Even in politics, things can change pretty darn quickly. Consider the recent ups and downs of labor unions in the political arena.
During the 2008 presidential campaign, labor unions went all in on Barack Obama. He was on board with most of their legislative agenda. Make it easier to unionize a workplace? Expand opportunities to sue employers? Jack up taxes on upper-income earners? More regulation? Trade protectionism? Government-run health care? Increase government spending? Absolutely.
You could hear the labor union bosses declaring: “Obama, he’s our guy.”
And their guy, of course, won. Legislation was quickly passed and signed into law making it easier to bring compensation-related discrimination lawsuits with the so-called Lilly Ledbetter Fair Pay Act. The president pushed class warfare economics by advocating higher taxes on the “rich.” Obama vastly expanded upon the huge spending increases begun under his predecessor. Pending free-trade agreements with South Korea, Panama and Colombia were ignored. Big-government ObamaCare became law, though it did not go as far as many union leaders wanted.
As for regulation, a recent issue of The Economist offered some worrisome findings. During his first two years in office, Obama’s issuance of “economically significant” rules (those with annual costs topping $100 million) ran about 40 percent ahead of the annual rates under Presidents Bush and Clinton (neither of whom were exactly shy to regulate), with rules for financial regulation and ObamaCare still to come. And while the private sector has lost jobs, the federal regulatory work force under Obama expanded by 16 percent during his first two years in office.
Obama’s initial two years in office ranked as heady times for labor unions. Big labor’s bet on Obama seemed to pay off big time.
But then came the midterm elections in November 2010. Obama’s Democrats got beaten badly, giving up control of the House of Representatives, losing seats in the Senate to hold a slim majority, and suffering big setbacks at the state level.
Suddenly, the terrain shifted against labor unions. Even their guy, the president, didn’t seem like a sure thing.
He dusted off the South Korea trade deal, and now calls for its passage, and the White House is now talking more favorably about the Panama and Colombia accords as well. Obama also agreed with congressional Republicans to extend most of the 2001 and 2003 tax relief measures, due to expire at the end of 2010, for another two years — including those for upper incomes.
Oh yes, then there was his Executive Order and related memoranda calling on federal agencies to review their regulations and reduce or eliminate those deemed overly burdensome on entrepreneurs. The day after that announcement, OSHA withdrew new noise regulations, which would have placed unnecessary costs on manufacturers.
Of course, based on his record, it’s unlikely that the president’s heart was truly in any of this change. Much rides on his willingness to execute in a substantive way. The White House has made clear, for example, that they expect ObamaCare and financial regulation to pass muster under its regulatory review, despite the economic reality that both will saddle business and the economy with big costs. For good measure, in his State of the Union speech, the president still called for raising taxes on upper income earners, who, it must be noted, are largely entrepreneurs and investors.
But post-November politics have at least forced some changes in rhetoric by the president, and labor unions are not happy.
As for Congress, Republican hearts, at least starting out, seem to be in the effort to move against the union agenda. For example, repeal or rolling back parts of ObamaCare has been a leading issue at the start of this new Congress. Pro-growth tax reform has replaced talk about how to hike taxes on the wealthy.
As for spending, the Spending Reduction Act of 2011 has been presented as a start at reining in federal spending. It would hold non-security discretionary spending to 2008 levels this year, and then cut that spending to 2006 levels for the rest of the 10-year budget window. In addition, unspent “stimulus” funding would be eliminated, and the civilian federal workforce would be reduced by 15 percent through attrition and lose automatic pay increases for five years.
Definitely not pro-labor union.
An interesting signal of how the House is tilting on labor unions turns out to be the name of one committee, as noted recently by TheHill.com. When Republicans took control of Congress in 1994, they changed the House Education and Labor Committee to the Committee on Economic and Educational Opportunities, and later to the House Education and the Workforce Committee. Democrats regained the House, and it went back to Education and Labor after the 2006 elections. Now, it’s back to the House Education and the Workforce Committee.
What’s in a name? Well, with apologies to William Shakespeare, according to worried labor union leaders, a committee by any other name does not smell as sweet. But given the costs and lost efficiencies that labor unions impose on taxpayers, businesses and consumers, it could smell even sweeter for the economy.
Raymond J. Keating, chief economist for the Small Business & Entrepreneurship Council, can be reached at email@example.com