April 9 2014

Should It Have Been Called "Red Tape Day"?

Patrice J. Lee

The President announced unilateral measures this week to close what the Left calls the pay gap between men and women. But he’s actually just opened up a whole new world of red tape.

The President’s executive orders direct the federal government to create regulations to collect demographic information on employee compensation from federal contractors and to prevent federal contractors from "retaliating" against workers who discuss their compensation.

These efforts feed on the 77-cent pay gap, which, as we explain, is myth. Equal Pay Day is the “holiday” used to perpetuate this myth.

What hasn’t been sufficiently highlighted is the impact of these new measures on government and small business. Here’s a hint: more bureaucracy, more red tape, and higher costs for federal contracts. Unfortunately, taxpayers will be stuck with the bills.

Legal analysts are beginning to assess just what this will mean. The Washington Times reports:

“Equal treatment is an admirable goal, but smaller companies who already have difficulties competing with larger firms for federal contracts are now going to need to consider a new set of issues: reporting compliance, the ability to award merit pay or the possibility of wage data being used as grounds for discrimination lawsuits,” said Simon Brody, a spokesman for the National Association of Government Contractors, which represents firms doing business with the federal government.

But by trying to drive social change and provide equal pay for women through the contracting process, analysts said, the government will end up spending more to hire contractors.

“It is disappointing to see additional cost drivers or inefficiencies imposed upon on the procurement process at a time when the same administration — and, more broadly, the government — claims to be concerned with squeezing savings out of the system,” said Steven Schooner, co-director of the Government Procurement Law Program at George Washington University Law School.

“The bottom line is simple: Imposing social policies on the procurement process drives up the prices the government pays for the goods and services it buys,” said Mr. Schooner, who served in the White House Office of Management and Budget and in the Justice Department.

In light of what will be higher costs for taxpayers and businesses, do the benefits outweigh the added costs? That may be more of a political calculation. The President and liberals certainly think they will benefit. These measures join a cadre of executive actions the President is taking to remedy what he calls income inequality.

During the State of the Union Address, President Obama warned that he wouldn’t wait on Congress to get his agenda passed; he has a pen and will use it. That’s a promise he hasn’t broken –one of few. But it’s really a distraction from the disaster that his signature healthcare legislation is wreaking on the job market, economy, and health insurance industry. It’s also a diversion from the fact that the economy is slowly hobbling along but leaving good jobs behind.

That all of his efforts only apply to federal workers or contractors reveals the limits of his power. Frankly it’s window-dressing with the hope that Congress, governors, and state legislatures will follow suit.

Let’s hope Americans, American workers, and Americans businesses see through the tricks. The President has failed to deliver economic progress through opportunity for Americans. His redistributionist policies simply shift money from one person to another. Real growth and prosperity occur when we expand the economic pie for everyone. It’s not shared misery but shared success.

 

 

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