W. W. Norton & Company | We the People, 6th Edition

We the People 6^th Edition

Politics in the News

A Proposed Tax on Cadillac Health Plan May Also Hit Chevys

9/20/2009
Reed Abelson

Refer to Chapter 17

Essence of the Story

One way that the health care reformers plan to pay for their bill is to tax so-called "Cadillac" health care plans that are far more expensive than typical health care plans that cover most Americans.
The problem for Democrats is that, while at first they thought these plans were mainly the purview of rich executives, it turns out that many generous labor union contracts may fall under this provision.
In addition, the proposal as currently stands does not have an inflation adjustment, meaning that more and more plans will become "cadillacs" as they naturally increase in cost over time.

Political Analysis

The economic idea behind the tax on plans is to discourage the use of extremely expensive health care plans. These plans disguise the cost of health care to the consumers, and are a way for companies to compensate their employees while avoiding paying tax on compensation.
Politically, however, the Democrats absolutely cannot afford to lose union support for reform.
Ultimately, some sort of compromise is likely to emerge that will index this tax, and make it high enough that most union contracts are unaffected.

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Politics and the Age Gap

9/12/2009
Adam Nagourney

Refer to Chapter 11

Essence of the Story

Traditionally, American politics has been defined by racial, regional, and gender "gaps." Now, many are observing a new "gap"--a generational gap--and believe it creates worrisome divisions in current American politics.
The health care debate has brought this new gap into clear focus, as older Americans, the one age group that Obama did not win and the one that remains most skeptical of him, remain opposed to health care reform.
Baby boomers are just entering retirement this year, raising the concern among some administration officials that the oppositional generation will increase over time.
Some argue, however, that there is little evidence of "generational" issue cleavages. Mainly what is happening, they think, is that older Americans are simply less likely to be comfortable with an African American as president.

Political Analysis

An age gap worries Democrats because the party has traditionally been able to appeal to older Americans, particularly on issues such as health care and social security.
It is ironic that older Americans are opposed to health care reform since all retired Americans over the age of 65 are already on a government health care program--Medicare.
It is quite possible that the retiring baby boomers, who grew up during the turbulent 60s, will end up being far more comfortable with Obama and with social and cultural change generally, than are the older cohorts.

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