AFL-CIO leader: Democrats inviting repeat of 1994 over economy woes

The Democratic Party could see a repeat of its epic electoral defeat in 1994 unless it institutes dramatic changes in economic policy, the leader of the AFL-CIO said Monday.

In a speech at the National Press Club, AFL-CIO President Richard Trumka said to avoid losing control of the House, the majority party needs to end its coziness with the financial sector and step up and take action for workers.

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“In 1992, workers voted for Democrats who promised action on jobs, who talked about reining in corporate greed and who promised healthcare reform. Instead, we got NAFTA, an emboldened Wall Street — and not much more,” Trumka said. NAFTA is a reference to the North American Free Trade Agreement with Mexico and Canada.

Union leaders got behind Democrats in 1994 despite their disappointment, but were unable to motivate their members to get out the vote, according to Trumka.

“There was no way to persuade enough working Americans to go to the polls when they couldn’t tell the difference between the two parties,” Trumka said in his remarks. “Politicians who think that working people have it too good — too much healthcare, too much Social Security and Medicare, too much power on the job — are actually inviting a repeat of 1994.”

In his remarks, Trumka blasted the Senate healthcare reform bill as an example of what has led the United States into economic distress. Unions are particularly frustrated with a proposed tax on so-called "Cadillac," or high-cost, insurance plans that is included in the Senate bill. He and other union leaders say the tax would cut into benefits workers have won through negotiations with employers.

The House healthcare bill did not include a tax on the insurance plans, and Trumka and other union leaders are scheduled to meet with President Barack Obama at the White House later on Monday to discuss the issue.

In his remarks, Trumka said the Senate bill would drive “a wedge between the middle class and the poor.”

“The tax on benefits in the Senate bill pits working Americans who need healthcare for their families against working Americans struggling to keep healthcare for their families,” Trumka said. “This is a policy designed to benefit elites — in this case, insurers, hospitals, pharmaceutical companies and irresponsible employers — at the expense of the broader public.”

The union leader also laid out a number of labor’s priorities in Washington for the next year. He said Congress should institute a consumer financial protection agency, tax financial transactions and pass labor law reform.

In the question-and-answer session that followed his speech, Trumka predicted the Employee Free Choice Act (EFCA) would pass in “the first quarter of 2010” and would help create jobs. EFCA, heavily lobbied against by business groups, has been a tough sell for centrist Democratic senators and has seen little progress this Congress.

Asked if he would agree to jettison an EFCA provision that would allow workers to unionize if a majority of them signed cards stating their intent to organize — often called “card-check” — in order to keep another measure establishing a government-appointed arbitrator for stalled union contracts, Trumka said he would not bargain in public.

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Trumka also pushed for a second stimulus to follow the $787 billion recovery effort that was passed in February of last year. The House passed a jobs bill last December and the Senate plans to move on that legislation once healthcare reform is finished. The AFL-CIO has already laid out a five-point plan to boost the economy, including spending more on infrastructure and lending Wall Street bailout funds to medium- and small-sized businesses.

Without a second recovery package being passed, Trumka said, “We stand the danger of the double-dip recession … because the states are not spending, workers are not spending.”

The labor movement has found itself on the opposite side of the Obama administration over healthcare reform due to the White House’s leaning toward the Senate version of the bill, which Trumka calls “inadequate.” But the union leader downplayed any friction between the president and one of the Democrats’ core constituencies as he headed to the White House to meet with Obama later on Monday.

“It is a meeting among friends, trying to solve problems,” Trumka said.

This story was updated at 4:13 p.m.