Excise Tax Deal Collapsing?

Not that the deal between labor and the Democrats would have kept federal employees from being hit by the excise tax in a health care reform bill, but it looks like that compromise might be falling apart anyway:

But labor leaders have backed away from the proposal in the wake of the special Senate election in Massachusetts.

"I do not believe there will be an excise tax enacted," said Larry Cohen, president of the Communications Workers of America. "It appears that the administration and Congress will be taking a much more modest approach to health care reform. The cost and value of such reform would not justify using an excise tax."

A wide range of House Democrats continue to criticize the tax as bad policy, even with the changes negotiated by labor leaders and the White House.

Moreover, House Democrats said, the tax is bad politics because it would set the middle class against the poor -- people struggling to keep health insurance against people struggling to get it.