Pat Dollard

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WASHINGTON (AP) — President Obama summoned House and Senate Democratic leaders to the White House late Thursday to discuss an apparent breakthrough in health care reform negotiations — on the make-or-break issue of taxing high-value health plans and other issues.

Obama began meeting with twelve top Democrats at 9 p.m., and the meeting has no scheduled end time. This comes after most of the same lawmakers spent more than eight hours at the White House on Wednesday trying to hammer out a deal.

After enduring months of criticism that he was too detached from negotiations — criticism mostly expressed in Democratic cloakrooms on Capitol Hill — Obama has jumped in with both feet. He has personalized a marathon push to land a health care deal this week or early next week, telling lawmakers and key stakeholders that he will not tolerate failure and that compromises, even hard ones, must be achieved on a tight schedule.

The breakthrough announced Thursday was a biproduct of the previous days talks: a deal on so-called “Cadillac” insurance plans. The White House and top union leaders heralded the agreement, which shields all union workers for five years from significant taxes on health benefit packages that non-union workers will face starting in 2013.

On Tuesday, Obama told union leaders who came to the White House to express their opposition to the excise taxes that they would not deter him and they must accept the tax in some form. Under those conditions, union leaders sought various exemptions, even though some in their membership adamantly opposed any tax on health benefits.

Republican critics called the union deal another back-room favor handed out in secret talks that violated Obama’s promise of transparency.

House leaders were intimately involved in two-days of wrangling with top blue-collar and public employee union leaders and with the White House over restructuring a Senate-passed 40 percent excise tax on high-priced health benefit plans. Union leaders complained the taxes would force their members to lose existing benefits or pay higher premiums.

Whether rank-and-file Democratic House members will accept the deal is another matter. Union backing improves the chances that most, if not all, of the full 256-member Democratic caucus will accept the arrangement, but a formal nose count has not been taken.

Other unresolved issues include abortion funding, the anti-trust exemption for insurers and the precise plan for formation of a health care exchange that will serve as a clearinghouse for consumers to purchase health coverage.

To buck up House Democrats, Obama offered a stirring defense of the party’s head-long push for health reform.

“I know how big a lift this has been, I see the polls,” Obama told House Democrats assembled for their annual issues conference. “I know that the virtues of this legislation … have been entirely obscured by fear and distraction.

“I also know what happens once we get this done,” he said. “The American people will suddenly learn that this bill does things they like and doesn’t do things that people have been trying to say it does. Their worst fears will prove groundless.”

Top union officials said newly drafted exemptions from their members will cut from the legislation $60 billion in projected revenue over 10 years. The White House said no official figure was available but did not suggest the union figure was inaccurate.

The Senate’s original tax was to raise $149 billion over 10 years. Cutting $60 billion from that figure would require negotiators to find revenue elsewhere. Neither union leaders nor the White House offered any specifics on replacement taxes under consideration.

Lawmakers have been eyeing applying Medicare payroll taxes to capital gains and other dividend income for annual incomes above $200,000 for individuals and $250,000 for families. The Senate bill already seeks to increase Medicare payroll taxes from 1.45 percent to 2.35 percent on individuals and joint-filers in those wealth categories.

The union deal exempts all workers covered by collective bargaining agreements from any excise tax on health benefits until 2018, five years later than non-union workers.

“Our people were very very pleased by it,” said Gerald McEntee, president of the American Federation of State, County and Municipal Employees. “They’re ready to go out and fight for it and even improve it down line. We’re for this health care reform and ready to fight for it.”

Richard Trumka, president of the AFL-CIO called the excise the biggest hurdle for union support. Absent any last minute changes, Trumka said the AFL-CIO’s on board.

“We will endorse it and do it proudly,” Trumka said of the emerging health care bill.