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Member Questions of the Week of August 30, 2010

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Gerald Bakes of Banford, CT asks: “Are Project Labor Agreements unconstitutional? Seems wrong a group of private citizens/businesses can make this kind of a deal with public employees and force work away from taxpaying businesses that must still fund the projects.”
OUR ANSWER: While no court has declared them unconstitutional, Project Labor Agreements — which force contractors to negotiate a collective bargaining agreement before they start work — are, at the very least, discriminatory and expensive. They legally prevent most nonunion workers and businesses from competing for government construction contracts. The Beacon Hill Institute estimates that PLAs increase construction costs by 12 to 18 percent, according to this blog post by Heritage labor expert James Sherk. It’s no wonder, then, that voters in two California towns — Chula Vista and Oceanside — voted this June to prohibit PLAs on city-funded construction projects. Unfortunately, those votes don’t change federal policy. When he took office, President Bush banned the use of PLAs on federal construction projects. In 2008, that saved taxpayers between $1.6 billion and $2.6 billion — but President Obama repealed that directive shortly after he became president and, in its place, issued an executive order to encourage federal agencies to pursue PLAs on federally funded projects worth more than $25 million. Obama’s executive order will richly reward union lobbyists, while adding billions to the deficit and leaving nonunion workers in the cold. As Sherk writes, “Project labor agreements are political favoritism at its worst.”

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Andres Castaneda of Sharpsburg, GA asks: “Why is the United States not having or not interested in having more influence in Latin America?”
OUR ANSWER: It’s certainly not because Latin American policy has no impact on us. As Heritage expert Ray Walser writes in this backgrounder, U.S. national interests in Central and South Amer­ica are broad in scope. The United States government presumably recognizes that it’s important to combat the drug trade, stop the spread of terrorism, build strong representative democracies with sound institu­tions, advance broad-based prosperity and counter the ideological and geopolitical challenges posed by a range of anti-American actors from Hugo Ch¬∑vezs Venezuela to geostrategic interlopers like Russia and Iran. One way we propose the government do that is by shoring up its chal­lenged global leadership position with enduring ties to allies and friends like Panama, which can stand with the U.S. for the long haul. For more Heritage research on Latin America, click here.

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Michael Dee of Palmer, MA asks: “What is the current status of Cap and Trade legislation, and how is it currently affecting us?”
OUR ANSWER: While the House passed the Waxman-Markey cap-and-trade bill, ensuing voter backlash has stalled equivalent Senate action. That means that cap-and-trade legislation is not directly affecting us yet — but, if it passes, it absolutely will. Further, the threat of cap-and-trade affects current investment decisions, especially in electric power industry and other energy intensive sectors. According to this commentary by Heritage expert David Kreutzer, the aggregate lost national income (GDP) from the Waxman-Markey bill would be more than $9 trillion for just the first two dozen years of a 40-year program. That adds up to thousands of dollars per year per family — and leads to energy price increases of 50 percent to 90 percent. And for what? The legislation would moderate temperatures only by theoretical but unmeasurable thousandths of a degree. Aware of the unattractive tradeoff cap-and-trade legislation presents, legislators have attempted to obfuscate the purpose of their legislation with clever titles. But the Kerry-Boxer “Clean Energy Jobs and American Power Act” is no less cap-and-trade than the original Lieberman-Warner “Climate Security Act of 2007.” The costs are enormous no matter what the legislation is called.

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