Trump’s Labor Budget May Set Off Political Fireworks

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By Ben Penn

A White House budget blueprint expected March 16 is likely to contain cuts in Labor Department funding that could reignite a political debate over President Donald Trump’s job growth promises.

“You can’t really be serious about creating jobs” if you cut appropriations for DOL job training programs such as apprenticeships, Rep. Rosa DeLauro (D-Conn.), the top Democrat on the House labor appropriations subcommittee, told Bloomberg BNA. “It’s just a lot of loose talk.”

The administration has said the president’s “skinny budget” release will seek to offset a $54 billion boost in defense and security spending by cutting domestic agency funding. The DOL is considered primed for an overall reduction somewhere around 10 percent for fiscal year 2018.

It remains to be seen whether the White House will specify funding at the subagency level this week or save that for a full budget request later this year. The Employment and Training Administration could be perceived by the White House as having the most fat to trim. But it may also be seen as the agency best positioned to deliver on the president’s vow to be “the greatest jobs producer that God ever created.”

Currently, the Employment and Training Administration receives about 75 percent of the DOL’s $12.2 billion in overall discretionary funding. That money is largely filtered to state unemployment insurance programs and thousands of job training providers and not spent in Washington.

Potential reductions at enforcement agencies will also be closely monitored. A spending proposal that trims the Wage and Hour Division and Occupational Safety and Health Administration could give Democrats fodder to blame Trump for failing to protect workers from minimum wage and overtime violations and dangerous working conditions.

Can Tax Cuts Bring Jobs?

The administration would likely seek to deflect such criticism by pointing out other White House initiatives, unrelated to the DOL, that would create jobs.

“The idea is to find budget cuts that will help pay for the tax cuts,” Diana Furchtgott-Roth, who served on Trump’s DOL transition team, told Bloomberg BNA. “I don’t see the budget cuts as affecting jobs. I see the tax cuts as having more influence on jobs created as companies come back to the United States.”

Furchtgott-Roth was the department’s chief economist from 2003 to 2005 and is now a senior fellow at the Manhattan Institute, a free-market-oriented think tank.

Absorbing Reduced Budget

The president’s opening bid likely won’t resemble what Congress ultimately appropriates, but Republicans have traditionally sought to decrease WHD and OSHA spending. In past GOP administrations, some of that funding was transferred to the Office of Labor-Management Standards for heightened scrutiny of alleged union corruption.

Subagencies tapped for budget cuts will be searching for ways to limit the effect on personnel, Mark Wilson, who held a range of senior DOL positions under the four presidents preceding Barack Obama, told Bloomberg BNA.

“The agencies are going to be working on doing whatever they can to maintain their employment levels but cut wherever they can on contracting, travel and other unnecessary expenses to the extent they can,” said Wilson, who is now chief economist and vice president of employment policy at the HR Policy Association.

Still, at the end of the day, the two chambers of Congress will dictate the allocations, and a proposal to significantly decrease workforce training funding would be contentious, said Jane Oates, former DOL assistant secretary for employment and training under Obama.

The ETA’s job training programs receive more bipartisan support than other DOL programs and affect constituents across every district.

“You’re going to have lots of people who are going to look at these cuts and say, what does that mean for jobs in my state?” Oates, now vice president for external affairs at the Apollo Group, told Bloomberg BNA. “So it’s not going to be an easy sell.”

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

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

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