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Clinton calls for nixing Obamacare provision opposed by unions

In a move that could help her shore up support with unions, Hillary Clinton came out against Obamacare's "Cadillac tax."

In a move that could help her shore up support with labor unions, Hillary Clinton called Tuesday for replacing a key funding mechanism of the Affordable Care Act that unions have long opposed.

“I encourage Congress to repeal the so-called Cadillac Tax,” the Democratic presidential candidate said in a statement. “My proposed reforms to our health care system would more than cover the cost of repealing the Cadillac Tax, while also reining in skyrocketing prescription drug costs and out-of-pocket expenses for hard-working families.” She did not give details of her replacement plan.

The so-called Cadillac tax, which levies a hefty 40% tax on high-end employer-provided insurance plans, has come under increasing fire from some Democrats, even though it provides crucial funding for Obamacare.

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While aimed at the wealthy, the tax also threatens to hit many union members, who tend to have excellent health care plans. Labor unions opposed the tax from the beginning and have fought with the White House ever since to end it. Critics worry employers would reduce health care benefits to avoid the tax once it goes into effect in 2018. 

Lately, the center of gravity in the Democratic Party has moved against the tax, which is also aimed at keeping down overall health care spending.

Clinton's top rival for the Democratic presidential nomination, Sen. Bernie Sanders introduced a bill last week to repeal the provision. And he was joined by more mainstream Democrats, like Sen. Chuck Schumer, who is expected to become the party’s next leader in the Senate. Sen. Chris Murphy, who leads a pro-Obamacare campaign in the Senate also signed on. Sanders, who is competing with Clinton to secure labor union endorsements, has opposed the tax since 2009.

The news of Clinton’s opposition was first reported by The New York Times, after Clinton told the president of a major union that has already backed her. As Clinton works to secure more union support, her opposition to the tax could be a major boost.

The White House has so far defended the tax and expressed no interest in repealing it, making this a rare break for Clinton from President Obama.

But opposition to the tax does not mean Clinton opposes Obamacare, she assured. “The Affordable Care Act is working, plain and simple,” Clinton said. “President Obama doesn't get enough credit for this historic achievement, and Republicans' obsession with repeal is dead wrong. We should be defending and strengthening the Affordable Care Act, not scrapping it.”