Testimony of Secretary of Labor Thomas E. Perez Before the Subcommittee on Labor, Health and Human Services, Education and Related Agencies, Committee on Appropriations, United States Senate

April 9, 2014

Chairman Harkin, Ranking Member Moran and members of the Subcommittee, thank you for the invitation to testify today. I appreciate the opportunity to appear before you to discuss the Fiscal Year 2015 budget request for the Department of Labor.

President Obama's 2015 Budget builds on his vision of opportunity for all Americans of which he spoke in January in the State of the Union address. The President's budget sets forth concrete, practical investments and proposals to achieve his vision by growing the economy, strengthening the middle-class, and empowering all those hoping to join the ranks of the middle-class. It is an agenda of opportunity, action, and optimism. It is the agenda for our work at the Department of Labor over the next three years.

The core principle is as American as they come — if you work hard and play by the rules, you should have the opportunity to succeed. In America, your ability to get ahead should be determined by hard work and personal responsibility — not by the circumstances of your birth.

Making good on the promise of opportunity has always been central to the Labor Department's mission to help create jobs and build a stronger middle class, to invest in human capital to build a skills infrastructure that supports business growth, to give every American the chance to retire with dignity and a measure of economic security, to promote a fair wage and safe working conditions, to help our nation's veterans find a place in the civilian economy, and to help historically marginalized populations, like immigrant communities and people with disabilities, move into the economic mainstream. But now, more than ever, as the President's agenda is our agenda, working to fulfill the promise of opportunity is fundamental to what we do, and the budget proposal would provide the investments necessary to enable us to help fulfill the promise.

We have come a long way since the depths of the Great Recession. We have seen 48 consecutive months of private sector job growth, which has added 8.7 million jobs, and the unemployment rate has reached its lowest point in over five years. Moreover, our manufacturing sector is experiencing the largest and most consistent growth since the mid-1990s. Over 600,000 manufacturing jobs have been added since February 2010. We have cut our deficits by more than half to their lowest share of GDP since before President Obama took office.

By those measures, we are well on our way to a full recovery. But the statistics do not tell the whole story as economic growth is still hamstrung by stubbornly high unemployment. They are cold comfort to the underemployed construction worker who continues to be laid off in between sporadic jobs. They do not encourage the factory worker whose application never gets a second look after the human resources department sees she has been unemployed for six months; or the waitress or bank teller who works full-time but must depend on public assistance to feed her family. They do not help the country's youth for whom so much depends on that critical first job. So while we have come a long way, much work remains.

The President's budget outlines a comprehensive agenda to make America a magnet for middle class jobs and business investment. Equipping workers with the skills they need and for which employers are hiring is not just a workforce development issue, it is an economic development issue. No matter what your political party, we can all agree on one thing: good jobs and low unemployment are good for the country. As part of the effort to achieve this shared goal, the President is acting on a set of specific, concrete proposals that will make sure American workers have the skills they need for in-demand jobs of today and the jobs of tomorrow. These initiatives will allow industry to identify the skills and credentials required for jobs they are seeking to fill now and tomorrow; give workers and job seekers access to education and training that meets those needs; and provide employers with easy ways to find workers who have or can acquire those skills. Some of these proposals will require new legislation while others can be done within existing program authorities. I am eager to work with all who are willing to roll up their sleeves with me to enact these critical programs.

The President's budget also supports the extension of emergency unemployment benefits for the long-term unemployed. If not extended, 3.6 million additional people are estimated to lose access to extended UI benefits by the end of 2014, despite remaining unemployed and looking for work. As I will explain, the President's budget request creates opportunity for all Americans while continuing long term deficit reduction through:

OPPORTUNITY, GROWTH AND SECURITY INITIATIVE

While the 2015 Budget will adhere to the spending levels agreed to in the Bipartisan Budget Act of 2013 and reflect the tradeoffs that are required to maintain those levels of spending, the Budget also presents the President's vision for an economy that promotes opportunity for all Americans. As part of this vision, the Budget sets forth a fully paid for Opportunity, Growth, and Security Initiative (OGSI), which will include additional policies to grow the economy and create jobs without adding a dime to the deficit. The OGSI would increase the FY 2015 discretionary caps to make room for priority defense and non-defense investments, paying for $56 billion in funding with a balanced package of spending reforms and closed tax loopholes. It will increase employment, while achieving important economic outcomes in education, research, manufacturing and public health and safety. Although not included in our budget totals before the Committee, the OGSI envisions a significant role for the Department. At DOL, the OGSI includes:

INVESTING IN A COMPETITIVE WORKFORCE

To continue the economic recovery, the 2015 Budget proposes a set of initiatives that would reduce long-term unemployment and hasten reemployment including the New Career Pathways program (formerly the Universal Displaced Workers initiative), reemployment services and eligibility assessments and services, and the three-pronged Job-Driven Training legislative proposal comprising the following programs: Bridge to Work; Back to Work Partnerships; and Summer Jobs Plus.

To invest in the Nation's youth and the long-term unemployed, the 2015 Budget also includes a package of mandatory funding for job-driven training proposals. These proposals would be designed with employer needs in mind, putting an end to what I call the "train and pray" era of training workers for jobs with limited demand or with credentials employers do not value. This $8.5 billion package of proposals includes:

I am working closely with the Vice President to continue other evidence-based efforts to replicate approaches that have been proven to work, move funds from those that have not, and continue to encourage and evaluate innovative and promising strategies. As that process unfolds, there are steps that we can take right away. The Budget proposes to maintain a strong foundation with funding for existing programs, while taking steps to foster innovation and improvement. The Budget includes:

PROTECTING AMERICA'S WORKERS AND THEIR INCOME AND RETIREMENT SECURITY

Worker protection programs are crucial to protecting the health, safety, wages and working conditions of America's workers. The American people rely on the Department to fulfill our responsibility to make these protections not just words in the statute books, but real safeguards against threats to their lives and livelihoods. The Budget includes nearly $1.9 billion for the Department's worker protection agencies. Some highlights of our worker protection request include:

In addition, the Budget request includes legislative proposals to modernize two worker benefit programs to improve the operation of both programs.

ADDITIONAL PRIORITIES

The Department's budget request also includes other programmatic increases outside the training and employment services and worker protection areas that support the well-being of American workers.

CONCLUSION

In FY 2015 the Department of Labor will strive to advance our mission of serving American workers and employers and to build the foundation for our next 100 years. Our request helps create opportunities for working Americans by investing in skills and our enforcement infrastructure. The Budget will help ensure that the Department has the resources to lead the job-driven workforce system to hone the job skills of American workers; bolster efforts that address long-term unemployment; maintain safe and healthy workplaces; strengthen worker voice in the workplace; safeguard critical minimum wage and overtime protections for workers; and ensure secure retirements. The Department's budget request is really a request to invest in the opportunity and potential of the American people.

That's why I am so eager to tackle these challenges every single day. As it's been for all 101 years of our existence, I believe the work of the Labor Department is the work of America.

Mr. Chairman, thank you for inviting me today. I look forward to working with you during the coming year and I am happy to respond to any questions that you may have.