06.08.2012 0

Obama administration handicapped by own regulations

Obama and WorkersBy Adam Bitely — The regulatory nightmare that has developed out of the Obama administration since taking office in 2009 has finally caught up with them.

The Obama administration ordered that all federal construction projects that exceeds $25 million must have a project-labor agreement (PLA). A PLA is an order from the government that sets the conditions for the construction workers, such as pay and benefits. A PLA almost always requires union labor for projects as well. PLAs typically result in the union wage becoming the prevailing wage in all federal construction projects as a result.

PLAs have had the result of raising costs for construction through higher wages paid to union employees. Many complain that PLAs remove competitive forces from federal construction projects that would keep costs down. According to a Cato Institute report on PLAs, the cost of public construction projects rises 12-18 percent because of the PLA.

Because of the PLA surrounding the construction of a $35 million Job Corps Center in Manchester, NH, a group of construction companies took to the courts to get it thrown out. The construction project in New Hampshire had been delayed since 2009, and with prospects of the Obama administration having another 4 years at the wheel of government growing bleak, they are willing to compromise on their regulations to get their projects done faster than ever before.

As Rep. Frank Guinta (R-NH) described PLAs in the Union Leader, “PLAs bloat the cost of government construction projects, sticking taxpayers with a bigger bill. They funnel tax dollars into union pockets and quash a level playing field, which is a requirement for free enterprise to succeed.”

And Sen. Kelly Ayotte (R-NH) said this about the PLA situation in New Hampshire, “Under a PLA, New Hampshire’s overwhelmingly non-union construction workforce would potentially be prevented from getting hired. That’s why reissuing the solicitation without a PLA is so important.”

The Obama administration is having to come to grips with the fact that creating jobs and forcing all major federal construction projects to have a PLA are counter intuitive items. If the Obama administration was truly interested in creating jobs and getting the Jobs Corps Center built, they would have done away with the PLA in 2009 and moved forward. In fact, the unemployment rate in New Hampshire was near 7 percent in 2009 when the Obama administration decided that putting taxpayer dollars in the pockets of labor unions was more important than moving forward with the project.

Watching the Obama administration get caught up in their own regulatory red tape is amusing. After all, Obama told the nation that these regulations were for the better of society. Turns out that the multitude of people crying out for a rollback in the regulatory scope of government were right, and the Obama administration learned firsthand.

Adam Bitely is the Editor-in-Chief of NetRightDaily.com. You can follow Adam on Twitter at @AdamBitely.

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