WRAPUP 4-Obama says will reverse Bush labor policies

Fri Jan 30, 2009 11:42pm GMT

* Obama says will turn back Bush-era labor policies

* Obama says strong labor movement key to economic recovery

* Labor Unions welcome creation of middle class task force

* Obama talks to Chinese counterpart on economic crisis

By Ross Colvin

WASHINGTON, Jan 30 (Reuters) - U.S. President Barack Obama pledged on Friday to reverse labor policies from his Republican predecessor, George W. Bush, that unions have long contended favored employers over workers.

Obama, who won significant backing from trade unions in his Democratic presidential campaign, said there could not be a strong middle class, the focus of his economic recovery plan, without a strong labor movement.

He signed three executive orders to bolster unions in the workplace and strengthen workers' rights.

"I believe we have to reverse many of the policies toward organized labor that we have seen over the past eight years, policies with which I have sharply disagreed," Obama told a gathering at the White House.

"Labor is not part of the problem, it is part of the solution," he said to loud applause from an audience that included representatives of labor unions and business groups.

On Thursday, Obama denounced as "shameless" lavish Wall Street bonuses for senior financial executives at a time when taxpayers' money was shoring up a financial system in crisis.

His spokesman, Robert Gibbs, told a news conference the president planned to address the issue of executive compensation, with meetings scheduled at the White House next week to discuss tighter regulation of the financial industry.

Obama discussed the economic crisis in a phone call with Chinese leader Hu Jintao, telling him the two countries needed to correct global trade imbalances and get credit markets flowing, the White House said. [ID:nN30386699]

The Chinese news agency Xinhua said Hu told Obama that China opposed trade or investment protectionism as part of settling the crisis and said Beijing would join Washington in promoting stable development at an economic summit in London in April.

ROLLING BACK BUSH'S POLICIES

Obama has spent much of his first 11 days in office rolling back some of his predecessor's policies. He has ordered the closure of Guantanamo Bay prison, begun reversing Bush's climate policies and lifted restrictions on U.S. government funding for groups that provide abortion services abroad.

The president spoke as new data showed the U.S. economy shrinking at its fastest rate in nearly 27 years and a day after the number of Americans seeking jobless benefits hit a record high. [ID:nN30348995]

"The recession is deepening and the urgency of our economic crisis is growing," Obama said. "This is a continuing disaster for America's families."

He announced the creation of a task force under Vice President Joe Biden to look at ways of raising middle-class living standards, a signature campaign promise.

Biden said his group would travel across the United States to canvass the views of ordinary Americans, holding meetings in different towns and cities each month.

The first of the three executive orders will prevent taxpayer funds being used to reimburse federal contractors who spend money "trying to influence the formation of unions."

A second will require federal contractors to inform employees of their rights under the National Labor Relations Act. A third will ensure that qualified workers keep their jobs even when a federal contract changes hands.

The Teamsters, one of the most influential U.S. unions, called Obama's action a "new day for workers."

"We finally have a White House that is dedicated to working with us to rebuild our middle class. Hope for the American Dream is being restored," said Teamster President Jim Hoffa.

The American Federation of Government Employees, the largest federal employee union, welcomed "the dedication of this administration to reverse the anti-labor and anti-worker policies that have been in place the last eight years."

Obama, who was sworn in on Jan. 20, has said that fixing the economy is his top priority. He is pushing Congress to approve a $900 billion stimulus package to jolt the economy out of its worst crisis in decades.

Christina Romer, a top Obama economic adviser, said Friday's figures showing a 3.8 percent drop in gross domestic product in the fourth quarter made clear the financial crisis had spread to the whole economy. (Additional reporting by David Alexander and Jeff Mason; Editing by Peter Cooney)