13 Organizations Sign Letter to President Obama Urging Narrow ‘Inherently Governmental’ Redefinition

Washington, DC, March 27, 2010 – A coalition of thirteen national business, taxpayer and free market organizations has sent President Obama a letter warning that the impending Administration redefinition of the term ‘inherently governmental’ functions will “have a serious and negative impact on taxpayers and private sector jobs, including those in small business”.  The organizations also noted their alarm “by a movement toward ‘in-sourcing’ that is expanding the size and cost of government at the expense of America’s taxpayers and entrepreneurs”.

The Office of Management and Budget (OMB) is redefining the term “inherently governmental” related to activities and functions to be appropriately performed by private contractors and government employees.

The letter points out that only Congress, not the Administration, can change the definition, as it is in statute (112 STAT 2382, Public Law 105-270).

The groups urge the President to propose a definition that avoids in-sourcing, or cancelling existing government contracts and moving work to federal employees, prevents unfair government competition with the private sector, including small business, and breaks up monopolies inside the government that denies taxpayers fair and equitable assessments of savings through established rules for comparing public and private sector performance.

John Palatiello, President of the Business Coalition for Fair Competition (BCFC) said, “Over a year has passed since the White House published its March 4, 2009 memo on government contracting that set a September 30, 2009 deadline to ‘clarify when governmental outsourcing for services is and is not appropriate.’ However, continuous delays regarding this clarification has led to a belief that the redefinition of ‘inherently governmental’ activities and functions will be tilted heavily on the side of in-sourcing more employees, activities, and functions out of the private sector and into the public sector.”

“Over the last twelve months, numerous defense and civilian agencies have been in-sourcing thousands of positions once satisfied by private contractors. This shift to government performance of commercial activities not only hinders the private sector, but places additional costs to taxpayers during a lengthened period of steep decline in the Nation’s economy,” Palatiello said.

The letter noted that based on Bureau of Labor Statistics, the economy shed over 4 million private sector jobs while adding over 109,000 Federal jobs during President Obama’s first year in office. In addition, Senator Bayh of Indiana recently commented on the failure of the government to create jobs in the private sector within the previous six months.  The letter said, “uncertainty as to which sector of the economy is next subject to a government takeover or threatened by unfair government competition from a government entity is casting a pall over private investment” and “having a detrimental effect on capital investment and jobs creation.”

Signing the letter was Alliance for Worker Freedom, Americans for Limited Government, Americans for Tax Reform, BCFC, Construction Industry Round Table, Design Professionals Coalition, Hispanic Leadership Fund, MAPPS, National Society of Professional Surveyors, National Taxpayers Union, Public Service Research Foundation, Reason Foundation, and Tea Party WDC.

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