A new small-business law spearheaded by House Majority Leader Eric Cantor is harming relations between the White House and its labor allies. Unions objected strongly before the legislation was enacted, and several weeks later, they’re continuing to air grievances.
The Jumpstart Our Business Startups (JOBS) Act, which passed with broad bipartisan support earlier this year, loosens regulations on small-business capital formation. Proponents on Capitol Hill say it will encourage entrepreneurship while a growing number of critics, including worker advocates, worry that it incentivizes fraud and will diminish the government’s ability to police bad business practices.
AFL-CIO President Richard Trumka said he was “disappointed and angry” that the bill received so much support. “This is a vote against investors in the real economy and for Wall Street speculators,” he said in a scorching statement after the bill passed in late March. “When the next bubble bursts, Americans will know who to blame.”
Weeks later, tensions haven’t yet cooled. A top AFL-CIO official this week told In These Times magazine that Trumka, a key Obama ally, is “personally outraged by the JOBS Act and the implication that this administration thinks that it’s going to be good for the country to re-inflate a stock market bubble.”
Unsurprisingly, the friction isn’t enough to burn up AFL-CIO’s endorsement of Obama for reelection. Though the administration and its union allies often find themselves on opposite sides of important issues, AFL-CIO has been instrumental in advancing key elements of Obama’s agenda, particularly health care reform. And as the 2012 election nears, union enthusiasm could have a substantial impact on Democratic voter turnout.
The Service Employees International Union, the second-largest labor union, also strongly opposed the JOBS Act and tried unsuccessfully to stop it.
Politically, both the GOP leader and the White House, despite their well-documented clashes, had incentives to link arms on the JOBS Act: It helped soften Cantor’s image as an ideological hatchet-man and allowed President Obama to tout his willingness to work with Republicans. That yielded an exceedingly rare display of solidarity between the two foes.
“The president said today that he’s always believed that it’s the private sector that is the job generator in this country,” Cantor said at White House the signing ceremony. “I agree with him, and I think most Americans agree with him.”
Sahil Kapur is a congressional reporter for TPM. He previously covered politics and public policy for numerous publications including The Guardian and The Huffington Post. He can be reached at sahil [at] talkingpointsmemo.com.