According to the New York Times, labor leaders are turning to the ‘Plan B’ that has been speculated on for months. Faced with the prospect of trying to get swing-state Democrat Senators to vote for a radioactive bill, they have thrown in the towel on the best-known part of ‘Card Check’ – the part that gives the bill its name:

A half-dozen senators friendly to labor have decided to drop a central provision of a bill that would have made it easier to organize workers.

The so-called card-check provision — which senators decided to scrap to help secure a filibuster-proof 60 votes — would have required employers to recognize a union as soon as a majority of workers signed cards saying they wanted a union. Currently, employers can insist on a secret-ballot election, a higher hurdle for unions.

The abandonment of card check was another example of the power of moderate Democrats to constrain their party’s more liberal legislative efforts. Though the Democrats have a 60-40 vote advantage in the Senate, and President Obama supports the measure, several moderate Democrats opposed the card-check provision as undemocratic.

This is a step forward. Dropping this provision makes it more likely that workers will be able to make a choice about whether to unionize, with less pressure from union bosses. The problem is that as bad as this proposal is, it’s not the worst part of the bill. Far more onerous is the section which allows federal bureaucrats to impose a collective bargaining agreement if labor and management cannot come to an agreement. Despite the enormous damage this could do to the economy, the Times does not mention it until paragraph 24:

Business also opposes the bill’s provisions to have binding arbitration if an employer fails to reach a contract with a new union. Companies argue it would be wrong for government-designated arbitrators to dictate what a company’s wages and benefits should be.

“Binding arbitration is an absolute nonstarter for us,” said Mark McKinnon, a spokesman for the Workforce Fairness Institute, a business group opposing the bill. “We see it as a hostile act to have arbitrators telling businesses what they have to do.”

Calling this ‘binding arbitration’ is a misnomer. The phrase typically conjures images of an impartial expert deciding claims based on a pre-existing agreement. In this case you would instead have a bureaucratic ‘expert’ deciding on all provisions of a labor agreement. In a best-case scenario, workers and employers would be forced to adopt some least-common-denominator version of the contract governing other businesses in the same sector. In that case, say goodbye to innovation. In a worst-case scenario, you’ll see schills for labor or industry impose contracts specifically designed to further an agenda.

If you’re a fossil-fuel company, you obviously can’t feel good about your chances of the Obama administration imposing a fair contract. But given the federal government’s increased role in the economy, all employers and employees ought to worry about whether they’ll get a fair shake. The federal government wants GM and Chrysler to succeed with cutting-edge, high-mileage cars. If you work for a startup that produces batteries for electric cars, do you want Uncle Sam deciding the cost of labor? The truth is that all employers and employees ought to worry about Washington picking winners and losers.

Let me also take this opportunity to extend my thanks to Norm Coleman. As he fought to retain his Senate seat and to prove that victory was stolen by vote counters, Democrats in Washington waited and waited for Al Franken to weigh in in support of Card Check. By waiting so long Democrats lost the initiative. Had they struck while the iron was hot – and while Barack Obama floated around 70 percent in the polls – the unions would likely have gotten more than half a loaf. Now they’re left to scramble for the crust. So while Norm Coleman’s challenge may not have netted conservatives a Senate seat, it may have defeated Card Check.