There are a lot of reasons why the Obama stimulus failed, but perhaps the bill's most insidious problem is that it was used to pay off special interests, especially the labor unions. In fact, this is happening right now on the White House doorstep.
On Sept. 14, the General Services Administration awarded a $52.3 million stimulus-funded contract to renovate the Lafayette Building at 811 Vermont Ave. NW -- right across Lafayette Square from the White House.
The building houses a number of government entities, including the Department of Veterans Affairs. The contract went to the builder who offered the bid with the best overall score under federal procurement regulations and the lowest price.
But then, as usually happens in Washington, things got political. On the same day the contract was awarded, the GSA ordered the winning contractor, Grunley Construction, to use a "Project Labor Agreement (PLA)," thus forcing the firm to use more expensive unionized labor.
Even in the Washington region, union labor only makes up 12 percent of the construction industry, so the price of forcing the PLA on Grunley added $3.3 million to the cost of the Lafayette renovation, courtesy of the taxpayer.
Unless you're in the construction business, you've probably never heard of PLAs. Accepting a PLA locks a company into an iron-clad construction contract that virtually guarantees cost overruns. Typically, construction projects with PLAs cost 12 to 18 percent more than those without them.
Nationally, unions only make up about 14 percent of the construction industry. There's no shortage of competition. So why would anyone hire union labor knowing it will make their project cost more?
The answer is political pressure. One of President Obama's first actions was to rescind an executive order signed by his predecessor in 2001 that protected taxpayers from PLAs on federally funded construction projects of $25 million or more.
Why? Because unions collectively spent $400 million to elect Obama and a Democratic majority in Congress in 2008. They spent hundreds of millions more this year trying to keep Democrats in power on Capitol Hill.
Thanks to the stimulus bill, the federal government now has $140 billion in new federally assisted construction projects to oversee. And Obama is doing his best to insure all of them use PLAs.
Instead of fair bidding on the open market, GSA awards extra points to bidders who agree in advance to use PLAs. While it's not an explicit requirement, the message to government contractors is clear - accept a PLA or be at a huge disadvantage to rivals who do.
If PLAs were added to all stimulus-funded construction projects, it would add $17 billion to $25 billion to their total costs, money that would be better spent creating new private-sector jobs or reducing the federal deficit.
Meanwhile, the White House has the temerity to suggest its actions are good economic policy. The Annual Report of the White House Middle Class Task Force released earlier this year had an entire section inexplicably touting PLAs. Nowhere does the report acknowledge the added costs PLAs impose on taxpayers.
If you can figure out how awarding billions of tax dollars to a powerful special interest that represents a small slice of a single employment sector helps the middle class, you might be smart enough to work for the White House economic team.
The rest of us are left wondering why those 814 billion stimulus dollars didn't create jobs.
Mark Hemingway is an editorial page staff writer for The Examiner. He can be reached at mhemingway@washingtonexaminer.com.