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White House Proposes 11% Cut in Labor Department Spending (1)

Feb. 10, 2020, 4:01 PMUpdated: Feb. 10, 2020, 7:43 PM

The Trump administration wants to cut fiscal year 2021 spending on the Labor Department, National Labor Relations Board, and Equal Employment Opportunity Commission, reviving previous belt-tightening bids that have not been approved by Congress.

The White House budget request, released Feb. 10, seeks $11 billion for DOL next year, down 11% from the department’s current funding level. The NLRB would see a 10% spending slash, while the EEOC budget would slip by 7% under the proposal.

The annual request is an aspirational proposal that lays out policy priorities and spending suggestions, which Congress can consider or ignore when it begins negotiating appropriations later this year. The Trump administration’s effort to slash DOL funds, as in the prior three years, will likely be met with disapproval in the Democratic-majority House. But the Fiscal 2021 proposal marks the first time the DOL outlined its spending priorities since Eugene Scalia took over as labor secretary last fall.

“The President’s Budget sets forth the Administration’s plan for uplifting America’s workers,” Scalia said in a statement. “Whether it’s expanding access to apprenticeship programs, helping our transitioning service members enter the next phase of their careers, or providing options for paid family leave, the President’s Budget creates more opportunity for America’s workers to thrive in today’s strong economy.”

In April, Democrats in the House Appropriations Committee proposed hiking the DOL budget to $13.3 billion for FY 2020, highlighting the gap between Democrats and the White House on prioritizing the department’s efforts.

The latest budget proposal renews the administration’s call for paid parental leave for private sector workers. It also recommends a boost in H-1B filing fees “to fund training and education.” DOL has used those fees in the past to finance the expansion of apprenticeships through a new industry-led model.

The White House separately asked for $200 million to fund that initiative, known as Industry-Recognized Apprenticeship Programs. The apprenticeship initiative, which has yet to be launched, has been a key White House priority for the DOL, though enthusiasm in the workforce development community has waned due to uncertainties about funding and program parameters.

Union Oversight Bump

Consistent with previous years, a $1.3 billion trim proposed for the department targets the Employment and Training Administration, which typically accounts for about three-quarters of overall DOL spending. ETA spending would be cut by $1.2 billion, to $8 billion.

The White House called for closing down ineffective Job Corps centers overseen by ETA and consolidating the nation’s workforce development system, which is currently spread across 15 separate agencies. The budget would eliminate “programs that are ineffective, unproven, or duplicative,” the document stated.

The department’s union oversight agency, the Office of Labor-Management Standards, would get a 16% boost, to $50 million next year. The additional funding would go toward more audits and investigations into union officer elections, fraud, and embezzlement. The Trump administration’s prior attempts to bolster the office haven’t been passed into law, as Democrats and unions have expressed concern that the initiative is designed to harass the labor movement.

The DOL would see more than $300 million in savings over multiple years by moving the Bureau of Labor Statistics from its downtown Washington office to a building in Prince George’s County, Md., that houses the Census Bureau.

NLRB, EEOC Spending Down

The NLRB’s 10% proposed cut follows the administration’s previous unsuccessful attempts to trim spending at the board, which enforces labor rights in the private sector. Board spending would drop to $246 million, from $274 million, next fiscal year under the plan.

The proposal comes as the Government Accountability Office is looking into claims by a pair of Democratic lawmakers that the board deliberately underspent $5.7 million last year. The GAO dropped a similar review of the NLRB’s $3 million budget surplus in Fiscal Year 2018 after the board took unspecified action to address the issue.

The five-seat board, currently down to three Republican members, has overturned a number of Obama-era rulings during the Trump administration. It’s also finalizing three business-friendly regulations that would revise union election rules and narrow shared liability for companies in contract, staffing, and franchise relationships.

The White House requested $362 million to fund the Equal Employment Opportunity Commission, down from the nearly $390 million in discretionary funding the agency is estimated to receive this fiscal year. The agency enforces federal anti-discrimination laws in the workplace.

The Trump administration’s blueprint provides funding to execute the agency’s strategic enforcement plan, which extends through 2022. Top-line items within that plan include combating employment bias and promoting inclusive workplaces.

Republican EEOC Chair Janet Dhillon recently outlined her own goals for the agency, which include providing “excellent customer service” to workers filing bias claims against their employers and recognizing that litigation of job bias cases is “truly a last resort.”

The five-member panel—currently filled by Dhillon, fellow Republican Victoria Lipnic, and Democratic commission member Charlotte Burrows—has two open seats.

Federal Worker Compensation Trimming

The administration is seeking a 1% across-the-board pay raise for federal workers next January, along with a host of benefits changes that would have the effect of reducing overall compensation for agency employees.

The budget request would increase federal employees’ contributions toward their retirements and use the workers’ five highest salary years, rather than their three highest years, to calculate their pensions.

President Donald Trump has made similar benefits proposals in previous budget requests, and there is virtually no chance the Democratic-controlled House will allow the ideas to become law. The pay raise proposed for federal employees next January is also unlikely to be the final word on the subject: Trump, in his fiscal 2020 proposal, called for a pay freeze, but the administration and Congress ended up providing a 3.1% average pay raise for federal workers in January 2020.

The budget request also proposes to transition the existing civilian leave system—consisting of annual leave, sick leave, and other types of leave—to a new model that would combine all forms of leave into one new paid time-off category, except that disability leave would remain a separate category. Combined leave systems are “used in the private sector to grant employees maximum flexibility” in taking time off, the administration said.

(Updated with additional reporting)

To contact the reporters on this story: Ben Penn in Washington at bpenn@bloomberglaw.com; Chris Opfer in New York at copfer@bloomberglaw.com; Paige Smith in Washington at psmith@bloomberglaw.com

To contact the editors responsible for this story: Terence Hyland at thyland@bloomberglaw.com; John Lauinger at jlauinger@bloomberglaw.com

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