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Firms warn of cuts to benefits

Wall Street Journal, December 24, 2009

Some of the biggest employers are warning that a provision in the Senate's proposed healthcare overhaul could lead to cuts in retiree benefits and a sharp reduction in reported earnings next year. Companies including Boeing Co., Deere & Co., MetLife Inc., and Xerox Corp. plan to lobby Democratic leaders to drop the provision, which would change the tax status of payments for retiree health benefits. Democrats identified the change as a way to help pay for the healthcare overhaul. It would raise about $5.4 billion over 10 years—a relatively small slice of the bill's overall cost—according to estimates. The AFL-CIO has joined the corporate giants in an unusual alliance to warn the provision would encourage companies to drop drug benefits for million of retirees.