Friday, July 6, 2012

WARN-ing Sign

On January 1, 2013, we face what we Beltway insiders call Taxmageddon.  On that date, $8 trillion in tax hikes and spending cuts become law.  On that date, the Bush era tax cuts expire for everyone.  On that date, the Obama 2% payroll tax holiday ends.   According to Tax Policy Center (via The Week), 4 of 5 households will greet the New Year staring down the barrel of an average of $3,701 in additional taxes.  At the same time that money is removed from the economy, $100 billion in cuts to Medicare, defense, and other domestic programs are scheduled to take effect.  Taxmageddon.

As even the casual observer is well aware, this narrative will not change one dollar between now and Election Day.  Everyone with the power to change this doomsday scenario wants to wait until after November 6, 2012 to do anything.  On that date, the music will stop and one party will find that there are not as many chairs left to sit in.  Each side believes that they will have the stronger hand in the game after that date, and they will avert Taxmageddon in a manner that reflects their governing philosophy.  Only one side is correct, but either way, Taxmageddon will never happen.

But here’s the problem – the WARN Act. 
The WARN (which stands for Worker Adjustment and Retraining Notification) Act offers protection to workers, their families and communities by requiring employers to provide notice in advance of covered plant closings and covered mass layoffs. This notice must be provided to either affected workers or their representatives (e.g., a labor union); to the State dislocated worker unit; and to the appropriate unit of local government.  It gives those facing an impending layoff time to plan; it gives a town facing a large number of unemployed time to adjust; it gives the state time to react.  Businesses need to plan 2 months in advance in order to comply with the law.

As my human resources’ compatriots know all too well, WARN notices must go to workers 60 days in advance of a potential job loss.  60 days before Taxmageddon is scheduled to suck billions out of the economy is November 1, 2012, 6 days before Election Day.  Six days before voters head to the polls to elect a President, thousands or maybe millions of workers will be required by law to be notified that their job will be going away.  Many of those will be government contractor employees in the critical swing state of Virginia.  Thousands of registered voters would be receiving WARN notices all at the same time. 

So much for the House of Representatives having any incentive to address the issue before the election.  The ruling GOP would like nothing better than a damaging headline in the Virginia papers 6 days before polls open that reads “Thousands of Area Workers Losing Jobs During Holidays”.  Call it a “November Non-Surprise”.

On November 1, 2012, Romney will blame Obama for the uncertainty.  Obama will blame Republicans for their obstructionism.  When I think about this, I stand shoulder to shoulder with the crowd that chants “Throw everybody out!” as they let the American people twist in a twisted game of political chicken.

Don’t say I didn’t WARN you.

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