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Brian Koegle: Message for American businesses

Right Here, Right Now

Posted: February 12, 2009 8:59 p.m.
Updated: February 13, 2009 4:55 a.m.

Brian Koegle

 
Message for American businesses

Twenty-four days into the new Obama administration, a clear message is being sent out to small businesses across the nation - "Watch out!"

Even though Obama promised that business as usual would become a thing of the past under his administration, his first actions as president have told a different story.

So what exactly have we learned in the first three-plus weeks of having a Democratic Congress and Democratic president?

Tax rates for small to mid-sized businesses will increase dramatically.

Earlier this week the Senate passed its version of what has been dubbed the "Spendulus Bill." The bill is basically 40-plus years of frustrated Democratic pork-barrel spending rolled into one package.

By early next week, we should find out whether businesses and our future generations will be burdened by the costs of the biggest spending bill in American history to the tune of somewhere between $780 billion (with a "B") to $1 trillion (with an "Oh my gosh, how much money is that?") spending bill.

Obama and congressional Democrats have suggested that the increased spending may work and repair our economy over the course of the next five to 15 years.

Even early economic theorists like Karl Marx (who lived in a time where workers' conditions and unemployment were much worse than today) or John Maynard Keynes (who wrote during the Great Depression of the 1930s) - both of whom were strong advocates for governmental intervention in the economy - believed that economies are cyclical in nature, and that times of prosperity will surely be followed by tougher periods, and vice-versa.

What that means is with or without government intervention, the economy will eventually right itself.
But our infinitely wise Democratic politicians would rather throw nearly $1 trillion (seriously, I can't even fathom this amount) at a problem that should self-correct in the same relative period of time than if nothing was done at all.

A short-term fix will clearly have long-term implications - but Obama and most of the Democrats pushing this package (and the three Republicans who broke ranks) will be long gone by the time that happens and will not have to worry about the fallout.

The "Spendulus Bill," when combined with Obama's promise of lower taxes for the "middle class" - means one thing: American businesses will likely be forced to pick up the tab for the increased spending through increased taxes.

Obama's first three weeks also show that discrimination lawsuits will become even bigger business.
Nine days after being sworn in as president, Obama signed the Lily Ledbetter Fair Pay Act of 2009, which overturned a 2007 U.S. Supreme Court decision.

Under this new law, the statute of limitations for a claim of pay discrimination basically starts anew every time an employee receives a paycheck with unequal pay or receives unequal distribution of benefits.

The practical effect of this change is that an employee will be able to pursue a claim for discrimination no matter how long ago the disparate pay practice was implemented.

Further, under the Ledbetter Act, an "aggrieved" employee may recover two years of back pay, compensatory damages for economic injury and noneconomic losses (i.e. pain and suffering), punitive damages, injunctive relief, and his or her attorneys' fees associated with pursuing the claim, further increasing the economic burden on already overburdened businesses.

Without a valid limitation period, employers may be facing an extraordinary increase in the number of claims of discrimination, which will negatively impact their bottom line, especially if they are uninsured.

And thirdly, we have learned that labor unions will be seen as the solution - not the problem.

President Obama has promised to sign into law a bill that is currently awaiting approval by the Senate, which has been misnamed "the Employee Free Choice Act" (EFCA).

The EFCA is a pro-labor piece of legislation that has been working its way through Congress for nearly four years.

In 2008 unions realized that former President Bush would veto the bill, so "coincidentally" the bill was put on the Senate's back burner late last year. It's is now being revived.

This bill would make it much easier for unions to organize employees and to obtain first contracts with the employer by amending current laws regarding union certification requirements, collective bargaining negotiations, and employer penalties associated with opposing unionization.

Pro-business groups such as the U.S. Chamber of Commerce have vehemently opposed the EFCA and argue that small to mid-sized manufacturing, textile and industrial organizations will be crushed by the new requirements, which will likely result in either significant reductions of work forces or businesses moving their facilities out of the country - meaning fewer and fewer jobs for American workers.

American small business owners should buckle their seat belts; it looks like it will be a rough ride for the next four years. Take heart and hold on tightly. Jan. 17, 2012, is only 1,068 days away!

Brian Koegle is a local attorney and 25-year resident of Santa Clarita. "Right Here, Right Now" is published Fridays in The Signal and rotates among local Republican writers. His column reflects his own views and not necessarily those of The Signal.


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