Through executive orders, Obama tests power as purchaser-in-chief

WASHINGTON — As he tries to increase the minimum wage, ensure paycheck fairness and provide paid time off for American workers, President Obama is turning to an arcane but powerful tool: the power of the purchaser.

If there's one industry that's been disproportionately impacted by President Obama's executive orders, it's federal government contractors. Since becoming president, Obama has signed at least 15 executive orders and presidential memoranda aimed at contractors, dictating their hiring and firing practices, compensation policies and working conditions. The orders also require contractors to meet energy efficiency goals, prohibit human trafficking and other exploitative hiring practices, and ban texting while driving.

Buyers have always used their ability to buy in bulk to leverage a better deal, and the federal government has more purchasing power than any other buyer in the world, awarding more than $445 billion in contracts in fiscal year 2014.

With his executive orders, Obama is using the government's buying power not just to get a better deal for the taxpayer, but also to set economic and social policy on minimum wage, paid leave and paycheck fairness — issues the Republican-controlled Congress has not acted on. The White House is hoping that the orders send a message to the economy at large, and have an effect far beyond the public sector.

"When the president issues an executive order, it reinforces that we care," said Anne Rung, administrator of the White House's Office of Federal Procurement Policy. "That kind of statement can not only drive greater economies and efficiency in the federal government, it can have a trickle-down or multiplier effect on the economy at large."

Prep for the polls: See who is running for president and compare where they stand on key issues in our Voter Guide

Obama issues 'executive orders by another name'

But critics of Obama's aggressive use of the executive order say the actions will kill off small businesses and may be unconstitutional.

"It's completely in line with his sort of pen-and-phone philosophy. Obama is trying to impose his will through his bureaucracy," said Rep. Steve Chabot, R-Ohio, the chairman of the House Small Business Committee. "The shame of it is that the people who are going to suffer are small businesses and families all across this country. The large corporations will find a way to deal with these new rules and regulations. ... Hiring a few more lawyers or accountants to deal with these things is not a huge deal for them."

Rung said the Obama administration is working with small businesses to reduce the burden, and has also made strides in making contracts more efficient by consolidating them throughout government. That allows the government to insist on higher standards and still save money, she said. "In the end, you can't always put a dollar figure on helping to advance human dignity fairness and safety in the workplace, as we’re doing though many of these executive orders."

The use of executive orders on contracting to shape social policy goes back to President Franklin Roosevelt, who banned racial discrimination in war production in 1941. President Kennedy strengthened that order by requiring affirmative action, and Presidents Johnson, Nixon, Carter, Clinton and George W. Bush signed orders strengthening enforcement and expanding the classes of people protected from discrimination. Last year, Obama added sexual orientation and gender identity to that line of executive orders.

"Federal procurement is a powerful weapon by which American presidents attempt to expand their power and shape public policy in areas in which Congress has not acted or will not act," argues Daniel Gitterman, a professor of public policy at the University of North Carolina at Chapel Hill, in an article in Presidential Studies Quarterly. Obama is no different, he said.

"My sense is that he has clearly taken an interest in this particular tool," Gitterman said. And with Congress safely in Republican hands for most of the remainder of his presidency, "you'll probably see a spike now in terms of using that strategy."

Obama has also taken his executive power as purchaser further than his predecessors. Two recent executive orders expand the definition of contractors to include anyone who rents space from the federal government — including, for example, day care centers, military base concessionaires stands and vendors in national parks.

"In the context of these two executive orders, they’ve essentially rewritten what it means to be a contractor, to get maximum participation in these goals they’re pursuing," said Marc Freedman, who directs labor law policy for the Chamber of Commerce.

And then there's the most controversial of the Obama contracting orders, called the Fair Pay and Safe Workplaces executive order, which Freedman calls the "mother of executive orders." That order requires contractors to disclose any labor violations of city, state or federal labor laws — or executive orders — against themselves or their subcontractors.

Because the government can consider allegations of violations, businesses argue that the executive order deprives them of due process. The U.S. Chamber of Commerce also argues that some of the orders violate the separation of powers because Congress passed the 1949 Procurement Act to ensure greater efficiency, while the orders impose additional rules "in pursuit of non-procurement objectives."

Rung says the Obama administration has had extensive consultations with businesses to make sure the rules implementing the orders can work. "When we do these executive orders, we do extensive outreach to industry even prior to developing a proposed rule," she said.

Obama issues 'executive orders by another name'

That's too late, said Stan Soloway of the Professional Services Council, a trade group of government contractors. "Executive orders are not by their nature consultative," he said. "Once the executive order comes out, the implementing rules have to adhere to the letter of the executive order. So you don’t get flexibility."

Obama may not be done with his use of the tool. Interest groups are lobbying him to sign at least two more executive orders applying to federal contractors.

One, called the "ban the box" campaign, asks Obama to prohibit any company getting a federal contract from screening out job applicants by asking about their criminal history. "He's already endorsed 'ban the box' as a concept," said Scott Simpson of the Leadership Conference on Civil and Human Rights. "He's been creeping so much closer, and we know they’ve been hearing us. We only have so much time in this administration to put this in place."

Another would require federal contractors to disclose their political spending. A draft of such an executive order was leaked to the Huffington Post in 2013, but nothing came of it, and advocates have renewed their campaign this year. "It's definitely under serious consideration inside the White House," said Public Citizen President Robert Weissman said. "I believe this is hotly under consideration but not yet decided upon. I don’t have a god answer of why we don't already have it."

Some contracting regulations go back and forth depending on the party in power. President George H.W. Bush signed an executive order in 1992 requiring contractors to notify employees that they didn't have to join a union to keep their jobs. Clinton revoked that order shortly after his election, George W. Bush reinstated it, and Obama revoked it again.

Similarly, if a Republican is elected president next year, "my guess is that a number of these Obama ones will get reversed rather quickly," Gitterman said.

But other executive orders on purchasing have had a lasting impact. In 1997, as the National Rifle Association lobbied against legislation requiring trigger locks on all new guns, Clinton used his power of the purchaser to put pressure on the industry. He signed a presidential memorandum — a directive with the same force of law as an executive order — telling federal agencies to provide trigger locks with every handgun issued to federal law enforcement officers.

Seven months later, Clinton appeared in the White House Rose Garden with executives from eight gun manufacturers who agreed to voluntarily provide trigger locks with all new guns sold. State and federal legislation gradually followed.