Union Rift

President Obama and Democrats did a better job selling their health reform to drug companies than labor unions.

A coalition of more than two dozen unions are running full-page newspaper ads today blasting the $829 billion health care overhaul that passed out of a Senate committee Tuesday. The unions, historically staunch Democratic backers, don't like a tax on premium "Cadillac" insurance plans. The AFL-CIO, American Federation of State, County, and Municipal Employees, and United Auto Workers are among the unions encouraging senators to vote against the bill unless it's changed.

The labor groups went ahead with their ads despite pleas from White House Chief of Staff Rahm Emanuel to hold off going public, Bloomberg News reports. The rift shows how difficult it is to build a solid coalition of labor, business, and other interests to pass something as big and complex as health reform. The controversy threatens to sink the bill.

Emanuel told the unions "that we really don’t want to be looked upon as the group that stopped meaningful health care reform,” AFSCME president Gerald McEntee says in an interview with Bloomberg. “We would love to be on the exact same page as the White House, but we see ourselves as fighting for our members.”

Not every union is on board. The Service Employees International Union, the fastest-growing labor group in the U.S., doesn't like everything in the bill but made a much more diplomatic statement.

SEIU boss Andy Stern, whose union includes janitors, nurses, and security guards, says the bill didn't go far enough to ensure health care coverage for everyone and notes that reform shouldn't be paid for at the "expense of working middle-class families." The reference was to the Cadillac plan tax the other unions are vigorously opposing. While the tax is on insurers, the companies say they'll pass the costs on to customers.

While the labor groups criticize the proposal, pharmaceutical companies that have historically backed Republicans commended the Democratic bill yesterday. The drugmakers struck a deal earlier this year with Obama in which they would consent to billions in lower payments from Medicare over a decade as long as the reform plan didn't seek further concessions. In exchange, Democrats get the drug companies' unwavering support.

"We are going to do our part to try and get a bill on the president’s desk this year,” Billy Tauzin, CEO of drug-industry trade group PhRMA, said yesterday.