Federal Contracts are Not the Way to Change Labor Policy

There had been some suspicion that the Director of the Office of Management and Budget, Peter Orszag, would announce support for the proposed “High Road Contracting Policy” in remarks at the Center for American Progress, a speech that addressed the Administration’s plans to reduce federal spending by managing costs at federal agencies.

This “high road” proposal would create a system where federal bureaucrats would score the employment practices of private businesses that seek contracts with the government. Proposals would be evaluated by these terms and would grant preferential treatment in award the bids on the basis of factors that aren’t related to the business’ ability to deliver the terms of the contract. Such a system creates barriers for smaller-sized employers to compete and driving up costs for taxpayers.

Thankfully, the OMB Director did not indicate support for the proposal in Tuesday’s remarks. We hope the issue’s absence means the Administration recognizes that such efforts would go counter to its stated goal of rein in federal spending.

Further the White House Taskforce on the Middle Class has expressed support for a policy proposal which would actually do the opposite of reining in federal spending – a goal that the OMB Director made quite clear in his remarks.

As we’ve noted previously, several groups have been pressuring the Administration to enact major policy changes by reconfiguring the way that the federal government does business with the private sector. “Progressive“ think tanks and labor unions have been clamoring for the President to sign an executive order that would create a “high road contracting policy” to place new requirements on companies that do business with the government. We hope that the Administration will recognize the flaws of such a misguided proposal.

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