Labor Secretary, Senators Spar Over Trump Budget Cuts

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By Ben Penn

Senate pursestring holders from both parties dismissed the labor secretary’s plan to slash his own budget by 20 percent, serving notice to the White House that the Labor Department budget drafting process starts over in Congress.

“This year the department has submitted a budget that so significantly cuts programs or eliminates them altogether that it’s really tough for us to figure out your priorities,” said Sen. Roy Blunt (R-Mo.), chairman of the labor appropriations panel, in remarks to Labor Secretary Alexander Acosta. “I’m concerned that reducing funding so much and so suddenly—and particularly taking so much of that from worker training—would further jeopardize our workforce development efforts.”

Speaking at a Senate subcommittee hearing on the Labor Department budget proposal, both Acosta and Blunt indicated a willingness to work together on a spending compromise. After President Donald Trump called for eliminating 20 percent of the department’s appropriations for fiscal year 2018, mostly via workforce training reductions, the budget proposal has widely been considered dead on arrival.

Blunt, in an interview after the hearing, suggested Congress isn’t using the White House plan as a blueprint. When asked if the eventual spending package for fiscal year 2018 will come anywhere close to the 20 percent decrease suggested by Trump, Blunt told Bloomberg BNA, “I wouldn’t think so.”

The chairman said he’ll be responding to the White House plan just as he would under the prior administration. “President Obama’s budget was equally unlikely to be followed as a guideline,” he said.

Acosta Touts State Flexibility

Acosta, in his first Senate testimony as a Trump Cabinet member, was optimistic about his agency’s ability to facilitate job growth, even when facing “hard but responsible” budgetary choices.

But he was pressed by Blunt and the subcommittee’s top Democrat, Sen. Patty Murray (Wash.), about his proposal to eliminate job training grants that are already authorized by Congress with overwhelming bipartisan support.

The labor secretary deflected criticism by pointing to the benefits of states absorbing the financing.

“The current budget proposes to further increase that flexibility to the states in how they can allocate their money, which is an important action,” Acosta said. “Ultimately, governors and localities are those that best focus the money within their jurisdiction.” But Murray wasn’t satisfied with this response, citing governors who have said they can’t cover the costs to fund job training centers without federal support. House lawmakers are expected to soon unveil their own funding legislation. The House labor appropriations subcommittee heard testimony from Acosta earlier in June.

Where Are Nominees?

Sen. Lamar Alexander (R-Tenn.) veered the discussion momentarily away from the budget and over to an issue of interest to him as chairman of the Senate Health, Education, Labor and Pensions Committee.

“When are we going to get some more nominations from your department?” Alexander asked, referring to the White House’s slow start in tapping DOL personnel.

“I am approaching my own 60-day mark as secretary and I have set as a personal goal to have the vast majority of my sub-department leadership identified and in clearance by the 60-day mark,” Acosta responded. “I believe that goal can be reached.”

It is now exactly 60 calendar days since Acosta was sworn into office April 28. After Acosta selects candidates for senior DOL posts, they must still undergo a thorough White House vetting process that has been the cause of delays at multiple Cabinet agencies. Thus far, the only White House DOL nominee besides Acosta is Patrick Pizzella for deputy labor secretary.

Alexander said his committee has the ability to swiftly advance appointees to the Senate floor but that he’s frustrated by the Trump administration’s slow pace in presenting him with nominees.

Fiduciary Rule Coordination

The secretary also provided an update on new inter-agency coordination in the department’s ongoing review of the hotly contested fiduciary rule.

Sen. James Lankford (R-Okla.) queried Acosta on whether the DOL has been corresponding with the Securities and Exchange Commission on the regulation, which aims to reduce conflicts of interest for financial advisers giving advice to retirement savers.

“Previously the SEC did not work jointly with the Department of Labor,” Acosta replied. “I think the SEC has important expertise and they need to be part of the conversation.” Further, SEC Chairman Jay Clayton has indicated his willingness to get involved on the fiduciary rule, Acosta said.

The DOL is in the process of reviewing the more controversial parts of the rule that aren’t scheduled to go into effect until 2018.

To contact the reporter on this story: Ben Penn in Washington at bpenn@bna.com

To contact the editors responsible for this story: Peggy Aulino at maulino@bna.com; Terence Hyland at thyland@bna.com; Chris Opfer at copfer@bna.com

Copyright © 2017 The Bureau of National Affairs, Inc. All Rights Reserved.

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