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Big Labor Makes Big Spending Demands on President Obama

Posted By Mike Brownfield On August 31, 2011 @ 1:57 pm In Featured | Comments Disabled

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The Big Labor full-court press is in full swing ahead of President Barack Obama’s speech next week [1] in which he will roll-out a new jobs plan. What do they want? You guessed it: more government spending (as if an auto industry bailout, Obamacare, and a $780 billion stimulus weren’t enough.)

Yesterday, AFL-CIO president Richard Trumka continued beating the drum and calling for President Obama to aggressively push forward with more government spending in order to stimulate the economy, all while abjuring conservatives’ complaints that Washington is spending too much. Trumka wants America to spend $400 billion a year over 10 years on public works projects. The LA Times reports [2]:

“Who knows what’s politically achievable until we try?” Trumka said. “The president should articulate a solution of the size and scale necessary to solve the problem. We have a jobs crisis. … If you do only what you think the other side and the ’tea party’ will agree to, then they control the agenda.”

Trumka laid out a six-point jobs plan of his own that goes far beyond what Obama has endorsed to date. His proposal includes rebuilding schools, roads, ports and energy systems; reviving the manufacturing sector and stopping the flow of jobs overseas; preventing layoffs in state and local governments; and stepping up measures to avoid home foreclosures.

Trumka, though, isn’t the only union boss who is in denial about America’s spending crisis. In a speech to the Detroit Economic Club yesterday, UAW president Bob King trotted out the line that “America is not broke!” while calling for higher taxes and more spending. Detroit News editor Nolan Finley writes in The Michigan View blog [3]:

The real problem, the United Auto Workers president says, is not a shortage of resources, but that the country is leaving those resources in private pockets. Higher taxes, King says, will fuel an economic boom, alleviate social misery and bring fairness to our land.

It should be no surprise that America’s labor leaders want higher taxes and higher spending from the Obama Administration. After all, government spending has been their bread and butter. Under the Davis-Bacon Act, for example, federal construction contractors must essentially pay union-inflated wage scales, and as a result many if not most of those construction jobs will go to AFL-CIO members. So as Trumka calls for more government spending, his union will directly benefit–all at the cost of higher debt and fewer jobs elsewhere in the economy. Heritage’s James Sherk explains [4]:

In order to pay for new construction workers, the government takes money from elsewhere in the economy through either taxes or borrowing. Each $1 billion the government spends on construction represents $1 billion less spent in the private sector. Less spending and investment means fewer private sector jobs. Research shows that the jobs lost in the private sector outnumber the jobs funded by government spending. Congress cannot reduce unemployment through public works projects.

While it makes sense for union bosses like Trumka to advocate for more spending to directly benefit their members, it’s coming at the expense of the U.S. economy. Despite President Obama’s massive stimulus, unemployment is at 9.1 percent (and, ironically, union rolls are shrinking). But rather than changing course, Trumka, King, and the like want more of the same from the Obama Administration. We’ll find out next week what the President proposes to deliver.


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URL to article: http://blog.heritage.org/2011/08/31/big-labor-makes-big-spending-demands-on-president-obama/

URLs in this post:

[1] Image: http://blog.heritage.org/wp-content/uploads/trumka-8-31-11.jpg

[2] reports: http://www.latimes.com/news/politics/la-pn-obama-jobs-20110830,0,3413608.story

[3] The Michigan View blog: http://detnews.com/article/20110830/MIVIEW/108300353/Finley--King-Tax#ixzz1WcfiiRrW

[4] explains: http://www.heritage.org/research/reports/2010/01/davis-bacon-suspension-would-fund-160000-new-construction-jobs

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