For Immediate Release
June 11, 2014
Contact:

Aaron Fobes/Julia Lawless (202) 224-4515

Hatch Calls For Ending Taxpayer-Funded Unions at VA and IRS

In Speech on Senate Floor, Utah Senator Says, “In the federal government, where the bottom line is the taxpayer, and where unions are not permitted to strike, this practice is a way for weak managers to use government funds to reward public sector union political supporters and financial contributors, passing the costs along to the unknowing taxpayer for services not rendered.”

WASHINGTON – In a speech on the Senate floor today, Finance Committee Ranking Member Orrin Hatch (R-Utah) highlighted taxpayer-funded unions at the Department of Veterans Affairs (VA) and the Internal Revenue Service (IRS). 

I, for one, don’t believe that taxpayers ought to be footing the bill for union work.  I think that the majority of the American people, if given an opportunity to fully understand this practice and the abuse it entails, would agree with me,” said Hatch.

Below is the text of Hatch’s full speech delivered on the Senate floor today:

Mr. President, I rise today to speak on a matter of great importance that seems to have slipped through the cracks of the public’s consciousness.  However, with growing furor over the recent scandal at the Veterans Administration, I expect that more and more people will be made aware of it.  

I don’t think it’s unreasonable to argue that most Americans would be outraged to learn that the federal government pays tens of millions of dollars every year to pay hundreds – if not thousands – of government employees not to work.  

This practice used to be called “featherbedding.”  

The term featherbedding originally referred to any person who is pampered, coddled, or excessively rewarded.  It was later used to describe certain labor relations practices.  

According to Wikipedia:

“The modern use of the term in the labor relations setting began in the United States railroad industry, which used feathered mattresses in sleeping cars. Railway labor unions, confronted with changing technology which led to widespread unemployment, sought to preserve jobs by negotiating contracts which required employers to compensate workers to do little or no work or which required complex and time-consuming work rules so as to generate a full day's work for an employee who otherwise would not remain employed.”  

Congress tried to put an end to the practice in the 1947 Taft Hartley Act amendments which define and outlaw featherbedding. However, the U.S. Supreme Court has narrowly defined the terminology, leaving most practices undisturbed. 

The featherbedding-like practice I’m referring to today is most often called “official time,” wherein government employees – who are highly compensated, often including overtime pay – are paid to perform no work for the government, only work for the benefit of their unions. 

These “employees” are not union employees, nor are they paid by the union. Instead, they are union members paid by the taxpayers to work full-time for the union. 

Of course, this practice also goes on in the private sector. However, in the private sector, the featherbedding comes off of the bottom line and is negotiated as a measure of ensuring labor peace, and in exchange for other union concessions. 

In the federal government, where the bottom line is the taxpayer, and where unions are not permitted to strike, this practice is a way for weak managers to use government funds to reward public sector union political supporters and financial contributors, passing the costs along to the unknowing taxpayer for services not rendered. 

In the private sector, official time is carefully monitored and controlled. 

In the federal sector, managers generally look the other way. 

According to the Office of Personnel Management (OPM), during FY 2011, unions represented 1,202,733 non-Postal Federal civil service bargaining unit employees, an increase of more than 17,000 employees compared to FY 2010. 

In that same year, agencies reported that bargaining unit employees spent nearly 3.4 million hours on official time, an increase of nearly ten percent compared to the previous year. 

How much money are we talking about? 

And, why should American taxpayers shoulder the entire burden if the official time is for union work? 

Now, Mr. President, you may be wondering what this has to do with the VA scandal.  

Well, I don’t think it’s a coincidence that the VA – which is plagued by incompetence, dishonesty, and bureaucratic ineptitude -- utilizes the practice of official time more than any other federal agency, according to OPM.  

In 2011, the VA reported paying out nearly a million hours in official time, an increase of more than 23 percent over the previous year. 

The cost of official time in 2011 amounted to nearly $43 million dollars.  

That’s $43 million dollars paid out to VA “employees” to do union work full-time.  

As Wall Street Journal editorial board writer Kimberly Strassel noted a few weeks back: “The VA boasts one of the largest federal workforces, and VA Secretary Eric Shinseki bragged in 2010 that two-thirds of it is unionized. That's a whopping 200,000 union members, represented by the likes of the American Federation of Government Employees and the Service Employees International Union.” 

Mr. President, I ask unanimous consent that the Wall Street Journal editorial I just referenced be placed in the record immediately following my remarks.  

Union supporters often lament that, under federal law, federal employee unions are relatively toothless, especially when compared the very powerful state employee unions. 

However, as Ms. Strassel noted, given its size and influence, the VA union may be an exception to that rule. 

Once again, two thirds of the VA workforce is unionized.  And, the agency has paid out more than $40 million in salaries to full-time union workers in a single year.  That has to have an impact on the VA’s efficiency.

Obviously, the inefficiency of the VA has recently been the subject of a very high-profile public debate.  However, the impact unions have had on the VA’s operations was being talked about well before news of the recent scandal broke.  

For example, Senators Portman and Coburn sent a letter to former VA Secretary Shinseki in 2013, noting that the vast majority of VA employees on official time were trained nurses, instrument technicians, pharmacists, dental assistants, or therapists.  In other words, these were employees hired specifically to fulfill roles in direct support of veterans.  Yet, instead of caring for veterans, processing claims, and helping to eliminate the horrendous backlog, these employees were being paid to do union work full time.  

On top of that, union-negotiated work rules over things like seniority and job classification have contributed to the bureaucratic nightmare at the VA.  

In addition, the unions have been the most vocal opponents of any reform proposals that would give veterans access to outside health care.  

So, while it may be overstating the unions’ influence to assign to them the blame for the entire VA scandal, it is clear that these unions have at least contributed to the problems we’re now seeing at the agency. 

They are at least partially to blame for the backlog in veterans’ claims. 

They are at least partially to blame for the failed VA bureaucracy. 

And, they are at least partially to blame for the failure of reasonable attempts to reform the agency in the past.  

Now, Mr. President, I wish I could say that this problem is isolated at the VA.  

Unfortunately, there’s at least one other scandal-plagued agency with a similar union problem.  

I’m talking, of course, about the IRS. 

We’re all pretty familiar with the IRS targeting scandal.  

By its own admission, the agency was targeting tea party groups in the run-up to the elections in both 2010 and 2012.  

And, like the VA, the IRS consists of a heavily unionized workforce.  

About 66 percent of IRS employees belong to the National Treasury Employees Union (NTEU). 

It shouldn’t surprise anyone to learn that the NTEU is extremely active in politics, having twice endorsed President Obama.  

During the 2010 election cycle, when the IRS first began targeting conservative groups, the NTEU raised over $600,000 through its PAC, almost all of which went to Democrats. 

In the next election, in 2012, the NTEU PAC raised more than $700,000, 94 percent of which went to Democrats.  

In other words, Mr. President, during the same campaign cycles in which the IRS was targeting conservative organizations – organizations that were critical of the President, his administration, and, in many cases, the IRS itself – for harassment and extra scrutiny, the union that represents nearly two-thirds of IRS employees was busy raising and donating well over a million dollars to Democratic candidates.   

Is it any surprise that the agency found itself predisposed toward harming conservative organizations or their causes? 

And, of course, the IRS has its own issues with the practice of paying out official time. 

Indeed, as of 2011, there were at least 200 IRS employees working full time for their union.  In that same year, the agency paid out more than 625,000 hours of official time.  The total cost of these union activities to the taxpayers was roughly $27 million.  

That’s $27 million in a single year paid out to “employees” of the federal government who did nothing but union work.  

That’s simply preposterous, Mr./Mdm. President.  And, like I said, if the American people understood that this type of fleecing of the taxpayers goes on every day, they’d be outraged.  

Current law allows most federal employees to be represented by a union.  There are, however, some exceptions. 

Most of these exceptions are for agencies that perform a national security function or other highly sensitive work.  

For example, we don’t allow employees at the FBI, the CIA, or the Secret Service to be unionized.  We also don’t allow employees at the GAO or the Federal Labor Relations Authority to unionize. 

In days to come, Congress is going to have to take a hard look at reforming both the Veterans Administration and the IRS.  One of the questions we’re going to have to ask ourselves is whether these agencies – with their important and sensitive missions and their poor performance in the recent past – should be added to the list of agencies not permitted to unionize.  

In addition, as we continually look for ways to improve the efficiency of our government, we will need to examine the overall practice of official time and determine whether it should be eliminated entirely. 

I, for one, don’t believe that taxpayers ought to be footing the bill for union work.  I think that the majority of the American people, if given an opportunity to fully understand this practice and the abuse it entails, would agree with me. 

One thing is for sure, Mr. President.  If what we’ve seen at the VA and the IRS is in any way representative of the influence unions have on government agencies, drastic changes are going to be necessary. 

I yield the floor. 

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