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DEPARTMENTS OF LABOR, HEALTH AND HUMAN SERVICES, EDUCATION, AND RELATED AGENCIES APPROPRIATIONS FOR /r1feteH3^ n- Y 4.AP 6/l:L 11/997/PT. I J JUL26l9% °% [NGSp,,, Departnents of Labor, Health and Hu... «2»W^«s«PsA/iSh|!s/5n L^• '-b, ^Sl U BEFORE A SUBCOMMITTEE OF THE COMMITTEE ON APPROPRIATIONS HOUSE OF REPRESENTATIVES ONE HUNDRED FOURTH CONGRESS SECOND SESSION SUBCOMMITTEE ON THE DEPARTMENTS OF LABOR, HEALTH AND HUMAN SERVICES, EDUCATION, AND RELATED AGENCIES JOHN EDWARD PORTER, Illinois, Chairman C. W. BILL YOUNG, Florida DAVID R. OBEY, Wisconsin HENRY BONILLA, Texas LOUIS STOKES, Ohio ERNEST J. ISTOOK, Jr., Oklahoma STENY H. HOYER, Maryland DAN MILLER, Florida NANCY PELOSI, California JAY DICKEY, Arkansas NITA M. LOWEY, New York FRANK RIGGS, California ROGER F. WICKER, Mississippi NOTE:UnderCommitteeRules,Mr.Livingston,asChairmanoftheFullCommittee,andMr.Obey,asRanking MinorityMemberoftheFullCommittee,areauthorizedtositasMembersofallSubcommittees. S. Anthony McCann, Robert L. Knisely, Susan E. Quantius, Michael K. Myers, and Joanne L. Orndorff, Subcommittee Staff PART 1 DEPARTMENT OF LABOR Page Secretary ofLabor 1 Employment and Training Administration/Veterans' Employment and Training 121 Enforcement Agencies/Bureau ofLabor Statistics 217 Occupational Safety and Health Administration 445 Justifications ofthe Budget Estimates 525 Printed for the use of the Committee on Appropriations DEPARTMENTS OF LABOR, HEALTH AND HUMAN SERVICES, EDUCATION, AND RELATED AGENCIES APPROPRIATIONS FOR 1997 HEAEINGS BEFORE A SUBCOMMITTEE OF THE COMMITTEE ON APPROPRIATIONS HOUSE OF REPRESENTATIVES ONE HUNDRED FOURTH CONGRESS SECOND SESSION SUBCOMMITTEE ON THE DEPARTMENTS OF LABOR, HEALTH AND HUMAN SERVICES, EDUCATION, AND RELATED AGENCIES JOHN EDWARD PORTER, Illinois, Chairman C. W. BILL YOUNG, Florida DAVID R. OBEY, Wisconsin HENRY BONILLA, Texas LOUIS STOKES, Ohio ERNEST J. ISTOOK, Jr., Oklahoma STENY H. HOYER, Maryland DAN MILLER, Florida NANCY PELOSI, California JAY DICKEY, Arkansas NITA M. LOWEY, New York FRANK RIGGS, California ROGER F. WICKER, Mississippi NOTE:UnderCommitteeRules,Mr.Livingston,asChairmanoftheFullCommittee,andMr.Obey,asRanking MinorityMemberoftheFullCommittee,areauthorizedtositasMembersofallSubcommittees. S. Anthony McCann, Robert L. Knisely, Susan E. Quantius, Michael K. Myers, and Joanne L. Orndorff, Subcommittee Staff PART 1 DEPARTMENT OF LABOR Page Secretary ofLabor 1 Employment and Training Administration/Veterans' Employment and Training 121 Enforcement Agencies/Bureau ofLabor Statistics 217 Occupational Safety and Health Administration 445 Justifications of the Budget Estimates 525 Printed for the use of the Committee on Appropriations U.S. GOVERNMENT PRINTING OFFICE 25-051O WASHINGTON 1996 : ForsalebytheU.S.GovernmentPrintingOffice SuperintendentofDocuments,CongressionalSalesOffice,Washington,DC 20402 ISBN 0-16-052788-0 COMMITTEE ON APPROPRIATIONS BOB LIVINGSTON, Louisiana, Chairman JOSEPH M. McDADE, Pennsylvania DAVID R. OBEY, Wisconsin JOHN T. MYERS, Indiana SIDNEY R. YATES, Illinois C. W. BILL YOUNG, Florida LOUIS STOKES, Ohio RALPH REGULA, Ohio TOM BEVILL, Alabama JERRY LEWIS, California JOHN P. MURTHA, Pennsylvania JOHN EDWARD PORTER, Illinois CHARLES WILSON, Texas HAROLD ROGERS, Kentucky NORMAN D. DICKS, Washington JOE SKEEN, New Mexico MARTIN OLAV SABO, Minnesota FRANK R. WOLF, Virginia JULIAN C. DLXON, California TOM DELAY, Texas VIC FAZIO, California JIM KOLBE, Arizona W. G. (BILL) HEFNER, North Carolina BARBARA F. VUCANOVICH, Nevada STENY H. HOYER, Maryland JIM LIGHTFOOT, Iowa RICHARD J. DURBIN, Illinois RON PACKARD, California RONALD D. COLEMAN, Texas SONNY CALLAHAN, Alabama ALAN B. MOLLOHAN, West Virginia JAMES T. WALSH, New York JIM CHAPMAN, Texas CHARLES H. TAYLOR, North Carolina MARCY KAPTUR, Ohio DAVID L. HOBSON, Ohio DAVID E. SKAGGS, Colorado ERNEST J. ISTOOK, Jr., Oklahoma NANCY PELOSI, California HENRY BONILLA, Texas PETER J. VISCLOSKY, Indiana JOE KNOLLENBERG, Michigan THOMAS M. FOGLIETTA, Pennsylvania DAN MILLER, Florida ESTEBAN EDWARD TORRES, California JAY DICKEY, Arkansas NITA M. LOWEY, New York JACK KINGSTON, Georgia RAY THORNTON, Arkansas FRANK RIGGS, California JOSE E. SERRANO, New York MIKE PARKER, Mississippi RODNEY P. FRELINGHUYSEN, New Jersey ROGER F. WICKER, Mississippi MICHAEL P. FORBES, New York GEORGE R. NETHERCUTT, Jr., Washington JIM BUNN, Oregon MARK W. NEUMANN, Wisconsin James W. Dyer, Clerk and StaffDirector (ID DEPARTMENTS OF LABOR, HEALTH AND HUMAN SERVICES, EDUCATION, AND RE- LATED AGENCIES APPROPRIATIONS FOR 1997 Tuesday, May 7, 1996. SECRETARY OF LABOR WITNESS hon. robert b. reich, secretaryof labor Introduction of Witnesses Mr. Porter. The subcommittee will come to order. We continue our hearings today with the Department of Labor. Mr. Secretary, we welcome you back before the subcommittee to discuss your 1997 budget request. I believe this is the fourth time that you have appeared now before the subcommittee on behalf of your budget. Secretary Shalala appeared here a few weeks ago and Secretary Riley will be here on Thursday. The fiscal year 1996 budget process was very difficult and a try- ing one for all of us. The final bill that was produced probably didn't satisfy any one very much. But under the circumstances, it was probably the best we could do. We hope and expect that the 1997 process will be somewhat smoother and will hopefully con- clude much faster. We will have serious disagreements over fund- ing levels and some policy matters, but I believe that we can work together to resolve them for the good ofthe country. Mr. Secretary, I want to take a minute and thank your staff at the Department for its very hard and excellent work in producing the fiscal year 1997 budget justifications and other documents in a very expeditious manner after the enactment of the final 1996 appropriations bill just a couple of weeks ago. We asked your staff to withhold preparation of the documents until we had a final appropriations bill for 1996 so that we could have meaningful num- bers and comparisons. They agreed to do that and now we have some very useful documents to help us in producing a 1997 appropriations bill. Their cooperation and yours is very much appre- ciated. Mr. Obey is not here with the many duties that he has, but when he does come here I will ask him ifhe would like to make an opening statement as well. Now, Mr. Secretary, we welcome you and ask you to proceed with your opening statement. (l) Opening Statement Secretary Reich. Thank you very much, Mr. Chairman and dis- tinguished members of the subcommittee. I am pleased to be here today to discuss the Department's accomplishments and our request for fiscal year 1997. I would first like to thank you Mr. Chairman and other members of the subcommittee, and when Mr. Obey arrives I would like to thank him. This was, as you said, an extraordinarily difficult year. You and I communicated a great deal. I found your knowledge and insight and help a kind and reas- suring voice all the way along. And there were policy differences, and there will continue to be policy differences, but I think that because of the hard work of this subcommittee and your staff and all of us, we got through the budget debate and we did very well. This was a long and hard and grueling exercise. We can now get on with this year and hopefully we can get on with next year. The Department's fiscal year 1997 budget proposals support the President's goals by working in partnership with American business and also enhancing the skills of American workers. What I would like to do, with your permission, is submit my formal com- ments to the subcommittee and just highlight what I believe are some of the most interesting and important issues we have for the coming year. As you know, our budget is built on the foundation ofaccomplish- ments that resulted from several interrelated tasks and goals of the Department of Labor and I think the entire American society. One is a better prepared workforce. There is widespread agree- ment, I don't think there is anybody that disagrees. There maybe disagreements about method, that is how do you get the best preparation, but everybody agrees that we do need a better prepared workforce. And second, promoting workplace safety and health; third, ensuring pension security of America's working men and women; fourth, enforcing minimum wages and working conditions; and fifth, providing the best economic data we can to the United States, to the business community, to other members of the public. PAST YEAR ACCOMPLISHMENTS I would like to begin by mentioning just a few of our major accomplishments during this past year, and it was a difficult year. It was difficult to manage through the uncertainties, and I am sure it was difficult for all of you. To begin, we did manage under our School-to-Work program to award grants to 19 States. We also increased total School-to-Work States to 27. These grants make it possible to provide opportunities for hundreds of thousands of students to prepare for careers. Mr. Chairman, as I travel around the country I am impressed repeatedly by what I hear and what people tell me about School-to-Work, that it is working, that it's keeping kids in school, that it's having a big impact. We increased Job Corps placements injobs paying over $6.00 per hour and that increase was 37 percent, a 37 percent increase in Job Corps placements over $6.00 an hour. The effectiveness of Job Corps is continuing to improve and there is a greater emphasis on performance standards. Some 73 percent of Job Corps graduates have been placed in jobs or further education overall. Mr. Chair- man, I know how you and other members of the subcommittee are interested in knowing what works, actually having the data. I will try to give you as much as I can in my testimony and within the questions and answers back and forth because we have more evi- dence about what works and we are shifting more resources in the direction ofwhat does work. Summer employment, provided opportunities to about half a million young people during the summer of 1995, with two out ofthree enrolled in education services. Again, we know this program helps youth stay in school and gets them back to the road toward better jobs. One-Stop Career Centers, we've talked about this for the past couple ofyears, implementation grants went out to 10 States which increases the total to 16 States. Now, 6 of these States have al- ready opened the doors to 26 new One-Stop Centers, another 27 new One-Stop Centers in the next three months. These are taking off. Individually, I've had the opportunity to talk with many ofyou about One-Stop Centers. These centers are the building blocks for consolidation of the workforce development system. We're hoping that the new Careers Act legislation will facilitate this consolidation. But the key building block is the One-Stop Center and we are moving on that. Another key building block of the Careers Act and the One-Stop Center is information about what jobs are available, where they are, and who has the best placement rates. We are implementing America's Job Bank data base on the Internet. That is a 24 hour a day web site providing access to 400,000 job openings daily. In fact, I'm told that during the month of April just ending, there were 5,000,000 visits to that particular place on the Internet. This is one of the most popular places on the Internet. This is another example ofhow we are not only keeping up, but ahead ofwhat people actually need and we're responding to those needs. Regarding worker protections, let me just highlight a couple of things. Our campaign against sweatshops in the United States is continuing. We recovered more than $1.1 million for 2,800 workers by conducting 550 investigations to eradicate sweatshops in the garment centers of this country, and I'll talk more about that in a little while. It is a very important part of the Government's policy to discourage undocumented aliens, among other things. Obviously, it's important on its own grounds to make sure that people are not working in sweatshops in the United States. With regard to 401(k) pensions, we have taken steps, as some of you know, to make sure that the system is working even better. It is a sound system. Every time I talk about it I emphasize the 401(k) system is a good system, but it is growing so fast that we have got to make sure that there are not a few apples in that bar- rel that are going to divert wittingly or unwittingly 401(k) con- tributions to purposes other than into 401(k) plans. We've recovered $3.3 million for 401(k) plan participants and $192 thousand for health care plan participants as part of our pension and health care enforcement actions. We've increased special mine inspections aimed at discrete haz- ards by 30 percent over the past year. With regard to OSHA reforms, and I know several of you are interested in this, based on the exceptional success with the Maine 200 Program, similar programs in Wisconsin and New Hampshire are achieving positive results. This program, again, for those ofyou who may not have been following this, this is a program that really encourages manage- ment and employees to work together to promote safety. We've had enormous progress and shown great results in Maine. We are promoting this program around the country. We accomplished these items and others that are listed in my formal testimony and many others that we didn't even list, com- pleted under the most difficult circumstances faced by the Depart- ment due to, again, seven months offunding uncertainty. Congressman Obey, before you walked in I complimented you. I want to compliment you as well as the Chair for your valiant efforts on behalf of the Department and the American people in terms of getting a compromise on the FY 1996 appropriations. Al- though a lot of people worked very, very hard and it took a long time to come, everyone is extremely appreciative ofyour efforts, the Chairman's efforts, this subcommittee's efforts to make that hap- pen. BALANCED BUDGET While the President's budget proposes to balance the budget by the year 2002, I want to remind the committee that he has stead- fastly supported education andjob training along with basic worker protections of health, safety, pensions, wages, hours, and working conditions, and the prevention ofjob discrimination. And, our fiscal year 1997 budget request reflects those priorities. I want to remind you also that although the Labor Department only represents a little over 2 percent ofthe entire domestic discretionary budget in the United States, we have enormous responsibilities, the committee has enormous responsibilities, and we are proceeding on the basis ofvery limited resources to fulfill those responsibilities. CAREERS ACT Just before I get into a little bit more detail on job training, the job training legislation now pending before Congress, I mentioned before that the Careers Act would significantly reform the delivery of employment and training programs. I am hopeful that Congress can work out its differences soon. This is a bipartisan bill and this represents many of the objectives we have been talking about for several years in terms of consolidating job training programs, providing people with good information, accurate information, and ideally vouchers so if they've lost a job they can get training when they need it under circumstances that they need it. The collapse of separate training programs, streamlining access, injecting choice and responsibility does have bipartisan support and I'm hopeful that we can get it done in this Congress. Again, one of the keys to that consolidation is "One-Stop shop- ping." The Administration is requesting a total of $1.3 billion to We provide services to 636,600 dislocated workers. are also requesting $947 million to assist approximately 407,000 economically disadvantaged adults. These funds, totalling $2.2 billion, will be used by States and localities to provide services to the disadvantaged and to dislocated workers both for training and other services available through the one-stop system. To help the transition to the new workforce delivery system that I mentioned to you a moment ago, we're also seeking authority to give States and localities flexi- bility to move up to 20 percent between programs for disadvantaged under Title II-A and also dislocated programs under Title III. The administration is also requesting a total of $2.6 billion for several programs that assist young people in making a successful transition to the world of work and family responsibility. First, the Department of Education and Labor requests $200 million each to continue assisting States to develop and implement School-to-Work systems. Congress passed, as you know, the School-to-Work Ap- prenticeship Opportunities Act in 1994 on a bipartisan basis. Since then, 27 States have received implementation grants, 44 States have received planning grants. This, I would like to remind the subcommittee, is a very different conception offederalism because this is a competitive grant system, this is not a formula-based system. We are saying to each locality that is competing you have to meet certain very specific but very simple objectives in terms of leveraging this money. This is working very well. It's only a five year program that will be phased out. Again, a kind of seed capital program. We are asking, again, $200 million each for Education and Labor. In order to assure that low income young people have an opportunity to gain that first job, use some of the skills they've learned in school and build their knowledge of the demands of the workplace, the Department also requests $871 million for summer youth employment and training opportunities for 574,000 low income youth across the United States. We're also asking $127 million for year-round services for 75,900 low income youth, many of whom are no longer in high school. These combined funds will help support efforts by workforce development boards to assure that at-risk young people will be served in some modest way in the new employment and training system. In anticipation of the new legislation, we're also seeking contin- ued authority to permit States and localities to transfer up to 100 percent offunds between the summer and the year-round programs in accordance with needs as determined by decision-makers on the scene, not far away in Washington, D.C. The administration also requests $1.2 billion for Job Corps to support a total of 119 centers, including four new centers which were previously approved by Congress. Again, I want to remind the subcommittee these centers continue to serve some ofthe most disadvantaged young people in the United States, both school and work-based learning in a residential setting. Job Corps is the Na- tion's largest employment and training program for at-risk youth. The current program operates 110 centers in 46 States and over the next 2 years, as I've said, we'll be opening nine new Job Corps centers. One, Mr. Chairman, I am happy to say is in Chicago and is scheduled to open in the fall of 1997 to serve approximately 350 students. OPPORTUNITY AREAS FOR OUT-OF-SCHOOL YOUTH But even with school-to-work reforms, year-round and summer youth employment programs, and the Job Corps, the problems fac- ing impoverished young people, particularly those who are out of school, are enormous. In some high poverty urban neighborhoods dropout rates exceed 60 percent and less than half of all out of school youth are employed. Among male high school dropouts, in some poor areas three-quarters of those between 25 and 34 are un- employed. I don't have to remind this subcommittee about the ex- pense and cost to society because of the difficulty in effectively serving youth in high poverty areas. The administration is also requesting $250 million for a pilot project we call "Opportunity Areas for Out-of-School Youth." We would welcome the opportunity to work with the subcommittee on its details. Essentially, this pilot project would increase employment among out-of-school youth in high poverty areas to 80 percent; that's our goal. Again, it would be a competitive grant system like School-to- Work that would phase out after five years. Federal funds would be competitive seed grants used to leverage State and local as well as private funds to sustain public-private efforts to train and em- ploy youth residents in private sector jobs. The Federal share would decline over five years as the share funds from other sources increased. Again, the School-to-Work model has worked so well and this is such a very difficult population to serve that we wanted to try it. WORKER PROTECTION With regard to protecting workers, very briefly, in fiscal year 1997 the Department is requesting $85.4 million for the Pension and Welfare Benefits Administration. This increase of $11 million will enable the PWBA to complete the design and development of the electronic filing initiative. This initiative which was rec- ommended by the Vice President in the Report on the National Performance Review will work towards a new system and computer software for the processing ofthe form 5500 series offinancial data required under ERISA. The IRS and the Pension Benefit Guaranty Corporation will also benefit from this new system in terms of effi- ciencies. An additional $4.4 million and 44 full time equivalent personnel is requested for 401(k) enforcement. This has become increasingly important, having increased from 17,000 plans covering 7.5 million people in 1984 to 140,000 plans covering 22 million in 1992. An increase of $2 million is requested for our public education and as- sistance programs to make sure that wittingly or unwittingly these funds are not diverted. ILLEGAL IMMIGRATION The Department has included an increase of $15.2 million and 200 full time equivalent personnel to curb illegal immigration through stronger worksite enforcement. This is particularly for in- dustries and in areas of the country where we have had problems with undocumented aliens. The Department's primary role will be to reduce the economic incentive to hire illegal workers through