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The Right Priority Should be Economic Growth

Jul 31, 2014

At a time when economic growth should be first, second and third priority for Washington – and there are some burning foreign policy issues that deserve attention – President Obama is instead targeting companies with additional burdens.

The President signed an executive order requiring companies to disclose labor violations (under the Fair Labor Standards Act) when they seek federal contracts.

The “Fair Pay and Safe Workplaces Executive Order” (President's remarks on signing) will also create new positions in federal agencies, the “Labor Compliance Advisor” who will review contract applications and work with the Department of Labor to identify supposed bad actors, companies that will be locked out of federal contracts.

Congress will certainly point out that this a major policy action, and Congress is the policymaking branch of government.  Companies with federal contracts represent a huge percentage of the economy and to simply change the rules on them without a legislative policy review invites unintended consequences, e.g., potential job losses. This at a time when the focus should be on putting more Americans back to work.

Really, what will this accomplish except encourage more political attacks against America’s employers? Legal attacks, too, as BRT President John Engler pointed out in an interview with Bloomberg.

John Engler, president of the Business Roundtable, a Washington-based group that includes chief executives of the largest U.S. companies, said the order may encourage more lawsuits against businesses.

"It'll be dressed up — we're protecting these rights or this rights — but when you strip it all away, more work for trial lawyers," Engler said at a meeting with Bloomberg News reporters and editors in Washington Thursday.

And encouraging more litigation does nothing for economic growth, which should be the real priority for the Obama Administration.

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