Labor Dept. power grab rewards Obama's union allies
In a stealthy bureaucratic move, an Obama political appointee is rewriting rules to enrich unions, economically harm developers, and hinder future construction. The Washington Post takes Obama's Labor Department to task for deciding "with a stroke of a bureaucrat's pen" to reward unions while imposing crippling costs on everyone else . The issue involves one of unions' favorite pieces of legislation: The Davis-Bacon Act.
The 1931 Act has required contractors to pay construction workers "prevailing wages" for construction projects involving "public buildings or public works' funded by the federal government or by the District of Columbia.
The prevailing wages usually mean the highest union wages for that community. As an aside, this is one reason why Obama prefers government expansion: funding for the government comes with many strings attached -- especially the one that requires federal funds be used in ways that empower unions-regardless of the costs to taxpayers and the budget.
Until now, the plain language of the statue has been followed: that the Act applies only to "structures funded, owned or occupied by the U.S. or District governments".
But we live in the Age of Obama and all prior definitions, agreements, understandings are null and void at the whim of Barack Obama and his team.
The Washington Post editorializes:
Now, with the stroke of a bureaucrat's pen, that understanding has been upset. A Labor Department regulator has ruled that Davis-Bacon covers the CityCenter DC project, a $700 million private-sector complex under construction downtown at the site of the former convention center. The decision is astonishing, both because it is such a stretch legally and because of its implications - which range from a financial hit for the District to higher costs for development across the country.
Investors were assured that the Davis-bacon Act did not apply. After all, no federal money went into the project and no government offices would be located there once the project was completed. Even a civil servant at the Labor Department agreed, But then Nancy Leppink, an Obama political appointee and the acting administrator of the U.S. Department of Labor's Wage and Hour division, entered the picture and overruled her underling.
The Washington Post continues:
Her reasoning: The District owns the land, which it is leasing to developers for 99 years; it retains "direct authority" in the form of a limited veto over aspects of construction; and it has touted the public benefits of the project, such as more jobs and tax revenue for the city. Ergo, CityCenter's hotels and restaurants are "public works," just like the 14th Street Bridge.
Never mind that the District's actual control over construction amounts to little more than the usual regulatory oversight, or that long-term leasing of municipal land is a common economic development tool not previously thought to convert office-retail complexes into public works. Never mind that Ms. Leppink's expansive reasoning could apply to all future commercial redevelopment of land belonging to the District or to the federal government anywhere.
The result: increased costs for developers, less development going forward, and damage to the economy as a whole. The rule by fiat also undermines confidence -- who can calculate the risks of undertaking projects when the government can decide "with a stroke of the pen" to undermine the economics of the development? Even after a great deal of money has been poured into projects with the understanding that the federal government would not swoop in and decide to enrich union coffers at the expense of investors.
Obama's political appointees are the culprits who often undermine the work and the decisions of bureaucrats who are more knowledgeable and experienced.
This is just one more example of the modus operandi of President Obama and his appointees: ignore previous agreements and precedent, throw free enterprise into the ditch, in order to reward union allies.
Hasn't Obama been talking about putting country before politics? His administration is all about politics -- especially getting Barack Obama reelected and his appointees keeping their jobs.
Here is his hypocrisy in full bloom: he needs union money and help for his upcoming election. Therefore he uses regulatory power to transfer wealth to unions.
Given this environment can anyone blame business for being seized by paralysis?