On Monday, October 26, Senate Majority Leader Harry Reid may have initiated a turning point in health care reform.
He indicated that a government-run insurance program for people under 65, a so-called public option, would be included in the measure that goes to the Senate floor next month.
Now Washington pundits are furiously doing the math, trying to figure out whether Reid, D-Nevada, has 60 votes to overcome a filibuster and send a sweeping health care bill to President Barack Obama’s desk. Of course the House will play some role as well.
This routine has been a staple of capital life since last November. That’s when Democrats took control of the White House and increased their margins in the House and the Senate, where their caucus has reached a filibuster-proof 60 members.
Every time a major piece of legislation comes along, there is the mandatory calculation to figure out whether Democrats can come up with 60 votes, either by holding their own ranks together or drawing in a couple Republicans.
But winning elections has another—and perhaps more profound—effect on governance when one party controls both the Senate and White House. Its nominees for administration positions are almost certain to be confirmed.
Personnel is policy, goes the Washington saying. The reason that aphorism has been repeated to the point of becoming a cliché is because it’s true. One of the most cherished spoils of political victory is determining who serves at government’s highest levels.
In the polite society of the Senate, the rule in the past has been that a president pretty much gets to appoint the nominees of his (one day “her”) choice unless they have a criminal background or are otherwise egregiously unfit for office.
But Obama’s rival for the White House, Sen. John McCain, has halted the confirmation process for one of the president’s nominees for the National Labor Relations Board because of policy differences.
Echoing Becker criticisms from the business community, McCain expressed qualms about some of Becker’s articles about labor-management relations. The Yale Law School graduate doesn’t mince words when it comes to organizing in the workplace.
In an excerpt from a 1993 University of Minnesota Law Review article highlighted in a U.S. Chamber of Commerce letter to the HELP Committee, Becker writes that “employers should be stripped of any legally cognizable interest in their employees’ election of representatives.” With his trademark irascibility, McCain first insisted on a roll-call vote on Becker. Sen. Tom Harkin, D-Iowa and HELP Committee chairman, said that NLRB nominees are typically voted on as a bloc. Becker was being considered along with two others.
But Harkin acquiesced and allowed a separate vote on Becker. “How generous of you,” McCain sneered through a smile.
Becker was approved by a 15-8 vote, but McCain vowed to block a Senate floor vote by placing a “hold” on him. It is the prerogative of each senator to put a hold on any nominee for any reason.
McCain said that all the commotion could have been avoided if Harkin had agreed to a hearing for Becker. Harkin responded that it is Senate tradition not to conduct hearings for members of the NLRB other than the chair.
Sen. Mike Enzi, R-Wyoming, also voted to uphold Senate tradition. He approved Becker along with all the other nominees in the package that was presented to the HELP Committee on October 21.
It may be true that Becker deserves more scrutiny than the usual NLRB nominee. Several senators would like to know whether he still holds what some call “radical” views of labor-management relations. Others want to know what role Becker may have played in the vote-buying scandal that drove former Illinois Gov. Rod Blagojevich out of office.
But there was a more straightforward way for McCain to put the kibosh on Becker. He wouldn’t be hassling with this nominee if he had won the White House in November. It’s one more reason why elections matter.
Before casting the only Republican vote in Congress so far for a health care reform proposal on October 13, Sen. Olympia Snowe of Maine cautioned that the journey toward final legislation has “miles to go.”
Now the two Senate bills and three in the House have to be combined into one in each chamber. The bills that the Senate and House approve are likely to be divergent and require potentially tense bicameral negotiations. Then each chamber votes again on the product that comes out of conference.
If you need evidence that this process is likely to take weeks, look at the situation with legislation to extend unemployment benefits.
The urgency of the matter is not in question. Congress has acted twice so far during the recession to add up to 53 weeks of unemployment benefits to the normal 26 weeks.
But now unemployment has reached 9.8 percent, and most experts believe it will continue to climb. At a hearing of the Senate Finance Committee last month, witnesses testified that there are about 3 million job openings for 15 million people seeking work.
As of September, nearly 5.4 million people have been unemployed for 27 weeks or longer, Sen. Jeanne Shaheen, D-New Hampshire, said in an October 15 speech on the Senate floor. Nearly 2 million will exhaust unemployment benefits by the end of the year.
But when the bill got to the Senate, Shaheen was one of the senators who held it up in order to expand it. New Hampshire’s unemployment rate is lower than 8.5 percent, and Shaheen didn’t want her jobless constituents to be left out.
Shaheen joined Senate Majority Leader Harry Reid, D-Nevada, and Sens. Max Baucus, D-Montana, and Jack Reed, D-Rhode Island, to introduce a bill October 8 that would extend unemployment benefits for 14 weeks for workers in all 50 states. They would fund for the bill by extending a surtax on employers through June 2011.
They wanted to push the bill through the Senate that day, but Republicans slowed down the process. They said that they hadn’t had a chance to study the measure and wanted an opportunity to introduce amendments.
It looks as if the Senate will act on an unemployment extension during the week of October 19. Among the amendments that Republicans are likely to offer would be one to finance the unemployment extension with money from the $787 billion stimulus package Congress passed earlier this year rather than by increasing taxes on employers.
It’s not certain whether the Republican amendments will succeed, but Sen. Jon Kyl, R-Arizona, said that prospects for action on unemployment extension are “very good.”
Republicans want to have their say in shaping the bill, but it doesn’t look as if they will filibuster it. The political price—when so many Americans are facing long-term unemployment—is too high.
But even an issue that seems to be a slam-dunk has nuances. It’s inaccurate—and heartless—to say that more benefits will enervate the motivation of a jobless person, according to Gary Burtless, the Whitehead Chair in Economic Studies at the Brookings Institution in Washington.
Instead, an extension will make the labor market more efficient by allowing the unemployed to “look longer and harder for a job in which their skills will be fully utilized,” Burtless testified at a Senate Finance Committee hearing in September.
From the moment President Barack Obama was inaugurated until he signed the $787 billion stimulus bill on February 17, all the activity surrounding the package focused on him and Congress.
I’ll get to the part about HR in a moment. But first, governors will determine whether and how the unemployment benefits tucked into the stimulus behemoth will become a reality. My colleague Ed Frauenheim outlined the changes in an online feature story.
Some governors, however, are wary of signing up for the $7 billion in incentives that the package provides to enhance coverage for low-wage workers and extend it to part-time workers.
They worry that long after the stimulus funding has evaporated, they will be responsible for a much larger unemployment system that could require higher taxes on businesses to maintain.
Indiana Gov. Mitch Daniels is one of the skeptical state executives. He has already raised unemployment payments by $25 each week, a provision of stimulus that is fully federally funded. But he says that the so-called modernization initiative could have a deleterious effect on Indiana.
In an interview with Indiana reporters while he was in Washington on February 23 for a meeting of the National Governors Association, Daniels said that his state’s unemployment program already is paying out more than it takes in. The “leakage” would be exacerbated if it was extended to part-time workers and incorporated other changes under the stimulus incentive.
“If you take this short-term bait, you commit yourself to this larger expenditure,” Daniels said. “That wouldn’t be a good bargain for us. Indiana’s already got some of the most generous benefits in the country.”
The TAA program provides training and health care benefits for workers who have lost their jobs due to global competition. Under the changes in the stimulus bill, it now covers employees in the service sector. Previously, help was limited to those in manufacturing.
TAA now applies to workers affected by offshoring to all countries—including China and India—not just those with whom the U.S. has trade agreements. Other provisions increase training funds available to states by $575 million per year for the next two years and also create TAA programs for entire communities.
These changes would be helpful to workers. But the regulations needed to implement them could take six months to a year, according Howard Rosen, executive director of the Trade Adjustment Assistance Coalition.
The Department of Labor has to determine how to identify a service industry—and service employees, for that matter. For instance, TAA could include computer programmers for the first time.
“This is very technical stuff,” Rosen said.
But a bigger challenge is introducing TAA to HR professionals, according to Rosen. Many companies don’t know the program exists, let alone understand that it has been expanded.
“There’s going to have to be an incredible outreach effort,” Rosen said.
That job is complicated by the fact that most HR people aren’t familiar with how unemployment insurance works.
“I’m astounded by their basic lack of knowledge of the unemployment system that has existed for 75 years,” Rosen said.
Now TAA can better augment standard severance payments. “This is aggressive employment services, which many companies don’t provide,” Rosen said.
Once President Barack Obama moves into the White House on January 20, we will finally get a clue as to the direction he’s taking the country.
So far, like the Rorschach test to which he has compared himself, Obama is all things to all people. He even embodies multilateralism.
He is the son of a Kenyan father, and his childhood included several years growing up in Indonesia. To a greater extent than perhaps any other U.S. president, he is the world.
But opponents of the workplace law that Obama endorsed during the campaign worry that he would move the U.S. too close to a part of the globe they say is too highly regulated and too costly a place to do business—Europe.
Most of the attention so far has been on legislation that would make it easier for workers to join unions. That bill, however, may slow down.
The so-called card-check bill is only one item on a laundry list of proposals that could gain traction quickly. The list also includes measures to mandate paid time off and to lengthen the statute of limitations on pay discrimination.
Adding to their appeal is the fact that they are budget neutral—at least as far as the federal budget is concerned. The bills require no government expenditure at a time when Washington is spending hundreds of billions of dollars to prop up the economy.
Opponents say that the measures will cost business plenty. Senate Minority Leader Mitch McConnell, R-Kentucky (who also is husband of outgoing Labor Secretary Elaine Chao), has cast the union bill as a step toward “Europeanizing America.”
Meanwhile, some countries in Europe are trying to become more like the U.S. by loosening their labor laws and reducing regulations. In France, President Nicolas Sarkozy is pushing businesses and unions to agree to a plan to open stores on Sundays.
It’s one example of Sarkozy’s effort to address stultifying French labor laws. For instance, it’s almost impossible to dismiss a worker in France on grounds of incompetence, according to John Johnson, an attorney and director of business development at Daem Partners in Paris.
Johnson practiced law in California for more than a dozen years before moving to France about nine years ago to pursue personal projects. He was certified as a lawyer in France in 2007. In California, Johnson was a plaintiff’s attorney; in France, he represents corporations. I caught up with him while he was in the U.S. for the holidays.
Although he practiced in California, the state most friendly to employees, Johnson says that its worker protections aren’t as stringent as France’s. “You could call France ‘California-plus,’ ” he says.
Sarkozy is embarking on a long journey to reinvent the French economy. “For certain cultural and historical reasons, it’s going to be difficult to adopt a completely American or Anglo-Saxon-style system,” Johnson says. “There is a kind of distrust of all that is new.”
But there are certain advantages of the French approach for employers. For instance, companies have to pay higher taxes to support the health care system. But the coverage it provides makes it more likely that employees will get medical care and less likely to miss work because of illness, according to Johnson.
“I’m not sure you can say that national insurance coverage is a drag on economic growth,” he says.
Another advantage for companies is the French legal system. Multimillion-euro damages are unheard of, and there’s pretty much no such thing as a class-action lawsuit. Companies don’t often feel compelled to settle, as Wal-Mart did in a wage-and-hour case last week—to the tune of $640 million.
Johnson doesn’t think it’s ironic that some people see the U.S. trending toward a European-style economy while Europe looks to the other side of the Atlantic—or the English Channel—for guidance. The desperate economic times call for new thinking.
“Throughout the world, different systems are being forced to do a self-analysis,” Johnson says. “Every system is looking for a solution outside the box.”
As the global economy declines, Johnson sees the need for more experimentation and less political battle. “This old-fashioned [notion] of left-right, labor-employer doesn’t work anymore,” he says. “We’re in a different place right now. Everyone’s going to have to give something up to get something. That’s consensus.”
I can’t wait to see whether stateside Republicans and Democrats demonstrate that attitude.
After I cast my vote early the morning of November 4, I passed a group of giddy supporters of Democratic nominee Barack Obama. They held up signs saying, “Honk for Obama.” In my heavily Democratic neighborhood, horns blared.
As I write this, I’m not certain who won. Although Election Day is a time to look to the future, it’s also a moment to remember that we have only one president at a time. Until January 20, President Bush will hold sway in one crucial area: regulations.
Rule-making in the waning days of the Bush administration could have a big impact on Workforce Management readers. Even as speculation swirls about the president-elect’s Cabinet, the current leadership of government agencies wields power.
For instance, it’s likely that the Bush administration will promulgate a final rule modifying the Family and Medical Leave Act. It will be the first time since it was enacted in 1993 that any changes have been made to the controversial statute.
The Department of Homeland Security also is busy on the regulatory front. A couple weeks ago, it released a supplemental final rule on so-called Social Security “no-match” letters. The business community can’t stand this one because it makes the receipt of such notices evidence of a knowing violation of immigration law.
The problem, according to employment lawyers, is that the Social Security database is rife with mistakes. Resolving a mismatch can take much longer than the deadline contained in the regulation. If a company can’t take care of the discrepancy in time, it has to fire the employee in question.
The Society for Human Resource Management and other groups criticize this rule as a back-door route to making the voluntary E-Verify program mandatory. Currently, about 90,000 employers use the system. SHRM, however, wants to overhaul E-Verify, which it calls inefficient, ineffective and a potential choke point in the labor market.
Finally, the Treasury Department is in the middle of shaping regulations that will govern the $700 billion financial markets rescue package that Congress passed in early October. That means it will have enormous influence over how tough, or how lenient, the executive pay strictures will be for companies participating in the program.
Already, members of Congress from both parties are warning the Treasury not to let banks and other institutions use tax dollars to fund hefty executive severances and bonuses. Capitol Hill leaders want to assuage constituent outrage about Wall Street titans feathering their nests while retirement savings vanish.
Congress approved pay restrictions at companies that sell toxic assets to the government. But now the Treasury has come up with a new twist on the bailout: It is buying stock in failing banks through the Capital Purchase Program.
House Speaker Nancy Pelosi, D-California, and Senate Majority Leader Harry Reid, D-Nevada, sent a letter to Treasury Secretary Henry Paulson on October 29 saying that the interim final rule on golden-parachute limits at the Capital Purchase Program institutions was too weak. It doesn’t block parachutes “unless they equal or exceed three times [an executive’s] base pay.”
“We are concerned that such lavish severance packages could weaken public support for your critical efforts to stabilize the economy,” they wrote.
House Minority Leader John Boehner, R-Ohio, expressed similar sentiments in his own letter to Paulson. “Mr. Secretary, funds made available under the economic rescue package should not be used to pay for bank acquisitions, raises and executive bonuses,” he wrote.
The Center on Executive Compensation, which is hosted by the HR Policy Association, also lobbied Paulson. The center wants him to use his discretion to allow companies ample room to offer severance packages that will lure top executives.
“The goal of this program is to restore the performance and economic viability of these institutions, thus allowing them to repay shareholders and taxpayers,” the center said in a statement. “An absolute prohibition would serve only as an impediment to attracting and retaining the talent needed to accomplish this essential and monumental task.”
Paulson will continue to get a lot of attention from Capitol Hill and others in Washington between now and January 20, Inauguration Day. Until then, he and other Bush administration officials are in charge and will be regulating.
= Member Only
