Articles

The Political Payoff Behind 'Paycheck Fairness'

April 16, 2014

To understand President Obama's legislative agenda, follow the money.

At a Houston fundraising dinner last week, Mr. Obama criticized Senate Republicans for opposing the Paycheck Fairness Act, which he called "common sense" legislation "to meaningfully enforce the simple concept of equal pay for equal work."

Here's what the president didn't say. It's been illegal since the 1963 Equal Pay Act to pay men and women with equal years of service a different wage for the same work. No matter. The Paycheck Fairness Act is a political twofer.

First, Mr. Obama hopes the bill will drive up turnout for the midterms among younger women, where he's got problems. His job approval among women in the April 13 Gallup survey was 46%, just above his national average—and down from 54% a year ago. This decline was reflected in an April 8 Democracy Corps poll that found 58% of likely unmarried women voters will support Democrats this fall, less support than even in 2010, when Democrats were buried nationally.

Second, the Paycheck Fairness Act would reward one of the Democrats' most generous sources of ready cash: wealthy personal-injury lawyers.

Consider John Eddie Williams and his wife Sheridan, the hosts of the president's Houston fundraiser where 55 guests paid between $16,000 and $64,000 to the Democratic Senatorial and Congressional Campaign Committees. Mr. Williams got rich by suing tobacco and drug companies. The dinner was held at the couple's 26,463-square-foot mansion, complete with five full baths, seven half baths, five fireplaces and an elevator. It is carried on the tax rolls at $17.1 million.

The same day as his Houston fundraiser, Mr. Obama also attended a roundtable with 25 donors at the mansion of Steve and Amber Mostyn. Mr. Mostyn is president of the Texas Trial Lawyers Association and made $150 million from lawsuits over hurricane insurance. He vows to spend $10 million this year to help Mr. Obama's national campaign field director, Jeremy Bird, to "turn Texas blue," changing the Lone Star State from reliably Republican to comfortably Democratic, starting with this fall's gubernatorial election.

Messrs. Williams and Mostyn have each contributed millions to Democratic candidates and raised tens of millions more. Mr. Obama would reward trial lawyers like them with the Paycheck Fairness Act. How so?

Section 3 (a) of the bill would remove the presumption of innocence for companies accused of wage discrimination. They would now be presumed guilty unless they can pass three difficult tests, which could be invalidated if a plaintiff demonstrates "an alternative employment practice exists" and the employer refused to adopt it. Just tell your boss what to do and when she doesn't, sue her.

This is more than an open invitation to lawsuits. It's practically an order to companies to settle any suits filed against them.

Section 3 (c)(1) allows for punitive damages, ensuring the trial lawyers get more millions to bankroll Democratic campaigns. This section exempts the federal government from paying punitive damages. That's a convenient exemption because an analysis posted by the American Enterprise Institute showed to the administration's embarrassment that women in Mr. Obama's White House get paid 88 cents for every $1 paid male White House staffers.

Section 3 (c)(5) also allows individuals to be counted as plaintiffs for class actions without their consent, which fattens paydays for trial lawyers and provides an additional incentive for companies to settle rather than fight.

To help personal injury attorneys identify possible targets and relieve the lawyers of research costs, Section 8 requires every company to report pay data by sex, race and national origin to the Equal Employment Opportunity Commission. Section 3 (d) would add to lawyers' fees by allowing the Labor Department to seek additional compensatory or punitive damages, turning it into an unpaid auxiliary of the personal injury bar.

This is public policy in the age of Obama: legislation drafted by West Wing political hacks to boost the Democratic Party's election chances and reward its financial backers.

Mr. Obama is deeply hostile to extractive industries like oil and gas drilling and coal mining. But there's one extractive industry—personal-injury lawyers separating corporations from their cash—that the president likes, even if every American ultimately picks up the tab for these lawsuits. Until the election is over and all value has been wrung from the Paycheck Fairness Act, Mr. Obama will use it to further the Democrats' "War on Women" theme while offering his party's paymasters images of future big paydays.

A version of this article appeared April 17, 2014, in the U.S. edition of The Wall Street Journal, with the headline The Political Payoff Behind 'Paycheck Fairness' and online at WSJ.com.

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