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  I've written about this before but it bears repeating--particularly when The New York Times and the rest of the MSM continue to let ideology, not economic facts, dictate policy coverage. Today's Times article on the challenges facing UAW retirees gives us another opportunity see how, despite large public sentiment in support of single-payer, the MSM ignores the only solution that can protect workers' health and security--and save industry here hundreds of billions of dollars.

  The Times' article is a preview of national negotiations that open Friday between the auto companies and the United Auto Workers (for what it's worth, I'm a proud UAW member). The thrust of the article is: the auto companies have massive health care costs, particularly for retirees, and it is time for retirees to accept the fact that they've had "generous" benefits to date but, well, it's just not realistic to expect those benefits to continue.

  It is absolutely true that the auto companies bear these costs. Tens of billions of dollars in liabilities sit on the balance sheets of the major auto companies simply because of their obligations to current and future retirees--obligations that, in my opinion, are a moral promise made to people who broke their backs in auto plants for years. Daimler unloaded Chrysler largely because of the huge health care costs.

  It's interesting that the Times's reporter, Michelle Maynard, spends a fair amount of time talking about an unusual proposal:

In recent months, one unusual solution has come up in pre-negotiations between auto executives and the union, according to people with knowledge of the deliberations.

The automakers and the U.A.W. could create a health care trust, called a Voluntary Employee Beneficiary Association, that could take over the responsibility for worker and retiree benefits.

That would allow the three companies to get their combined long-term health care liability, about $100 billion, off their books, and would give the U.A.W. a more direct say in the benefits that its workers would receive.

But the solution carries an enormous price tag: the trust, known as a V.E.B.A., must be funded with cash upfront, with most of the liability accounted for.

The U.A.W. recently agreed to such an arrangement at Dana. It called for the company to pay upfront about 71 cents on the dollar for workers’ estimated health care expenses, or about $800 million.

In the U.A.W.’s case, the car companies would need to come up with far more money, probably in the range of $60 billion to $65 billion, experts say. The more money that is put in the trust, the less risk exists for the union.

  I've been aware of this concept but it worries me, even if this is the best solution in a bad situation. As long as we have this insane health care system, where costs are completely unpredictable, saddling the union with the responsibility to manage the crisis seems to me to be very risky. It really angers me that our political leaders have put the union in this predicament where, rather than defend its members, it may have to be in the position to impose cuts in benefits to preserve the VEBA.

  And the Times does point out the real risk, for both sides in this potential gamble:

Yet, the concept still gives both sides pause. The companies’ poor credit ratings mean they would pay high interest rates on the money they borrowed to start the trust. Given that, they might be better off leaving things as they are, and try to cut medical costs, some analysts say.

Moreover, the union, not the companies, would be in charge of administering the huge fund, and would have to face tough choices if health care costs climb precipitously.

  And, yet, not once--not once--does this article utter the phrase "single-payer." Given the somber tone of the article and the choices facing the union and the company--choices that range from bad to awful--it is an absolute travesty that the piece does not explore the only health care solution that will guarantee every American decent health care AND help business. That's the aspect that is infuriating--single-payer is good for workers AND business (or, at least, all businesses except the leeches in the insurance and drug industries). This is not news (and nyeve and DrSteveB have done a wonderful job explaining the economic benefits of single-payer)

  We are letting ideology and greed triumph over sound economics and good policy.  

  Let me just add a related point on presidential politics. I believe Dennis Kucinich is the only presidential candidate who explicitly calls for a single-payer system. I'm not advocating for his candidacy but it is a mystery to me why the other candidates--who all profess to be concerned about American competitiveness, jobs and health care--won't simply say: health care should not be about profit. Period. And we cannot fix the health care crisis by continuing to let the private insurance industry and drug companies play a role in health care delivery (okay, it's not really a mystery if you look at the the huge amounts of insurance industry and drug company money pouring into the campaign coffers of candidates, presidential and otherwise). I'm hoping that perhaps the presidential candidates forum at YearlyKos will focus heavily on this issue and ask the candidates directly: why are you being so timid?

  I have a very bad feeling about the outcome of the negotiations. But, I hope that my union extracts at least one concessions from the companies: a promise to support and lobby for single-payer health care.

Originally posted to Tasini on Thu Jul 19, 2007 at 07:40 AM PDT.

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Comment Preferences

  •  Even When It Makes Economic Sense... (14+ / 0-)

    ...the MSM can't get beyond its ideology.
    Tips and comments

  •  "a promise to support" (2+ / 0-)
    Recommended by:
    lcrp, DBunn

    means nothing.
    Perhaps write into the CB agreement a few mil in dedicated funding for research, legislative action, and member mobilizing to achieve single-payer.

    And let's not get hincty about what is legal or not.  What Exxon can use corporate funds to get out of policy-makers, the auto industry can too. That's what attorneys are for.

    "The best lack all conviction while the worst are full of passionate intensity." -- W.B. Yeats

    by sayitaintso on Thu Jul 19, 2007 at 07:46:36 AM PDT

    •  This is a great idea (2+ / 0-)
      Recommended by:
      sayitaintso, lcrp

      ... a few mil in dedicated funding for research, legislative action, and member mobilizing to achieve single-payer.

      Considering these facts:

      • automakers have maybe $100 billion in health care liablities hanging over their heads, which they could maybe buy their way out of for the low low price of $65 billion
      • automakers are getting killed by health insurance costs that contribute about an extra $1500 to the price of every car made in the US relative to those made elswhere
      • peak oil and global warming essentially require the auto industry to completely re-invent itself anyway, or go extinct.

      Under the circumstances, it would seem that for the auto industry to contribute, say, $100 million annually to a massive campaign for single-payer would be a simple business decision. Cheap at the price, as the saying goes.

  •  They'll be better off than the salaried retirees (7+ / 0-)

    As I pointed out in my diary a while ago,

    Ford has recently out and out CANCELLED the retiree health plan for salaried retirees and their survivors, beginning January 2008, leaving people like my mother, widowed and in her 80's, with a cash grant of less than $2000/yr in its place.  The union retirees will be fortunate to have a VEBA, frankly.  And lest you say, "well, the fat cat salaried retirees don't need it", my father was a foreman, never made over $15,000 a year before he retired, worked swing shifts his whole life, and was not a wealthy man.  Fortunately for my mom and our family, she and pop were both incredibly frugal, saved like crazy, and she will be fine, since she has the money saved to make up for what she's losing.  But I'll bet many of her contemporaries are not so well placed.

    Your principal point is the crucial one - why  the auto companies haven't been front and center pushing for national health care is beyond me.

    •  are the auto unions pushing for universal care? (1+ / 0-)
      Recommended by:

      they're a more pivotal player, seems to me --- my gut tells me workers/retirees prefer their private health insurance, but maybe I'm wrong?

      Unions for Universal Health Care?? any out there? anyone??

      "Oprah, you're my girl." Barack Obama

      by PhillyGal on Thu Jul 19, 2007 at 08:11:10 AM PDT

      [ Parent ]

      •  Read below (0+ / 0-)

        the UAW support single payer.

        They have since 1948, but there's more than meets the eye here.

      •  Retirees want stability (1+ / 0-)
        Recommended by:

        The unions have a case of divided loyalties, I think, as the interests of workers and current retirees are not always the same.  But what old people principally want, in just about everything, is stability and predictability - it's hard to convey the impact on an elderly person of telling them they're losing their health insurance (my mother immediately went into heart arrythmia, and I'm sure others had similar or worse reactions.)

  •  What??? The NYT being "ideological"... (0+ / 0-)

    ...(and NOT in a progressive way!)  I AM TRULY SHOCKED. The next thing you know you'll be telling me that the NYT was one of the biggest cheerleaders for the President's war with Iraq...........ah, nevermind....

    "...if my thought-dreams could be seen, they'd probably put my head in a guillotine...." {-8.13;-5.59}

    by lams712 on Thu Jul 19, 2007 at 07:56:51 AM PDT

  •  Perhaps you're the idealogue? (0+ / 0-)

    b/c HR 676, languishing in a subcommittee, is irrelevant to the union's contract which expires September 14, 2007.

    "Oprah, you're my girl." Barack Obama

    by PhillyGal on Thu Jul 19, 2007 at 08:00:22 AM PDT

    •  Yr point is? (1+ / 0-)
      Recommended by:

      I think my diary is pretty clear that this has been a long-term issue in the past and will be in the future. The expiration of the union contract is not that relevant--if we enacted single-payer the day after a deal was made, it would remove the health care burden on the industry and/or the union.
      Unless you are prepared to contest the economics of single-payer?

      •  See my comment below (1+ / 0-)
        Recommended by:

        it is intensely relevant.

        And it's influencing the presidential campaign.  

        Remember that Bonior, Edwards campaign manager, is a long time UAW ally.

      •  just the politics of it! (0+ / 0-)

        and the fact that first introduced by Conyers in '03, now still w/only 78 co-sponsors, it's in a subcommitte for the last 2 years ...

        dealing with reality, Tasini

        psssst -- I asked above -- is there any evidence that auto unions even want universal/single payer??

        "Oprah, you're my girl." Barack Obama

        by PhillyGal on Thu Jul 19, 2007 at 08:14:08 AM PDT

        [ Parent ]

        •  Phillygal (7+ / 0-)

          I hate to be a sourpuss...

          But the fact of the matter is that the UAW has supported universal healthcare since 1948.  Walter Reuther was a long time advocate of socialized medicine.  Since they couldn't get that, they secured healthcare through union contracts.

          This meant giving up wages (Substantial amounts of wages I might add.  Consider that while straight pay in the auto industry is $27/hr, it rises to something like $75 with benefits calculated in. Spread over a 30 year carreer, that's hundreds of thousands of dollars of foregone wages to secure health insurance.)

          •  You were faster on the draw than me (1+ / 0-)
            Recommended by:

            That is correct re: UAW

          •  sourpuss? lol .. don't be silly! (0+ / 0-)

            the historical background is appreciated! iirc, it was FDR's price/wage freezes during WWII which made employers compete for better workers w/private health care plans, in the only way the federal govt allowed, in the first place?

            but it's 2007 now, of course, and my question remains:

            Is there any current union support for universal/single payer??

            "Oprah, you're my girl." Barack Obama

            by PhillyGal on Thu Jul 19, 2007 at 08:27:17 AM PDT

            [ Parent ]

            •  Well, I don't think you're a sourpuss (4+ / 0-)
              Recommended by:
              PhillyGal, TiaRachel, lcrp, lams712

              just off the top of my head: four AFL-CIO international unions  have officially endorsed H.R. 676 are: United Auto Workers, International Longshore Workers Union, United Association of Plumbers and Pipe Fitters, and the National Association of Letter Carriers. 17 state federations that have signed on for H.R. 676: Connecticut, Delaware, Florida, Kentucky, Minnesota, Missouri, North Carolina, North Dakota, Ohio, Pennsylvania, South Carolina, South Dakota, Vermont, Washington State, West Virginia, Wisconsin and Wyoming.
              The California Nurses Association affiliated with the AFL-CIO recently primarily because of the AFL-CIO's expression of support for single-payer (I'm not saying the AFL-CIO, as a federation, as thrown everything behind 676 to the exclusion of other health care proposals)

        •  The politics of it (2+ / 0-)
          Recommended by:
          TiaRachel, lcrp

          Well, if we ceased to advocate and mobilize everything just because of "the politics of it", we should just pack up and go home and leave the running of the country to the right-wing, the corporations and hedge fund managers. Having 78 co-sponsors is not a bad accomplishment given the power of the health-care destroying lobby.

          •  you're an underdog kinda guy, Tasini; (1+ / 0-)
            Recommended by:

            running against Hillary :) -- but Kucinich's advocacy of HR 676 ain't got a chance -- focusing on the plans of Clinton/Edwards/Obama is just more realistic.

            "Oprah, you're my girl." Barack Obama

            by PhillyGal on Thu Jul 19, 2007 at 08:31:35 AM PDT

            [ Parent ]

            •  I'm not always an underdog (1+ / 0-)
              Recommended by:

              Heck, I'm a Yankees' season ticket holder..tho this year I suppose you could argue that that is an underdog position.

              Let's separate Kucinich from 676--I think i made clear I'm not promoting his candidacy. I've always been much more interested in building the grassroots, public support for issues (that may make me a real underdog) as opposed to believing that any one candidate will carry the water.

  •  I think that the VEBA is an important reason (2+ / 0-)
    Recommended by:
    lcrp, DBunn

    why single-payer is off the table for all candidates in the short term.

    This all started out with the VEBA established during the Goodyear Strike last year.  

    Looking specifically at the Edwards Plan, I think that the emergence of VEBAs explains in large party why he isn't pushing a single payer plan.  

    Rather he's pushing for a government run plan modeled on Medicare, that I have to assume would be where most of these union ran VEBAs are going to turn to secure retiree coverage if Edwards is able to pass his plan.

    This does something important, it preserves that value of wages foregone by UAW workers in previous contract negotiations in exchange for guaranteed healthcare in retirement.  Now let's say that the VEBA is able to generate $3600 per member to secure retiree health care coverage.

    Now that's going to get very bad insurance for a 62 year old autworker and their spouse.  It's only $400 month, which just isn't going to be enough.  But let's say that they Edwards plan passes, and the government run plan is able to offer coverage at $200 month, that means that the VEBA has a surplus of $200 month that can be applied to securing supplemental health or any other number of collective benefits for their members.

    On the other hand simply switching to single payer, requires retirees to pay again for health coverage they secured through union contracts.

    I think that Gettlefinger and the rest of the folks at Solidarity House realize that they have to prepare for the possbility that any or all of the big 3 might declare bankruptcy.  ERISA offers important, if somewhat meager for those guys under 50, insurance of pension benefits through the PBGC (Pensions Benefit Guarantee Corporation).  It does not cover retiree health benefits.  

    VEBAs are the future, and until they've been secured by the UAW and the other unions in declining industries, single payer is off the table.  Because there're nothing like pissed off union retirees to ruin a candidates day.

    •  Thanks for this info (1+ / 0-)
      Recommended by:

      I try to follow the single-payer issue pretty closely. This is the first time I've been made aware of this obviously important angle.

    •  yr assumptions are dicey (0+ / 0-)

      If you assume your numbers, I see yr point. But, I would be very cautious about promising a particular health care return from the VEBA--if anything has been proven it's that until you change the system of health care delivery, it's very hard to estimate the cost in the future.

      I do agree that, absent single payer, Edwards' plan is the best.

      •  I think that in the absence of a government (1+ / 0-)
        Recommended by:

        insurance program that covers retiree healthcare benefits like the PBGC does for pensions, the VEBA is the only option available to avoid a total loss of benefits (unleashing tens of thousands of retirees onto the VA for healthcare) in case of a bankruptcy.  

        The only other option is a long, brutal strike.  And who's the strike target in that case?  GM, Ford, Chrysler?  An extended strike could provoke any of the three to declare bankruptcy, and try to pull a Delphi.  That benefits no one.

        There has to be a way to save the jobs of the guys on the line, and the benefits for the retirees who did their time.  That's the VEBA.

        Why do you think that GM just sold Allison Transmission, and Volvo?  Both are profitable units that were sold to generate the cold hard cash needed to conclude a VEBA, bringing the benefit component of wage structure in the Big Three into line with the transplants.  Now ironically, the transplants have made similiar promises about retiree healthcare to their workforces.  

        The difference is that Toyota and the others haven't been hit by a wave of retirees yet. That's going to really start happening in the next 10-15 years, and Toyota is going to face the same problems with legacy healthcare costs that the big three do now.

  •  same shite NY Times pulled on the Clinton (2+ / 0-)
    Recommended by:
    lcrp, lams712

    proposal many years ago...Their "news" stories either failed to mention the single payer option or gave it the back of their hand...The NY Times will never act against the wishes and greed of the insurance industry...I am glad the NYT will be gone and out of business in 5 years or less

  •  MSM to miss out on big Phama ad bucks ? (2+ / 0-)
    Recommended by:
    howd, lcrp

    That sort of advertising should be illegal - they are spending billions in ads every year. The MSM is not going to lose those ad bucks so they kiss their ass at every opportunity. Don't expect to hear any "news" organization that takes ad money from big pharma

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