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Statement of Alexis M. Herman
Secretary of Labor



BEFORE THE
SUBCOMMITTEE ON LABOR,
HEALTH AND HUMAN SERVICES, AND EDUCATION
COMMITTEE ON APPROPRIATIONS
UNITED STATES SENATE
March 23, 1999



Mr. Chairman and Distinguished Members of the Subcommittee:

I am pleased to be here with you today to discuss my Fiscal Year 2000 request for appropriations for the Department of Labor.

My request for appropriations for FY 2000 builds on the successes of the past six years. Under the leadership of President Clinton, the American people are enjoying the first budget surplus in 30 years. This Administration has presided over the longest peacetime economic expansion in our history. Over 18 million new jobs have been added. Wages are rising at more than twice the rate of inflation. Welfare rolls are down, while home ownership is up. Unemployment is at its lowest peacetime rate in over 40 years.

HELPING WORKING FAMILIES MANAGE CHANGE

Though the economy is strong, the dynamic forces of technology, globalization, and competition are sending changes through the workplace. Large firms, which provided stable employment, and a stable climate for regulation and enforcement, are now complemented by a dynamic world of small and medium-sized business startups, often in new lines of industry. Many new jobs are in these smaller firms, and many new workers now work in them. We must help working families as they attempt to adapt to these changes.

ADDRESSING WORKERS' PROBLEMS STRATEGICALLY

Against this backdrop we are preparing for the challenges of the 21st century. I believe that government must be fiscally responsible as well as dedicated to giving people the tools they need to succeed. With this in mind, I have set three strategic goals for the Department of Labor: promoting a prepared workforce, a secure workforce, and quality workplaces. Those overriding goals are based on underlying values opportunity and responsibility, community and family, justice and fair play. Let me explain.

A Prepared Workforce - My budget request reflects one of the President's top priorities: investing in education and training to ensure that every American has the schooling and the skills to succeed in the increasingly competitive global economy. The Workforce Investment Act (WIA), incorporating the President's principles of job training reform, expands the One Stop system of streamlined service delivery to job seekers and employers, empowers customers with the resources and information to select training that meets their need through Individual Training Accounts and "Consumer Reports" on training provider performance, and authorizes Youth Opportunity Grants, to help boost employment among young people living in high poverty urban and rural areas. WIA was a bipartisan effort and enjoys continued bipartisan support. It requires that all States be fully operational by July 1, 2000. It is essential that adequate funding, as proposed in my FY 2000 budget request, be provided to assure States' and local communities' success in implementing this key reform.

In the new economy, and on the edge of a new century, education cannot end with a high school diploma, or even with a college degree. Now, education must mean lifelong learning and continued development of new skills.

A Secure Workforce We receive thousands of letters from people who discover after they retire that they do not have the retirement benefits they expected. This is one reason I believe it is critical that we step up our efforts to ensure that all Americans are economically secure after they retire. Employment-based pension and health benefits are the foundation of family security.

I am troubled by the fact that only about one-half of all full-time workers in the private sector have pension coverage. Three-quarters of workers in small businesses are not covered by a pension plan. Increasing access to our private pension system and assuring that private pensions, health care, and other employee benefits are secure and properly administered are among my most important priorities and are addressed by this budget. Several initiatives have been designed to achieve significant progress in helping to promote an economically secure workforce, such as safeguarding pensions and health care plans which I will describe in more detail later in my statement.

Finally, a secure workforce requires a fair minimum wage. Today, a full-time minimum wage worker earns approximately $10,700 $2,900 below the poverty level for a family of three. In the midst of the greatest peacetime expansion in the Nation's history, this is unacceptable. A hard day's work deserves a fair day's pay. We must raise the minimum wage by $1 an hour over the next two years. I hope that we can work in a bipartisan fashion to enact this legislation.

Quality Workplaces My third goal is to guarantee every working American a safe and healthful workplace with equal opportunity for all. If an employer's practices threaten workers' safety and health, discriminate on the basis of gender, race, color, national origin, religion, veterans' status, or disability, or deprive workers of fair wages, then tough enforcement becomes a necessity. Our ultimate goal, however, is compliance with employment laws. My emphasis is to ensure an appropriate balance of fair and consistent enforcement, compliance assistance, training and cooperative partnerships. I am also committed to improving working conditions at home and abroad by aggressively working toward the elimination of abusive child labor and by promoting international core labor standards, which I believe will enhance economic growth and stability abroad.

GAPS BETWEEN SKILLED AND UNSKILLED WORKERS STILL EXIST

As I mentioned earlier unemployment is at its lowest level in a generation. Be they young or old, women or men many more Americans who want a job can find one. That's good news for working families.

However, the continuation of a large gap in employment and earnings between less-skilled under-educated workers and the rest of the labor force is well-documented, and must be addressed if America aspires to be a Nation where hard work is rewarded fairly.

The Administration has instituted policies that have helped to begin narrowing this gap, but more remains to be done.

In addition to the wage gap, research shows that there are continuing gaps in other important aspects of workers' lives in training, benefits, and working conditions.

Not that long ago, some policy and program analysts held that non-wage benefits and working conditions acted as a leveling influence on wage gaps. Now, we see that benefits and better working conditions tend to be associated with higher paying jobs in other words the gap in real wages is actually wider when we include benefits in the calculation. While highly skilled, educated workers have enjoyed the benefits of economic growth, low skilled, low wage workers have not kept pace. And so I want to be clear that workers also experience disparities in other areas safe and healthful working environments, fair and equal opportunities and in workers' rights.

My strategic goals of promoting a prepared workforce, a secure workforce and enabling workers to perform in high quality workplace environments are intended to help close these gaps.

I believe that the Department's budget request is both innovative and responsible it takes account of the dramatic changes that continue to sweep through the economy, and proposes ways to help America's working families succeed in the new environment. It reflects my priorities to provide assurance that all workers have the opportunity to find and hold jobs, under high quality working conditions, with good wages, safe pensions, health benefits, and opportunities to improve their skills.

For these purposes, the Department's FY 2000 budget proposals total $39.6 billion, of which $13.0 billion is subject to the annual appropriations process and is now pending, Mr. Chairman, before your Subcommittee. The request for discretionary programs is $11.6 billion in budget authority, which is $0.6 billion above the FY 1999 level.

FY 2000 BUDGET PROPOSALS CLOSING THE GAPS

My budget request for FY 2000 proposes several programs and innovations, all of which are focused upon narrowing or closing the gaps in wages, benefits and working conditions.

Closing the Skills & Wages Gap

I am proposing several programs to address the wage gap and advance my goal to promote a prepared workforce.

Education And Training

Despite the low overall unemployment level, there are still pockets of Americans who want to work but have difficulty finding new jobs. At the same time, employers across the country tell me they cannot find qualified workers. I don't believe we have a worker shortage. Instead, we have a skills shortage. I believe we must give Americans who want to work the skills to ensure they can get and keep a decent job.

In Fiscal Year 2000 I propose to make substantial progress toward creating a 21st century reemployment system. My proposal would ensure that we move toward: (1) helping all dislocated workers who want and need services with resources for training or to find new jobs; (2) expanding and enhancing the quality of employment services available for workers receiving UI and other job seekers who have lost their jobs; and (3) ensuring that any job seeker has access

in person or in the rapidly expanding world of electronic communication to a core set of employment-related services through One-Stop Centers. My budget includes an increase of $368 million for a Universal Reemployment Initiative as a first step toward achieving this goal.

For assistance to Dislocated Workers, I am requesting a total of $1.6 billion, an increase of $190 million, to provide readjustment services (including job search assistance), skill training and related services to help an estimated 858,500 dislocated workers find new jobs as quickly as possible. This is the initial downpayment on a five-year investment to ensure that all dislocated workers, who need it, receive assistance.

Included within the $190 million increase is $40 million to provide dislocated worker training and job placement services in industries and occupations experiencing skill shortages. Although funding is requested now for this program, legislation will be proposed to finance it through fees paid by employers applying for foreign workers through labor certification programs.

Also in FY 2000, I am requesting $53 million for Reemployment Services Grants to State Employment service agencies. These grants will provide funds for increased reemployment services to unemployment insurance claimants to ensure that all unemployed workers who need help to become reemployed will get the help they need. The increase will target staff assisted services to insured unemployment claimants, providing early intervention and immediate referrals to suitable job openings to help them get jobs faster reducing their period of unemployment and benefit costs. For those in need, State Employment Service staff will provide customized services including workshops, job search assistance and screening for referrals to training or other support services.

I am proposing to continue development of a One Stop Center System, as authorized by WIA, to transform a fragmented array of employment and training programs into an integrated service delivery system for adults seeking to advance their careers. The FY 2000 request is $149 million, which includes a $65 million set of initiatives to develop new ways to provide employment-related information through America's Labor Market Information System an essential part of the One-Stop service delivery system that is now required in the WIA. Some examples of new ways we intend to provide services are a "talking" America's Job Bank for the visually impaired, mobile service centers for rural areas, a 1-800 number providing the entire customer base of the workforce investment system with information on public workforce services available at a location most convenient to them, and continued enhancements in America's Job Bank, America's Talent Bank, and America's Career InfoNet.

The FY 2000 budget also includes $10 million for the second year of the joint Labor - Education Learning Anytime, Anywhere Initiative to enhance and promote learning opportunities outside the usual classroom settings via computers and other technology for all adult learners.

I am also proposing an additional $10 million for the new America's Agricultural Labor Network (AgNet). I view this as an important step in assuring U.S. farmworkers have increased access to jobs, better wages and working conditions. I see AgNet as a resource for growers to find domestic farmworkers instead of being reliant on international labor markets. AgNet would automatically be available through local libraries, unions, community-based organizations, State Employment Security Agencies and Department of Agriculture extension offices. Basic job information from AgNet also would be available in "America's Job Bank."

In FY 2000, I am also requesting $50 million for new Work Incentive Grants. This is part of the President's comprehensive initiative to provide economic opportunities for people with disabilities. This will provide competitive grants to partnerships of organizations in every State, including organizations of people with disabilities, to help One-Stop Career Centers and Workforce Investment Boards provide a range of high quality services to individuals with disabilities to allow them to return to work or obtain employment.

As another important piece for closing the wages and skills gap, I am proposing an FY 2000 level of $2.8 billion for the Department's Youth Programs, a net increase of $68 million above FY 1999.

Included in the request is $1 billion for Youth Activities, authorized by WIA. This program replaces Job Training Partnership Act Youth Training Grants and Summer Youth Employment and Training with a single funding stream that provides local flexibility to support a wide range of activities and services to prepare disadvantaged youth for academic and employment success, including summer jobs. An estimated 577,700 participants will be served at the requested level.

My request also includes $250 million to continue the Youth Opportunity Grants at the level at which it was funded in FY 1999. These competitive grants address the special problems of out-of-school youths, especially in inner-cities and other areas where jobless rates can top 50 percent. The initiative takes a saturation approach to solving high unemployment, investing large amounts of resources in high poverty areas to increase educational and economic opportunity. Grantees will use case managers and job developers to place and maintain youth in private sector jobs. Education, job training, and work experience slots will be available for youth not ready for private sector placement. Related goals include reducing dropout rates, teen pregnancy, and crime; and increasing enrollment in post-secondary education.

The budget also includes $100 million for a new Right Track Partnership (RTP) initiative of competitive grants designed to prevent economically disadvantaged and limited English proficient youth from dropping out of school and to encourage those who have already dropped out to complete their high school education. Building innovative partnerships between the private sector, school districts, and community based organizations, RTP will provide comprehensive services and economic opportunity to youth in high poverty areas.

For the Job Corps, I am requesting an increase of $38 million to continue the operation of 118 existing centers plus an additional 3 new centers scheduled to be activated in 2000. Increases are requested for post-program termination and follow-up services, teacher/staff salary increases, and operating costs of new centers. In addition, funding is requested to complete the last of four new centers for which construction was initiated with 1998 resources.

The budget includes $110 million (equally divided between DOL and Education) to complete the final year of Federal funding for the School-to-Work Initiative. Since 1995, this initiative has made over $1.7 billion available to States and local communities to build comprehensive systems that link Federal, State, and local activities to help young people move from high school to careers or post secondary training and education.

Ensuring a prepared workforce also requires us to continue the work of welfare reform and that is the reason I have included a request for $1 billion to continue the Welfare-To-Work jobs initiative. With the current healthy economy, characterized by low unemployment rates and labor shortages in some areas, the Nation has unprecedented opportunity to move a substantial portion of hard-to-serve welfare recipients into unsubsidized employment with career potential. This is good news. But the hardest work lies ahead, because those still on the rolls face the biggest challenges to employment. So, we propose a one-year, $1 billion reauthorization of Welfare-to-Work that would retain the program's strong focus on long-term, hard-to-employ recipients. These funds not only help people get jobs they will help people keep their jobs and move into better jobs by providing critical job retention and support services. In addition, we need to focus more on fathers, to ensure that every State helps committed fathers fulfill their basic obligations to their children on welfare. Many fathers want to do the right thing, but do not have the skills to earn enough to meet their child support responsibilities.

The challenge of closing the skills gap is central to this country's ability to compete in the 21st Century. By closing the skills gap, we can help close the wage and benefits gap, as well. We

must offer low-skilled workers the opportunities to find and sustain productive employment with career potential.

For the Bureau of Labor Statistics (BLS), I am requesting $22 million to improve statistical indicators which are essential to the development of economic policy and the ability of businesses, labor and governments to make well informed decisions. This includes resources to augment the Employment Cost Index (ECI) with an addition of 7,000 establishment units to its sample. The ECI, as you know, is the Principal Federal Economic Indicator that provides the nation's most comprehensive measure of changes in employer costs for all compensation (including wages, salaries and employer provided benefits).

To expand the application of quality adjustment and accelerate the introduction of new products for rapidly changing industries in the Producer Price Index (PPI), extend PPI coverage for the first time in the construction sector of the economy, to enhance the ongoing expansion of PPI coverage of the service sector, and to improve our productivity measures, I am requesting $5.1 million.

These funds also include a request for resources to continue the multi-year Consumer Price Index (CPI) Improvement Initiative effort begun in 1998 to improve the timeliness and accuracy of the CPI. This is the third year of the expansion effort to speed the process of updating the expenditure weights in the CPI Market Basket and to expand the amount of information collected on prices and characteristics of certain goods and services.

We will continue streamlining and begin a major restructuring of immigration activities by transferring the Alien Labor Certification Program from ETA to the Employment Standards Administration (ESA). This effort is consistent with the recommendations made by the Commission on Immigration Reform (CIR) as outlined in its report "Becoming An American: Immigration and Immigrant Policy" in September 1997. In addition to the consolidation, ESA will reengineer the program to better serve the customers of these programs while enhancing the Department's ability to effectively protect foreign and similarly employed U.S. workers.

These programs will help ensure that the workforce of the 21st century is ready to tackle the challenges ahead. We must prepare our workers to seize the opportunities presented by the expanding global economy, while at the same time we must preserve and expand the economic security of working Americans and their families.

This brings me to my second strategic goal: ensuring a secure workforce. We know that more Americans are working than ever, and they are bringing home higher earnings as well. This is real progress. Still additional challenges lay ahead of us.

Closing the Benefits Gap

As I pointed out earlier, research conducted by the Department of Labor shows that the disparity in benefits such as health insurance and pension coverage between low-wage workers and highly skilled workers continues to grow. Less than half the workforce is covered by an employer-sponsored pension plan. And the percentage of the workforce covered by private health insurance is dropping more than one in four workers has no employer-provided health coverage. Bureau of Labor Statistics research shows that the decline is even worse for low-wage workers. The wage gap is increasingly becoming a benefits gap as well.

My budget has several proposals which are designed to address this issue by providing workers access to information on benefits, such as health care and pensions, and also for employers, particularly small businesses, to help them meet the needs of the changing workplace. We can and must do better. We must protect the benefits earned by so many working Americans, while we also expand coverage to the many who lack access to these needed programs.

Pension Security and Health Care Initiatives

American workers deserve a secure retirement. Social Security is an integral part of the retirement equation, and we must do all we can to ensure that the benefits are there for our children and the generations yet to come. We should not spend the budget surplus until we save Social Security. The promises made to our workers and our children must be kept.

But all three legs of the retirement stool must be strong, so we must also help all Americans save for their retirement. I have long supported pension and savings education programs. All of you understand the importance of preparing for retirement.

The American people also understand the need to save, but many simply cannot afford to do so. In his State of the Union address, the President proposed an historic initiative using 12 percent of the budget surplus to establish Universal Savings Accounts to give all Americans the opportunity to save. These USA Accounts will give every American a share in the wealth of this Nation, and help all to enjoy a more secure retirement. I am committed to making USA Accounts a reality this year, and I look forward to working with the Congress on this essential program.

We must also strengthen and promote the security of the private pension and health systems. My budget includes $11.8 million over last year for enhanced pension security and health care initiatives. The Pension and Welfare Benefits Administration (PWBA ) will provide education and outreach to American workers and their families to make informed decisions about how to best protect themselves from being financially overburdened by the cost of day to day medical expenses or a catastrophic illness. PWBA has stepped up its efforts in regulation, enforcement and disclosure especially with respect to the Health Insurance Portability and Accountability Act of 1996 (HIPAA). PWBA 's role is also expected to increase with enactment of legislation currently under consideration by Congress such as the Patients' Bill of Rights and genetic nondiscrimination legislation.

My request includes an increase of $5.0 million for the final installment of a multi-year effort to improve reporting and processing of Form 5500 - Annual Reports on employee benefit plans in the new ERISA Filing Acceptance System (EFAST). Funding is also included to improve the Internet site, which would disclose images of the most recent Form 5500 annual reports for approximately 800,000 health and pension plans. The new system which will begin operation in July, 2000, will improve the quality and accuracy of data, and will speed their use in safeguarding pensions. These reports provide financial information and answers to questions designed to highlight possible problem situations regarding the safeguarding of plan assets.

I am also requesting $2.6 million for PWBA 's Reporting Compliance Enforcement activities and Customer Services initiatives.

To develop new ERISA data sources on covered employee benefit plans and to conduct research and policy analysis required to address emerging policy, legislative and operational issues, my budget includes $1.4 million.

Related to our pension protection initiatives, I am also requesting $1.5 million for the Office of Inspector General. These funds will be used to target the industry of service providers and seek to prosecute individuals who pillage pension plans causing financial hardship for workers or retirees.

I have made pension security a top priority especially for women. Last fall, the President released a report demonstrating that women rely especially heavily on Social Security and lag in private pensions. In response, we are proposing two initiatives to help women in their retirement. First, we will require that pension plans that currently must offer joint and survivor annuities must now offer options ensuring that a spouse usually the wife does not experience a steep decline in pension benefits after the death of the husband. This will not increase costs to the plan. Instead, the couple can choose to receive a slightly lower benefit during their lives, in exchange for increased income for the survivor.

Second, we should require pension plans to count any time used under the Family and Medical Leave Act toward pension vesting and participation requirements. This will help ensure that working family members again, mostly women need not sacrifice their pension in order to take time off to care for a new baby or seriously ill relative.

These modest proposals will help ensure that millions of older Americans, especially women, can live in dignity.

Mr. Chairman, as you, and many others on the Committee know so well, too many Americans have no access to a private pension. That is why we are proposing measures to increase coverage and portability. We want to improve the rules so that more employees can take their pension benefits with them when they change jobs. We should make it easier for small businesses to establish pension plans, especially plans that give workers predictable, guaranteed pensions. Finally, we want to enhance the private pension rules to help keep employees' pensions safe. These and other measures can widen access to the private pension system and make it more secure. That is a goal we can all support, and I will do all I can to see that these proposals are enacted in this Congress.

One of my top priorities involves ensuring access to health care for millions of Americans with disabilities. Last year, we established the Presidential Task Force on Employment of Adults with Disabilities, which I chair. Our Task Force has already made tremendous progress in bringing together government agencies and identifying real solutions to help people with disabilities find real jobs. But we must do more. Mr. Chairman, the President and I strongly support the notion that millions of Americans with disabilities can and want to work, yet cannot afford to give up their health care to do so. We should break down the barriers keeping these Americans out of the workforce. No one should be forced to choose between keeping his or her health care and taking a job.

Like many on this Committee and across the Nation, I am also concerned about the quality of health care. American workers and their families deserve the world's best health care. The managed care system has dramatically altered the delivery of health care in America, coupling lower expense with an emphasis on promoting health instead of merely treating illness. We all believe in cutting costs, but not at the expense of quality. Within the Department, we are developing regulations ensuring fair treatment for people when employer health plans deny or delay promised benefits. But many important patient protections can only be achieved by improving Federal law. That is why the President and I are committed to a strong and enforceable Patients' Bill of Rights. I look forward to working on this vital issue with this Congress.

Other Security Initiatives

To make sure we leave no one behind, the President's budget includes an initiative to strengthen the Unemployment Insurance (UI) safety net to make the program more accessible to unemployed workers, assure the availability of benefits in the event of an economic downturn and improve State administrative operations. In addition, we want to have further discussions with stakeholders and the Congress to develop broader bipartisan reforms to the unemployment compensation system, consistent with budgetary constraints. Our goals are to expand coverage and eligibility for benefits, streamline employer tax filing and reduce tax burden where possible, emphasize reemployment, guard against abuse, and improve administration.

For the Unemployment Trust Fund (UTF), I am requesting increases of $71 million to invest in integrity activities such as benefit payment control, screening for eligibility for benefits, and field tax audits. These functions are vital for benefit payment accuracy, detection of overpayments (fraud and non-fraud), and collection of non-paid and under paid State taxes. Failure to provide an evenhanded, accurate and fair UI program results in losses in State tax funds, increased fraud, and error.

The Wage Record Initiative, for which I am requesting $40 million, will fund State Employment Security Agencies for the one time cost to increase computer capacity to accurately report needed information for each worker for the National Directory of New Hires. This initiative will permit the Social Security Administration to verify names and social security numbers and thus improve the usefulness of the data for Social Security and child support enforcement purposes.

To assist ETA in the efforts to preserve the integrity of the Unemployment Insurance Trust Funds, I am also requesting $1.2 million for the Office of Inspector General. These resources will support high impact criminal investigations to target and investigate schemes that might otherwise defraud the UI program.

And, we are proposing consolidation and reform of Trade Adjustment Assistance (TAA) and the NAFTA-Transitional Adjustment Assistance (NAFTA/TAA) programs and extension through September 30, 2001. The reforms will extend TAA eligibility to those who lose their jobs because of shifts in production abroad similar to the current provision for workers who lose their jobs because of shifts in production to Canada or Mexico. The reforms will also increase the cap on training expenditures, harmonize the existing requirements linking training and income support, and provide supportive services as needed.

Closing The Gap In Working Conditions

My final strategic goal is fostering quality workplaces that are safe, healthy and fair to help close the gap in working conditions. All American workers deserve safe worksites, healthy working conditions and fair pay. The benefits of these workplace enhancements flow to employers, too. Quality workplaces reduce turnover, which increases productivity. Employers see the results on the bottom line. So ensuring high-quality workplaces isn't just the right thing to do, it's in an employer's own best self-interest as well. I am also committed to improving working conditions abroad by aggressively working to eliminate abusive child labor and by promoting international core labor standards.

Low-wage workers often work in demanding jobs that are accompanied by difficult and sometimes dangerous working conditions. The risk of lost-time injury in low-paying jobs is higher than in jobs held by highly skilled wage earners with good fringe benefits. To help close this gap, I am focusing the Department of Labor's emphasis on enforcement and compliance assistance to ensure conformity with our regulatory programs.

International Labor Standards/Child Labor

We have also targeted abusive and exploitative child labor, both at home and abroad, through a comprehensive strategy of enforcement, education and partnership. But we can do more. I believe that in the new global economy, we have an opportunity to lift millions of people into a worldwide middle class and a decent standard of living without exploiting children. My FY 2000 budget proposals attempt to harmonize the Administration's goals of increasing trade and improving working conditions. Promoting international core labor standards and improving worldwide enforcement of labor laws is vital to this effort. Achieving expanded opportunity and security for American workers has become increasingly dependent upon how effectively the U.S. addresses the international challenges of economic globalization.

Child Labor

My budget request continues to provide $30 million for grants to enable the International Labor Organization to expand its work to eliminate abusive child labor in more countries and industries. This five year initiative, which began in 1999, will help ensure that goods produced abroad are not made with exploitative child labor. Senator Harkin, I want to thank you for your active leadership over the past six years in this important work.

International Labor Standards

I am asking for an additional $35 million in FY 2000 to promote core labor standards throughout the world. This includes $25 million for a major new ILO-based multilateral program designed to help developing countries implement core labor standards and build their own social safety nets.

I am requesting an additional $10 million for DOL to provide technical assistance on these same issues in support of important U.S. bilateral relationships. Examples of the sorts of projects we are planning include training in occupational safety and health, local economic development, dislocated worker services and social insurance reform.

On the domestic front, ESA's Wage and Hour Division (Wage and Hour) will continue to pursue and expand our strategy of enforcement, education and partnerships by requesting an additional $4.25 million for this effort. We have a special focus on child labor compliance in agriculture, through our "Operation Salad Bowl" initiative, and the garment industry, through our "No Sweat" initiative. Wage and Hour is expanding its use of the "hot goods" remedy to deter those using illegal and abusive child labor and their customers from violating the law.

Last summer marked our third annual "Work Safe This Summer" educational campaign to give child labor compliance information directly to young workers, parents, educators and employers. We also renewed our "Fair Harvest/Safe Harvest" campaign, which educates farm workers and their children about workplace rights, child labor and safety/health hazards in agricultural employment. And, in December 1998, we added a child labor component to our "E-Laws" Internet Advisor. Now, young workers, parents, teachers and employers can log onto the Internet for comprehensive, easy-to-understand information about child labor protections.

Finally, we have established partnerships with commercial consumers of agricultural goods. H.J. Heinz, "Newman's Own" and others are working with us to help prevent abusive child labor. And we work directly with employers to help them comply with the law.

Safe and Healthful Working Environments

We have made real progress in this area. The rate of occupational injuries and illnesses is at an all-time low. Thirty years ago Congress passed two landmark pieces of legislation that together help ensure a safe and healthful workplace to all working Americans. Since then, the Mine Safety and Health Administration, working in partnership with the mining community, has made dramatic improvements in miners' safety and health. Last year, the number of mining-related deaths was the lowest in history. This is real progress. But one death, one disability, one case of black lung is one too many. There is still more to do.

Safety and Health

The Occupational Safety and Health Administration has achieved comparable results, helping to save millions of American workers from illness and injuries on the job in industries ranging from construction to manufacturing to service and retail firms. In the coming year, OSHA will continue its effort to enhance partnerships with employers. We know that most employers want to do the right thing, but many need help to do so. I am committed to enhancing our partnership efforts through compliance assistance, consultation programs, and other cooperative mechanisms. However, we must retain a strong enforcement capacity as well, to protect workers against those employers who simply refuse to comply with the law. And, we will continue our work on a standard to help employers prevent the onset of debilitating work-related musculoskeletal disorders.

A high priority this year is the development and issuance of a proposed ergonomics program standard. There were 647,000 lost-workday musculoskeletal disorders reported in 1996, which accounted for approximately one-third of all injuries and illnesses that year that resulted in one or more days away from work. Work-related musculoskeletal disorders account for $1 of every $3 spent for workers' compensation and cost $15-20 billion in workers' compensation costs each year. An enormous body of scientific evidence demonstrates a clear relationship between work and the onset of musculoskeletal disorders. In addition, many companies are successfully implementing ergonomic programs, protecting their workers, and achieving significant savings. OSHA has spent the last several years talking to hundreds of business people who have responded to problems by implementing successful ergonomic programs in their workplaces. Clearly, as so many employers, workers and scientists have already learned, ergonomics programs work. The draft ergonomics proposal OSHA released last month incorporates the basic features of ergonomics programs already used by many businesses to reduce their musculoskeletal injuries/illnesses.

I am requesting an increase of $35.1 million for workplace safety and health programs covering both compliance assistance and targeted enforcement. Included in my request is $10.5 million to enhance OSHA's compliance assistance activities by providing staff in every Federal OSHA office that will be responsible for direct outreach and training assistance to employers, and by providing for an increase in the number of training grants and expert advisors.

For targeted enforcement activities, my budget includes increases of $4 million to focus front-line efforts on the most dangerous workplaces and hazards. Over the past several years, OSHA has undertaken measures to leverage its resources and utilize information to target firms with the highest workplace injury rates. With information generated from the data initiative, OSHA has been able to identify those employers with the worst safety and health programs and direct resources to those work sites.

I am requesting an increase of $13 million for Mine Safety and Health programs. This includes $2 million to conduct more frequent dust sampling, target operator abatement activities, enhance MSHA's ability to maintain and calibrate sampling and laboratory equipment, and to process the additional dust samples collected. This proposal builds on FY 1998 and FY 1999 efforts it is the third year in our program to eliminate black lung disease. Resources are also included to reduce fatalities among metal and nonmetal miners. There are more than 11,000 metal and nonmetal mines throughout the country, ranging from very small sand and gravel operations to large, open pit copper mines. As a result of the Transportation Equity Act for the 21st Century and the continued growth of our nation's economy, we have already seen increased activity in the aggregates industries. The need for more education and training has never been greater.

More than 20 years ago, when the Mine Act was passed and signed into law, the Congress and Administration wisely decided that education and training were critical elements of an effective safety and health program. As a result, we are now actively engaged in a results-oriented dialogue to come up with final training rules for the men and women who work in some 10,000 surface nonmetal mines. We are on course to promulgate these rules that are so critical to our continued success in protecting miners' safety and health.

Family and Medical Leave (FMLA)

The Family and Medical Leave Act allows workers to take up to 12 weeks of job-protected, unpaid leave to care for a newborn or adopted child, attend to their own serious health needs, or care for a seriously ill parent, child or spouse. The President is proposing to expand FMLA to businesses with 25 or more employees, and to allow FMLA eligible workers to take up to 24 hours of additional leave each year to meet family obligations. The budget includes $10 million for the Department to research the impact this law has had on the American family and how to make leave accessible and affordable for more of America's working families.

Equal Pay/Civil Rights

We must also step up our efforts to end wage discrimination and expand employment opportunities for all working men and women. Today working women earn only about 75 cents on the dollar compared to men. Only part of this gap can be explained by differences in workers' education, experience, and occupational characteristics, and the rest appears to reflect persistent discrimination in pay. That is why the President's budget will invest $4 million for ESA's Office of Federal Contract Compliance Programs (OFCCP) under the President's Equal Pay Initiative to increase outreach, education, and technical assistance to Federal contractors. OFCCP will assist contractors by providing additional tools to assess current pay policies and practices and make any necessary improvements. OFCCP will partner with the Women's Bureau on a public education program on pay discrimination.

Let's be clear. This isn't simply a women's issue, it's a family issue. Today, nearly 3 out of 4 women with children work. And in 10 million families, women are the primary breadwinners. But it's hard to get by on three-quarters of a loaf of bread. I would like to thank Senator Harkin for his very important work in the area of ending wage discrimination. The President and I are committed to improving the enforcement of wage discrimination laws and providing research, education, training and outreach on this important issue.

One Stop Services to Workers and Employers: Crosscutting Initiatives

The Department's FY 2000 budget submission is the product of a new and rigorous process, driven by an unusually high level of interagency cooperation throughout the Department. Given the complexities of the challenges now facing America's working families, I directed agencies to work together to develop, wherever possible, "crosscutting" initiatives that would bring all the necessary tools to bear on a problem. As a result, the FY 2000 budget includes proposals to pilot test several exciting and innovative approaches more effective alternatives to the ways in which we have traditionally developed and implemented our programs. By unifying our efforts into proposals that transcend the traditional individual agency approach, I anticipate that we will make significant strides forward in our capacity to help serve the American worker better.

The Department's innovative one-stop system for employment and training, launched as an experimental program in the first years of this Administration, has now become a national system that provides one-stop assistance on all employment and training related needs.

Crosscut: Worker Education and Outreach

For example, I am requesting $6 million to add information services on a full range of DOL programs and regulatory requirements to the existing information and outreach currently available to American workers and employers. DOL will partner with State employment offices to pilot test a network of 50 one-stop walk-in centers for information on the full range of DOL assistance programs and workplace regulations. The Department would offer information for workers on employment and training programs, job search and training opportunities. Employers and individuals seeking employment will have available in one location, information about compliance assistance, pensions, health care, safety and health standards, minimum wage requirements, and child labor rules. No one should leave these centers confused about their rights or obligations.

Crosscut: Coordinated Compliance Assistance for Business

I am requesting an increase of $2.6 million for a Coordinated Compliance Assistance for Business program. To meet the needs of the changing workplace, where more small and medium-sized businesses lack the resources of many larger businesses, the Office of Small Business Programs (OSBP) would develop, implement, manage and evaluate the Department's new Coordinated Compliance Assistance pilot project for small businesses. OSBP would staff help desks at ten sites in three regions, and would serve as point of contact for DOL information. Specifically, the pilot program would partner with Federal agencies, and other organizations such as Small Business Development Centers, Agricultural Extension Offices, and Manufacturing Extension Partnership Centers to increase the availability of DOL information through on-site services in their existing education and assistance facilities. For example, OSHA would expand the development of education and training materials, and PWBA would make available products designed to inform businesses that offer pensions or health care benefits of the legal requirements of these benefits.

My request includes an increase of $1.875 million for a cross cutting initiative we refer to as Technology for Excellent Customer Service (TECS). The Wage and Hour Division would pilot test a Department-wide integrated information technology system to provide workers, employers, including small business, with prompt identification and referral to their specific requests and areas of need. We would be able to centrally handle and route a large volume of phone calls seeking information to the appropriate DOL agency.

Crosscut: Innovative Enforcement

My request includes $1.7 million for Alternative Dispute Resolution (ADR). While a strong enforcement program is essential to ensure compliance with our workplace laws, the Department cannot rely entirely on traditional means to comprehensively enforce the labor laws for which it is responsible. Innovative methods are being developed for working with employers to make maximum use of resources. In some cases, alternative methods of dispute resolution can resolve cases and avoid expensive litigation costs, for example, ADR can resolve problems with employers by clearing up inadvertent fiduciary violations in their health and benefit plans. The Department is currently participating in efforts at the Department of Justice to develop prototype ADR programs.

Finally, we will work more closely with the Department of Justice to enhance criminal enforcement by targeting resources on the most serious violators of the labor laws that we administer.

Crosscut: Strategic Management

In addition to these program proposals that cut across agency lines, I am also requesting funds for three management crosscuts that are vital to the successful design, development and operation of all departmental programs. In FY 2000, I am asking for a total of $41 million to enhance the Department's efforts in the areas of information technology, financial management, and performance measurement. These management cross cuts allow the Department to tackle common problems across agencies in a cohesive and consistent manner.

In the information technology arena, I am requesting several program increases totaling $30.7 million to ensure that the Department meets the legislative mandates of the Clinger-Cohen Act, Paperwork Reduction Act, Computer Security Act, Year 2000 challenge and the Administration's policy on the management of information resources and technology within the Department. These resources will allow the Department to meet the increasing demands for Web Services across program agencies, provide greater electronic access to DOL information and materials, and continue implementation of the Department's common IT and Web architecture.

On the increasingly important Y2K issue we expect all DOL systems to be Year 2000 compliant by the Government-wide deadline of March 31, 1999. The Department has a total of 61 systems considered critical to our mission to serve American workers. As of February 12, 1999, 52 of these systems had been renovated or replaced to correct Year 2000 problems.

After the completion of system repairs or replacement, we are requiring each mission critical system to undergo a rigorous assessment of Year 2000 readiness performed by independent reviewers, to provide further assurance that the Department's systems will effectively transition into the next century. This assessment program, referred to as Independent Verification and Validation (IV&V), is scheduled to be completed by June 30, 1999.

Notwithstanding our efforts, we recognize the potential that unanticipated problems or circumstances beyond our control could cause system or operational failures in the Year 2000. We are developing Business Continuity and Contingency Plans to ensure the continuation of all mission critical services and operations and will test these plans during 1999.

The Department has also provided guidance and technical assistance to our program partners, such as State and local government agencies and private sector organizations, in preparing for the Year 2000 and ensuring the uninterrupted delivery of benefits and services to America's workers.

To effectively implement the Government Performance and Results Act enhancements (GPRA), I am requesting a total of $7.5 million to undertake initiatives on behalf of several agencies to enable them to increase their capacity to become results-oriented performance based organizations. I am requesting resources for several agencies in the areas of performance measurement development; expanding data capacity to establish baselines and collect data for the measurement of outcomes; establish procedures for assuring the validity and reliability of data systems to support performance measurement effort and the requirement to conduct program evaluation to periodically assess the effectiveness of programs and strategies to achieve the statutory purpose of the Department's programs and activities.

In addition, my budget includes several increases totaling $2.8 million to support Financial Management activities with several agencies. These increases will enable the Office of Inspector General to meet increased financial management audit responsibilities, and will help ETA to closeout JTPA grants timely and accurately.

I am sure you will agree that initiatives related to GPRA implementation, improvements in financial management and information technology investments are an integral part of any serious efforts to manage for results.

CONCLUSION

I am delighted to have had this opportunity to discuss my Fiscal Year 2000 budget request with this distinguished panel. The ideas, policies and programs embodied within this request, I believe, will benefit our country by looking after our most precious natural resource the lives of our workers and their families.

I look forward to working with the committee and I thank you for the opportunity to appear before you. I will be happy to respond to any questions.


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