by Mitch Kokai
Senior Political Analyst, John Locke Foundation
George Leef’s latest Forbes column offers President Trump one suggestion for cutting the federal government’s cost.
The age-old problem of government is that the people in power (monarchs or elected representatives, it makes no difference) will try to use some of the money they collect in taxes to benefit their friends and supporters. One of the tactics used widely in the U.S. is for politicians to dictate that on a construction project, the winning bidder will have to sign on to a union-favoring Project Labor Agreement (PLA). …
… Mandating a PLA is a way for politicians to reward their union supporters by stifling competition that would lead to lower costs. The added expense is borne by the taxpayers, very few of whom notice that government construction projects are eating up more of their dollars than need be. On the other hand, the unions know perfectly well that PLAs secure them lucrative contracts; they will turn around and use some of their dues money to make sure their friends stay in office and come up with more projects for them.
This sort of “you scratch my back and I’ll scratch yours” play has been outlawed in 23 states (most recently Wisconsin) and had been stopped on federal and federally assisted projects under President George W. Bush. But in one of his earliest actions as president, in Executive Order 13502, Barack Obama did a favor for his union supporters – he declared that on federal projects exceeding $25 million, PLAs would be encouraged and PLA mandates were permitted on federally assisted projects. Thus, federal agencies were again at liberty to insist on these anti-competitive measures. …
… The kind of political favoritism exemplified by PLAs should be ended even if it didn’t save money on government construction. That it does makes the case for ending them all the stronger.