Research Briefing

Obama To Issue New Rules That Would Give Union Bosses Unfair Advantage When Competing For Millions Of Dollars In Federal Contracts

OBAMA RELEASING NEW JOB-KILLING RULES TODAY TO BAIL OUT HIS UNION PAYMASTERS 

“The Obama Administration Is Set To Issue A Rule Tuesday That Will Allow Federal Agencies To Require That Contractors On Large-Scale Public Construction Projects Agree To Union Representation For Workers.” (Melanie Trottman, “Unions Win Public-Contract Row,” The Wall Street Journal, 4/13/10)

New Rules Would Give Upper Hand To Unions Unfairly Receiving Millions Of Taxpayer Dollars Through Federal Contracts. “Next up after health care could be final approval of an executive order that calls for multi-employer, multi-union PLAs to be used when federal construction projects exceed $25 million. PLAs stipulate that projects be awarded to contractors and subcontractors who agree to recognize unions as representing their employees during that particular job …” (Kevin Mooney, “Unions Want Washington’s Help With Pension Funds,” The Washington Times, 3/25/10)

• That Could Raise Construction Costs, Discriminate Against 85 Percent Of Construction Workers “Who Choose Not To Join A Union.” “Building trade groups said pushing contractors to agree to such agreements with unions could drive up the costs of public construction by nearly 20% and discriminate against what they said are more than the 85% of the U.S. construction workforce members who choose not to join a union.” (Melanie Trottman, “Unions Win Public-Contract Row,” The Wall Street Journal, 4/13/10)
• And Kill Small Businesses’ Ability to Create Jobs By “Putting The Davis-Bacon Act On Steroids.” “Smaller businesses will find it harder to win government work.  Even if they put in better bids, many can’t match the benefits offered by big companies, or always meet the government’s plans to impose a new ‘livable wage’ standard for employees of its contract firms.  This is like putting the Davis-Bacon Act on steroids … the 1931 legislation that continues to distort federal spending by establishing ‘a prevailing wage’ standard for public works projects, which in practice means the top local union wage.” (Editorial, “Procuring The Union Agenda,” The Wall Street Journal, 3/9/10)

New Rules Would Bail Out Union Bosses By Forcing Job Creators To “Cover Costs For Underfunded Union Pensions.” “Another disadvantage to private companies concerns the ‘withdrawal liabilities’ they may be forced to cover as pensions erode, … an accounting professor with St. Louis University, has warned in a study that examines the impact of PLAs. Employers that are tied in with collectively bargained agreements are obligated to cover costs for underfunded union pensions when other contractors drop out ...” (Kevin Mooney, “Unions Want Washington’s Help With Pension Funds,” The Washington Times, 3/25/10)

• Because Labor Organizations Like SEIU Running Out Of Money To Meet Union Members’ Pension Claims. “The average union pension has resources to cover only 62 percent of what is owed to participants … Pensions with less than 80 percent of the assets needed to cover present and projected liabilities are considered ‘endangered,’ while those that fall below a 65 percent threshold are classified as ‘critical’ under the Pension Protection Act of 2006. Michelle Ringuette, a spokeswoman for the SEIU, acknowledged that pension funds for her union and for others were facing difficulties …” (Kevin Mooney, “Unions Want Washington’s Help With Pension Funds,” The Washington Times, 3/25/10)

THIS ISN’T THE FIRST TIME OBAMA BAILED OUT UNION BOSSES

Obama Used Recess Appointment To Place Union Boss Lawyer Craig Becker On The National Labor Relations Board, Even Though Senate Rejected Him Last Month. “Mr. Becker says he ‘worked with and provided advice’ to SEIU Local 880 in Chicago … one of two SEIU locals currently in the national spotlight for its deep ties with Acorn … Acorn co-founder Wade Rathke praised Mr. Becker by name … ‘For my money, Craig’s signal contribution has been his work in crafting and executing the legal strategies and protections which have allowed the effective organization of informal workers ...” (Editorial, “Acorn’s Ally At The NLRB,” The Wall Street Journal, 10/15/09; Cloture Motion On Craig Becker, Of Illinois, To Be A Member Of The National Labor Relations Board, Senate Roll Call Vote #22, Rejected 52-33, D 50-2, R 0-33, 2/9/10)

Becker Helped Draft President Obama’s Pro-Labor Executive Orders In 2009. “Mr. Becker also won’t give a clear answer about his role in preparing several pro-labor executive orders issued by President Obama shortly after inauguration … When asked by Sen. Hatch if he was ‘involved or responsible in any way’ for these executive orders, Mr. Becker responded: … ‘As a member of the Presidential Transition Team, I was asked to provide advice and information concerning a possible executive order of the sort described. I was involved in researching, analyzing, preliminary drafting, and consulting with other members of the Transition team.’”  (Editorial, “Acorn’s Ally At The NLRB,” The Wall Street Journal, 10/15/09)

• Including Executive Order That Forces Federal Contractors To Bargain With Unions Used By Previous Contractors. “It is the policy of the Federal Government that service contracts … shall include a clause that requires the contractor … under a contract that succeeds a contract for performance of the same or similar services at the same location, to offer those employees … employed under the predecessor contract whose employment will be terminated as a result of the award of the successor contract, a right of first refusal of employment under the contract in positions for which they are qualified.” (President Barack Obama, Executive Order – Nondisplacement of Qualified Workers Under Service Contracts, The White House, 01/30/09)

AND IT WON’T BE THE LAST TIME

Last Month, Obama’s OMB Proposed To Grow Unionized Government Workers By Broadening Definition Of Jobs That Should Be Performed By Those Workers Instead Of Private Contractors. “The proposed guidance is built around the general principle that the more critical a function is, the greater the need for internal capability to maintain control of the agency’s mission and operations. This is most obviously the case where the function is critical to achievement of the agency’s core mission, but even for functions that may not be viewed as critical, such as functions that are not directly involved in performing the core mission, the agency may determine that the function is, nonetheless, sensitive enough as to require that many, most, or, in some situations, all positions be filled by federal employees.” (Office Of management And Budget, “Work Reserved For Performance By Federal Government Employees,” The White House, 3/31/10)

Obama’s Education Grants Given To State Programs With Union Support Over Stronger States Programs That Unions Opposed. “The announcement that Delaware had won about $100 million highlighted that all of the state's teachers unions backed the plan for tougher teacher evaluations linked to student achievement. In second-place Tennessee, which won about $500 million, 93 percent of unions were on board … [A]pplications from Florida and Louisiana were considered innovative but fell short in part because they had less union support. The District's bid, rated last among 16 finalists, was opposed by the local union …” (Nick Anderson, “Input Of Teachers Unions Key To Successful Entries In Race To The Top,” The Washington Post, 4/3/10)

Sen. Bob Casey (D-PA) Introduced Legislation That Would Take Pensions Previously Funded By Unions And Move Liability To Taxpayers. “Under [Sen. Casey’s Create Jobs & Save Benefits Act of 2010] the Pension Benefit Guaranty Corporation would … have the authority to take over the pension obligations of employers who have withdrawn from the plans, and pay the benefits out of taxpayer dollars. Once the PBGC shoulders that obligation, it would keep making payments until the last retiree or designated survivor dies … Since many multiemployer plans are in financial difficulty, this legislation, if enacted, could dramatically increase the federal deficit, putting even more pressure on the American taxpayer and the economy. Depending on events, it might add billions to government spending-current underfunding levels are estimated at $165 billion-bumping up future deficits.” (Diana Furchtgott-Roth, “Decrying The Union Pension Bailout Bill,” The Hudson Institute, 4/8/10)