Open Letter to Congress: The Promise of the Williamsburg Accord

Michael A. Needham | May 6, 2013

Dear Congressman,

In the coming months, you will face tremendous pressure to accept a deal to raise our nation’s debt ceiling. Conservatives around the country will insist the debt ceiling not be raised unless our nation gets on a path to a balanced budget within 10 years and stays balanced. This is not an arbitrary marker; rather, it is the marker laid out by the entire House Republican Conference in what has become known as the Williamsburg Accord.

Conservatives cannot enter into the debt ceiling debate without understanding the promise of the Williamsburg Accord.

On January 18, four current and former chairmen of the Republican Study Committee announced an agreement to re-sequence the 2013 fiscal fights. In exchange for holding the line on the sequester and producing a budget that balanced in ten years, conservatives agreed to postpone the debt ceiling debate for several months. In turn, the debate on the debt ceiling would revolve around enacting the policies that put the federal budget on the path to 10-year balance.

A few days later, Speaker Boehner declared, “It’s time for us to come to a plan that will in fact balance the budget over the next 10 years.” He said it was the GOP’s “commitment to the American people.”

A Wisconsin Lesson for Congress

Michael A. Needham | June 5, 2012

What are the lessons from Wisconsin if Governor Scott Walker prevails in today’s recall election?

Over at National Review, John Fund provides a rather in-depth answer. Importantly, he says a Walker victory will mean voters view the reforms as working:

Walker can claim to have wiped out a $3.6 billion deficit without raising taxes or seeing service cutbacks. Indeed, property taxes fell statewide by 0.4 percent last year, the first time they’ve fallen since 1998. The average homeowner’s property tax bill would have been about $700 higher if the previous rate of increase had continued. The state now expects to have a surplus of $150 million at the end of the current budget cycle.

One area Fund does not address though is the impact of a Walker win on Congress. If voters reward Walker for taking a principled stand and enacting reforms that actually work, lawmakers in Washington who are willing to demonstrate a seriousness of purpose should feel empowered to lead. Given America’s increasingly perilous state, there is no shortage of opportunities.

First, lawmakers must resist a return to the status quo:

The Washington Establishment’s Big Problem

Michael A. Needham | October 18, 2011

Nobody is happy with Washington. Polls showing public dissatisfaction with the federal government at an all time high of 81 percent make you wonder what in the world the other 19 percent are thinking.

It is no wonder the chattering classes in Washington are whispering about this unique moment being ripe for a third party candidacy. Mark McKinnon and Doug Schoen both have recent pieces in which they argue that the time is ripe for a centrist candidate.

While we agree that America is indeed at a special moment in history – one in which we could see a watershed moment in American politics – we fail to see how observers can reasonably conclude that the American people are clamoring for a ticket whose feature characteristics are moderation and abandonment of principle. Finding a middle road and going along to get along is how our nation ended up $14.8 trillion in debt. If the Republican Party were to live up to the opportunity it was given in the 2010 election, a third party would not be necessary.

FEMA Offsets Set Left Ablaze

Michael A. Needham | September 6, 2011

Another hurricane is brewing in the Atlantic and fires rage in Oklahoma and Texas. Meanwhile, all across the country, Americans are working to rebuild after spring floods, summer tornados and Hurricane Irene. Enter the federal government.

State and local officials often look to Washington for financial assistance after a disaster strikes. The Federal Emergency Management Agency (FEMA), a product of the Carter administration, is frequently a governor’s best friend, doling out federal money for various assistance plans and reconstruction projects. And because that money is for disaster relief, it is usually designated as “emergency spending” and ends up adding to our national debt.

For Employees, It’s Time for RAISE

Michael A. Needham | August 30, 2011

With fears of a double-dip recession growing, Americans are saving more and spending less. Economic uncertainty and stagnant wages are a bad combination for American families.

Image, for just a moment, the following situation:

You complete a very important project for your company, coming in on time and under budget. Your boss is ecstatic and the company’s profits are set to soar. In any economy, especially this one, that is great news. Here’s the catch, though; despite your contribution and your company’s renewed profitability, you are told you are not eligible to share in the financial windfall.

Such a scenario seems unreasonable and unlikely. But for more than 8 million union workers around the country, this is a harsh reality. What could possibly hold back such a stellar employee? The union!

Sounds implausible, doesn’t it? After all, union organizers and their defenders in the political class constantly tell us that unions exist to lift up middle class, blue collar workers. Union contracts do indeed set a floor on wages, meaning workers cannot be paid below a certain amount. But, they also set a ceiling on wages, meaning an individual worker cannot be paid above a certain amount.

Simply put, these union contracts make merit-based pay obsolete.

Unions have actually fought bonuses awarded to their own members. Amazingly, the National Labor Relations Board (NLRB) sided with the unions, not the workers. They claimed the bonuses constituted an illegal “direct dealing” with the workers, which was forbidden under collective bargaining law.

Why would unions, which are supposed to fight for their members, oppose merit-based rewards for them? Because it is about the union as a whole, not the individual worker.

The current system creates a perverse dynamic in which union members see the union as their true employer (and wage setter), not the company that actually employs them. As a result, hard workers are held back while less motivated workers are propped up. It runs contrary to the spirit and values that built America.

Fortunately, there is a legislative solution for those 8 million workers who are potentially being held back by their union. The Rewarding Achievement and Incentivizing Successful Employees (RAISE) Act would simply allow employers to pay individual union workers more than the union contract specifies.

It is good policy and the economic effects of incentivizing successful employees are well documented. Performance-based pay allows the average worker’s earnings to rise by 6-10%. Hard working employees will be rewarded, while the ones that slack off will not. At companies that were allowed to provide performance pay, the typical union member received bonuses and merit-based pay increases worth $2,600 to $4,300 each year.

In an era of stagnant wages and enormous economic uncertainty, the RAISE Act seems like something politicians of all stripes could support. Unfortunately, lawmakers who are beholden to Big Labor are in no hurry to embrace the concept which the unions would characterize as “union-busting.”

As The Heritage Foundation’s James Sherk points out, “Unions were originally established to protect workers from making too little money, not too much. The RAISE Act would still allow union contracts to set the minimum that workers can earn.”

The RAISE Act would not undermine the original purpose of unions, nor would it allow employers from unfairly rewarding non-union workers with raises just to punish union workers. It is not union busting, it simply allows exceptional employees to be compensated as such.