A White House official said on Friday that the Obama Administration “does not see a legal way” to give Big Labor the taxpayer-funded Obamacare subsidies it vigorously argues it deserves and needs.

The announcement was made in a Treasury Department letter issued shortly after a White House meeting between President Barack Obama and Vice President Joe Biden, AFL-CIO President Richard Trumka, and other top union bosses.

Instead of union workers receiving the subsidies for multi-employer plans they have demanded, a White House official told The Hill that the Obama Administration will “encourage them to offer coverage through the Marketplace, on an equal footing, to create new, high-quality, affordable options for all Americans.”

Union bosses say the Obama Administration’s denial could have disastrous consequences for the labor movement.

“I guarantee you by your next convention four years from now, you won’tmeet a quarter of this room,” said President of the SheetMetal, Air, Rail and Transportation Union Joseph Nigro. “We won’t be here.”

Union opposition to the unpopular Obamacare law has been building in recent weeks. The AFL-CIO recently passed a strongly worded resolution blasting Obamacare during its recent national convention, despite White House efforts to silence union opposition. Laborers’ International Union of North America (LIUNA) President TerryO’Sullivan said during the convention that “if the Affordable Care Act is not fixed, and itdestroys the health and welfare funds that we have all fought for andstand for, then I believe it needs to be repealed.” O’Sullivan, who says he supports Obamacare, added, “We’ll be damned if we’re going to lose our health insurance because of unintended consequences in the law.” Nevada AFL-CIO chief Danny Thompson also expressed his frustration with Obamacare to the Las Vegas Sun “We were told that if you liked the health insurance you had, then it would be left alone. Well, it hasn’t been left alone.”

The growing gulf between the Obama Administration and the labor unions who once strongly supported the president’s government healthcare overhaul could have political implications for Democrats come the 2014 midterm elections. 

A CNN poll finds that 57% of Americans oppose “all” or “most” of Obamacare.

Obamacare’s government healthcare exchanges open for business in 16 days.