U.S. DEPARTMENT OF LABOR

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Statement of Secretary of Labor Elaine L. Chao
Subcommittee on Labor, Health and Human
Services, and Education Appropriations
U.S. House of Representatives

February 13, 2002

Good morning, Chairman Regula, Congressman Obey, and distinguished Members of the Subcommittee.

Thank you for the opportunity to present the President's Fiscal Year 2003 request for the Department of Labor.

For our nation, and for the Department of Labor, the world changed on September 11th, 2001.

Just hours after the terrorist attacks on our country, inspectors from our regional Occupational Safety and Health Administration office were on the scene at Ground Zero, risking their own lives to ensure the safety of rescue workers at the site.

Our Office of Worker Compensation Programs immediately set up operations to provide services to federal employees and their families who were impacted by the attacks on the World Trade Center and the Pentagon.

One week after the attacks, the Department of Labor approved a $25 million National Emergency Grant to the State of New York, to help dislocated workers in the region. A month later, we provided a $10 million National Emergency Grant to Virginia, to deal with the effects of the temporary closing of Ronald Reagan National Airport.

When the nation's postal system was threatened by anthrax mailings, OSHA reached out to the postal unions and forged an innovative partnership with the Laborers International Union to create a new biohazard abatement-training program.

And even before a month had passed since September 11th, we worked with the President to unveil a "Back to Work" plan that would extend income and health care support to laid-off workers, and re-connect them to the workforce.

I mention all these things to express how proud I am of this Department of Labor - and the contributions that so many of our career and non-career professionals have made to serving our nation in a time of crisis.

And because these events reveal how our Department - in fact, our entire federal government - has had to change and adapt to the new realities we face.

The President's Budget responds to these new realities by setting the very highest priorities on winning the war against terrorism, defending our homeland, and renewing our economy.

The President's top legislative priority for the Department of Labor is passage of the "Back to Work" plan. This legislation, which has already passed the House, would increase funding for National Emergency Grants by $4 billion. It would distribute an additional $9 billion in Reed Act funds to state unemployment insurance accounts, to be used for higher unemployment benefits, reemployment services, and payroll tax cuts.

The dislocated worker support funding proposed by the President's "Back to Work" plan is more than our entire job training programs combined.

Our commitment to strengthening the economy and creating jobs is reflected in other ways as well. We have increased funding for the Job Corps by $73 million, because we know that for every dollar invested in this time-tested program, we get two dollars back from productive Job Corps graduates.

In this budget, we have also consolidated some job training programs, giving states the discretion to fund specialized or targeted activities out of their Workforce Investment Act allocations. As the chart behind me shows, there is more than enough money in our federal-state WIA system to fund job training activities without any reduction in services.

At a time when we are counting every penny to fight the war on terror and defend our homeland, we must make every effort to spend down the $1.7 billion carry-over in state WIA accounts rather than pour additional budget dollars into the system.

Even in these uncertain economic times, this budget provides the funding we need for training and reemployment activities. We will not short-change America's workers.

This budget also reaffirms our Department's commitment to enforcing vital worker protection laws.

In order to concentrate funding on the front lines, we are reducing unnecessary non-enforcement overhead in some of our worker protection agencies.

This will allow us to increase spending on targeted worker protection activities - by $13 million at OSHA, and by $10 million at the Mine Safety and Health Administration, in Fiscal Year 2003.

These are real increases that will make a real difference in the day-to-day safety and health of hard-working Americans. For example, if you look at my next chart, we have set a goal of pursuing more OSHA enforcement actions in 2003 than in recent memory - rising from fewer than 36,000 in 2001 to nearly 38,000 in 2003.

And long before a company named Enron began to dominate our nation's headlines, we at the Department of Labor were preparing a budget that increased our commitment to defending Americans' retirement security.

As you know, the President has set forth a plan that will give workers more choice, confidence and control over their retirement savings.

This plan gives workers the right to make their own investment decisions. It gives them access to the same professional investment assistance that wealthy people have. And it creates a level playing field of control over workers' investment holdings - whether they work on the top floor or the shop floor.

I'd like to work closely with Congress to pass this timely plan. At the same time, even these powerful safeguards will not guarantee the security of workers' retirement benefits without aggressive enforcement of ERISA pension protections.

That's why our 2003 budget increases enforcement and compliance funding by $7.8 million for the Pension and Welfare Benefits Administration - and by $2.5 million for the Office of the Inspector General.

Both PWBA and the Office of the Inspector General are on the front lines defending workers' retirement savings from mismanagement and fraud. While companies like Enron have received the lion's share of press attention, the reality is that retirement security is a concern for every worker, whether they have a 401(k) plan or a company or union pension. It's our job to protect their rights and their security, and these funding increases will help us do that job even better.

Overall, we are requesting more than $37.4 million in targeted funding for worker protection activities over last year's budget --that's a significant increase.

Going beyond our enforcement responsibilities, we also have commitments to expand opportunities for workers with disabilities and our nation's veterans.

To follow through on the President's New Freedom Initiative, we are requesting an additional $9 million for the Office of Disability Employment Policy - which will target community-based employment and specialized youth training for those with disabilities.

We also stand ready to transfer the Veterans Employment and Training Service to the Department of Veterans Affairs, as the Principi Commission has recommended. This is a structural matter - concentrating veterans' services in one place - and does not entail any net reduction in services, funding or personnel.

We are committed to making this transfer as smooth and seamless as possible. And even with this consolidation, we will continue to vigorously enforce veterans' employment rights under the veterans' preference law and the Uniformed Services Employment and Reemployment Rights Act.

In closing, the Department's 2003 budget will fully support our responsibilities - from training a workforce that is able to compete in today's global speed-of-light economy, to securing the pensions of hard-working Americans.

It will meet the day-to-day needs of the workforce as well as with the longer-term goals of overcoming the Bin Laden recession and revitalizing our economy.

Our budget will also drive efficiencies and make our agencies more accountable. It's a win-win solution for the American worker and taxpayer.

Thank you for the invitation to appear before this committee. I will be happy to answer any questions you may have.

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U.S. Labor Department news releases are accessible on the Internet at www.dol.gov. The information in this release will be made available in alternate format upon request (large print, Braille, audio tape or disc)from the COAST office. Please specify which news release when placing your request. Call 202-693-7773 or TTY 202-693-7755.