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Union leaders opposed to a Senate plan to tax the most expensive employer-provided health benefits said Democrats face losses in this year’s U.S. congressional elections if they fail to support labor’s agenda.

“This is a moment that cries out for political courage, but it is not much in evidence,” Richard Trumka, head of the 11 million-member AFL-CIO labor federation, said yesterday in a speech before he and other union leaders met with President Barack Obama, who supports the tax. Trumka warned of a repeat of 1994, when Democrats lost control of Congress, if lawmakers back a health-care overhaul without heeding labor’s concerns.

Harold Schaitberger, president of the International Association of Fire Fighters, said Obama “will be held accountable” if he continues to push for the excise tax on the insurance plans, which is intended to help fund the overhaul.

“The president’s support for the excise tax is a huge disappointment and cannot be ignored,” he said yesterday in a statement about the levy, which would be imposed on insurance plans worth more than $23,000 a year for families.

Trumka, Service Employees International Union President Andy Stern and other labor leaders met with Obama and aides at the White House to talk about their disagreement over the proposal.

The union presidents declined to discuss the meeting when it was over. Trumka, in a statement, called it a “frank and productive meeting between friends on moving forward on health- care reform.”

Reid Cherlin, a White House spokesman, called it “a productive discussion” about health-care overhaul that will cut costs and “protect families from unfair insurance company practices,” in a statement.

Biggest Issue

The Democratic-controlled House and Senate are trying to reach a compromise on legislation calling for the biggest revamp of the U.S. medical-insurance system since the establishment of the Medicare program for the elderly more than four decades ago.

How to pay for the overhaul looms as the biggest problem. Obama last week urged House Democrats not to oppose the plan to tax insurance plans that offer the most generous employee benefits, according to a Democratic aide.

Labor leaders say their members have traded wage increases for stronger health benefits and that they and other working Americans would bear the brunt of the 40 percent excise tax.

They favor health-care legislation passed by the House in November that includes a 5.4 percent surtax on couples earning at least $1 million a year.

Labor unions spent a record $450 million in 2008 helping to elect Democrats to Congress and Obama to the White House. Democrats have said they are counting on that support again during this year’s elections.

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Tags: Health insurance, Insurance