The paper did let the unions push back on other arguments made by economists, including one by the ubiquitous Jonathan Gruber from MIT, who predicted that the excise tax might just raise workers’ wages from 2010 to 2019. Balderdash, countered the president of the United Steelworkers, Leo Gerard.
The people who are promoting this tax say companies will make up for this with higher wages. These people who say that have never been at the bargaining table. It doesn’t work that way.
It does kind of call into question Mr. Gruber’s experience with the nitty-gritty of collective bargaining.
The political part examined what might happen to Democrats in the fall elections if they support a tax that affects workers and the middle class. Ron Gay, an AT&T repairman in Ohio who urged co-workers to vote for the president, told the Times: “If this passes in its current form, a lot of working people are going to feel let down and betrayed by our legislators and president.”
The story lede did mention another important political point: When John McCain talked about taxing health insurance benefits during the campaign, and many union workers were thinking about voting for him, the labor unions steered them back to Barack Obama, repeatedly saying McCain wanted to tax their health benefits. Later in the piece, the Baucus aide said there was a difference between what McCain wanted to do and what Obama supports. McCain wanted to eliminate all tax breaks for employer-provided plans, and the president just wants to tax policies that fall above a certain threshold. Some experts view Obama’s approach as a way to ultimately end the tax breaks. The finer points of all this are the subject of another post. Still: Is that the reason Christina Romer had so much trouble finding the right words to say?