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BEFORE THE SUBCOMMITTEE ON LABOR, HEALTH
AND HUMAN SERVICES, AND EDUCATION COMMITTEE ON APPROPRIATIONS UNITED
STATES SENATE
May 2, 2001
Mr. Chairman, and distinguished Members of the Subcommittee, thank you
for the opportunity to appear before you today to present the Department of
Labor's Fiscal Year (FY) 2002 Budget.
The President's 2002 budget moderates the Federal Government's recent
rapid growth in spending while funding national priorities, paying down the
debt, and providing tax relief. The Department of Labor's budget request for
2002 follows this responsible approach and will serve as the foundation for us
to become a 21st Century Department of Labor.
Before I discuss the specifics of the Department's 2002 request, I would
like to highlight a new addition to the Department of Labor. We at the
Department of Labor need to provide a beacon of hope, finding solutions for the
problems facing our Nation's workers and the economy as a whole. Thanks to the
bipartisan work of Congress, we have a new road map -- the Workforce Investment
Act -- to lead us toward this goal. Along with states and localities, the
professionals in our Employment and Training Administration are diligently
implementing this new legislation. But we need even more fresh ideas, fresh
approaches, and new partnerships to help us succeed in this journey. That is
why I am creating within the Department a new Office of the 21st Century
Workforce to bring focus and drive to this mission.
This Office will be funded out of existing resources and its first
responsibility will be to hold a Summit on the 21st Century Workforce
on June 20, 2001. At the Summit, I will call on leaders from business, labor
unions, government, and academia to address the structural changes affecting
our workforce and our economy.
We need to review every aspect of this Department's work to ensure that
we are helping, not hindering, the development of a workforce that is ready for
the future. We want to give workers the flexibility to custom-design their work
to fit their lives -- and not the other way around. But I want to make clear
that this focus on the 21st Century workforce is about a lot more
than just making sure Silicon Valley has enough engineers. Every
worker should have the opportunity for a fulfilling and financially rewarding
career.
Given everything we are setting into motion with our 2002 budget
request, our mission at the Department of Labor must not be just to
react to changes, but to anticipate them and help the Nation's workforce
adapt to them. Better yet, the workforce should be able to take advantage of
those changes. We need to recognize that the 21st Century economy is not the
same one we grew up with and that America's 21st Century workforce has to
adjust. To help people do that -- to give workers constant hope in a changing
world -- we need to become a 21st Century Department of Labor.
At the Department of Labor, it is about making sure that no worker is
left behind -- like those who have been laid off from jobs because their
company could not keep up with technological changes or foreign competition,
those who did not get a full education, or those who made a wrong turn at some
point in their lives and are trying to make it back. And, as the President has
insisted, we must reach out to those who have been denied the opportunity for a
productive, meaningful work life because of a disability. At the Department of
Labor, we are prepared to do just that.
As for our FY 2002 budget, the Department's overall request is 17,483
Full-Time Equivalents (FTE) and $44.4 billion in budget authority, of which
$13.6 billion is subject to the annual appropriations process and is now
pending, Mr. Chairman, before your Subcommittee. The request for discretionary
programs is $11.3 billion in budget authority, which is $564 million less than
2001 -- with a net reduction of 184 FTE. In a country experiencing a current
skills gap and a long-term worker shortage, this is a budget request that will
allow America to achieve its full potential while still maintaining a
responsible fiscal approach with precious taxpayer resources.
Employment and Training Programs
The Department's FY 2002 budget for Employment and Training Programs is
$6.8 billion. Included in this total is $2.3 billion, which is targeted for
employment and training programs for adults -- including $1.4 billion for
employment and training activities for dislocated workers. In addition, $2.7
billion is requested for youth employment and training programs -- including
$1.4 billion for Job Corps -- to help young people make a successful transition
to the world of work and family responsibility.
This budget represents a net decrease of $474 million from 2001, which
is largely due to decreases of $359 million in formula grants related to the
availability of large amounts of State unexpended carryover which can be used
in lieu of new budget authority. I want to be clear,
Mr. Chairman: there will be no diminution of service. We are prepared to
serve the same number of participants as in 2001. It is estimated that $1.6
billion in unexpended youth, adult, and dislocated worker funds will be carried
into 2002 -- approximately $600 million more than what is typically realized,
which is due largely to the implementation of the Workforce Investment Act.
Disability Employment Policy
The 2002 budget provides $43.2 million and 67 FTE to fund the
Department's work toward eliminating policy barriers that impede the employment
of people with disabilities.
A particular highlight for the Department is the new Office of
Disability Employment Policy (ODEP). The 2002 budget includes $40.6 million and
57 FTE for ODEP, an increase of $20.3 million and 10 FTE over 2001, to support
key elements of the President's New Freedom Initiative in areas that
focus on integrating Americans with disabilities into the workforce.
The increase includes $6 million and 3 FTE to expand one-stop
accessibility grants and support the process of ticket-to-work
through One-Stop Career Centers; an additional $6 million and 3 FTE to build on
the Youth-to-Work Grant program and ensure that young people with disabilities
benefit from youth programs under the Workforce Investment Act; and $8.3
million and 4 FTE for an Olmstead grant program to assist persons with
significant disabilities in making the transition from institutional settings
to the community and employment.
The Task Force on the Employment of Adults with Disabilities will
continue its efforts to create a coordinated and aggressive national policy to
bring adults with disabilities into gainful employment. The Task Force will
deliver its fourth and final report to President Bush by July 26, 2002, the
twelfth anniversary of the Americans with Disabilities Act. The 2002 budget
includes $2.6 million and 10 FTE for the Task Force to complete its
mission.
Worker Protection/Compliance
Assistance
The Department's 2002 request maintains our worker protection agencies
at 2001 levels, and we are expanding our efforts in 2002 for compliance
assistance activities. An example of prior rapid growth in spending can be
found in our worker protection programs. Since 1996, the Department has
realized a 36% increase for worker protection programs, which significantly
outpaced inflation. From providing for the safety of every worker's pension, to
ensuring the safety of every workplace, and from ensuring that Federal
contractors provide equal opportunities to their workers, to ensuring that all
employers comply with the Nation's wage and hour laws, a responsible fiscal
approach will allow us to moderate recent growth in Federal spending while
still realizing the same levels of worker protection.
I want to be clear on what we wish to achieve: we will continue to make
administration of labor laws a top priority, but with an eye toward a common
sense, flexible approach that aims to protect workers and help employers comply
with the law. To more effectively and efficiently administer our laws, our
worker protection agencies will be emphasizing more -- and better -- compliance
assistance as our initial strategy in preventing workplace injuries and
illnesses and violations of labor laws.
One example of more and better compliance assistance is the Occupational
Safety and Health Administration's approach to implementing its new
"Needlestick" rule. We have a proactive strategy to ensure that employers
understand this new rule -- which includes extensive outreach and educational
efforts before rule enforcement. This approach will allow everyone involved --
the Department, employers, and workers -- to focus on the prevention of
needlesticks and other similar injuries to workers.
Worker protection laws are only as effective as the degree to which they
are understood and followed. By emphasizing compliance assistance, we help both
employers and workers understand not only a rule's requirements but also how
best to avoid the injury or illness the rule is designed to prevent. Each time
I hear about safety violations that were discovered after an accident that cost
the life of an employee, I cannot help but feel great sadness. After-the-fact
enforcement cannot ease a family's grief when a loved one is injured or killed
on the job. If we really are going to protect workers, we must put more
emphasis on prevention. By enforcing laws before injuries or illnesses
occur, and by helping employers provide the necessary levels of protection and
meet their compliance obligations, we can and will save workers' lives.
Labor Statistics
The 2002 request includes $25 million in additional funding for the
Bureau of Labor Statistics, including $8.1 million and 40 FTE for a key step in
fundamentally changing the manner in which the Consumer Price Index (CPI) is
revised and updated. For some time, the Bureau has worked to improve the
accuracy and timeliness of the CPI. The additional funds requested in 2002 are
critical to the continuation of this effort, which has as its goal the
production of a more up-to-date CPI and should substantially reduce the need
for large periodic increases like those historically requested.
International Labor Affairs
The Department requests $71.6 million and 100 FTE for international
labor activities in 2002. This request recognizes the importance of promoting
international labor standards and reducing abusive child labor throughout the
world. I believe the Administration's request helps us to effectively balance
our priorities on these critical issues while maintaining sensible spending
policies.
Our 2002 request preserves the Bureau of International Labor Affairs'
(ILAB) core responsibilities and allows the Department to integrate activities
in ILAB with the overall foreign policy of the Administration. In this budget,
ILAB continues its work on the global HIV/AIDS initiative begun in FY 2001 and
continues bilateral and multilateral projects to assist developing countries in
establishing basic labor protections, enabling more and more workers to enjoy
fundamental employee rights.
Unemployment Insurance
The FY 2002 budget includes a request of $2.4 billion for Unemployment
Insurance administration. This is an additional $50 million above the FY 2001
appropriation level, to reflect the increased unemployment insurance claims
workload under the President's economic assumptions. The increase reflects an
average weekly insured unemployment (AWIU) rate of 2.622 million compared with
the 2.396 million level set in the FY 2001 appropriations.
Energy Employees' Occupational Illness Compensation Program
Act
The Department's budget includes $136 million and 413 FTE for
administration of the Energy Employees' Occupational Illness Compensation
Program. In addition, $597 million will provide compensation and medical
benefits to eligible workers and survivors.
Advance Appropriation
The Administration proposes to reverse the budget practice of using
advance appropriations simply to avoid spending limitations. Accordingly, the
amount requested to be appropriated for the 2002 budget is sufficient to
provide normal funding, and no advance appropriation is requested. In order to
avoid overstating discretionary budget authority in FY 2002, language is
proposed to designate the Department's advance appropriation budget authority
of $2.463 billion as direct spending. The Administration is committed to
resolving this issue in the Fiscal Year 2002 Budget.
Veterans' Employment and Training Service
For 2002, the Department requests $211.7 million for the Veterans'
Employment and Training Service (VETS), the same funding level as for 2001.
This request includes 250 FTE to accomplish the VETS mission of providing
employment and training opportunities for veterans through the public
employment service and other employment and training programs, as well as
protecting veterans' employment and re-employment rights. The 2002 request
continues the funding of the Homeless Veterans Reintegration Project at $17.5
million. This program, as authorized by the Stewart B. McKinney Homeless
Assistance Act and title 38, will provide employment and training assistance to
homeless veterans, with expected job placements of approximately 10,000.
Information Technology
A total of $80 million -- an increase of $43 million over 2001 -- is
requested for the centralized Information Technology (IT) account to fund the
Department's IT investments within four cross-cutting areas: $40.5 million for
Enterprise Architecture; $10.6 million for a Common Office Automation Suite;
$19.7 million for Security and Privacy; and $9.1 million for Common
Administrative Systems. This request will support the second year of our
efforts to replace duplicative and disparate systems with a coordinated
approach to provide centralized information technology investments managed by
the Department's Chief Information Officer. These IT resources will help ensure
program effectiveness among DOL programs and are key to my renewed commitment
to compliance assistance through maximum use of technology.
Government Performance and Results Act
There is a small -- but important -- amount of $5 million in our 2002
request for a centralized fund to finance program evaluations, primarily in the
Department's worker protection agencies. These funds will be used to improve
overall program effectiveness and data quality pursuant to the Government
Performance and Results Act (GPRA) of 1993. The Department has made significant
strides in implementing the provisions of GPRA and we believe that funding for
program evaluations will provide data that can be used to further evaluate and
improve program effectiveness and data quality. In addition, the Budget request
for the Employment and Training Administration includes $9 million to evaluate
job training programs, including an evaluation of the Workforce Investment
Act's performance management system.
Grant Accountability
$1.8 million is requested to improve the Department's administration of
grant funds to improve the timeliness, accuracy, and usefulness of financial
and performance information. $1.5 million of this increase would go to the
Employment and Training Administration to increase its financial management
capacity and strengthen program management through specialized oversight and
assistance to states and other grantees. The Office of the Chief Financial
Officer will use the remaining $300 thousand to develop financial tools for
grant programs and provide added oversight to grantee cost reporting.
Federal Employees' Compensation Act
Surcharge
The President's 2002 budget includes a proposal to amend the Federal
Employees' Compensation Act (FECA) to provide for a surcharge, to be paid by
each agency, to finance the administration of the FECA program. The surcharge
will replace the $80.3 million in budget authority to finance FY 2002 program
administrative costs and will be based on the amount of the workers'
compensation benefits paid by each agency. The purpose of this surcharge is to
boost Federal agency incentives for improving safety in their respective
workplaces.
Trade Adjustment Assistance (TAA)/North American Free Trade
Agreement-Transitional Adjustment Assistance (NAFTA-TAA)
For FY 2002, $415.7 million is requested for the Employment and Training
Administration's Federal Unemployment Benefits and Allowances. Legislation will
be proposed at a later date to reauthorize the TAA and NAFTA-TAA programs,
which expire on September 30, 2001.
Mr. Chairman, this is an overview of what we have planned at the
Department of Labor for FY 2002. While the President's 2002 budget presents a
responsible approach to meet the needs of America's workers -- including
funding national priorities, paying down the debt, and providing tax relief --
it will also ensure that our Nation's workers are prepared for the
21st Century workplace.
I will be happy to answer any questions you may have about the
Department of Labor's budget request.
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