Executive Order 13495: Nondisplacement of Qualified Workers Under Service Contracts

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Executive Order 13495: Nondisplacement of Qualified Workers Under Service Contracts

"NONDISPLACEMENT OF QUALIFIED WORKERS UNDER SERVICE CONTRACTS

When a service contract expires, and a follow-on contract is awarded for the same service, at the same location, the successor contractor or its subcontractors often hires the majority of the predecessor's employees. On some occasions, however, a successor contractor or its subcontractors hires a new work force, thus displacing the predecessor's employees.

The Federal Government's procurement interests in economy and efficiency are served when the successor contractor hires the predecessor's employees. A carryover work force reduces disruption to the delivery of services during the period of transition between contractors and provides the Federal Government the benefits of an experienced and trained work force that is familiar with the Federal Government's personnel, facilities, and requirements.

Therefore, by the authority vested in me as President by the Constitution and the laws of the United States of America, including the Federal Property and Administrative Services Act, 40 U.S.C. 101 et seq., and in order to promote economy and efficiency in Federal Government procurement, it is hereby ordered as follows:

Section 1. Policy. It is the policy of the Federal Government that service contracts and solicitations for such contracts shall include a clause that requires the contractor, and its subcontractors, under a contract that succeeds a contract for performance of the same or similar services at the same location, to offer those employees (other than managerial and supervisory employees) employed under the predecessor contract whose employment will be terminated as a result of the award of the successor contract, a right of first refusal of employment under the contract in positions for which they are qualified. There shall be no employment openings under the contract until such right of first refusal has been provided. Nothing in this order shall be construed to permit a contractor or subcontractor to fail to comply with any provision of any other Executive Order or law of the United States.
Sec. 2. Definitions.
(a) "Service contract" or "contract" means any contract or subcontract for services entered into by the Federal Governmentor its contractors that is covered by the Service Contract Act of 1965, as amended, 41 U.S.C. 351 et seq., and its implementing regulations.
(b) "Employee" means a service employee as defined in the Service Contract Act of 1965, 41 U.S.C. 357(b).
Sec. 3. Exclusions. This order shall not apply to:
(a) contracts or subcontracts under the simplified acquisition threshold as defined in 41 U.S.C. 403;
(b) contracts or subcontracts awarded pursuant to the Javits-Wagner-O'Day Act, 41 U.S.C. 46-48c;
(c) guard, elevator operator, messenger, or custodial services provided to the Federal Government under contracts or subcontracts ith sheltered workshops employing the severely handicapped as described in section 505 of the Treasury, Postal Services and General Government Appropriations Act, 1995, Public Law 103-329;
(d) agreements for vending facilities entered into pursuant to the preference regulations issued under the Randolph-Sheppard Act, 20 U.S.C. 107; or
(e) employees who were hired to work under a Federal service contract and one or more nonfederal service contracts as part of a single job, provided that the employees were not deployed in a manner that was designed to avoid the purposes of this order.
Sec. 4. Authority to Exempt Contracts.
If the head of a contracting department or agency finds that the application of any of the requirements of this order would not serve the purposes of this order or would impair the ability of the Federal Government to procure services on an economical and efficient basis, the head of such department or agency may exempt its department or agency from the requirements of any or all of the provisions of this order with respect to a particular contract, subcontract, or purchase order or any class of contracts, subcontracts, or purchase orders.

Sec. 5. Contract Clause. The following contract clause shall be included in solicitations for and service contracts that succeed contracts for performance of the same or similar work at the same location:
"NONDISPLACEMENT OF QUALIFIED WORKERS
"(a) Consistent with the efficient performance of this contract, the contractor and its subcontractors shall, except as otherwise provided herein, in good faith offer those employees (other than managerial and supervisory employees) employed under the predecessor contract whose employment will be terminated as a result of award of this contract or the expiration of thecontract under which the employees were hired, a right of first refusal of employment under this contract in positions for which employees are qualified. The contractor and its subcontractors shall determine the number of employees necessary for efficient performance of this contract and may elect to employ fewer employees than the predecessor contractor employed in connection with performance of the work. Except as provided in paragraph (b) there shall be no employment opening under this contract, and the contractor and any subcontractors shall not offer employment under this contract, to any person prior to having complied fully with this obligation. The contractor and its subcontractors shall make an express offer of employment to each employee as provided herein and shall state the time within which the employee must accept such offer, but in no case shall the period within which the employee must accept the offer of employment be less than 10 days.
"(b) Notwithstanding the obligation under paragraph (a) above, the contractor and any subcontractors (1) may employ under this contract any employee who has worked for the contractor or subcontractor for at least 3 months immediately preceding the commencement of this contract and who would otherwise face lay-off or discharge, (2) are not required to offer a right of first refusal to any employee(s) of the predecessor contractor who are not service employees within the meaning of the Service Contract Act of 1965, as amended, 41 U.S.C. 357(b), and (3) are not required to offer a right of first refusal to any employee(s) of the predecessor contractor whom the contractor or any of its subcontractors reasonably believes, based on the particular employee's past performance, has failed to perform suitably on the job.
"(c) In accordance with Federal Acquisition Regulation 52.222–41(n), the contractor shall, not less than 10 days before completion of this contract, furnish the Contracting Officer a certified list of the names of all service employees working under this contract and its subcontracts during the last month of contract performance. The list shall also contain anniversary dates of employment of each service employee under this contract and its predecessor contracts either with the current or predecessor contractors or their subcontractors. The Contracting Officer will provide the list to the successor contractor, and the list shall be provided on request to employees or their representatives.
"(d) If it is determined, pursuant to regulations issued by the Secretary of Labor (Secretary), that the contractor or its subcontractors are not in compliance with the requirements of this clause or any regulation or order of the Secretary, appropriate sanctions may be imposed and remedies invoked against the contractor or its subcontractors, as provided in Executive Order (No.) _______, the regulations, and relevant orders of the Secretary, or as otherwise provided by law.
"(e)
In every subcontract entered into in order to perform services under this contract, the contractor will include provisions that ensure that each subcontractor will honor the requirements of paragraphs (a) through (b) with respect to the employees of a predecessor subcontractor or subcontractors working under this contract, as well as of a predecessor contractor and its subcontractors. The subcontract shall also include provisions to ensure that the subcontractor will provide the contractor with the information about th employees of the subcontractor needed by the contractor to comply with paragraph 5(c), above. The contractor will take such action with respect to any such subcontract as may be directed by the Secretary as a means of enforcing such provisions, including the imposition of sanctions for non-compliance: provided, however, that if the contractor, as a result of such direction, becomes involved in litigation with a subcontractor, or is threatened with such involvement, the contractor may request that the United States enter into such litigation to protect the interests of the United States."

Sec. 6. Enforcement. (a) The Secretary of Labor (Secretary) is responsible for investigating and obtaining compliance with this order. In such proceedings, the Secretary shall have the authority to issue final orders prescribing appropriate sanctions and remedies, including, but not limited to, orders requiring employment and payment of wages lost. The Secretary also may provide that where a contractor or subcontractor has failed to comply with any order of the Secretary or has committed willful violations of this order or the regulations issued pursuant thereto, the contractor or subcontractor, and its responsible officers, and any firm in which the contractor or subcontractor has a substantial interest, shall be ineligible to be awarded any contract of the United States for a period of up to 3 years. Neither an order for debarment of any contractor or subcontractor from further Government contracts under this section nor the inclusion of a contractor or subcontractor on a published list of noncomplying contractors shall be carried out without affording the contractor or subcontractor an opportunity for a hearing.
(b) This order creates no rights under the Contract Disputes Act, and disputes regarding the requirement of the contract clause prescribed by section 5 of this order, to the extent permitted by law, shall be disposed of only as provided by the Secretary in regulations issued under this order. To the extent practicable, such regulations shall favor the resolution of disputes by efficient and informal alternative dispute resolution methods. The Secretary shall, in consultation with the Federal Acquisition Regulatory Council, issue regulations, within 180 days of the date of this order, to the extent permitted by law, to implement the requirements of this order. The Federal Acquisition Regulatory Council shall issue, within 180 days of the date of this order, to the extent permitted by law, regulations in the Federal Acquisition Regulation to provide for inclusion of the contract clause in Federal solicitations and contracts subject to this order.
Sec. 7. Revocation. Executive Order 13204 of February 17, 2001, is revoked.
Sec. 8. Severability. If any provision of this order, or the application of such provision or amendment to any person or
circumstance, is held to be invalid, the remainder of this order and the application of the provisions of such to any person or circumstances shall not be affected thereby.
Sec. 9. General Provisions. (a) Nothing in this order shall be construed to impair or otherwise affect:
(i) authority granted by law to an executive department, agency, or the head thereof; or
(ii) functions of the Director of the Office of Management and Budget relating to budgetary, administrative, or legislative proposals.
(b) This order shall be implemented consistent with applicable law and subject to the availability of appropriations.
(c) This order is not intended to, and does not, create any right or benefit, substantive or procedural, enforceable at law or in equity by any party against the United States, its departments, agencies, or entities, its officers, employees, or agents, or any other person. This order is not intended, however, to preclude judicial review of final decisions by the Secretary in accordance with the Administrative Procedure Act, 5 U.S.C. 701 et seq.
Sec. 10. Effective Date. This order shall become effective immediately and shall apply to solicitations issued on or after the effective date for the action taken by the Federal Acquisition Regulatory Council under section 6(b) of this order.


BARACK OBAMA

THE WHITE HOUSE,
January 30, 2009"

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The above Executive Order Revokes Executive Order 13204, February 17, 2001

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Executive Order 13494: Economy in Government Contracting

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Economy in Government Contracting

"By the authority vested in me as President by the Constitution and the laws of the United States of America, including the Federal Property and Administrative Services Act, 40 U.S.C. 101 et seq., it is hereby ordered that:
Section 1. To promote economy and efficiency in Government contracting, certain costs that are not directly related to the contractors' provision of goods and services to the Government shall be unallowable for payment, thereby directly reducing Government expenditures. This order is also consistent with the policy of the United States to remain impartial concerning any labor-management dispute involving Government contractors. This order does not restrict the manner in which recipients of Federal funds may expend those funds.
Sec. 2. It is the policy of the executive branch in procuring goods and services that, to ensure the economical and efficient administration of Government contracts, contracting departments and agencies, when they enter into, receive proposals for, or make disbursements pursuant to a contract as to which certain costs are treated as unallowable, shall treat as unallowable the costs of any activities undertaken to persuade employees -- whether employees of the recipient of the Federal disbursements or of any other entity -- to exercise or not to exercise, or concerning the manner of exercising, the right to organize and bargain collectively through representatives of the employees' own choosing. Such unallowable costs shall be excluded from any billing, claim, proposal, or disbursement applicable to any such Federal Government contract.
Sec. 3. Notwithstanding section 2 of this order, contracting departments and agencies shall treat as allowable costs incurred in maintaining satisfactory relations between the contractor and its employees, including costs of labor-management committees, employee publications (other than those undertaken to persuade employees to exercise or not to exercise, or concerning the manner of exercising, the right to organize and bargain collectively), and other related activities. See 48 C.F.R. 31.205-21.
Sec. 4. Examples of costs unallowable under section 2 of this order include the costs of the following activities, when they are undertaken to persuade employees to exercise or not to exercise, or concern the manner of exercising, rights to organize and bargain collectively:
(a) preparing and distributing materials;
(b) hiring or consulting legal counsel or consultants;
(c) holding meetings (including paying the salaries of the attendees at meetings held for this purpose); and
(d) planning or conducting activities by managers, supervisors, or union representatives during work hours.
Sec. 5. Within 150 days of the effective date of this order, the Federal Acquisition Regulatory Council (FAR Council) shall adopt such rules and regulations and issue such orders as are deemed necessary and appropriate to carry out this order. Such rules, regulations, and orders shall minimize the costs of compliance for contractors and shall not interfere with the ability of contractors to engage in advocacy through activities for which they do not claim reimbursement.
Sec. 6. Each contracting department or agency shall cooperate with the FAR Council and provide such information and assistance as the FAR Council may require in the performance of its functions under this order.
Sec. 7. (a) This order shall be implemented consistent with applicable law and subject to the availability of appropriations.
(b) This order is not intended to, and does not, create any right or benefit, substantive or procedural, enforceable at law or in equity by any party against the United States, its departments, agencies, or entities, its officers, employees, or agents, or any other person.
Sec. 8. This order shall become effective immediately, and shall apply to contracts resulting from solicitations issued on or after the effective date of the action taken by the FAR Council under section 5 of this order.


BARACK OBAMA

THE WHITE HOUSE,
January 30, 2009"

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Executive Order 13497: Revocation of Certain Executive Orders Concerning Regulatory Planning and Review

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Executive Order 13497: Revocation of Certain Executive Orders Concerning Regulatory Planning and Review

• Signed: January 30, 2009
• Federal Register page and date: 74 FR 6113, February 4, 2009
• Revokes: EO 13258, February 26, 2002; EO 13422, January 18, 2007

By the authority vested in me as President by the Constitution and the 
laws of the United States of America, it is hereby ordered that: 

Section 1. Executive Order 13258 of February 26, 2002, and Executive Order 
13422 of January 18, 2007, concerning regulatory planning and review, which 
amended Executive Order 12866 of September 30, 1993, are revoked. 

Sec. 2.  The Director of the Office of Management and Budget and the 
heads of executive departments and agencies shall promptly rescind any 
orders, rules, regulations, guidelines, or policies implementing or enforcing 
Executive Order 13258 or Executive Order 13422, to the extent consistent 
with law. 

Sec. 3.  This order is not intended to, and does not, create any right or 
benefit, substantive or procedural, enforceable at law or in equity by any 
party against the United States, its departments, agencies, or entities, its 
officers, employees, or agents, or any other person. 

THE WHITE HOUSE, 
January 30, 2009

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13496: Notification of Employee Rights Under Federal Labor Laws

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Executive Order 13496 of January 30, 2009

Notification of Employee Rights Under Federal Labor Laws

By the authority vested in me as President by the Constitution and the laws of the United States of America, including the Federal Property and Administrative Services Act, 40 U.S.C. 101 et seq., and in order to ensure the economical and efficient administration and completion of Government contracts, it is hereby ordered that:

Section 1. Policy. This order is designed to promote economy and efficiency in Government procurement. When the Federal Government contracts for goods or services, it has a proprietary interest in ensuring that those contracts will be performed by contractors whose work will not be interrupted by labor unrest. The attainment of industrial peace is most easily achieved and workers’ productivity is enhanced when workers are well informed of their rights under Federal labor laws, including the National Labor Relations Act (Act), 29 U.S.C. 151 et seq. As the Act recognizes, ‘‘encouraging the practice and procedure of collective bargaining and . . . protecting the exercise by workers of full freedom of association, self-organization,
and designation of representatives of their own choosing, for the purpose of negotiating the terms and conditions of their employment or other mutual aid or protection’’ will ‘‘eliminate the causes of certain substantial obstructions to the free flow of commerce’’ and ‘‘mitigate and eliminate these obstructions when they have occurred.’’ 29 U.S.C. 151. Relying on contractors whose employees are informed of such rights under Federal labor laws facilitates the efficient and economical completion of the Federal Government’s contracts.

Sec. 2. Contract Clause. Except in contracts exempted in accordance with section 3 of this order, all Government contracting departments and agencies shall, to the extent consistent with law, include the following provisions in every Government contract, other than collective bargaining agreements
as defined in 5 U.S.C. 7103(a)(8) and purchases under the simplified acquisition threshold as defined in the Office of Federal Procurement Policy Act, 41 U.S.C. 403.

‘‘1. During the term of this contract, the contractor agrees to post a notice, of such size and in such form, and containing such content as the Secretary of Labor shall prescribe, in conspicuous places in and about its plants and offices where employees covered by the National Labor Relations Act engage in activities relating to the performance of the contract, including all places where notices to employees are customarily posted both physically and electronically. The notice shall include the information contained in the notice published by the Secretary of Labor in the Federal Register (Secretary’s Notice).

‘‘2. The contractor will comply with all provisions of the Secretary’s Notice, and related rules, regulations, and orders of the Secretary of Labor.

‘‘3. In the event that the contractor does not comply with any of the requirements set forth in paragraphs (1) or (2) above, this contract may be cancelled, terminated, or suspended in whole or in part, and the contractor may be declared ineligible for further Government contracts in accordance with procedures authorized in or adopted pursuant to Executive Order [number as provided by the Federal Register] of [insert new date]. Such other sanctions or remedies may be imposed as are provided in Executive Order
[number as provided by the Federal Register] of [insert new date], or by rule, regulation, or order of the Secretary of Labor, or as are otherwise provided by law.

‘‘4. The contractor will include the provisions of paragraphs (1) through (3) above in every subcontract entered into in connection with this contract (unless exempted by rules, regulations, or orders of the Secretary of Labor issued pursuant to section 3 of Executive Order [number as provided by the Federal Register] of [insert new date]) so that such provisions will be binding upon each subcontractor. The contractor will take such action with respect to any such subcontract as may be directed by the Secretary
of Labor as a means of enforcing such provisions, including the imposition of sanctions for non-compliance: Provided, however, that if the contractor becomes involved in litigation with a subcontractor, or is threatened with such involvement, as a result of such direction, the contractor may request the United States to enter into such litigation to protect the interests of the United States.’’

Sec. 3. Administration.

(a) The Secretary of Labor (Secretary) shall be responsible for the administration and enforcement of this order. The Secretary shall adopt such rules and regulations and issue such orders as are necessary and appropriate to achieve the purposes of this order.

(b) Within 120 days of the effective date of this order, the Secretary shall initiate a rulemaking to prescribe the size, form, and content of the notice to be posted by a contractor under paragraph 1 of the contract clause described in section 2 of this order. Such notice shall describe the rights of employees under Federal labor laws, consistent with the policy set forth in section 1 of this order.

(c) Whenever the Secretary finds that an act of Congress, clarification of existing law by the courts or the National Labor Relations Board, or other circumstances make modification of the contractual provisions set
out in subsection (a) of this section necessary to achieve the purposes of this order, the Secretary promptly shall issue such rules, regulations, or orders as are needed to cause the substitution or addition of appropriate
contractual provisions in Government contracts thereafter entered into.

Sec. 4. Exemptions. (a) If the Secretary finds that the application of any of the requirements of this order would not serve the purposes of this order or would impair the ability of the Government to procure goods
or services on an economical and efficient basis, the Secretary may exempt a contracting department or agency or group of departments or agencies from the requirements of any or all of the provisions of this order with respect to a particular contract or subcontract or any class of contracts or subcontracts.

(b) The Secretary may, if the Secretary finds that special circumstances require an exemption in order to serve the national interest, exempt a contracting department or agency from the requirements of any or all of
the provisions of section 2 of this order with respect to a particular contract or subcontract or class of contracts or subcontracts.

Sec. 5. Investigation.

(a) The Secretary may investigate any Government contractor, subcontractor, or vendor to determine whether the contractual provisions required by section 2 of this order have been violated. Such investigations shall be conducted in accordance with procedures established by the Secretary.

(b) The Secretary shall receive and investigate complaints by employees of a Government contractor or subcontractor, where such complaints allege a failure to perform or a violation of the contractual provisions required by section 2 of this order.

Sec. 6. Compliance.

(a) The Secretary, or any agency or officer in the executive branch lawfully designated by rule, regulation, or order of the Secretary, may hold such hearings, public or private, regarding compliance with this order as the
Secretary may deem advisable.

(b) The Secretary may hold hearings, or cause hearings to be held, in accordance with subsection (a) of this section, prior to imposing, ordering, or recommending the imposition of sanctions under this order. Neither
an order for cancellation, termination, or suspension of any contract or debarment of any contractor from further Government contracts under section 7(b) of this order nor the inclusion of a contractor on a published list of noncomplying contractors under section 7(c) of this order shall be carried out without affording the contractor an opportunity for a hearing.

Sec. 7. Remedies. In accordance with such rules, regulations, or orders as the Secretary may issue or adopt, the Secretary may:

(a) after consulting with the contracting department or agency, direct that department or agency to cancel, terminate, suspend, or cause to be cancelled, terminated, or suspended, any contract, or any portion or portions thereof, for failure of the contractor to comply with the contractual provisions required by section 2 of this order; contracts may be cancelled, terminated, or suspended absolutely, or continuance of contracts may be conditioned upon future compliance: Provided, that before issuing a directive under this subsection, the Secretary shall provide the head of the contracting department or agency an opportunity to offer written objections to the issuance of such a directive, which objections shall include a complete statement of reasons for the objections, among which reasons shall be a finding that completion of the contract is essential to the agency’s mission: And provided further, that no directive shall be issued by the Secretary under this subsection so long as the head of the contracting department or agency, or his or her designee, continues to object to the issuance of such directive;

(b) after consulting with each affected contracting department or agency, provide that one or more contracting departments or agencies shall refrain from entering into further contracts, or extensions or other modifications of existing contracts, with any noncomplying contractor, until such contractor has satisfied the Secretary that such contractor has complied with and will carry out the provisions of this order: Provided, that before issuing a directive under this subsection, the Secretary shall provide the head of each contracting department or agency an opportunity to offer written objections to the issuance of such a directive, which objections shall include a complete statement of reasons for the objections, among which reasons shall be a finding that further contracts or extensions or other modifications of existing contracts with the noncomplying contractor are essential to the agency’s mission: And provided further, that no directive shall be issued by the Secretary under this subsection so long as the head of a contracting department or agency, or his or her designee, continues to object to the issuance of such directive; and

(c) publish, or cause to be published, the names of contractors that have, in the judgment of the Secretary, failed to comply with the provisions of this order or of related rules, regulations, and orders of the Secretary.

Sec. 8. Reports.

Whenever the Secretary invokes section 7(a) or 7(b) of this order, the contracting department or agency shall report to the Secretary the results of the action it has taken within such time as the Secretary
shall specify.

Sec. 9. Cooperation.

Each contracting department and agency shall cooperate with the Secretary and provide such information and assistance as the Secretary may require in the performance of the Secretary’s functions under
this order.

Sec. 10. Sufficiency of Remedies.

If the Secretary finds that the authority
vested in the Secretary by sections 5 through 9 of this order is not sufficient to effectuate the purposes of this order, the Secretary shall develop recommendations on how better to effectuate those purposes.

Sec. 11. Delegation.

 The Secretary may, in accordance with law, delegate any function or duty of the Secretary under this order to any officer in the Department of Labor or to any other officer in the executive branch of the Government, with the consent of the head of the department or agency in which that officer serves.

Sec. 12. Implementation.

To the extent permitted by law, the Federal Acquisition Regulatory Council (FAR Council) shall take whatever action is required to implement in the Federal Acquisition Regulation (FAR) the provisions
of this order and any related rules, regulations, or orders issued by the Secretary under this order and shall amend the FAR to require each solicitation of offers for a contract to include a provision that implements section 2 of this order.

Sec. 13. Revocation of Prior Order and Actions.

 Executive Order 13201 of February 17, 2001, is revoked. The heads of executive departments and
agencies shall, to the extent permitted by law, revoke expeditiously any orders, rules, regulations, guidelines, or policies implementing or enforcing Executive Order 13201.

Sec. 14. Severability.

If any provision of this order, or the application of such provision to any person or circumstance, is held to be invalid, the remainder of this order and the application of the provisions of such to any person or circumstances shall not be affected thereby.

Sec. 15. General Provisions.

(a) Nothing in this order shall be construed to impair or otherwise affect:
(i) authority granted by law to a department, agency, or the head thereof;
or
(ii) functions of the Director of the Office of Management and Budget relating to budgetary, administrative, or legislative proposals.
(b) This order shall be implemented consistent with applicable law and subject to the availability of appropriations.
(c) This order is not intended to, and does not, create any right or benefit, substantive or procedural, enforceable at law or in equity by any party against the United States, its departments, agencies, or entities, its officers, employees, or agents, or any other person.

Sec. 16. Effective Date.

 This order shall become effective immediately, and shall apply to contracts resulting from solicitations issued on or after the effective date of the rule promulgated by the Secretary pursuant to section 3(b) of this order.

Barack Obama

THE WHITE HOUSE,
January 30, 2009.

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The Stimulus Package Passes House

President Obama pressed and pushed and attained the passage of his $819 Billion dollar stimulus package through the house while declaring "We don't have a moment to spare". But at what cost?


244-188 was the vote count that passed the package. A strong pass by most accounts with all but 11 Democrats voting in favor of the stimulus package. The problem is Republicans stood strong and held there opposition to the passage of the package unanimously. Not a single Republican voted in favor of the stimulus package. As I said earlier today, the cracks are starting to show up. Obama's frequent please for bipartisan support fell on deaf ears in the end. But will this be a sign of the future?


Has the promise of a bipartisan government for the people and of the people with the people put first already gone away? Is this the end of the honeymoon or just more political grandstanding by a party on the brink of collapse? Or is this the Democratic party showing force and command? Either way this is not a good first step for proving a strong union between the ruling parties.


The Republicans said that the stimulus package brought by the Democrats fell short on needed tax cuts and it contained far too much spending overall. Much of the spending outlined in the Dem Stimulus Package is considered wasteful by the Republicans. They went so far as to state that the package would fall far short of the new administration's predictions of job creation.

Rep. John Boehner of Ohio, said the package "won't create many jobs, but it will create plenty of programs and projects through slow-moving government spending."

The stimulus package that passed today includes $544 billion in federal spending and $275 billion in tax cuts for individuals and businesses. Money for traditional job-creating programs including highway construction and mass transit projects is in the package. The package also adds funds for unemployment benefits, health care and food stamps The additional protection is designed to help those who have been caught in the wheels of the current economic meltdown.
At the end of the day there was a last-minute addition of $3 billion for mass transit programs. Gone were the monies for the inclusion of contraceptives that had been publicised recently.

The stimulus package heart is the $500 tax break for single workers and $1,000 for couples. This tax break is also available for those who don't earn enough to owe federal income taxes.

The Republicans offered there own alternative package which was pinned on tax cuts instead of spending. The House defeated the alternative package with a vote of 266-170.

The House vote now sends the bill onto the Senate for further debate. They expect to begin the process as early as Monday on companion legislation that is already taking shape. The Democrat leaders have stated that they will have legislation ready for President Obama by mid-February.

Start of week two January 28 2009

January 28 2009

The day started out with a blanket of snow and ice covering the ground and area road ways. Making commuting a nightmare and adding to the frustrations being felt by large and small businesses alike. Many simply could not make the commute to work. Area schools were closed down and more cold and icy weather was expected through out the day. In opposition to the surrounding area DC public schools were open but did have a two hour delay to the start of the day. Both campuses of the private school Sidwell Friends were closed however, which afforded the Obama children the day off. According to some reports President Obama offered some humor; “My children’s school was canceled today, because of what? Some ice?” he said “As my children pointed out, in Chicago, school is never canceled,”

The storm and the blanket of snow and ice it brought with it was after all relatively minor, but in the Mid-Atlantic area even a minor bit of snow or ice can bring business to a halt. Many of the area townships just down have equipment to handle this type of weather and rely on private contractors to do the work. Many of those private contractors have been feeling the pinch of the economic downturn and that just makes the problems brought by the weather that much greater in scope.

Digital TV news

The House of Representatives was at work on Wednesday, despite the snow and ice. They passed a bill to delay the nationwide switch from analog to digital television signals by approximately four months. A move that many speculate was not wanted by television broadcaster's by was made as some fear that not all of the public are ready for the move to occur. The delay will move the switch over from February 17th to June 12th and is backed by both the Senate and President Obama. The rebates for the purchase of the DTV converters needed for the switchover on older televisions that still receive signal over the air has reportedly been straining its budget recently.

Aerospace Job Cuts

Boeing sighted the weakening economic conditions being felt worldwide as the reason they are now planning to slash about 10,000 jobs in preparation for a modest production cut for the coming year. One more example of how the financial meltdown has caused global financing problems and exactly how much weight now rests on the US economic stimulus programs outcome.

House Republicans offer a different take on Economic Stimulus

House Republicans put another economic stimulus idea on the table to be considered. This idea shifts the focus from spending to tax relief. This package is not attached to the previous amendment offered up by House Republicans, but is a separate package.

President Obama fully expects the Democrat stimulus package that has been presented to pass a full House vote later today. The House Republicans are hoping that there proposals will at least have some level of influence on the final stimulus package. This has little chance of being anything other than Political posturing at this point though.

"People are recognizing very quickly that's it's not one, stimulative, and two, it's full of all sorts of things that are sort of favorite political projects of the Democrat majority," said Rep. Tom Price, R-Ga. This comment alone may be presenting the signs of the possible unraveling of the joint non-partisan political machine we have been promised as the parties members from both sides vie for the attention of the world as the group that will lead the citizens home to the promised land. Mid term elections are just short of two years away after all.

Rain nor sleet nor dark of night shall stop the mail - but budget problems?

The Postmaster General told Congress on Wednesday that the post office may need to scale back on the delivery schedule. The Postmaster asked Congress to lift the requirement that the mail be delivered six days a week. Removing the six day a week mail delivery doesn't mean there will be no Saturday delivery however. Studies have shown that the mail is actually lower in volume on other days of the week, and if they were to trim a day from the scheduled deliveries it could perhaps be Tuesday or Wednesday. On the other hand the impacts that the trimming of a work week day from thew delivery of checks and other needed business instruments could have yet deeper ripple effects. the thing that all of the lawmakers are loosing sight of is the ripple effect. Every action has an equal and opposite reaction.

Tougher Emissions Standards

Yesterday, President Obama put forth a mandate to the automotive industry to reduce emissions and increase the MPG of the vehicles they produce. The mandate requires that the overall average of cars and light trucks produced reach at least 35 miles per gallon fuel economy by 2020.

The mandate requires a 22 percent drop in emissions by 2012, and a 30 percent drop by 2016. Some feel that the automakers should have "no major difficulty" in reaching the mandated efficiency goals based on the automotive manufacturers reports given to Congress on producing more fuel-efficient vehicles.

President Obama has requested the Transportation Department to develop guidelines by March of 2009, outlining the steps needed to reach the 35 MPG average fuel efficiency by 2020 in compliance with a law approved in December of 2007 by former President Bush. Bush's law on the CAFE (Corporate Average Fuel Economy) standard was never implemented however.

So what does all of this mean?

In the current market, the automotive manufacturers no longer have the upper hand. They have been resistant to the increase in fuel economy, sighting how expensive the increase in fuel economy will be for retooling and design efforts. They also sight the current low fuel costs as a reason that consumers will be resistant to purchasing the vehicles that they would produce with higher fuel economy standards. Enter the higher fuel tax ideas that are currently floating about. A a fuel tax hike that some claim, will add $2 to $3 to the price of a gallon of gasoline.

For the most part the automotive manufacturers are correct in the assumption that the vast majority of the American consumers will not fully embrace vehicles with higher MPG ratings unless they have a clear and direct reason to do so. With fuel prices relatively low at current, the average consumer will start to turn back to large vehicles with lower MPG ratings. Higher fuel prices would force consumers to buy more fuel efficient vehicles, and in large numbers. Using new fuel taxes to raise the fuel costs would also provide the added benefit of reducing budget deficits. But they would have to be careful how they implement this new tax idea. To much, to fast and they could end up with a tele-commuting society that drives only to the market. But if they roll out the new taxes over a period of time in small sums they might not be met with much resistance. Nine cents here and sixteen cents there is easier for the public to accept then going to the pumps tomorrow and having to pay a full dollar or two more than they would have yesterday. Phasing it in over a 24 to 36 month period might serve them best in the long run, though this will not send consumers in droves to purchase the new Fuel Efficient vehicles at the outset.

In addition to the fuel tax you would have to expect that the average cost of a more fuel efficient vehicle will be more than the average cost of a new vehicle at the current MPG estimates. Hybrid technology for example is not cheap, even in today's market. I would expect that we might see any where from a $1,000 to a $5,000 price increase over today's over priced cars and trucks. At this point the average consumer is going to have to see what is the lesser of the two evils. Keeping the 1992 lumina that is paid off and getting twenty odd miles to the gallon but paying $3.50 a gallon or buying the new "Insert clever name here" that gets 35 miles to the gallon but costs $32,000. My money is on the 92 Lumina since there is no payment involved other than maintenance.

So what other market drivers can be put into play to take away our 92 Lumina and make us think; "Buying that over priced piece of junk is a good idea after all"?

Enter the tax incentive and Gov. Arnold Schwarzenegger's request for a waiver under the Clean Air Act, allowing California to enforce strict limits on tailpipe emissions. Add in at least 14 other states who have already adopted the California standard and the other four states that are in the process of adopting those standards. Bye bye 92 Lumina. If they can't talk us out of our reluctance to take on new monthly payments it seems that they may be able to force us to take on a new monthly payment. And all of this while we are in a recession.

Day Seven and the bleeding economy January 27 2009

As the last day of the first week of the Obama Administration came to a close the economy again took center stage as the bleeding continued to seep through the surgical patch work of the previous administration. The bleeding oddly enough is why Timothy Geithner was in the end confirmed to the position that his lack of good judgment should have prevented him from attaining. In the end the 47 year old won his seat with the final vote of 60 to 34 being presented by the U.S. Senate late on Monday. The appointment gives Geithner full charge of a Treasury Department and control of the main efforts to restore stability to the nations markets.

This is not a job that anyone would really want to have. The major economists seem to agree that the economy is going to continue to contract throughout the remainder of 2009 and that recovery is only going to start once a real sense of consumer confidence is reestablished in the banking industry. For now they are hinging there bets that a 47 year old tax dodger will help to bring the confidence in the banking system back around.

As if a reminder of our current economic peril was needed, six companies announced staggering cutbacks and closures. Sprint / Nextel announced today that they will be shedding 8,000 jobs all by by March 31 of this year. To be honest they are playing third string to the major US cellular phone providers. Trailing long behind AT&T and Verizon in both coverage and quality. I know, first hand unfortunately. I had a Nextel for over four years after using Verizon. Now I have gone back to Verizon. It turns out that in the end, quality counts. But Sprint / Nextel was not the only victim this Monday.

Nearly 2.6 million jobs were lost during 2008, the highest yearly job-loss total since 1945. Those losses were due tot he end of World War II and the slowing down of the war machine.

Caterpillar announced that it will cut 20,000 jobs. The company was already planning to cut 15,000 workers since the fourth quarter of 2008. They recently decided to add an additional 5,000 jobs to the cut list, bringing the total to 20,000.

Pfizer said it will be cutting 10% of there 81,900 employees and close five of its manufacturing plants. They also stated that there will be a second round of cuts that will shed 15% of employees from the combined Pfizer/Wyeth staff of 120,000 employees total. That brings the job cuts to a total of 26,000. The company had previously cut 4,700 jobs in 2008.

Home Depot the world's largest home improvement retailer, announced Monday it will eliminate its EXPO design center business and slash 7,000 employees. The cuts represent approximately 2% of the company's total workforce.

Microsoft stunned investors by announcing its first-ever broad layoffs. The company said it would shed to 5,000 of its 94,000 employees over the next 18 months, including 1,400 people immediately.

General Motors said it would lay off 2,000 workers at two of there plants. One in Michigan and one in Ohio. In addition they will temporarily stop production at nine North American assembly plants in response to weak demand. They plan to cut 800 second shift workers at a plant in Lordstown, Ohio, and 1,200 second shift workers at the Delta Township outside of Lansing, Michigan. Those moves will bring production of the Chevrolet Cobalt and a trio of crossover vehicles including the Buick Enclave to a crawl.

Gm's move comes at the same time as President Obama announced the move to adopt strict limits on greenhouse gases from cars and trucks. He also directed the Transportation Department to begin working up rules that would impose higher fuel-economy standards on cars and light trucks from US manufacturers. President Obama said that his orders were intended “to ensure that the fuel-efficient cars of tomorrow are built right here in America.”

The directives that President Obama put forth today will force automotive manufacturers to quickly retool so they could begin producing and selling cars and trucks that are cleaner and get better gas mileage on an accelerated schedule. Obama directed the Transportation Department to start working on a law requiring a 40 percent improvement in gas mileage by 2020. The big three have lobbied hard against the regulations and have challenged them in court, however with two of the three taking government hand outs currently, they may be backed into a corner now.

Whats tomorrow going to bring?

First Days

It is always amazing to me, Inauguration Day.

It is a day that mixes New Year's Eve with your birthday, Christmas, Hanukkah, and Thanksgiving.

And this year was especially amazing due to the historic election of America's first African American President.

Of course, the pageantry quickly fades and the actual business of governing starts.

In his first days of the Presidency, President Obama has moved to draw a clear line between his administration and that of George W. Bush.

So far there has been a renewed emphasis on Afghanistan and a meeting to discuss what is going to occur now in Iraq.

There has been the beginning of the roll out of a stimulus package that would make The New Deal look like change.

And there has been a renewed emphasis on diplomacy with Secretary of State, Hillary Clinton, moving quickly to send a representative to the Middle East to attempt to slow down the conflict in the Middle East.

The first opinion poll shows people have a 68% approval rating of the new President. And the thing about this poll coming so soon after the inauguration is that how has Mr. Obama actually had enough time to really prove or disprove anything?

We have also had a small spat with the media over President Obama not allowing the media into his re-swearing in ceremony after Chief Justice Roberts misspoke the words of the oath on Tuesday.

But, after these first days, I am reminded of all of the big, massive changes that are coming and heartened by the renewed sense of hope that comes with a new administration and a new President.

It is much too early to begin the process of examining and judging Obama's actions, so as his first full week in office begins on Monday, let us all wish the new President the best...and judge him and hold him accountable, as he requested.

*Article contributed by Dave Wakeman - One of the guest contributors here on 1461.