oregonian's plan. As for eliminating the tax deduction that employers receive for covering their workers, the White House remains opposed to the idea. (Obama repeatedly criticized John McCain for offering such a plan during the '08 campaign).

"It was not in the president's campaign plan and wasn't in our budget," OMB Director Peter Orszag said Sunday on CNN. "Clearly, there are some members of Congress who are putting it on the table. We will have to let this play out."

A source familiar with the ad buy says $60,000 is being put behind its run on the radio in addition to direct mail efforts, phone and canvassing. The spot will air in Portland and Eugene.

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