The first priority is getting our nation’s fiscal house in order. As members of the House Education and the Workforce Committee, we know this is a particularly important responsibility. Reckless federal spending is a threat to students and working families, and the threat has grown exponentially worse in recent years. Under President Obama’s watch, the national debt has increased by nearly 71 percent and currently stands at more than $18 trillion. We are on a fiscal path that is not sustainable and have been for far too long.
That is why under Republican leadership, Congress passed a balanced budget that would lead to less debt, a stronger economy, and more prosperity for the American people. As the Speaker has noted, we are on track to cut $2.1 trillion in government spending over the next 10 years. We are also making progress improving federal policies and programs so that each one delivers positive results for students, workers, and taxpayers. But we still have a lot of work to do. The reconciliation process reflects our commitment to using the tools we have to reform government and rein in deficit spending.
The second priority is dismantling ObamaCare. Under the president’s health care law, costs are going up, not down. We continue to hear reports and stories of families facing higher premiums or higher deductibles or both. Patients are losing access to their trusted doctors as insurance carriers squeeze provider networks to control costs. Meanwhile, workers and employers are struggling because of the law’s punitive rules and mandates.
The proposal before us would repeal a particular mandate known as auto-enrollment. As the name suggests, the law requires certain employers to automatically enroll employees in a government-approved insurance plan. This mandate will create a lot of unnecessary confusion for workers and employers and result in costly penalties for those who may already have insurance coverage. The mandate is so convoluted and confusing that after four years the Department of Labor still hasn’t figured out a way to enforce it. Let’s repeal this costly mandate and help empower workers to do what’s best for themselves and their families.
The third and final priority we can and must address through reconciliation is holding Planned Parenthood accountable. Recent videos portray a number of practices by Planned Parenthood that are nothing short of gruesome and shocking. Charmaine Yoest, president of Americans United for Life, recently testified the videos as “deeply unsettling,” as well as “tragic and difficult to watch.” She went on to say, “Americans should not be forced to fund such unethical and abhorrent practices.” Many in Congress and concerned citizens from across the country agree.
Our colleagues on the Energy and Commerce Committee are leading this important effort. Right now, they are considering a reconciliation proposal that would stop the flow of taxpayer dollars to Planned Parenthood and redirect those resources to higher quality health care services for women. I hope we seize this opportunity to protect taxpayers and hold this organization accountable.
In closing, let me just say that the reconciliation process is never easy; it is always tough, complicated, and controversial. But because of our work here today, as well as the efforts of our colleagues on the Energy and Commerce Committee and the Ways and Means Committee, we can take an important step that will help address the priorities of the American people. I urge my colleagues to support this proposal and the reconciliation process as it unfolds in the weeks ahead.
For more than five years, the president’s health care law has failed to produce the kind of health care system the American people deserve. While the Obama administration continues to tout the “benefits” of its government takeover of health care, hardworking men and women across the country have been forced to contend with less access to doctors, a system plagued by waste and abuse, costly penalties, cancelled plans, and ever higher health care costs.
Those workers and families were promised that costs would go down. They’ve gone up. They were promised jobs would be created. They’ve been destroyed. They were promised that if they liked their health care plan, they would be able to keep it. We all know how that worked out. It’s only becoming clearer that the American people were handed a bunch of empty promises about the benefits of ObamaCare. What they’re seeing instead are consequences, and those consequences are playing out in communities across the country.
This reality is unacceptable. And it’s particularly unacceptable at a time when our economy is still struggling to recover, a time when so many people are still looking for jobs, and a time when small business owners are being forced to contend with a barrage of executive orders and regulations that make keeping their doors open a constant battle.
This is why it’s so important to make commonsense fixes to this law where possible – my constituents in New York’s 21st district want us to work together in Congress to ease the pain this law is having on so many North Country families and businesses.
The measure we’re here to discuss today is a step forward both in our efforts to protect workers and job creators from the president’s government-run health care system and in our efforts to rein in our out-of-control debt and deficits. It accomplishes those goals by getting rid of a duplicative and onerous ObamaCare mandate known as auto-enrollment. In moving employer-sponsored health care coverage away from a voluntary and flexible model, the president’s health care law has created a myriad of penalties and mandates.
This particular provision requires certain employers to automatically enroll their full-time employees in health care coverage.
What this means is that is a veteran or student in my district who is eligible for tri-care or to stay on their parent’s healthcare plan gets a job, they will be automatically enrolled in an unnecessary health care plan unless they know about this provision and decline coverage within a prescribed amount of time.
Making sure an employee has health care coverage sounds like a perfectly admirable goal. However, in this case, the cons outweigh the pros.
This auto-enrollment mandate will create a lot of unnecessary confusion for my constituents and, by triggering tax penalties, could actually cost employees who might already be enrolled in health insurance coverage. The mandate will also limit an employee’s ability to select a health care policy that works best for his or her family. It’s redundant, it’s unnecessary, and it’s not in line with the patient-centered health care system this country needs. The measure under consideration today would eliminate that misguided mandate, but does nothing to take away an employee’s ability to opt-in and enroll in his or her employer’s coverage.
The proposed substitute amendment simply makes technical drafting corrections to the underlying proposal.
Thune: Rail Passengers Deserve Critical Safety and Infrastructure Improvements Put Forward in DRIVE Act
U.S. Sen. John Thune (R-S.D.), chairman of the Senate Committee on Commerce, Science, and Transportation, spoke on the Senate floor earlier today regarding the provisions in the underlying transportation reauthorization bill that focus on needed reforms to Amtrak and commuter railroads across the country. These bipartisan provisions will help to ensure adoption of critical safety and infrastructure improvements that impact millions of Americans across the country.
Sen. Thune delivered his speech during continued debate on the DRIVE Act, a bipartisan bill designed to improve the nation’s surface transportation infrastructure and allow America to better compete in the 21st century. The bill includes several Commerce Committee titles that cover key transportation and regulatory reforms. A summary of the Commerce Committee titles may be found here.
The full text of Sen. Thune’s floor speech follows:
Mr. President, thanks to the leadership of Sens. Wicker and Booker, and the bipartisan contributions of the members of the Commerce, Science, and Transportation Committee, the legislation before the Senate today includes critically important provisions from the bipartisan “Railroad Reform, Enhancement, and Efficiency Act” our Committee passed by voice vote last month.
This bill re-authorizes Amtrak through fiscal year 2019 while increasing rail safety, improving infrastructure, cutting red tape, and empowering local officials.
Following the tragic May 12th derailment of Amtrak 188 in Philadelphia that resulted in eight fatalities, Senators Wicker and Booker added additional rail safety provisions, which were approved by the Committee.
The bipartisan rail bill that passed in Committee and is included in the multi-year transportation bill before the Senate would also advance the deployment of Positive Train Control technology for averting accidents.
I am proud to note that we recently amended the multi-year transportation legislation to expand this authorization.
Never before has the Senate authorized robust, dedicated, and mandatory funding for Positive Train Control implementation.
The amendment, accepted by the Senate earlier today, would authorize $199 million in PTC grants and loan financing for commuter railroads in Fiscal Year 2016. This is the highest single year authorization for PTC ever.
Using the Railroad Rehabilitation & Improvement Financing program, commuter railroads would be able to leverage this funding for $2 billion in loans necessary to cover their PTC capital needs.
In addition to advancing deployment of PTC, the Wicker-Booker bill would:
• Require speed limit action plans for all passenger railroads to address automatic train control modifications, crew communication practices, and other measures to prevent over-speed derailments while Positive Train Control is being implemented;
• Require grade crossing action plans to improve state grade crossing safety efforts; and
• Consolidate grant programs to focus resources on critical safety and infrastructure needs. Building on the work of the Commerce Committee’s Ranking Member, Sen. Nelson, the bill would increase the rail passenger liability cap for inflation, from the $200 million level set in 1997 to $295 million, with inflation adjustments every 5 years.
The bill applies the new, higher cap retroactively to the date of the Amtrak accident in Philadelphia, thereby raising potential compensation available to victims and their families.
The legislation also includes a measure from Sen. Peters to require a thorough examination of Amtrak’s post-accident response following the Philadelphia derailment, ensuring a close look at whether Amtrak addressed the needs of families and passengers involved in the tragedy.
Sen. Peters’ work will make meaningful improvements to Amtrak’s emergency preparedness going forward.
As we worked on the legislation before Committee adoption, I included a requirement for all passenger railroads in the nation to install inward- and outward-facing cameras on their locomotives. This fulfills an outstanding recommendation of the National Transportation Safety Board.
These cameras will not only help with accident investigations – a need we saw following the Philadelphia derailment – but will help monitor each passenger railroad’s compliance with critical safety requirements.
Last week I received a letter from NTSB Chairman Christopher Hart stating, “I applaud the recent passage of the passenger rail safety bill. I was pleased to see the inclusion of recommendations regarding inward and outward facing audio and image recorders. Thank you for your support of the NTSB.”
The bill also includes extensive contributions from Sen. Blumenthal to improve passenger rail safety, including redundant signal protection to increase roadway worker safety, potentially preventing tragedies like the one in West Haven, Connecticut in 2013.
Sen. Blumenthal also made important contributions on provisions covering alerters, signage, and track inspections. And, the bill includes his proposal for the Federal Railroad Administration to increase oversight of needed safety improvements at Metro-North.
Mr. President, I’d like to put in the record the following documents:
• The Federal Railroad Administration’s “Operation Deep Dive Report” outlining the safety concerns at Metro-North and setting forth specific directed actions. This bill before the Senate would require FRA to follow-up on that report and its recommendations.
• Emergency Order 29, which was issued after terrible derailments in the Bronx; Bridgeport, Connecticut; and West Haven, Connecticut. This bill would apply the Emergency Order’s speed limit action plan framework to the entire passenger rail network, reducing the risk of future over-speed derailments.
• A statement from Sen. Blumenthal following the news that 13 current and former Metro-North employees had been accused of cheating on licensing exams. The statement reads, “my amendment was accepted into the bill, which was voted out of the Committee favorably, and I urge the Senate to take up the measure swiftly so we can ensure Metro-North is implementing true safety reforms.”
I echo Sen. Blumenthal’s statement and urge the Senate to ensure Metro-North and other railroads improve safety by voting in support of the bill before the Senate.
Working with Sen. Cantwell, who has been a strong advocate for crude-by-rail safety, we’ve also included in the bill new requirements for real-time train information to aid emergency response officials in the event of an accident.
And Sen. Baldwin worked last week to ensure emergency officials have advance notice of crude oil and ethanol unit trains traveling through their jurisdictions.
The bill also includes a provision for comprehensive oil spill response plans to ensure railroads are prepared and have resources positioned to respond to worst-case scenarios—another priority for my colleague from Washington State, Sen. Cantwell.
Further aiding emergency response efforts, Sens. Booker and Menendez included provisions that prohibit the withholding of train information from first responders. Their work will also examine the sufficiency of response information carried by train crews, addressing issues raised in relation to the 2012 derailment in Paulsburo, New Jersey.
Sen. Manchin worked to ensure tank car owners and shippers annually report on their compliance with the new tank car requirements, creating stronger oversight for these important safety upgrades.
In addition, Sen. Manchin and I have agreed on the need for a real-world derailment test of Electronically-Controlled Pneumatic or “ECP” brakes.
As this testing moves forward, the existing Department of Transportation requirement will be kept in place unless the real-world testing and evaluation show the requirement is not justified.
Enhancing the bill’s grade crossing safety provisions, Sen. Gardner added stronger oversight of the Federal Railroad Administration’s actions pertaining to the use of locomotive horns at highway-rail grade crossings.
And Sen. Klobuchar included timely provisions to help address issues with the blocking of crossings as a result of idling trains.
The bill also incorporates the work of Sen. Roy Blunt, whose TRAIN Act, co-sponsored by Sens. Machin, Heller, and myself, will streamline the permitting process for rail improvements, making our critical infrastructure dollars go further.
Sen. Daines included provisions to improve Amtrak’s operations through the study of new station development options where Amtrak would turn a profit, potentially increasing private sector investment in our nation’s passenger rail system.
The reforms extend to project financing, and Sen. Booker’s embedded “RRIF” reform bill, co-sponsored by Sens. Heller, Carper, and Kirk, will create a faster and more flexible RRIF program.
I also applaud Sen. Kirk for his contributions to the RRIF reform bill, improving the loan process and facilitating more timely and transparent decisions. These RRIF loans can be used for safety improvements, including Positive Train Control.
It also explains why its inclusion in the broader surface transportation bill is strongly supported by Transportation for America, the States for Passenger Rail Coalition, the National Association of Railroad Passengers, the American Public Transportation Association, and the Southern Rail Commission.
I ask unanimous consent to include these statements in the record.
Transportation for America wrote that the Committee-reported legislation “would be an important step forward in creating a transportation program that will boost the nation’s economy and ensure future prosperity.”
It also stated that the bill would improve the safety of our nation’s rail system.
The States for Passenger Rail Coalition stated that the bill “will empower state departments of transportation to maximize their resources and make efficient and effective mobility investments.” It said the Coalition “applauds the Committee’s work to enhance safety programs.”
The National Association of Railroad Passengers said the bill will be a positive step needed to “build the modern rail system American workers and businesses will need to compete in a 21st Century global economy.”
I also ask unanimous consent to submit a support letter from over 100 other local, state, and national leaders, including mayors from cities such as Alexandria, Virginia; Cleveland, Ohio; and La Junta, Colorado.
Building on the work of the Commerce Committee, the multi-year transportation bill also includes a bipartisan extension to the PTC deadline. The bipartisan extension is a rigorous and demanding case-by-case approach, with enforceable milestones and metrics.
The Secretary of Transportation approves or disapproves the dates in a railroad’s updated implementation schedule, including the hard end date for implementation.
Under no circumstances could the Secretary approve a date for full installation and activation that is later than 2018. The Secretary also has the authority to identify and require changes to deficient schedules that do not show safe and successful implementation as soon as practicable.
Multiple government reports, including from the Government Accountability Office, the DOT, and the FRA, have concluded that the vast majority of railroads will not meet the December 31, 2015 deadline for PTC implementation.
This extension will not delay safe and successful implementation of Positive Train Control technology. Rather, it offers a realistic approach to ensure this important technology is implemented as quickly as possible without risking shutdowns of rail service that will not meet the current deadline no matter what the law says.
This proposal is not novel. S. 1006, with original co-sponsors Blumenthal, Schumer, and Gillibrand would extend the deadline to the end of 2018 on a case-by-case basis in one-year increments. Despite good faith efforts from railroads, the Blumenthal extension recognizes the deadline is simply not attainable.
Similarly, in its GROW AMERICA proposal, the Administration requested giving the Secretary of Transportation discretion to extend the deadline on a case-by-case basis, without any constraints on the dates that the Secretary may approve.
We follow this model but add explicit constraints on installation and activation by 2018, while allowing the Secretary discretion in overseeing testing to ensure PTC works as intended.
Recently, railroads from across the country explained the potential disruption caused by the current unattainable deadline:
• Virginia Railway Express, or VRE, wrote to me stating that its commuter rail operations could be suspended after December 31, 2015. It has requested more time to ensure PTC works as intended. I ask unanimous consent to submit this letter into the public record.
• BNSF Railway, one of the freight railroads that have collectively spent over $5 billion in private funds on implementation, recently sent a letter to the Surface Transportation Board that stated the possibility, “if Congress has not extended the deadline for PTC operations, as of January 1, 2016, neither passenger nor freight traffic would operate on BNSF lines that are required by Federal law and regulation to have an interoperable PTC system as of that date.” I ask unanimous consent to submit this letter into the public record.
Critically, as I’ve noted, this extension is now paired with robust, dedicated, and mandatory funding for PTC implementation among commuter railroads.
Recently, the American Public Transportation Association, or “APTA,” surveyed its commuter railroad members, and found 50 percent were deferring maintenance to install PTC, and only 29 percent had a shot at installation by the end of the year.
That’s why APTA, the National Association of Railroad Passengers, and rail labor support the inclusion of the critical funding in the underlying measure. I ask unanimous consent to submit these letters into the record.
APTA wrote, “these funds are of critical importance as commuter railroads address the $3.5 billion in costs associated with installing PTC systems.”
The National Association of Railroad Passengers wrote, “just as important as the level of the authorization is the structure of the eligibility…RRIF could potentially be used to leverage the amount provided by the DRIVE Act by a factor of ten.”
The Senate has an important opportunity to advance deployment of Positive Train Control and help commuter railroads get over the finish line. In sum, this is a national rail safety and infrastructure improvement bill:
• Amtrak provides service to over 30 million riders per year, with stops in over 500 communities and in 46 states.
• New York has about 6 million riders, Pennsylvania about 3 million, and states such as Florida, Virginia, and Washington all have over 1 million too. This bill also improves the safety of commuter railroads, which collectively have nearly 500 million boardings per year. Metro-North, serving New York and Connecticut, Long Island Railroad, and New Jersey Transit each have over 80 million boardings per year.
These passengers deserve the critical safety and infrastructure improvements put forward in this bipartisan legislation.
The failure to pass this bipartisan DRIVE Act – which includes these passenger rail investments and safety improvements – would be a significant loss for the traveling public who utilize passenger rail systems across the country.
Last month, I traveled to communities in Alabama and Georgia to hear more about the NLRB’s latest Big Labor scheme, an effort to change what it means to be an employer by expanding the joint employer standard. For more than 30 years, two or more businesses were considered “joint employers” – or equally responsible for decisions affecting employees and the daily operations of a business – if they shared “actual,” “direct,” and “immediate” control over those decisions. That standard had been in place for decades, and it had worked well for consumers, workers, and employers. However, it became apparent that an effort was underway at the NLRB to change the joint employer standard and upend countless small businesses in the process.
So we got out of Washington to get a better idea of what would happen if the board did what many people feared they might do. At two separate field hearings, we heard serious concerns that expanding the joint employer standard would have far-reaching consequences. We heard words like “disruptive,” “devastating,” and “detrimental.” We heard fears that the board would make a decision that would lead to higher costs, fewer jobs, and less opportunity for individuals – including veterans, women, and first generation Americans – to pursue the American Dream. And then, the board did exactly that.
Before we even returned to Washington, the NLRB issued a ruling in a case known as Browning-Ferris Industries that significantly expanded the joint employer standard. The decision discarded years of established labor policy to include employers who have “indirect” or even “potential” control over virtually any employment decision. To put it plainly, the board blurred the lines of responsibility for decisions affecting the daily operations of countless small businesses, including the nation’s 780,000 franchise businesses and countless contractors, subcontractors, independent subsidiaries, and more.
Having heard the stories of so many small business owners across the country and understanding the impact of this decision on countless lives and industries, Chairman Kline and Senator Lamar Alexander introduced the Protecting Local Business Opportunity Act. This commonsense legislation would roll back the NLRB’s harmful decision by reaffirming that two or more employers must have “actual, direct, and immediate” control over employees to be considered joint employers. It would prevent the disruption of countless small businesses; it would ensure future entrepreneurs have the opportunity to pursue the American Dream; and it is the reason that we’re here today.
We’ve spoken many times and heard many stories about the problems related to board’s radical rewrite of the joint employer standard. Now it’s time to talk about the solution. I’m eager to hear from our witnesses – not only about how the board’s decision will affect them, their businesses, and their families, but how this legislation can help protect those things that they’ve worked so hard for and those that they hold so dear.
The Committee on Small Business Subcommittees on Contracting and the Workforce and Investigations, Oversight and Regulations will meet for a hearing titled, “The Blacklist: Are Small Businesses Guilty Until Proven Innocent?” The hearing is scheduled to begin at 10:00 A.M. on Tuesday, September 29, 2015 in Room 2360 of the Rayburn House Office Building.
Last year, President Obama signed Executive Order 13,673, to “promote economy and efficiency in procurement by contracting with responsible sources who comply with labor laws.” Under the Executive Order, before contracting officers may award contracts worth more than $500,000, prospective contractors must disclose violations of 14 labor laws and “equivalent state laws” within the preceding three-year period. These disclosures will then guide decisions on the contractor’s ability to ultimately be eligible for award. The hearing will examine the ramifications of the United States Department of Labor and Federal Acquisition Regulatory Council’s implementation of Executive Order 13,673 for small businesses that sell goods and services to the federal government.
The Hon. Angela B. Styles
Chair and Partner
Crowell & Morning
Mr. Theron M. Peacock, P.E., BSCP
Senior Principal / President
WOODS • PEACOCK Engineering Consultants
*Testifying on behalf of the American Council of Engineering Companies
Ms. Debbie Norris
Vice President, Human Resources
Merrick & Company
Greenwood Village, CO
*Testifying on behalf of the Society for Human Resource Management
The Hon. Anne Rung
Office of Federal Procurement Policy
Office of Management and Budget
Mr. Lafe Solomon
Senior Labor Compliance Advisor
Office of the Solicitor
United States Department of Labor
Senate Committee Chairmen Urge Administration to Immediately Adopt Stage Two Modifications for Electronic Health Records Program, Make Rules for Stage Three Final No Sooner Than 2017
"Good afternoon. I am pleased to convene the Senate Subcommittee on Surface Transportation & Merchant Marine Infrastructure, Safety and Security for our ninth hearing, titled “Pipeline Safety: Oversight of our Nation’s Pipeline Network.”
"Pipeline infrastructure transports vital energy resources to homes, businesses, schools, and commercial centers across the United States. According to the Pipeline and Hazardous Materials Safety Administration (PHMSA), more than 2.5 million miles of pipelines traverse the United States.
"Half a million miles of pipeline transports natural gas, oil, and hazardous materials to critical infrastructure, including power plants, military bases, and airports. In addition, pipelines move approximately 75 percent of our nation’s crude oil and 60 percent of our refined petroleum products.
"In order to protect the safety and natural resources of Nebraskans, and all Americans, Congress must maintain robust oversight over PHMSA’s activities.
"State and federal officials must also ensure that pipelines across the country can continue operating efficiently. After all, pipelines are renowned as the safest way to transport crude oil and natural gas.
"Two weeks ago, I travelled to Montana with Senators Daines and Tester to convene a field hearing on the importance of state and local perspectives in pipeline safety. With an excellent panel of witnesses, our hearing focused on the safe movement of liquid materials on rural pipelines.
"We heard from the newly-confirmed PHMSA Administrator about the agency’s organizational assessment, aimed at re-focusing resources and streamlining PHMSA’s work.
"Thanks to an inquiry by Senator Daines, we learned that pipeline operators are seeking faster turnaround times on the results of PHMSA inspections, which can often take more than a year.
"Today’s hearing will focus on the transportation of natural gas throughout our nation’s vast pipeline network.
"In addition to natural gas pipeline operators, we are fortunate to have pipeline inspections technology represented, as well as officials from the Government Accountability Office and the National Transportation Safety Board.
"As many of you are aware, in 2010, a natural gas pipeline exploded in San Bruno, California, killing eight people, injuring 60 people, and destroying 37 homes. Most experts cite this incident as among the worst pipeline accidents in recent history.
"In March 2014, a natural gas pipeline in Fremont, Nebraska, exploded, burning for nearly four hours. Fortunately, this accident took place in the middle of a corn field and no one was injured.
"Through stronger oversight and collaboration between stakeholders, we can be better prepared for pipeline incidents.
"I look forward to hearing how natural gas pipeline operators are working with local communities and PHMSA on risk-based approaches to preventing pipeline accidents.
"Most importantly, we must work to help PHMSA re-prioritize and complete the outstanding requirements from the 2011 PHMSA reauthorization bill.
"Although PHMSA has made substantial progress, the agency must work to complete the remaining requirements to provide regulatory certainty to industry and local communities.
"With regard to staffing, PHMSA is experiencing challenges competing with the private sector for highly-skilled labor. I would like to explore the ways in which we can work together to accelerate the agency’s hiring practices.
"I hope to learn more about PHMSA’s work with pipeline operators on the agency’s risk-based “integrity management” assessment programs, and pipeline inspection requirements.
"Accurate and ample data is key to the success of PHMSA’s integrity management program. PHMSA should continue to work with stakeholders on best practices for data-sharing to better educate ancillary industries and the public on pipeline safety. This is especially important when it comes to high consequence areas, including drinking aquifers, environmentally delicate regions, and population centers.
"Thank you all again for being here today. Together, I am certain we can pass a bipartisan reauthorization bill that enhances pipeline safety for all Americans.
"I would now like to invite Senator Booker to offer opening remarks."
WASHINGTON- Today, the House Committee on Small Business Subcommittee on Contracting and Workforce and Subcommittee on Investigations, Oversight, and Regulations held a joint hearing to examine the ramifications of Executive Order 13,673, commonly known as the Administration’s blacklisting proposal. The United States Department of Labor and Federal Acquisition Regulatory Council’s implementation of this order threatens to “blacklist” small businesses from competing for federal contracts.
While the Administration justifies this proposal as a way to bring companies into compliance, in reality it is, as Angela Styles, chair at Crowell & Moring LLP, described it, an opportunity to “extort settlements out of small businesses.”
“The Administration itself acknowledges that ‘the vast majority of federal contractors play by the rules,’” said Styles. “But if this EO is aimed at only a small number of bad actors, then surely there is a more efficient way to accomplish this goal than imposing requirements that will lead to procurement delays, the blacklisting of ethical companies, and reduced competition in the federal marketplace.”
Since 2013, more than 100,000 companies have stopped doing business with the federal government. Testimony today revealed that the mere cost of complying with the blacklisting proposal -- it is estimated that compliance with government regulations costs almost 30 cents of every contract dollar -- would force many small businesses out of the marketplace.
“One fact is crystal clear: compliance with the new requirements will be incredibly expensive and burdensome,” said Styles. “These costs hit small contractors especially hard as they have limited resources to build new compliance infrastructure, track legal allegations, or even challenge frivolous claims. All of this comes at a time when the government is attempting to encourage more innovative small businesses and commercial item contractors to enter the government marketplace.”
Theron Peacock, Senior Principal/President of Woods-Peacock Engineering Consultant, Inc. in Alexandria, Virginia, who testified on behalf of the American Council of Engineering Companies said that, “[r]ecent contracting changes, like the implementation of Fair Pay and Safe Workplaces executive order, issued by the current Administration threaten small business participation in the Federal market.”
Furthermore, Ms. Debbie Norris, Vice President of Human Resources for Merrick & Company located in Greenwood Village, Colorado, testifying on behalf of the Society for Human Resource Management, said “[T]he proposals create a vague and unworkable system that will harm the federal contracting process and impose requirements on contractors and subcontractors that are impractical and hugely expensive. For these reasons, we believe the Executive Order should be withdrawn or substantially modified.”
“In the last three years, the Department of Labor hasn’t referred a single ‘bad actor’ to the existing adjudication system – not one,” said Small Business Committee Chairman Steve Chabot (R-OH). “Instead of improving the current system or using it at all, the Administration has set out to create a duplicative framework with an agreeable name. What it really means for small contractors is new costs and new burdens. The Small Business Committee will continue its investigation and stand up for these small companies who are threatened by this unworkable blacklisting proposal.”
“This is an executive order in search of a problem.” said Small Business Subcommittee on Contracting and Workforce Chairman Richard Hanna. “As a former small business owner, I support the idea of fair pay and safe workplaces – I’m sure we all do. Companies with labor law violations that affect their performance of contracts should be suspended or debarred. However, the executive order and resulting proposed regulation and guidance go far beyond that – instead, it seems to punish companies for unproven allegations.”
“This Executive Order is another example of overreach that has become a hallmark of the Obama Administration,” Small Business Subcommittee on Oversight, Investigations, and Regulations Chairman Cresent Hardy said. “Bad actors should never receive a federal contract, but we already have a fair and transparent process in place to weed them out. Instead of using this process, the Administration is imposing significant new burdens on all small federal contractors.”
Industry partners have issued serious concerns with the Administration’s actions. The National Association of Manufacturers described the blacklisting proposal as an “unlawful, unfair, and unworkable” framework, which will not “enhance the efficiency or efficacy of the nation’s federal procurement processes.”
The Associated Builders and Contractors, whose members perform a substantial portion of federal government construction contracts, surveyed its members and found that 57% believe that the proposals, “will compel them to abandon the pursuit of federal contracts” and that 94 percent are “less likely to pursue federal contracts”
Since 2009, President Obama has issued 13 executive orders that relate to government contracting, which have resulted in 16 new regulations so far.
The House of Representatives this afternoon passed H.R. 1624, the Protecting Affordable Coverage for Employees (PACE) Act, offered by Congressman Brett Guthrie (R-KY). The PACE Act ensures that small businesses of between 51 and 100 employees do not fall into a new, costlier health insurance category as they are currently scheduled to do under the Affordable Care Act on January 1, 2016.
“Once again, the Affordable Care Act has proven its name was a harsh joke on American families and small businesses,” said Small Business Committee Chairman Steve Chabot (R-OH). “Small businesses won’t be able to breathe easy again until this law is a thing of the past, but the bill we passed in the House today can help many small business employees keep the health care plans they have and give their employers some much-needed certainty as they plan for next year.”
To understand more about the PACE Act and why it is important for small businesses, please see this report from the House Energy and Commerce Committee.