May 04 2011

Shelby: Labor Spending Reductions Do Not Go Far Enough

U.S. Senator Richard Shelby (R-AL), ranking Republican on the Appropriations Subcommittee on Labor, Health and Human Services, Education, and Related Agencies (Labor/HHS), today made the following statement at a committee hearing to examine the Fiscal Year 2012 Budget Request for the Department of Labor.

Excerpts of Shelby’s statement are immediately below in bold, followed by the full text of his prepared remarks:

“We are in difficult economic times.  The unemployment rate is 8.8 percent.  When you consider the underemployed and those who have stopped looking for work – which the Department of Labor does not incorporate in their unemployment statistics – the real unemployment rate is actually much higher at 16.2 percent.

“I do not believe a 5 percent reduction within the Department of Labor goes far enough.  In this difficult economic environment, we need to cut spending today.  To get federal spending under control in the long term, we must reduce spending in the short term.

“To the greatest extent possible, we should not have duplication within the federal government, and certainly not within one Department. 

“How can this Subcommittee make funding decisions without having thorough reviews of programs?  We should have clear metrics and a results-driven evaluation process to ensure we fund only the most successful programs.

“We need to work together to reduce excessive burdens on businesses and job creation while still maintaining workplace health, safety, and basic employment protections.”

OPENING STATEMENT OF SENATOR RICHARD C. SHELBY

FY2012 Budget Hearing on Department of Labor

May 4, 2011

“Thank you, Mr. Chairman.  Madam Secretary, I look forward to hearing your testimony today on the fiscal year 2012 budget request. 

“We are in difficult economic times.  The unemployment rate is 8.8 percent.  When you consider the underemployed and those who have stopped looking for work – which the Department of Labor does not incorporate in their unemployment statistics – the real unemployment rate is actually much higher at 16.2 percent. 

“The federal deficit is $1.65 trillion.  In fiscal year 2012, we need to make cuts to our discretionary budget.  The Department of Labor’s fiscal year 2012 budget request reduces federal spending by 5 percent compared to fiscal year 2010 levels.

“While the Department of Labor should be recognized for cutting spending, a feat not accomplished by every Department in fiscal year 2012, I do not believe a 5 percent reduction within the Department of Labor goes far enough.  In this difficult economic environment, we need to cut spending today.  To get federal spending under control in the long term, we must reduce spending in the short term.

“The first place to begin to reduce expenditures is by eliminating duplication among Department of Labor training programs.  On March 1, the Government Accountability Office (GAO) released a report on duplication within federal programs.  I am concerned that forty-four of the forty-seven federal employment and training programs GAO identified overlap with at least one other program. 

“I would think we could all agree that providing the same services to the same population but through separate administrative structures does not make sense.  Many federal workforce programs meet important skill needs, but the workforce system could be better aligned across agencies and streamlined to ease access for both workers and employers. 

“While I understand implementation could be challenging, co-locating services and consolidating administrative structures would increase efficiencies and reduce costs.  To the greatest extent possible, we should not have duplication within the federal government, and certainly not within one Department.  The GAO report makes a number of recommendations that would move this system in that direction and I think our Subcommittee needs to seriously consider them.

“Second, as the GAO report pointed out, we do not know the effectiveness of most Department of Labor programs.  In last year’s testimony before this Subcommittee, Madam Secretary you stated that you understand the importance of evaluating Department of Labor workforce programs and you have “a new commitment to program evaluation.”  A year later, I see few results. 

“Job Corps has not had a rigorous evaluation since 2003.  The programs funded under the Workforce Investment Act were supposed to be evaluated in 2005 and now we will not have results until 2013.  How can this Subcommittee make funding decisions without having thorough reviews of programs?  We should have clear metrics and a results-driven evaluation process to ensure we fund only the most successful programs.

“Finally, over the past ten years, the federal government’s regulatory reach has greatly expanded.  The Administration continues to want to extend that reach, even though costly new regulations are oppressing economic growth in the business community.  According to the Center for the Study of American Business at Washington University, $1.3 trillion is lost each year in total US economic activity due to federal regulations throughout our government.  We need to work together to reduce excessive burdens on businesses and job creation while still maintaining workplace health, safety, and basic employment protections. 

“I am particularly concerned regarding draft rule proposals on welfare benefit plan disclosures and on the definition of a fiduciary.  I will have questions for the record on both of these topics.

“Thank you, Mr. Chairman.  I look forward to working with you as we move forward with the Fiscal Year 2012 appropriations process.”