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When Cutting Spending is Bad


Regular readers know that we tend to promote less government spending. But there are a few areas where current spending levels are justified; even an increase might be warranted. One such case: the Labor Department’s Office of Labor-Management Standards (OLMS).

Under the previous administration, Labor Department Secretary Elaine Chao fought for more transparency in labor union accounting practices—and got it.

Labor unions have been heavily engaged in political activities for decades, spending millions of dollars in union members’ dues supporting political candidates and labor-friendly policies.

But when reporting time would roll around, union management would report little or no political activity. The whole process was a complete sham.

Well, Chao forced the unions to identify expenses as low as $5,000, including political expenses, and a world of information emerged. According to The Wall Street Journal’s John Fund, the disclosures led to nearly 1,000 indictments and more than 900 convictions. That’s a 90 percent conviction rate!

Fund cites examples such as:
  • A New York local that spent $52,000 for a Cadillac in 2006 for a “retirement gift.”
  • And an Electrical Workers local that spent $10,000 on a “golf outing” for union officials.

And yet the Obama administration proposes cutting the OLMS budget by 10 percent, to $41 million a year. Plus, the plan is to move OLMS employees to other departments, scaling back both budgets and manpower.

Of course, union officials are elected, and they can be “unelected” if union members are dissatisfied with excessive spending on Cadillacs and the like.

The bigger problem has been union efforts to promote political candidates that support unions, even candidates who might … oh, scale back previous efforts to impose more transparency.

The Obama administration claims that it’s making the shift because the resources could be put to better use elsewhere. But we should all recognize this shift for what it is—a movement away from transparency, a reward for past political support, and encouragement for more in the future.