For organized labor, if there's anything better than a federal takeover of health insurance, it's a federal takeover of health insurance with a generous tax exemption for union-sponsored plans. Union leaders, led by AFL-CIO President Richard Trumka (see photo), this week gave the country a first-hand lesson on how to play behind-the-scenes political hardball. Yesterday, following a three-day marathon negotiating session, the nation's top labor officials announced they had reached an agreement to delay introduction of a federal excise tax on high-cost union-negotiated health insurance plans. While a number of Republicans are calling the deal a political giveaway, union leaders are spinning it as another example of doing right by working Americans.
No organization likes bad publicity. And when allied organizations create it, disavowing ties to them becomes attractive. The Service Employees International Union (SEIU) has exercised that option - at least on the surface. On Wednesday, September 30, the union's secretary-treasurer, Anna Burger, told a congressional panel that her organization no longer has a working relationship with the New Orleans-based nationwide nonprofit "anti-poverty" network ACORN, an acronym for the Association of Community Organizations for Reform Now. ACORN, as almost everyone in this country with a pulse knows by now, has been the target of federal and state investigations into a wide range of criminal activity. A very embarrassing and widely-aired homemade undercover video hasn't helped its case. Yet all the same, the union's move looks like a case of bait and switch.
In Barack Obama, organized labor knows it has its man in the White House. Arguably more than any U.S. president in history, President Obama supports the union domestic agenda, ever and always anchored in aggressive government intervention in the economy. And union officials support him, having provided indispensable financial and logistical support for his campaign last year. To show his appreciation, Obama was in downtown Pittsburgh today to address the AFL-CIO's quadrennial convention. His speech is the highlight of the labor confab at the David L. Lawrence Convention Center, which will run through Thursday.
Almost nobody doubts that come September, Richard Trumka will become the AFL-CIO's next president, replacing the retiring John Sweeney. Having occupied the labor federation's secretary-treasurer position for nearly 14 years, he's done everything his boss and the ideological faithful could ask of him. That's a major reason why he and his slate are running almost unopposed. But more than Sweeney, Trumka, a trained lawyer, has a palpably combative edge, much of it honed during his tenure as head of the United Mine Workers of America.
The Employee Free Choice Act (EFCA), as Union Corruption Update has noted repeatedly, is a misnamed piece of federal legislation. Its sole ulterior purpose is an expansion of union power at the expense of dissenting employees and employers. And despite the fact that supporters appear willing to strip the measure of its highly controversial "card check" component, the bill (H.R. 1409, S. 560) remains coercive in intent. That's because its less-heralded binding arbitration provision remains. And arbitration, as supporters envision things, would authorize the federal government to write (or rewrite) employment contracts from scratch.
The Department of Labor under President Obama appears to be doing everything it can to accommodate union interests, especially when it comes to investigating corruption. But a few members of Congress are openly objecting. Among them is Senator Orrin Hatch, R-Utah. Hatch on April 22 issued a rebuke to a decision by the department the previous day to roll back new rules designed to make union officials more accountable to the workers they represent. "It is extremely disappointing that the Obama administration is choosing a time of financial crisis to cut investigations into financial corruption solely because it may reside in its own politically constituency," he said.
If transparency is one of the Obama administration's highest orders of business, it hasn't made much of an appearance at the Department of Labor (DOL). On January 20, immediately following the inauguration ceremony, President Obama's chief of staff, Rahm Emanuel, issued a memorandum advising federal agencies to extend by 60 days the effective date of all regulations not yet published in the Federal Register. That gave the DOL under Secretary Hilda Solis exactly the wiggle room it needed to rescind new requirements to the annual financial reporting form for larger unions, LM-2, finalized during the waning days of the Bush administration.
Running a presidential campaign requires a certain amount of boiling down of ideas into easy sound bites and slogans.The opposition party candidate, in particular, must successfully define himself as the candidate of “change,” possessed of an ability to alter the nation’s course away from the “failed policies of the past.”The Democratic Party’s presumptive nominee, Sen. Barack Obama, D-Ill., is no exception.He knows he’s got to win over skeptics with simple messages, but at the same time offer specific proposals for true believers.And as much as any bloc in his party can be, labor leaders and activists are true believers.
Union members, especially those with a pension plan, can count on hearing the following words from their leaders with increasing regularity:“sustainability,” “ecological footprint,” “biosphere” and “renewable.”That’s no mystery.Labor officials lately have been highly receptive to the idea of investing union-sponsored retirement assets with managers publicly committed to protecting the environment.Make no mistake about – promoting environmental quality should be a priority everywhere, in industrialized and developing nations alike.But such activism covers a lot of ground when it comes to assessing and resolving problems.Very often, advocates for ecosystem protection line up behind policies whose consequences are likely to erode corporate self-governance, individual property rights and U.S. sovereignty.In other words, they’re the sorts of people who would not part company with union leaders on most issues of the day.
Union officials have made little secret of their desire to use member benefit plans as leverage to achieve a higher social good.Such a goal, however, may conflict with another, overriding goal inscribed in federal law: prudent and sound asset management.The Employee Retirement Income Security Act of 1974, or ERISA, requires fiduciaries of most private-sector benefit plans to base investment decisions solely on the welfare of their participants and beneficiaries.Advancement of broader social objectives, however desirable they might be, is not a criterion.The U.S. Chamber of Commerce, in recent years a target of union shareholder activists, recently wrote a letter to the U.S. Department of Labor asking for a clarification of the permissibility of a planned AFL-CIO shareholder campaign.In its response, dated June 27, 2008, the DOL wrote back that it was not.Employers thus won – that is, until the next round.