This afternoon Blue Girl, RBH, and I attended a “Save Our Jobs Rally” at the Penn Valley Community College Gym in Kansas City sponsored by the United Auto Workers and the Automobile Dealers Association.

I know what you’re thinking. A looming depression makes for strange bedfellows, doesn’t it?

Congressman Dennis Moore (D-Kansas) (center) and Congressman Emanuel Cleaver (D-Missouri) (right).

We estimated the number in attendance to be between 600 and 700. Keep in mind that we’re not exactly expert at estimating crowd size.

Congressman Emanuel Cleaver’s office issued the following in a release before the rally:

“The global financial crisis is crippling the availability of credit for the automakers, their suppliers, their dealers and consumers,” said Congressman Cleaver. “As our local auto plants extend their work stoppages, it is quite possible one or more of the domestic automakers could collapse. No one can afford American auto makers going bankrupt, least of all the 7,200 men and women who work at the Fairfax and Claycomo plants, the thousands who work for auto dealers in the area or the tens of thousands of retirees. These are our neighbors, friends and family and they are in trouble.”

“However frustrating things in Washington are right now, they pale in comparison to the insecurity, fear and anxiety being felt by millions of workers who are either standing in the unemployment line or looking for a pink slip with every paycheck. So, while we shake our heads and stomp our feet in the Capitol, our Congressional troubles are trivial compared to the peril faced by far too many we serve. We will hear from the families impacted directly by this terrible economy on Sunday,” said Cleaver.

Governmental leaders in attendance included Missouri Governor Jay Nixon, Congressman Emanuel Cleaver, and Congressman Dennis Moore, all who addressed the crowd. The Mayor of Independence, Missouri; the Mayor of Kansas City, Kansas; several state officials from Kansas; several Missouri state representatives, and a number of city council members from Kansas City, Missouri and Kansas City, Kansas were also in attendance. A representative of the Automobile Dealers Association also spoke to the crowd at some length.    

Jeff Wright, president of UAW Local 249 is interviewed by the local ABC affiliate.

UAW retirees.

Missouri Governor Jay Nixon (D) (right).

Bridgette Williams, President of the Greater Kansas City AFL-CIO.

Congressman Emanuel Cleaver remained past the end of the rally until the last individual who wanted to talk with him had left.

The impetus for the rally was for these governmental leaders to express their support for automotive workers and their industry.

There is a palpable fear that the current political spin (and conventional wisdom) in Washington will enable Congress to ignore the current serious needs of the automotive industry. The common theme from every speaker was that the survival of the automotive industry is absolutely essential for the good of the American worker and the American economy,

That stands for Voluntary Employees Beneficiary Association, you guys! And it’s what the UAW just recently agreed to for management of their employee health and retirement benefits. 

By definition, a VEBA is nothing more than a federally recognized non-profit 501 © (9) corporation set up to insure that health care, pension, unemployment or other benefits are routinely paid out to workers who are covered by the trust.  And, according to Guidestar, a non-profit monitoring service, there are as many as 2,700 VEBAS already in existence for union and non-union employees in industries ranging from steel to utilities and telecommunications.

The trust (VEBA) is generally funded up front by the employer entity in return for a release from responsibility, from the employee entity, for the current and future health and retirement benefits of their workers.  The funding is usually about 60 – 70% of what businesses project they will spend on health and retirement benefits for these employees presently and in the future. Maybe not a bad option, providing that the trust is adequately funded, that the economy continues to grow and that stock market advances outpace health care cost increases. Pushing the VEBA option in the particular case of GM was worker fear of seeing their jobs outsourced if the automaker continued to be hamstrung by the health care premium burden.  And in the case of bankruptcy, a real threat for GM, everything would be gone anyway, job and benefits. No small wonder that VEBA ruled.

Have your eyes glazed over yet?  It gets easier…or maybe harder depending on your perspective.

  For those of you in union shops with hardcore benefits contracts valiantly negotiated through long days and nights, I predict that VEBA’s are the wave of your future.  With the highly publicized UAW joining of the crowd already 2700 strong, businesses and manufacturers are going to jump on this bandwagon because health benefits are one of their most expensive operating costs. As for those of us with a verbally negotiated promise of health insurance at the time of our hire, we are sure to see a lessening of benefit, as well as, an expectation for us to assume increasingly higher percentages of the premium, until the obligation is moved entirely to our shoulders.  No more employer-based health care.  Instead we can have HSA’s or some equivalent.  That is a Health Savings Account.  Any amount that you contribute will likely be from pretax income and that is all the preferential treatment you will get. Period.  For really serious illness, you will also carry a high deductible insurance policy that you will purchase at an equally high premium.  See, it got easier, didn’t it.  It is what David Brooks of the NYT calls  “the new social contract”.

The Republican noise machine will shout that eliminating employer based insurance and giving individuals a tax benefit with which they must purchase insurance and care via their HSA will miraculously lower costs and improve health care access.  It will repeat endlessly  the talking points about  Democratic Socialized Medicine plans and how they will be the ruination of our good friends, the “in charge of everything including all the money” insurance industry. 

But according to TruthDig;

None of the leading Democratic contenders proposes a federally run system-such as Medicare to solve the coverage dilemma.  If anything, most current Democratic plans are weaker than anything the party has offered since Harry Truman proposed national health insurance.

Still, this development just might turn the proposals of these Democratic contenders upside down because just who will have the wherewithal to purchase the alternative private insurance laid out in their plans. Most everyone might opt for the government plan. If so, would that more quickly lead to a single payer system as envisioned by John Edwards.  Or would the feds pay a subsidy to insurance to ensure perpetuation of the private system.  These are unknowns.  But for now, the Democratic Party is directly on course to nominate a candidate for President who will not propose the single payer plan that we need, but instead propose a plan to maintain the health insurance industry’s place at the table  and condemn Americans to another fifteen years in health care hell.

Health Care on AFL rank and file are increasingly wary of the VEBA (Voluntary Employees Beneficiary Association) proposed by GM, Ford and Chrysler, for the purpose of ridding their corporations of the health insurance drag.  They worry that the plan may go broke, as did similar plans set up for Caterpillar and Detroit Diesel in the 1990’s. The VEBA would take $100 billion off the automakers books and in return the big three are proposing to fund the trust at 60% to 70% of these projected costs. United Steelworkers, the representing union, for Goodyear Tire and Rubber employees, recently negotiated a VEBA that Goodyear will fund with $1 billion in cash and company shares. Since a VEBA is a trust fund that earns by investing, the danger exists that if the investments go south, the VEBA risks going belly up leaving workers with nothing.  That is what happened with Caterpillar and now the legal system hums with lawsuits to determine just who is going to provide the retirees with the health care plans they were promised.

Writing in the NYT, David Brooks claims that the old employer based benefit contract, born in the 1940’s, is no longer a viable arrangement for health care funding, and states that this issue of funding will become the primary domestic debate of the near future. He dismisses the “liberals” who chase an elusive Single Payer plan.

Some liberals, believing that government should step in as employers withdraw, support a European-style, single-payer system health care system. This would be fine if we were Europeans. But Americans, who are more individualistic and pluralistic, will not likely embrace a system that forces them to defer to the central government when it comes to making fundamental health care choices.

Well, I don’t know what planet he lives on, but here on Earth there are about 47 million pluralistic individualistic Americans who would simply like to have fundamental health care. The rest of us have been trained by insurance to accept what they give us and, if brave enough, fight for what they owe us.

But Brooks is not alone with this proposal.  He draws his opinions from the Heritage Foundation framework and cites in particular, Stuart Butler, a vice-president at Heritage. Participating in a social policy project coordinated by the Brookings Institute, and called The Hamilton Project.  Butler’s vision [http://www.brookings…] calls for basic security while demanding reciprocity, ie, if you contribute to society, you are protected from catastrophe.  He wants to foster personal responsibility, stimulate private savings and calls for self-insurance from those who can afford it. He would like to form “insurance exchanges” that could be sponsored by entities such as unions and churches that we would join according to our preference. Then he pretty much recommends that we be sorted and slotted according to our ability to pay and proceed from that point with an insurance plan according to means.  And although he doesn’t come right out and say it, it is clear that he wants to turn Medicare into a means tested program also. Brooks calls it The New Social Contract.  It is probably the get business off the hook for employer health benefit contract.

But whatever it is called, VEBA seems to be a pathway to this goal. The UAW contract with the big three expires on September 14.  If the UAW goes VEBA, look for that to become a trend. Vacuums will open up in health care administration and the conservatives are already prepared to fill them.

( – promoted by Clark)

Grocery store workers in St. Louis voted overwhelmingly this week to accept new contracts with Schnucks, Shop n Save and Dierbergs.  While members of the United Food and Commercial Workers will receive a moderate pay raise and an expansion of some benefits, they do so by accepting to share the cost of their health insurance premiums. The new contract states that workers’ share of premiums will range from $4.00 weekly for employee only coverage to $12.00 weekly for family coverage.  The overall attitude among workers is that considering the cost of health care, this looks like a bargain.

More below the flip. – Clark

The UAW is also facing an employer-initiated proposal to overhaul the health insurance benefit currently provided to employees as part of their contract.  The proposal being offered by GM, Ford and Chrysler asks that the Union be willing to discuss the creation and administration of a health care trust which would provide benefits for active and retired workers. Creation of the trust would take $100 billion in health care liabilities off the automakers’ books. The carmakers would then contribute a large amount, in the tens of millions to create the trust.  If the union members should reject this offer, they risk wage and benefit cuts and loss of other employee perks. Strikes to protest these cuts would likely force at least one of the big three into bankruptcy. History on this plan has not proved  favorable.

The US is recognized as offering the gold standard in health care.  It is also recognized as the most expensive health care system in the world.  The union concessions noted above are but a drop in the barrel insofar as solutions to the high cost of care.  But wait! Here come the lending giants with zero interest financing.  Medical financing has become one of the fastest growing areas of consumer credit.  Of course not everyone is eligible for the zero interest option.  Only for the creditworthy, it will offer no help to the 47 million uninsured in difficult financial circumstances.  Even if you are creditworthy and get the zero interest option, if you should default, you will be subject to a 20% or more interest rate – such as the default penalty on a credit card.  If you don’t qualify for the zero interest option and need a longer-term loan, it can be had for an interest rate of only 12%.  Look for an increase in personal bankruptcies as a result of this fabulous solution to the health care conundrum.  And forgetful me, I almost forgot to mention, the credit card industry will now demand a seat at the table when health care reform is discussed.

Thank goodness that politicos on the presidential loading ramp have their very own solution for the funding hodgepodge that controls the gate of gold standard health care.  Some are serious, some are cutsey and most of them not worth mentioning. The Edwards plan comes closer than any other proposal to meet the health care needs of this country causing  the PNHP (Physicians for a National Health Program) to recently challenge Senator Edwards to  “eliminate the middleman, make our businesses more competitive globally, so that this country could afford health care for everyone.” Kudos goes to Gov. Mike Huckabee for the best non-answer.  It is simple, give every citizen the same insurance that legislators have or give every legislator the same insurance that everyone else has, he said with a sly grin, His interviewer struggled, but failed to come up with, a follow up question.

In the end the health care problem could reform itself. Right now 64% of our health care system is financed by public money, which includes federal and state taxes, property taxes and tax subsidies. With these monies, we pay for Medicare, Medicaid, the VA, and insurance coverage for public employees (including teachers), elected officials, military personnel, etc.  Hefty tax subsidies are also paid to employers to help pay for their employees health insurance.  About 17% of care is financed by all of us via out of pocket payments, such as co pay, deductibles, people paying out of pocket for health insurance or health care, etc.  Only about 19% of health care is attributable to employer health insurance.  If employers contract themselves out of health insurance provision, maybe we will be able to see beyond the fog and realize there is no earthly reason for insurance industry interference.  We might not want to fork over tax money, only to have the Feds pay insurance 30% just to let us know we will not be covered. We might just go ahead and excuse big insurance, big pharma, big politics and now big banking, from the health care table. But health care is projected to be a $4 trillion industry by 2015 so, don’t expect them to go quietly into the night.

About 300 people rallied in downtown St. Louis yesterday in support of higher fuel economy standards for automobiles. Among them were US Senator Claire McCaskill, US Congressman Russ Carnahan, and leaders of the UAW. It sounds great – Democratic leaders joining with organized labor to demand more environmentally friendly policies from the big automakers. The catch? They’re teaming up in support of the weaker standard favored in the House – an increase from the current CAFE standard of 27.5 miles per gallon to 32 mpg by 2022, instead of the Senate’s version with an increase to 35 mpg by 2020.

A representative of the auto industry, Barry Felrice of Chrysler, was present. He acknowledged that the auto industry has historically claimed its inability to meet previous standards (both emissions AND safety), only to pull it together in the end. But Felrice asked “What if the auto industry is right this time?”

What if, indeed. Is Felrice holding local autoworker jobs hostage?  “Lower CAFE standards or they get the ax!”

Here’s another “What if?” scenario for Felrice to contemplate. Shocks to the oil supply cause gas prices to skyrocket and long lines to form at gas stations. Americans increasingly turn to fuel efficient foreign cars designed for countries with more expensive gasoline. American automakers are forced to layoff thousands of workers. Guess what? It already happened in the ’70s and ’80s.

Raising CAFE standards isn’t a panacea for global warming and our dependence on foreign oil, but without more fuel efficient automobiles, it’s going to be incredibly difficult. Transportation is 28% of US greenhouse gas emissions. Raising CAFE standards to 40 mpg by 2016 could save the US 4 million barrels of oil a day  – that’s 20% of our current total demand for oil. Combined with other “wedges” that increase our energy efficiency (like increased reliance on renewable energy for our electricity production), suddenly the twin terrors of increasing reliance on foreign oil and global warming become more manageable. It’s a shame that Claire McCaskill and Russ Carnahan are stuck on the wrong side of this issue. It’s even more disappointing that they are pretending to be part of the solution.