Labor union supporters slip PRO Act provisions into huge budget bill

The passage of the federal budget reconciliation bill, otherwise known as the Build Back Better Act, in the U.S. House of Representatives last month means that the Democratic led Senate will now take it on. The massive bill has several provisions taken straight from the Protecting the Right to Organize (PRO) Act, an organized labor-backed bill strongly opposed by the business community. 

Because the PRO Act would need 60 votes to overcome a Senate filibuster and make its way to the president’s desk, congressional Democrats instead chose to insert several elements into the reconciliation bill, which would only need a simple majority to pass. The labor provisions’ inclusion in the larger bill, however, would need to be approved by the Senate parliamentarian.

Pieces from the original legislation that made their way into the Build Back Better Act include:

  • Financial penalties–Allow for the National Labor Relations Board to assess up to $50,000 for each violation and $100,000 for repeat violations of fair labor practices. Additionally, these penalties would be applicable to a director or officer of the employer if the NLRB determines that they “directed or committed the violation, had established a policy that led to such a violation, or had actual or constructive knowledge of and the authority to prevent the violation and failed to prevent the violation.”
  • Increased Funding–Approximately $2 billion in new funding is allocated in the bill for the Department of Labor and split among seven agences. One agency of special interest to the labor community is the Wage and Hour Division, which could create implications for the gig economy and app-based workers.
  • Tax Rebate–Electric vehicles that are assembled at a unionized factory would be eligible for a $4,500 tax rebate at sale. This provision would push nonunion companies to choose between operating at a competitive disadvantage or protecting their employees 
  • Rebate Program–Union contractors that perform home improvement work eligible for the “High Efficiency Electric Home Rebate Program” are slotted to receive a project bonus of $250 above non-union contractors, even when performing similar work. In order to qualify for the bonus, the contractor must abide by collective bargaining agreements and follow prevailing wage requirements. 
  • Wage Requirements–Thirteen different programs in the reconciliation bill include a prevailing wage requirement for specific classes of employees. Under these requirements, all laborers employed by contractors on projects are paid at the prevailing wage rate, which is typically pegged to the union rate in the area rather than the average wage. 
  • Advanced Manufacturing Production Tax Credit–Any unionized manufacturing facilities would receive an additional 10% bonus to the tax credit, which is provided for manufacturing components that are used for wind and solar power production.
  • Union Campaign Funding–A $250 above-the-line tax deduction is available for workers who pay full union dues, including the dues that fund union political activities and lobbying. Unionized workers who pay agency fees cannot take the deduction. Agency fees do not support the unions political activities, meaning that this provision indirectly subsidizes union political campaigns. 

“The PRO Act is bad as standalone legislation, and it’s just as bad when it’s slipped into the larger budget bill,” Arizona Chamber of Commerce & Industry President and CEO Danny Seiden said. “These provisions are straight out of the Big Labor playbook and should be rejected by the Senate.”

Concerns with the Build Back Better Act for businesses do not stop at the costly labor provisions, however. The inflation and supply chain issues that the U.S. has been experiencing will be exacerbated by the passage of the bill. 

According to the seven separate estimates released by the Congressional Budget Office and the Joint Committee on Taxation, the bill will increase the national deficit by $122 billion in 2022. The bill is expected to have drastic inflationary implications, as it accounts for more than $153 billion in transfer payments and tax cuts for individuals. This will fuel consumption and in turn continue to increase inflation. 

Ariz. Sen. Kyrsten Sinema, D, and other Senate moderates are the last line of defense to protect the economy. Sinema previously spoke out saying that she would not support the legislation until the infrastructure bill had been passed. With the $1.7 trillion infrastructure bill now signed into law, how Sen. Sinema and her Democratic colleague from West Virginia, Sen. Joe Manchin, will vote is under intense focus by both proponents and opponents of the bill. 

Taylor Hersch

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