Unions Look to Extort an Obamacare Handout

Wednesday's move by the AFL-CIO to demand more generous benefits from Obamacare is a puzzling thing.

Wednesday's move by the AFL-CIO to demand more generous benefits from Obamacare is a puzzling thing. The law is under attack from Republicans in Congress, at least half the states and the relentless march of crushing deadlines. So the country's largest labor group naturally decided the time was ripe to make things worse.

As Bloomberg News' Jim Efstathiou Jr. reports, the AFL-CIO's members passed a resolution calling for its members to be eligible for the same federal subsidies that Obamacare will extend to those who don't get insurance from their employers. Currently, those subsidies are only available for people who buy coverage on the insurance exchanges created by the law.

The AFL-CIO and various outside experts argue that some employers will stop offering coverage because of the law, pushing workers into the exchanges, where coverage may be more expensive. Extending the exchange subsidies to union members may reduce pressure to drop coverage, or so the argument goes.

That's true, up to that point: Using federal tax dollars to make employer-sponsored health insurance cheaper could shift costs away from the employer, and if that means workers get to keep better plans than what's available on the exchange, they win too.

Now let's consider why this proposal is a horrible, horrible idea. Start with the merits: When you clear away the rhetorical trappings about containing costs, Obamacare is meant primarily to extend health insurance to almost everyone who can't get it otherwise. As the past three years have shown, it's not at all clear whether the American public accepts the legitimacy of using government money to that end.

With this vote the AFL-CIO is demanding the government go further: That it use public money to make health insurance cheaper for those who already have it. That demand comes as many states are refusing to even expand their Medicaid programs, and the federal government is praying the actual cost of exchange subsidies is somewhere close to initial estimates. Moreover, the budget is on the verge of being crushed by the growing cost of Medicare. And that's just the health-care part of the budget; other needs are just as pressing.

So as public policy, adding to the cost of Obamacare to cushion the impact on the already insured is, frankly, stupid.

The politics are even worse. Sure, the law has survived a Supreme Court challenge and a presidential election. To put it mildly, some hurdles remain. House Republicans, who have trapped themselves between a riled-up base and no good way to appease it, could decide to actually follow through on their pledge to resist raising the debt ceiling or funding the government unless Obamacare is defunded or delayed. The White House says it won't negotiate, but experience suggests otherwise. Defenders of the law should think twice about feeding the beast of public opposition.

Meanwhile, the Obama administration is fighting a state-by-state battle to wear down Republican governors and legislators, who could aid the law immensely by helping with -- or even just not obstructing -- its implementation. Those state politicians are gauging the political winds daily and painting Obamacare as a giveaway to unions is a pretty good way of dooming the effort.

So the AFL-CIO resolution is toast, right? Not necessarily. Here's Efstathiou: "Two top administration officials, White House senior adviser Valerie Jarrett and Labor Secretary Thomas Perez, were in Los Angeles this week to reassure union officials that the White House is open to weighing changes." And this is the team that says it won't negotiate over the debt ceiling.

This column does not necessarily reflect the opinion of Bloomberg View's editorial board or Bloomberg LP, its owners and investors.