For Immediate Release

Floor Statement of Senator Christopher J. Dodd
State of the Economy and Administration's Changes to Overtime Rules

September 9, 2003

This is an issue that is befuddling, to put it mildly, to many of us. I have several amendments pending on the education bill. I would very much like to raise them on Head Start and on special education. We can't get there apparently because we can't get a vote on this simple proposition.

Not only are we not going to be able to vote on overtime this afternoon, but we can't even vote on whether or not we ought to do more on special education. We can't do something more on Head Start, title I, Pell grants. Here we are, coming in the midst of September, the waning days of the Session, with huge issues before us, and it is now the midpart of Tuesday--this started last week some time--and it would take, I suspect--and the Senator from Iowa is here, our leader; he can correct me--maybe another 15 minutes of debate and we could have a rollcall vote on this and move on.

I will take a few minutes to express my views, which are very similar to those expressed by the distinguished minority leader, as well as Senator Kennedy, Senator Durbin, Senator Harkin, Senator Boxer, and others, on this matter. But I think it is a great tragedy.

I thank the leader for taking the time to express to the American public his great concern about this issue and the wonderment he expresses about why we can't even have a vote on this proposal. I thank him and I know he has a busy afternoon.

I want to share with my colleagues my own thoughts on this issue as well. I think it is remarkable.

This is yet one additional bad decision after another when it comes to the economy.

We have seen what has happened regarding tax cut policy. I note an article written by Mike Allen and Jonathan Weisman in the Washington Post appearing this past Saturday, page A6, titled ``Tax Cut Claims Gain Criticism As Employers Shed More Jobs.'' I won't read the whole article, but let me quote from it, if I may:

Before the latest tax cut plan passed, White House economists had predicted it would add 1.4 million new jobs through the year 2004, on top of 4.1 million jobs that a growing economy would have generated anyway, a rate of 344,000 jobs created a month. By its own accounting, the Bush administration has fallen 437,000 jobs short of its own projections in August, a shortfall not lost on the President's critics.

We have seen already tremendous job losses in this country. The minority leader mentioned a job loss of 3.2 million jobs; 2.5 million of those job losses have occurred in the manufacturing sector of our economy; 93,000 jobs lost in America in the month of August, up sharply from the 43,000 jobs lost in July. For the seventh consecutive month, companies have slashed payrolls.

So the economy, when it comes to joblessness, is cratering. The tax cuts that the administration jammed through the Congress only a few short months ago are already demonstrating what a hardship they pose to the recovery and to putting Americans back to work.

As I mentioned, 93,000 jobs were lost in the month of August; 44,000 of those jobs in the manufacturing sector. Just over 2.5 million manufacturing jobs have been lost in the last 32 months.

African Americans and Hispanics bear the brunt of the economic downturn. The unemployment rate among African Americans is now hovering around 11 percent, almost twice the national average.

The unemployment rate among Hispanics is almost 8 percent. Long-term unemployment is on the rise. In August, almost 2 million people had been unemployed for over 6 months, triple the number at the beginning of the Bush administration.

A surge in discouraged workers masks the true impact of the economic downturn. Currently, 1.7 million people are marginally attached to the labor force. About 503,000 of these workers have stopped looking for work altogether because they believe that no work is available for them. That is an increase of 125,000 over the past year.

A new study suggests that job losses since 2001 are gone for good. A study by the Federal Reserve Bank of New York has concluded that the vast majority of job losses since the beginning of the 2001 recession were the result of permanent changes in the U.S. economy and are not coming back. This means the labor market will not regain strength until new positions are created in new economic sectors. Manufacturing is the area that is suffering the largest brunt of this decision.

An additional 1.3 million people are in poverty nationwide. The number of Americans living below the poverty line has increased by more than 1.3 million in the last year, even though the economy technically edged out of a recession during the same period. The number of families living in poverty went up by more than 300,000 in 2002, and the number of children in poverty rose by more than 600,000 in the same period.

We are heading in the wrong direction. On top of all that, we now have a decision being made by the administration to eliminate overtime pay. People in more than 250 white-collar occupations will lose their right to overtime. I won't list them all, but they include the critical areas of nursing, firefighting, police forces, emergency medical services, health technicians, clerical workers, surveyors, chefs, TV technicians, and reporters. Overtime pay will be eliminated.

I don't understand--in light of the news we are getting about the unemployment picture in this country and the hardships being faced, the rising level of poverty, the more difficult time families are having to make ends meet--why the administration persists in pursuing a policy of denying overtime pay. There was a very close vote in the House of Representatives. At least they voted. I am told the vote was 210 to 213 against blocking the President's proposed rule, so it was narrowly defeated by the Republican majority in the House of Representatives.

I want to know whether or not this body wants to confirm what the House and the President said they want to do. And should not the American public have the right to know what the answer of this body would be?

In 250 occupations, they want to know whether or not they are going to be able to get overtime pay. Overtime pay makes a huge difference for them economically. It can amount to as much as 25 percent of a worker's annual income. Denying 25 percent of someone's income at a time of already economic uncertainty is wrongheaded. It is dangerous for us to be pursuing that path.

I regret deeply that we will not have a chance to vote this afternoon on the administration's overtime proposal. We are faced with one more bad economic idea after another. We have the largest annual deficits in the Nation's history, one of the largest percentages of the gross domestic product, because they include, obviously, Social Security moneys in their calculations. We have lost more than 3 million jobs in the last 32 months.

Instead of working towards creating new jobs and helping working families and individuals, the administration has proposed a regulation to deny overtime protection to millions of people. These workers would have their jobs reclassified as professional, administrative or executive, even if their job duties do not change, thus losing the benefit of overtime pay. As I mentioned, more than 250 white-collar occupations could be impacted. Employees could be forced to work longer hours without the benefit of overtime pay.

I was speaking with a group of nurses in Connecticut. They were saying to me: We don't have the choice of not working additional hours in hospitals. If an emergency occurs, or there are problems with patients, you are always asked to stay on a few more hours and help out.

And they do it. The idea that we would be asking these people to continue to provide the valuable services they do to sick individuals in our Nation's hospitals and not provide them compensation for doing so is truly outrageous. The same goes for our firefighters and police officers.

Senator Boxer had it right when she said earlier: You can well imagine in the next 48 hours or so the kinds of images we are going to have, a replay of the tremendous outpouring of gratitude being expressed to the police officers and firefighters in New York and Connecticut, New Jersey, and others who gathered to fight for the lives at the World Trade Center almost 2 years ago. Yet what expression of gratitude do we provide them 2 years later? We tell them: Sorry, but your overtime pay no longer exists. What kind of a message is that to these people?

Asking employees to work longer hours and not providing overtime pay is significant because overtime pay can provide as much as 25 percent of a person's annual income. This is not the type of balance between work and family that the distinguished Democratic leader pointed out when we adopted unanimously a resolution offered last week. I was pleased to cosponsor S. Res. 210, a bipartisan resolution supporting striking a balance between work and personal lives as being in the best interest of worker productivity.

I find it terribly disheartening that at a time when this body is asking the President to designate October as National Work and Family Month, the administration is working to finalize a regulation to strip overtime pay for millions of people.

The 1938 Fair Labor Standards Act has been the backbone of worker protection. Never in its 65-year history have such sweeping overtime changes been proposed.

Hard-working individuals are deeply concerned about these changes and many of us here stand shoulder to shoulder with them in expressing our outrage. It is unfortunate that we are not going to be able to have a vote today in this body on whether or not we can overturn that decision.

I also find it ironic that the President suggested he would veto the underlying appropriations bill on education and health services if this amendment is accepted. In fact, an August poll of nearly 900 adults found that 74 percent--cutting across all regional and political lines--oppose the Bush administration's proposal to eliminate overtime protection. Almost 75 percent of those polled said don't do it.

Further, in 2001, the Department of Labor commissioned its own study that concluded that the current narrow overtime exemptions under the Fair Labor Standards Act are still relevant today.

Why then did the Bush administration unveil these proposals last March? One can only conclude that whatever the reasons, they do not include supporting the ability of working people to earn a decent pay for a day's work.

If my colleagues on the other side are so concerned about first responders, why not just oppose the regulation altogether because this is the major group about which we are talking. For example, let me point out what I am suggesting.

Police sergeants and lower-level police supervisors are likely to lose their overtime through the executive exemption. Let me explain why.

The fact that a sergeant performs nonmanual work such as walking the beat during 90 percent of his work hours does not matter if he also has a primary duty of supervising two officers or performing nonexempt administrative work.

Highly compensated police officers will not even have to have a primary duty of performing exempt work. If they perform any ``office or nonmanual work'' and perform any one exempt duty of an executive, administrative, or professional duty--no matter how little of their time is spent doing it--they lose the right to overtime.

How much imagination does it take to move people into those categories to be exempt from overtime compensation?

Police departments have been prevented from exempting police officers who teach in police academies because the instructors did not exercise sufficient independent judgment and discretion in how they taught their courses. The proposed rule eliminates the requirement for independent judgment and discretion.

Under the current law, an exempt executive is an employee ``who customarily and regularly exercises discretionary powers; and who does not devote more than 20 percent ..... of his hours of work in the workweek to activities which are not directly and closely related to the performance of [exempt] work.......

Under the proposal by the President, those current law requirements are eliminated.

Let me address the nurse issue. Nurses, skilled health technicians, and technologists could lose their overtime protection under the proposed regulations because of the changes to the educational requirement.

Registered nurses who do not hold a bachelor's degree are currently eligible for overtime protections, unless they hold administrative or managerial positions.

Under the Bush proposal, these RNs would lose their overtime protection if they have a few years of work experience.

Nonmanagerial licensed practical nurses--LPNs--have a right to overtime protection under current law. Under the administration's proposal, LPNs with a few years of work experience would also lose their right to overtime compensation.

Let me read current law and then read the regulation proposed by President Bush.

The current law:

Employees are exempt if they do ``work requiring knowledge of an advance type in a field of science or learning customarily acquired by a prolonged course of specialized intellectual instruction and study, as distinguished from a general academic education and from an apprenticeship, and from training in the performance of routine mental, manual, or physical processes.''

Under the President's proposal:

Employees qualify for exemption as a learned professional if they have a primary duty of performing office or nonmanual work requiring advanced knowledge in a field of science or learning customarily acquired by a prolonged course of intellectual instruction, but which may also be acquired by an equivalent combination of intellectual instruction and work experience.

That is very broad, very general language. Obviously, one can drive a Mack truck through it. That is why the nurses of this country, the RNs and LPNs, are vehemently opposed to this proposed regulation, because they know exactly what is going to happen, just as police officers do. That is why so many of us feel so strongly about this and why we would like to vote on it.

If a majority wants to uphold the President and vote for this stuff, then so be it; the Administration can go forward and it will become the law of the land. But I would like to know where 100 Senators stand. America would, too. As I mentioned, nearly seventy-five percent of the people polled in a recent survey said they are opposed to the administration's proposed rule. Let's find out where this body is. I think the proposed rule to eliminate overtime pay is wrong and I support the Harkin amendment. I hope that we will have a vote soon and I urge my colleagues to support the amendment.

I yield the floor.