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Union leaders OK new tax on high-cost health plans

WASHINGTON - In a major breakthrough, union leaders bowed Thursday to White House demands for a new tax on high-cost health plans as part of landmark health care legislation taking final shape in intensive negotiations.

"We are on the doorstep" of success, President Barack Obama said.

The tentative agreement on the tax, which included significant concessions by the administration, was disclosed as leading lawmakers set an informal timetable of Friday for a compromise on the health care bill that Obama made a top priority in taking office a year ago.

Democrats expressed the hope that the agreement would quickly open the way for progress on other key issues where House- and Senate-passed bills differ, as well as attempts by the White House to squeeze additional financial concessions from drugmakers, nursing homes and other health care providers.

The fast-paced events came as senior lawmakers went to the White House for the second straight day of bargaining over terms of a final compromise, and Obama gave a rousing speech to rank-and-file House Democrats in a late-afternoon appearance in the Capitol complex.

Referring to polls that show lagging support for the legislation, he told Democrats, "I know how big a lift this has been." In remarks looking ahead to the fall campaign, he added, "If Republicans want to campaign against what we've done by standing up for the status quo and by standing up for insurance companies over American families, that is a fight I want to have."

Republicans are nearly unanimously opposed to the legislation, and have made clear they intend to use it to their advantage in midterm elections this fall in which 37 Senate seats and all 435 House seats are at stake.

The president has told lawmakers he wants the tax on high-cost plans included in the legislation to help rein in costs. But that position courted conflict with labor leaders who fear exposing their membership to higher taxes, as well as with House Democrats who omitted it from the legislation they initially passed.

The day's events underscored the urgency with which the White House and top Democrats were working, and the tentative agreement on a new tax on high-cost plans was the most prominent fruit of the effort.

While not all details were set, it appeared the union leaders had backed down on their outright opposition to a new tax, and the White House had agreed to several concessions to mollify their concerns.

In a significant victory for unions, the 40 percent excise tax would not apply to policies covering workers in collective bargaining agreements, state and local workers, and members of voluntary employee benefit associations through Dec. 31, 2017.

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