Trump’s 20 Percent Cut in Labor Budget Aims at Job Training

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By Ben Penn

The White House asked Congress to reduce Labor Department spending by $2.4 billion in fiscal year 2018, a roughly 20 percent decrease that would largely be accomplished by slashing the nation’s workforce training programs.

President Donald Trump May 23 requested a $1.3 billion cut in Workforce Innovation and Opportunity Act grants for adult, youth, and dislocated worker training programs that have previously garnered bipartisan support. That would represent a 39 percent reduction. The White House justified this decision by citing evaluations of workforce programs showing a “mixed record of effectiveness.”

“My thinking is that these cuts are dead on arrival, given that WIOA was just recently passed on such strong bipartisan support,” Maria Flynn, president of Jobs for the Future, told Bloomberg BNA. “I think it’s hard to justify this dramatic approach to cutting the system.” Flynn was a senior career executive at the DOL’s Employment and Training Administration in the Bush and Clinton administrations.

WIOA, which funds 33 job training programs across the U.S., was signed into law in 2014 after overwhelming approval in the Senate (vote count of 95-3) and the House (415-6).

Like any presidential budget request, this proposal is an opening bid that may not influence what Congress ultimately appropriates. But the significant cuts requested to programs administered by the ETA signal that ongoing implementation of the GOP-backed overhaul of the nation’s job training system may no longer be a priority for the Trump administration. The overall cut to ETA would be $2.25 billion, or about 25 percent.

“I think with a more streamlined budget, ETA can achieve its mission,” Vincent Vernuccio, a former Trump DOL transition official, told Bloomberg BNA. “It’s just spending the money wisely and targeting it to the people who truly need it.”

Vernuccio has now returned to his job as director of labor policy at the Mackinac Center for Public Policy.

Disconnect to Trump’s Message

The proposal is already being interpreted by some as inconsistent with Trump’s broader jobs agenda, which prioritized returning displaced factory workers to the labor force.

“These kinds of deep and devastating cuts to job training for dislocated and disadvantaged workers will make it extraordinarily difficult to rebuild a strong and successful middle class in America,” Seth Harris, deputy labor secretary in the Obama administration, told Bloomberg BNA. “American workers need 21st century skills and the public workforce system is one of the principal places that workers go to acquire those skills.”

Harris is now an attorney in Washington and a visiting scholar at Cornell University.

The budget calls for shifting funding responsibility for the workforce grants to states, localities and employers.

While the nation’s job training system does require private-public investments, “I just don’t see how—particularly state and local governments—are in a position to make up the gap that they’re proposing,” Flynn added.

Wage-Hour Bump for Compliance Aid

Among enforcement agencies, the president proposed a slight bump in Wage and Hour Division spending, to $230.1 million from $227.5 million in FY 2017. In a sign of changing priorities, that’s still nearly $50 million less than what President Barack Obama requested last year for the agency charged with enforcing minimum wage and overtime laws.

The extra $3 million at WHD is to provide “effective compliance tools that support the employer community,” the DOL budget request states. The compliance aid language adds to the likelihood that the division plans on reverting to traditional GOP enforcement strategies that emphasize employer cooperation over double damages and targeted investigations.

The Office of Labor-Management Standards, which oversees union disclosure requirements, would get a 22 percent boost to $46.6 million in FY 2018. About $1.7 million of the program increases would be dedicated to the restoration of an office from the George W. Bush administration that was designed to audit large international unions. The Obama administration disbanded the office, which has been criticized by Democrats for harassing unions rather than improving transparency for members.

“Unfortunately, OLMS has been on the chopping block for the last eight years, and an increase is needed to tell union members exactly how their hard-earned dues are being spent,” said Vernuccio, who was also an assistant to Bush’s Labor Secretary Elaine Chao.

The White House also proposed taking a 77 percent hack at the Bureau of International Labor Affairs (ILAB), to $19 million from $86 million. That comes despite the urging of the business and labor communities to maintain ILAB funding to ensure U.S. workers are competing on a level playing field abroad.

The Bureau of Labor Statistics, another DOL subagency to attract controversy under Trump, would see its funding hold mostly steady at $543 million. Trump’s claims on the campaign trail last year that the BLS produces “phony” jobs report data generated concerns from some economists that he might try to slash the statistical agency’s funding. But those fears weren’t realized in Trump’s initial budget request.

The proposal follows up on the White House’s March release of a “skinny” budget blueprint, which didn’t include a subagency breakdown.

Acosta to Testify

A spokeswoman for Rep. Tom Cole (R-Okla.), chairman of the labor appropriations subcommittee, directed Bloomberg BNA to a statement from Rep. Rodney Frelinghuysen (R-N.J.).

“As outlined in the Constitution, the Congress, not the Executive Branch, has the ‘power of the purse,’” Frelinghuysen, who chairs the House’s overall appropriations committee, said. “It is our job to analyze the request, go through each and every budget line, question every witness, and demand spending justifications on behalf of the taxpayers who are footing the bill.”

Labor Secretary Alexander Acosta will eventually testify before Cole’s subcommittee and a companion Senate panel in defense of the budget. Hearing dates have not yet been announced.

“This budget reflects the Department of Labor’s core mission and commitment to ensuring all Americans have access to good, safe jobs—and does so in a fiscally responsible way,” Acosta said in a statement.

Jasmine Ye Han contributed to this report

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; Christopher Opfer at copfer@bna.com

For More Information

Text of the DOL budget proposal is available at http://src.bna.com/o8L.

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

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