Bush Administration Reverses Course on Wage Law After Criticism from Unions and Democrats

Strategic Insights -

As the White House prepares to push for massive spending cuts to help pay for hurricane relief, President Bush is backing down on a rule change that had sparked outrage from unions, Democrats, and some Republicans. The administration will reinstate the Davis-Bacon Act, a law requiring construction projects financed by federal money to pay wages at locally prevailing levels. The move comes after intense pressure from a coalition of Republican moderates and Democrats, who criticized the administration for exploiting the disaster to lift a law important to unions.

Key Takeaways:

  • The Bush administration will reinstate the Davis-Bacon Act on November 8 in areas devastated by the Gulf Coast storms, reversing a previous decision to suspend the law.
  • Critics had accused the administration of taking advantage of the disaster to lift a law important to unions, backed by conservative Congressional Republicans.
  • A coalition of Republican moderates and Democrats, who represent districts with significant union membership, urged the White House to reverse the policy, citing concerns about the impact on workers.
  • Some Congressional Republicans, such as Representative Jeff Flake (R-AZ), criticized the reversal, arguing it will mean that federal relief dollars will ultimately buy less.
  • The Senate Budget Committee approved a package with $39 billion in spending reductions and revenue increases, which includes a plan to open the Arctic National Wildlife Refuge to oil exploration and a $10 billion cut for Medicare and Medicaid.
  • House committees have advanced plans to cut money to enforce child support, tighten eligibility for foster care aid, and raise premiums for employers who contribute to the Pension Benefit Guaranty Corporation.
  • The House Agriculture Committee is set to consider reducing spending on food stamps by more than $1 billion.

Statistics:

  • $35 billion: The amount of reductions in federal spending proposed by the House and Senate for the next five years.
  • $39 billion: The amount of funding reductions and revenue increases in the package approved by the Senate Budget Committee on Wednesday.
  • $10 billion: The amount of Medicare and Medicaid cuts proposed in the Senate Budget Committee package.
  • $50 billion: The amount of savings proposed by House committees through various spending cuts.

Sources:

  • "President Bush Urged Congress to 'Push the Envelope' on Spending Cuts to Help Pay for Hurricane Relief", The New York Times, November 9, 2005.
  • "Bush Administration Reverses Rule on Wage Law", The New York Times, November 9, 2005.
  • "Senate Budget Committee Approves Package with $39 Billion in Spending Cuts", The New York Times, November 9, 2005.