It’s good to be king. Really good.
Kings don’t have to deal with that messy democracy stuff. If the king wants to impose a huge new business tax he—or she, in case it’s a queen—can just do it.
And that’s what King Obama did with his just-announced change to overtime pay for salaried employees.
Currently, salaried employees making more than $455 a week, or $23,660 a year, are not automatically eligible for overtime pay if they put in more than 40 hours a week—it depends on the company and employees. Obama is lifting that threshold to $970 a week, or $50,440 a year.
The Obama administration claims that change will make an estimated 5 million more salaried workers eligible for overtime. And it estimates the direct cost of the change between $240 million to $255 million a year, though the National Retail Federation claims the cost could hit $874 million when all costs are included.
But Obama isn’t worried about the cost because that’s “other people’s (i.e., employers’) money.”
In effect, Obama has just imposed a huge new tax on thousands of employers with mid-level salaried employees. He didn’t go through Congress to get approval for this tax, he just mandated it. He hopes to get the political credit while making others pay the bill.
But like all tax increases, expect employers to look for ways to minimize the new tax’s impact. For example, employers might impose 40-hour caps on certain salaried employees, or starting salaries might be lower. In other words, much of the cost may be passed on to lower-income workers.
But just because Obama mandates employers spend more money doesn’t mean employers have more money to spend. Even being a king has its limits.
To be sure, the president has the power to make such changes. Under the Fair Labor Standards Act of 1938, Congress gave the president (FDR) broad powers to make such changes unilaterally—and that’s part of the problem.
For decades Congress has been ceding more and more power to the president (and his minions) to do whatever the heck he wants—a gradual coronation, if you will. But it’s gotten much worse with Obama in the White House while Democrats controlled Congress.
For example, the word “secretary” appears nearly 3,000 times in the 2,700-page Obamacare legislation.
Over and over again we see: “the Secretary shall establish,” “the Secretary shall promulgate regulations,” “the Secretary shall develop standards,” “the Secretary shall periodically review,” “as the Secretary deems are important,” “the Secretary may develop and impose appropriate penalties,” “the Secretary may adjust the rates,” “if the Secretary determines necessary”; and “the Secretary has the authority.”
Or consider the Consumer Financial Protection Bureau (CFPB), created under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. CFPB funding is controlled by the also-unaccountable Federal Reserve Bank. Only the president can remove its director, and courts must defer to its judgments.
While passing all of that authority over to unelected bureaucrats makes it very difficult to blame Congress—Democrats, in this case, since they wrote and passed both laws—when something goes wrong, it also means Congress has little control.
One would hope a president would be circumspect and restrained with this growing panoply of power. Not Obama. He has taken more major unilateral actions than any other president except perhaps those engaged in major wars. What President I-have-a-pen-and-a-phone can’t get something through Congress, he looks to do it by himself, whether it’s immigration reform, signing treaties (with China and perhaps Iran), or raising taxes by executive action—as he suggested he would earlier this year.
And with his increase in the salary cap, that’s exactly what Obama’s done.
It’s time for Congress—and the voters—to take back some of the power, both real and perceived, ceded to the president. The Founding Fathers created three equal branches of the federal government, with the legislative—not the executive—being the first among equals.