Segment 1 Of 2     Next Hearing Segment(2)


 Page 1       TOP OF DOC    Segment 1 Of 2  

Thursday, February 5, 1998.







    Mr. PORTER. The subcommittee will come to order. Today is the first of three departmental overviews that we have scheduled for this year, where we have asked the GAO to help us look into the three departments, Labor, Health and Human Services and Education with a view to results in the implementation of the GPRA law. And today we are pleased to welcome Carlotta C. Joyner, the Director of the Division of Health, Education and Human Services dealing with education and employment issues who will fill us in on the situation at the Department of Labor.
 Page 2       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    Thank you, Ms. Joyner, for joining us.

    Ms. JOYNER. Thank you, Mr. Chairman and members of the subcommittee. I am very pleased to be here today. I would like to start by introducing, if I may, some of my colleagues I have asked to join me here who will assist me later in answering any questions that you might have.

    To my right is Sigurd Nilsen who is an Assistant Director for Education and Employment Issues. And to my left Senior Evaluators Lise Levie and Lori Rectanus. They have been three of the people who have been very much a part of the studies we have done about labor over the last few years.

    So, we are very pleased to be able to talk about the difficult management challenges that the Department faces in carrying out its mission in an efficient and effective manner.

    As you know, Labor has a budget of about $34,600,000,000 and about 16,700 staff for Fiscal Year 1998, with, as it states, its mission that of fostering and promoting the welfare of job seekers, wage earners, and retirees of the United States by improving their working conditions, advancing opportunities for profitable employment, and protecting their retirement investments.

    But, over the past few years, the U.S. work environment has changed in such a way that Labor's task is made more difficult now. The public is also demanding more assurance that their money is being spent in accordance with sound business practices.
 Page 3       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    So, I would like to discuss the Department of Labor's progress in implementing the strategic planning that is envisioned under the Results Act and also the challenge that they face in ensuring the effective information management that is necessary for the Department to fully realize the benefits of that planning.

    In summary, Labor's strategic planning efforts are still very much a work in progress. The strategic plan submitted as required on September 30th, 1997, addressed many of the concerns we had raised in our review of a draft plan submitted to OMB and provided to us for review four months earlier. But we remained concerned when we reviewed that plan about the Department's strategic planning and in general that it appeared to be more organizationally driven than mission focused. Our past work also raised some questions about how well it is meeting these information management challenges.

     I would like to say a bit more about both of those two points. Labor's overall strategic plan reflected its decentralized management structure and showed the difficulty that that structure presents for adopting the better management practices envisioned by the Results Act. That is, to articulate a comprehensive department-wide mission statement that is linked to results-oriented goals, objectives and performance measures and then monitoring the attainment of these results.

    We have a chart here that illustrates for you the 24 component offices of Labor that support its functional activities and it also has an additional 1,000 field offices. Labor chose to present individual strategic plans for 14 offices along with a strategic plan overview.
 Page 4       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    The strategic plan overview contained, as the chart will show, five department-wide goals that are generally results-oriented and then a sixth department-wide management goal. Goal one is life-long learning and skill development in promoting welfare-to-work, goal two—enhancing pension and health benefits security; three—safe, healthy and equal opportunity work places; helping working Americans balance work and family; and then a broad goal of maintaining a departmental strategic management process.

    When we reviewed the strategic plan, however, we were concerned about the lack of a department-wide perspective because the 15 agency goals, for example, were listed under goal four. Goal four is safe, healthy, and equal opportunity work places and it had within it 15 sub-goals that were really organizationally focused rather than reflective of goals in general that would be needed to achieve that mission.

    For example, there was no single goal of reducing work place fatalities, injuries and illnesses. Instead there were four separate goals, each of them relating to a particular kind of injury or illness in a work place that happened to be the responsibility of, for example, OSHA or MSHA or another entity.

    And our observation was that a more mission focused approach would improve their ability to identify ways in which they could improve their operations to minimize duplications or promote efficiencies.

    We did review their Fiscal Year 1999 performance plan, which was submitted this week, and found that it reflects a significant change and in response as they have stated to that review of our strategic plan—we just got the plans so I do not have a new term for that—but the Department now describes three goals rather than these six that were described in their September strategic plan.
 Page 5       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    They have now consolidated these goals to the first goal, which combines the previous goals one and two, which is to enhance opportunities for America's work force. A second goal combines former goals three and four, which is to promote the economic security of workers and families. And then the third goal foster quality work places that are safe, healthy and fair, picks up goal five and a part of goal four.

    The plan notes that this change was made in response to concerns raised by external reviewers, such as GAO, that the previous plan did not really reflect the integration and cross-cutting nature of the component units. They now see this as a one-department plan that will provide them a more unified approach.

    We have not reviewed in detail their performance plan but we certainly see this as a step in the right direction to unify this a bit more.

    On the other point of measuring performance, which is the next step required under the Results Act, Labor needs information that is sufficiently complete, reliable and consistent to be useful in their decision making. But our work has raised questions about how well Labor is meeting this management challenge.

    We have found data to be missing, unreliable, or inconsistent in agencies throughout the Department. Examples include, first, the Employment Training Administration has a lack of information to monitor and improve its timeliness in meeting employers' needs for temporary and seasonal agricultural workers under the H–2A program.

 Page 6       PREV PAGE       TOP OF DOC    Segment 1 Of 2  
    Second, there were questions of the reliability of some of OSHA's management information, data regarding the results of their inspections and also in ETA's database on the outcomes for Job Corps participants.

    Third, we have found inconsistent definitions of key program outcome data across multiple employment-focused programs. And our work has also identified a need for improvement in some of the information Labor provides for others to use, such as the prevailing wage rates under the Davis-Bacon Act, and the Consumer Price Index.

    In addition, Labor, as well as all other Federal agencies, must also address two information management issues that we have recently identified as high-risk because of vulnerability to fraud, waste, abuse and mismanagement and those are information security, which involves the agency's ability to protect information from unauthorized access, and the second requires Labor to rapidly change its computer systems to accommodate dates in the 21st Century.

    These two areas are just part of the management challenges organizations such as Labor face in the complex world of information management and technology. Others arise from the fact that Labor maintains multiple computer systems, operated by several computers with a variety of different architectural features such as the hardware of that operating systems and so forth throughout the department.

    This challenge to obtain reliable, complete, and consistent information is a very formidable one. And it is a complex problem but some solutions do exist. For example, as computer-based information systems have become larger and more complex over the last 10 years, we have become more aware of the importance of what is called a systems architecture and the Congress has recognized the importance of this as well by requiring that the Department-level chief information officer develop, maintain, and facilitate the implementation of an integrated systems architecture.
 Page 7       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    In conclusion, Labor's programs touch the lives of nearly every American because of the breadth of the Department's responsibilities. And like other agencies, Labor must focus more on the results of its activities and on obtaining the information it needs for more focused results oriented management decision making processes.

    The Results Act provides a framework for this and Labor has begun to make good use of it, but its decentralized structure makes it both more important and more of a challenge to achieve the results the act envisioned.

    The information systems of today also offer the Government and Labor unprecedented opportunities to provide high-quality services to the public and to enhance the quality and accessibility of information. It is extremely important for Labor to take advantage of these opportunities to improve its management information systems, we believe, if it is really to achieve what can be achieved through the Results Act.

    I will be glad to answer any questions. I have, of course, a longer statement I would like to submit for the record and if we can answer any questions, I would be happy to do that.

    Mr. PORTER. Your statement, of course, will be received for the record.

    [The information follows:]

 Page 8       PREV PAGE       TOP OF DOC    Segment 1 Of 2  
    "The Official Committee record contains additional material here."

    Mr. PORTER. Ms. Joyner, did you say that the Department had modified their strategic plan or they simply went ahead and adopted a performance plan that was built on it?

    Ms. JOYNER. What they have done in their performance plan reflects some changes essentially to the goals, for example, as they stated them at the time of their strategic plan. I do not know whether they now intend to create a new plan called a strategic plan as a result of those changes or whether they would do that at this time or wait for the next cycle.

    Mr. PORTER. Does GPRA require the strategic plan as well as the performance plan?

    Ms. JOYNER. Yes, it does. They were required by September 30th of 1997 to provide to the Congress a strategic plan. They met that date.

    Mr. PORTER. Well, it sounds like—this is my characterization—but it sounds like the strategic plan was not given a lot of very deep thought. It sounds like they kind of threw it together from each of their offices or agencies within the department never synthesized it into a comprehensive, logical whole.

    Is it fair to say that they have done better on the performance plan?

 Page 9       PREV PAGE       TOP OF DOC    Segment 1 Of 2  
    Ms. JOYNER. In the sense of overall, department-wide view of the goals and the agency goals and the performance goals related to that. They have definitely made progress. We reviewed a draft plan in the summer.

    There was progress from that plan to the final plan that was issued in September to overcome exactly what you have noted. The first one seemed to be very much just sort of an aggregation rather than an integration at all.

    And it has moved further now.

    Mr. PORTER. Recognizing that this is something that has not been done by Government departments at least formally before and in an organized way, you are looking at all cabinet agencies and all departments?

    Ms. JOYNER. Collectively GAO is looking at, I think, the 24 largest ones.

    Mr. PORTER. All right.

    Ms. JOYNER. And we are issuing a report. I think it was issued this week but not yet released that will summarize the results of our reviews of all of those, the reviews of the September 30th plans. So, that will be out. That was done for the House leadership and that will be available soon.

    Mr. PORTER. And your involved in many of those plans yourself?
 Page 10       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    Ms. JOYNER. My particular responsibility is for education and employment issues. And we reviewed the education and the labor plans and our observations about those two plans will be included in this overall report that has just been issued.

    We also, as a separate project, reviewed the plan for the National Labor Relations Board.

    Mr. PORTER. I would really like to know your opinion as to where the Labor Department stacks up as compared to other Government cabinet level agencies with respect to implementing the Results Act. Are they doing what we should and have a right to expect them to do or are they falling short? Are they in the middle, the top, or the bottom?

    Ms. JOYNER. Well, it is hard for me to generalize based on just the two. And one thing I would note is that the task facing Labor is, for example, quite different from that facing the Department of Education because of the diversity of its mission and its existing different component agencies, its history of having a separate OSHA, ETA, MSHA, et cetera.

    And, so, the option they chose was different from that of the Department of Education initially and it was one allowed by OMB which was to do separate unit plans and then prepare an overview and I think our sense is that it is both more important for them to do a good job of department-wide strategic planning but it is also more of a challenge than it would be for a less decentralized office or agency.

 Page 11       PREV PAGE       TOP OF DOC    Segment 1 Of 2  
    Mr. PORTER. They are responsible to and are being evaluated by OMB, with respect to GPRA and the plans and progress they are making on implementation, correct?

    Ms. JOYNER. Right. They had to submit their plans first to OMB and they got comments from OMB to which they presumably responded before they then submitted the plan to the Congress.

    Mr. PORTER. And by whose authority is GAO looking into each of these plans? Is that part of the law?

    Ms. JOYNER. No. In each instance, we just had a specific request as part of the assistance we would give to any committee on the Hill to look at those. For example, when we looked at the National Labor Relations Board that was a request from the Subcommittee on Human Resources from Government Reform and Oversight.

    The others are from, in general, from the House leadership, Mr. Armey and several others.

    Mr. PORTER. All right. So, they are responsible to OMB, and you are looking at them independently.

    Ms. JOYNER. Yes.

    Mr. PORTER. And we are trying to look at them from a congressional standpoint as well.
 Page 12       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    Ms. JOYNER. Right. And we are trying, we are just doing it to assist you, we are providing information we have been asked to provide to the Congress independently.

    Mr. PORTER. Are you providing your information to them?

    Ms. JOYNER. Yes.

    Mr. PORTER. So that they can take some suggestions?

    Ms. JOYNER. Absolutely. We are following our usual policies in the work that we do which is that we would prepare a draft report of our views and submit it to them for comment and then, for example, in the product that we issued with our comments on the June review of their plan we also included their comments about the plan. Ms. Rectanus was involved with that.

    And then we found in both instances in Labor when they issued their September plan, their final, if you will, strategic plan, they commented that some of those changes had been made as a result of our comments and those of the people with whom they consulted in the Congress. Similarly in the performance plan that has just been submitted along with the budget, they reflect that they have made some changes based on comments they have received from external reviewers.

    Mr. PORTER. Can we now look at your concerns about the department's evaluation process? You evidently feel that the department is not doing an adequate job of evaluating its programs. Is that a fair statement of your concerns?
 Page 13       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    Ms. JOYNER. There are two ways to look at that. One is that as far as discrete evaluation studies and how they use that information in developing their goals and objectives, we felt that they have not, they certainly did not describe them adequately in their strategic plan.

    And they acknowledge that in the regulatory areas they have not done as much of an evaluation study, if you will, when they have implemented a change in practice to design a study to see whether that is effective or not that they acknowledge that they have not done, and we have said in the past that they have not done enough of that sort of evaluation, for example, of OSHA's innovations or changes in practice.

    Another way of looking at this is the ongoing information they have to manage their programs and we do have concerns about that as well, that they sometimes do not collect the information we think they should collect in order to monitor the programs. For example, in the H–2A program we found that a third of their certifications did not meet the statutory deadline for timeliness. They could not tell us that, they did not even know that, they were missing the deadline. We had to go in and do the analysis and we have recommended that they collect the data to monitor and, thus, to improve their timeliness. That is an example, there are numerous others.

    Mr. PORTER. Thank you, Ms. Joyner. For the members of the subcommittee, we will operate under the five-minute rule. You notice that our staff now is armed with a timing device to remind us when our time is up. I will yield to members in the order in which they generally arrived and Ms. DeLauro, that would make you first.
 Page 14       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    Ms. DELAURO. I would be happy to let my senior colleague go.

    Mr. PORTER. Let me remind members of the rule. If you are ranking on another subcommittee and have a responsibility there we would defer to such a member, otherwise, I would like to go in the order in which we arrived.

    Ms. DELAURO. Fine.

    Mr. PORTER. So, if Lou has responsibilities that is fine.

    Mr. STOKES. Mr. Chairman, Ms. Delauro was ahead of me and right now I am not in hearing. So, I do not have to get away. I will defer.

    Mr. PORTER. Good, Ms. DeLauro?

    Ms. DELAURO. Thank you very much. Thank you, Mr. Chairman.

    Thank you for being here. I appreciate it.

    Let me try to get a framework in my mind here. There was a strategic plan which you did not feel dealt with or the department did not feel dealt adequately with integrating the mission with the operation and then so that the department submitted another report, a strategic plan that was to have addressed the problems that you identified in their first strategic plan that came forward, is that correct?
 Page 15       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    Ms. JOYNER. Let me clarify about what we are doing.

    Ms. DELAURO. Exactly.

    Ms. JOYNER. Okay. They were required by the end of September to issue a strategic plan and to deliver that to Congress. We were asked before they had prepared that we were asked to evaluate a draft plan earlier in the summer and we published some comments about that which they said they incorporated into revisions that they made in the September plan. So, there was one formal, final plan in September and we have since reviewed that and had some continuing concerns.

    Now, the most recent plan in which they have consolidated the goals is a different plan. It is called the annual performance plan and that is one that they were required this year for the first time to submit along with their budget proposal for Fiscal Year 1999.

    And in that plan they were supposed to go from the goals, strategic goals, to specific performance goals to take the general and make them specific and indicate some very precise measures and, you know, what percent do I hope to achieve on this?

    In the process of doing that they apparently concluded that they did not want to tie those performance goals to the goals they had originally stated. They felt a need to improve those goals.

    Ms. DELAURO. Okay.
 Page 16       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    Ms. JOYNER. And to reflect a more cross-cutting view and a more department-wide view. So, they took that opportunity to——

    Ms. DELAURO. So, that is to try to, in fact, make a difference in what they were doing by way of performance goals, of evaluation, of taking a look.

    Ms. JOYNER. Right.

    Ms. DELAURO. Now, is that with the new Secretary, did the new Secretary move forward with these performance goals with this effort?

    Ms. JOYNER. Exactly, that is right.

    Ms. DELAURO. Okay. And that is what we are now taking a look at.

    Ms. JOYNER. Well, we, in preparing this statement, we did not have the new annual performance plan yet because those only came out this week. But I have been able to make some observations about that.

    We are going to be looking at that plan again much more specifically and will be in April issuing some products reviewing that in more detail.

    Ms. DELAURO. Is it your sense and please do not misunderstand what I am saying, you have had a very short time to look at this, but I wanted to make sure that the department has acknowledged that, in fact, there are some difficulties here, they came forward with a new plan only that has just been released in taking a cursory look at the new plan. Is it your sense that they have addressed the concerns that you have expressed in the past and that they are moving to try to correct any of the problems that you saw?
 Page 17       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    Ms. JOYNER. Yes, with respect to the integrating the goals and grouping the various activities of the organizations in some way that is more mission-focused than organizationally focused. This performance plan is moving in the right direction. It is an improvement in that sense over the previous one.

    Ms. DELAURO. So, in fact, come April when you take a lengthier review of this we will have a better idea if they are meeting the goals that you have laid out.

    Ms. JOYNER. That is right.

    Ms. DELAURO. With that as the background, is there, in terms of evaluation, particularly in integration, what in your sense kind of a problem exists given the Department of Labor and it's, if you will, decentralized structure and giving a lot of leeway, flexibility to states, of being able to be an information gatherer and to try to take a look at evaluation? What is the nature of that structure, how does that affect what we do and what information we can get back in terms of evaluation?

    Ms. JOYNER. That answer would be different depending on the different component agencies and I think the individual programs. So, that, for example, OSHA has a particular kind of relationship with the states, which is statutorily allowed. But that relationship on their programs would not be the same as, for example, the Employment Training Administration's relationship with the States under with JTPA.

    Ms. DELAURO. So, even given what you have said there, and help me with this, given that it is different for OSHA, it is different for ETA, it is different, does that make the task of getting to where we want to go, which is the desired outcome, more difficult in trying to get a handle on what is happening by way of evaluation? I am trying to figure out how, in fact, we get what we want from the agency given, unless you decide to restructure the way we deal with OSHA, the way we deal with JTPA and some other things.
 Page 18       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    Ms. JOYNER. Well, what I would say is that is one of the things that this strategic plan challenges them to identify. Is to say, how have they used evaluations and how might they use them in the future and certainly the differing Federal/State relationships are a part of what they need to

tackle, I think, to identify how they get the evaluation there.

    Ms. DELAURO. So, that it could be that the Department has a better opportunity for that evaluation process and data gathering over programs that they controlled. There will then be a better view as to what we do rather than, if you will, quite frankly, of depending on the States because they, in fact, cannot mandate the State to do an evaluation et cetera.

    So, that of itself makes it more difficult unless we decide and say, hey, look, you go ahead and mandate that the State of Connecticut gives you this kind of information.

    Ms. JOYNER. Right.

    Ms. DELAURO. Does that——

    Ms. JOYNER. I think that observation that where they have more control over the program and over what happens they would also have more control over the data they can collect. It seems like a fair general observation.

 Page 19       PREV PAGE       TOP OF DOC    Segment 1 Of 2  
    Ms. DELAURO. So, we need to look at this and given the direction that they want to go in but also kind of take a look at what the structure is all about.

    Mr. PORTER. Ms. DeLauro.

    Ms. DELAURO. Am I out of time?

    Mr. PORTER. You are.

    Ms. DELAURO. Okay.

    Mr. PORTER. However, we will go around again to the extent that people want to do that.

    Ms. DELAURO. Thank you, I just wanted to get a framework.

    Mr. PORTER. Mrs. Northup.

    Mrs. NORTHUP. Thank you, Mr. Chairman.

    In working with the Department of Labor, I notice that you talked about being outcome based. Do they meet this criteria, did they inputbased looking at results. And I wondered if there was sort of a culture there that was punitive instead of enabling. For example, going out and citing people and prosecuting, rather than enabling a safer work place. With other compliance issues, being proactive rather than reactive, you know, being a work place police instead of a work place consultant.
 Page 20       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    Did that seem to exist, that sort of institutional environment?

    Ms. JOYNER. From our work over the years, for example, in OSHA, we are certainly aware of that issue of whether to focus on the number of inspections and the number of penalties assessed or whether to focus on where it is possible to do so the actual improvement in the safety, fewer deaths. And that has been, I would say, a trend in OSHA over the last few years to try to shift that focus and the Congress has encouraged them in making that sort of shift, so, that they have identified.

    And this was in both the initial strategic plan that we reviewed before and in a quick glance at the new performance plan they have continued to do that to try to identify industries in which they are going to be engaging in some sort of intensive activity whether it is inspections or education and training or whatever it might be, that they would look in those particular industries for changes in fatality, injury and illness rates and certainly that would be a move in the direction of focusing as we would encourage them to on outcomes rather than to focus on how high the penalties were.

    Mrs. NORTHUP. And, of course, first of all, identifying the industries that are maybe, already have the highest rates.

    Ms. JOYNER. That is right.

    Mrs. NORTHUP. I know you have mentioned OSHA, but do you feel that throughout the agency there is a change and a shift in that direction? But throughout the agency, do you feel like there is an attempt to change over to a different approach?
 Page 21       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    Ms. JOYNER. Would you like to speak to what they have been doing in job training, Sigurd? I thought that might provide a perspective on another department on whether you have seen that sort of difference?

    Mr. NILSEN. With the job training programs we have reported over the years that there are some 160-odd job training programs of which about 37 are in the Labor Department, most of them in the Employment and Training Administration.

    The Congress has been trying to consolidate these programs. Legislation I think was passed by the House this session again or last session. And it is waiting for Senate action. But before that has even been enacted the Labor Department has been trying to get States and localities to try to bring their programs together through their initiatives on one stop career centers.

    These are ways that people and employers, people looking for jobs and employers looking for workers, can come together in one central place and get the assistance they need.

    So, this has been one of the movements in the Employment Training Administration. So, I think there is movement to try to be, in a sense, more user-friendly. Certainly instead of having all the categorical programs where you have to find the one that applies to you, this is a way to sort of——

    Mrs. NORTHUP. Well, being user-friendly is one issue, but the other issue is whether or not you are going to have a outcome-based focus or whether you are going to have a input-based focus. How many dollars in, how many people in, how many people we get into the program? The other side of it is how many trained people that go to work and stay at work and have a career we get out of it.
 Page 22       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    And those are two entirely different measurements and my question is, have you seen agency-wide the change in how they measure?

    Mr. NILSEN. Well, my perspective on this, sticking with job training programs, I think for the most part, particularly the Job Training Partners Act, JTPA, has been over time more outcome oriented and not so process oriented. They have good data on whether or not people got jobs and the wages and that they were retained. And the department funded a major evaluation, an impact evaluation to see what happened to people who went through JTPA and compared it to people who did not go through the program at all.

    That kind of evaluation is relatively rare throughout the Government and it is not done on every program within Labor. But these are very——

    Mrs. NORTHUP. Do you have—I guess——

    Mr. NILSEN. It was privately conducted, funded by Labor but conducted——

    Mrs. NORTHUP. So, you are getting good results, good.

    And my other question was, considering that we have job training in both the Departments of Education and Labor, and since your

agency oversees or is auditing both of those departments, would you have us consider or will you eventually make any recommendations about whether they need to be reorganized, whether they are duplicative, whether or not the agencies ought to collaborate more?
 Page 23       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    Mr. NILSEN. Certainly in the job training programs it is important as you said they go across Education and Labor. There are a total of 15 different agencies that fund some form of job training program and to get these streamlined in some way.

    Exactly how that is done is essentially a policy question that is up to Congress to decide, but certainly efforts, programs that have similar goals and objectives should be well integrated and working together.

    Mrs. NORTHUP. My question is a little different than that. Are you going to identify programs that seem to be duplicative that perhaps should be combined in one department rather than still in two?

    Ms. JOYNER. We have, in times past, as we have mentioned we have done a lot of work with different kinds of slants on that. And we have issued some reports in the past identifying some possible candidates for integration or consolidation and I could provide you with that information if you would like?

    Mrs. NORTHUP. I would like that.

    Ms. JOYNER. Okay.

    [The information is in the Committee files.]

    Mrs. NORTHUP. Thank you, Mr. Chairman.
 Page 24       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    Mr. PORTER. Thank you, Mrs. Northup.

    Mr. Stokes.

    Mr. STOKES. Thank you, Mr. Chairman.

    I have a question concerning the programs that you were just discussing. As I understand it, you have identified about 160 programs, and I understand that the Department of Labor considers the number to be 25 to 30 programs with about 75 percent of the funds going into 12 programs. Is that analysis correct?

    Ms. JOYNER. Well, let me clarify. The 163 was based on a review we did of programs that existed in Fiscal Year 1995. So, we have not updated the number since that time and, you know, programs will come in and out of the count as time passes or some that exist might not be funded in a particular year.

    Again, I am not familiar with the way they did their analysis of the way they counted.

    Mr. STOKES. I am really trying to get at how you define programs if we have this type of difference between you and them.

    Ms. JOYNER. This issue is common to another area of my work which is education and there the issue arises as well and what is an education program? What is an employment training program? And my caution would just be that when one is looking at two studies where the count comes out different would be to take a look at the definitions that were used. I am not familiar with the particular study that you cited. If we could obtain that we would be glad to take a look at it and comment on how the definition we used might have differed from the one that they used.
 Page 25       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    Mr. STOKES. Okay. You can take a look at it, and if you want to amplify further in the record, that will be fine with me.

    Ms. JOYNER. We would be glad to do that.

    Mr. STOKES. There is, of course, throughout the nation today a great deal of concern about the health of the nation's pension plans. This subcommittee has given some funding to the Department of Labor for the purpose of bringing the agency's system up-to-date. What were the results of your findings relative to the current condition of that system?

    Did you look at that at all?

    Ms. JOYNER. I would need to, if you do not mind, provide you that information.

    [The information is in the Committee files.]

    Ms. JOYNER. I do not have direct responsibility for that work and when we queried our group that does that about any major issues they would like us to pose in today's hearing they did not identify any but I would be glad to follow-up with them and get back with you, individually or for the record to respond to that question in fullness.

    Mr. STOKES. I would appreciate that.
 Page 26       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    Did you review Davis-Bacon?

    Ms. JOYNER. We have done work on Davis-Bacon, yes, sir.

    Mr. STOKES. I understand that you examined the wage survey data and found that it was somewhat hindered by a lack of up-to-date computer hardware.

    Ms. JOYNER. That is right.

    Mr. STOKES. Can you tell us about that area, and what has been done, if anything?

    Ms. JOYNER. Yes. What we found was we looked at the system that they have for collecting wage data and using that as a basis for establishing the prevailing wage rates under Davis-Bacon to see whether there were vulnerabilities to the use of inaccurate data in setting those wage rates. And we found that there were problems with that and that it was vulnerable to use of inaccurate data. And one reason, as you have noted, is the obsolete, out of date computer equipment that they had. They also were not doing the kind of verification of the data that came in that we thought would be useful.

    The department is engaged in a multi-year modernization effort or a look at reengineering that whole process. And they were given some funds for that, I believe, out of the Fiscal Year 1997 budget. And, in fact, we were mandated to take a look at that process and see how it is proceeding. And independently or as a separate issue, as you know, last year your committee required them to spend some of their funds to implement another part of our recommendation which was in the short term until you get the whole system revised at least in the short term you need to do some things like obtaining better evidence, requiring some documentation to be submitted and then going out to check some of those and trace them back and see if what was submitted was really accurate.
 Page 27       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    We were also mandated to look at that. We plan to start work on a study that will combine both of these issues. We plan to start that within the next month or two. There, under the modernization or the reengineering effort, the operating plan that they submitted as required by your committee, indicated that they would have the first stage of that design completed by the end of December and that they had done so.

    So, now, that they have got a plan in place we think the time is right for us to go and take a look at it. So, the short answer is we do not know yet what they have done but we

are planning to start a study for that specific reason.

    Mr. STOKES. Okay. Thank you very much, Ms. Joyner.

    Thank you, Mr. Chairman.

    Mr. PORTER. Thank you, Mr. Stokes.

    Mr. Miller?

    Mr. MILLER. Thank you, Mr. Chairman.

    Let me continue along with the issue of the Davis-Bacon. I was at a hearing over in the Interior Subcommittee not long ago and it got a little publicity because one of the things we were talking about was a $330,000 outhouse in Pennsylvania. But we were also examining housing for employees at the National Parks, Yosemite and Yellowstone.
 Page 28       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    The houses varied in cost and were in the $350,000 to $500,000 range per house and they were relatively modest houses. You are not probably familiar with it, but we were talking about what was causing this.

    The Interior Department's report said that Davis-Bacon added $65,000 per house to the cost for each of those houses in Yellowstone and the Grand Canyon and Yosemite. That was not the intent of Davis-Bacon to increase by $65,000 the cost per house.

    So, there is obviously a problem somewhere. So, you are doing a study you say, an analysis on, this issue. Where does that stand? Are you looking also at the issue of the modal rate? Do they use a modal rate, is that your understanding?

    Ms. JOYNER. They establish a prevailing wage rate that is based on, in most cases, survey data that they collect that are voluntarily submitted by employers or by third parties in a given area.

    And, so, in some instances the wage rate that would be used is actually the union rate in that area, but only if that is the, as you say, the most commonly paid rate. If it turns out to be the union rate then the union rate would become the prevailing wage rate.

    Mr. MILLER. On average, is there a median?

    Ms. JOYNER. No. It is a combination. Let me let Lise speak to that.
 Page 29       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    Ms. LEVIE. If there is a wage that is paid for more than 50 percent of them then that is the wage but in the absence of that then it becomes a mean rather than a modal. And, in fact, we did some analysis that looked at how many of them were means rather than modals and the majority of them were means.

    Mr. MILLER. Okay.

    Ms. LEVIE. So, it is a first this, then, that, sort of scenario.

    Mr. MILLER. Have you ever analyzed how much more it costs? I mean, you know, the Interior Department claims the $65,000 per house in that one project. Have you looked or will you be looking at how much more it costs for the Government annually on projects because of Davis-Bacon?

    Ms. JOYNER. Well, the way that we have approached that is to say that it would cost more than in the absence of Davis-Bacon only if the prevailing wage rate is wrong.

    I mean if it is not, in fact, what we typically have been paying, absent the Davis-Bacon requirement, if it was set too high then, in fact, the wages paid would have been too high and the costs would have been inflated.

    So, alternatively, if the wage rate is set wrong, it might be set too low, and in that instance what might occur is that the workers would actually be paid less than they would be required to be if it had been set properly.
 Page 30       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    So, that involves some, the heart of that is whether the wage rate does fairly and accurately represent the wages being paid in the area. So, what we focus on is looking at the possibility for that rate being set wrong because people accidentally or intentionally sent in information that was too high.

    Mr. MILLER. Well, we have two cases right now, Yosemite and the Grand Canyon, where we are paying $65,000 more per house. Obviously, there is a mistake in that.

    We have over-paid. How do we go about looking at that problem? I asked the Interior Department that and, again, these are their numbers.

    Ms. JOYNER. Well, I think the issue you might ask the Interior Department would be what was their basis for their estimation that it was $65,000 more because that would, for them to know that, would require them to have gone in to ascertain for each of the wage rates paid, that it was actually inaccurate. And, so, since there is a different wage rate for each laborer category they would have to know how many wage rates were wrong and how many people worked at that wage rate for what period of time in order to know how much the house was, the value of the house was inflated.

    So, I, of course, have not looked at the methodology, but I would ask when someone offers that, you might ask them to support that.

    Mr. MILLER. Well, we did ask and they gave a rather lengthy document and I did not ask the details of how they come up with the numbers but that is the one that really bothers you when you can see——
 Page 31       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    Ms. JOYNER. Certainly, I can understand why.

    Mr. MILLER. I mean there is no reason that should be this far apart. I mean, you know, it is bad enough to pay that much for the house, let alone the out-house.

    You were talking about the job training programs. You know, I have heard people state that job training programs are a waste overall. Well, we know they are not a total waste, but, you know, it is like say 50 percent is a waste, which 50 percent we do not know. But the question is effectiveness.

    You mentioned in the report to Ms. Northup that, the Labor Department did their own effectiveness study. Do you feel confident that there is not a bias built into that report?

    You said, we do our own studies and we say they are effective.

    Mr. NILSEN. It was, the report was conducted by an outside organization and the site selection was done by the Manpower Demonstration Research Corporation which has done a number. They have been in the business for 25 years doing program evaluations, particularly in job training areas. And then they collected the data, did the site selection, did a lot of the data collection and then an independent entity, Abt Associates, actually did the analysis of the data and then they provided the report to the Labor Department.

    Mr. MILLER. Do you feel comfortable that it is totally independent and accurate and there is not any motivation to show good results to keep the program going?
 Page 32       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    Mr. NILSEN. Right.

    Mr. MILLER. You are not doing it.

    Mr. NILSEN. There are ways, I think to improve the study but I think it was very objective. In fact, some of the results were not very flattering, particularly for youth programs. They found that basically the program had virtually no effect for youths who were in the program. There was positive and significant effects for both adult men and women, however, in the program.

    Mr. MILLER. The study showed that for youth programs they were not every effective. What happened then? What did the Department of Labor do then?

    Mr. NILSEN. We have not looked at that but I know they have taken the results of the study very seriously to look at how can they improve the programs.

    Mr. MILLER. How long ago was that report issued?

    Mr. NILSEN. I would say that it was issued about two years ago.

    Mr. MILLER. Okay. Is there any reason that you all would do a follow-up to see, have they responded, if they are wasting the money and what are we doing about not wasting it?

 Page 33       PREV PAGE       TOP OF DOC    Segment 1 Of 2  
    Mr. NILSEN. Well, right now in terms of looking, particularly at JTPA, given that there has been a lot of legislation to consolidate programs and part of that would basically put JTPA together with other programs, we have not looked specifically at that program for a couple of years. But we did look at successful job training programs a couple of years ago to find out what were the key elements of programs that contributed to their success?

    We looked specifically at six programs nationwide that had been nominated to us as highly successful and we had some very interesting results. Two of them were JTPA programs, another was totally privately funded in New York and another one was funded from vocational education funds.

    Mr. MILLER. I will go back to that question but let me ask, are you familiar with LM-2 form?

    Ms. JOYNER. No, sir. I am not by that name.

    Mr. MILLER. Okay. It is the——

    Ms. JOYNER. Is that the LMRDA reporting?

    Mr. MILLER. Yes.

    It is a form that Labor files and, we have asked that it be automated.

    Ms. JOYNER. Yes. Right.
 Page 34       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    Mr. MILLER. Are you familiar with how they are proceeding on that?

    Ms. JOYNER. No, I am not. That is another study that is on my list to start just as soon as we can get some staff available. Except actually I sort of recall two. There was a deadline, I think, sometime in 1998 by which time they had to have their plan in place and then we would go in once they have done that to see how they are doing. And we anticipate doing that soon.

    Mr. MILLER. We are interested in that.

    Back to the job training issue. Do you look at job training and look at the costs? A cost-benefit type analysis? Do you take the total cost and divide it by the number of people that have successfully gone through the program? Do you do that kind of analysis when looking at effectiveness? Are we getting our money's worth?

    Mr. NILSEN. True effectiveness studies are very difficult to do. And the study that I was talking about before (by Abt Associates) was done right; where there were blind referrals, random assignment to services, people in and out of the program.

    The kind of work that we do looks more at how the program is operating, and assesses whether the operation of programs can be improved but looking at the results of programs as well. Work that we have been doing over the last several years on the Job Corps, for example. It is a very expensive program and we are finding ways that the program can be improved and should be better targeted.
 Page 35       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    Mr. MILLER. Do you analyze the cost per person going through the program for each person who has successfully gone through the program? Does it cost $100,000 per person?

    Mr. NILSEN. It is difficult to look at. We do not have the resources or the time. We have not been able to follow-up people one year, five years out after they have completed the program services. We look at, placement rates and are they measuring placement rates in the right way? Are we looking at people who retain the jobs? Is this related to the kind of training? But doing benefit-cost analysis that you are talking about, we specifically have not done that kind of work.

    I would just add quickly that there is an example where Labor has a study underway now, for the first time in over a decade, to look very closely—in a systematic way—to evaluate with people in the program and not in the program to try to see what the result and the outcomes from Job Corps experience is.

    Mr. MILLER. Because we are pouring so much more money into the program it is obviously important to be on top of it.

    Ms. JOYNER. Right.

    Mr. MILLER. Thank you.

    Mr. PORTER. Thank you, Mr. Miller.
 Page 36       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    Ms. Lowey?

    Ms. LOWEY. Thank you, Mr. Chairman.

    Thank you, Ms. Joyner. I do apologize that because of activities on the floor I missed the presentation but I do not believe that anyone has addressed their questions to the issue of pension simplification. And this committee has been very involved with the pension system, it has been very successful in restoring the integrity of the pension system. And as you know there has been growing attention to the pension system through the years.

    The committee has provided funds requested by the Administration over the past two years to improve and streamline the form 5500 filing process, which is the annual report that all ERISA pension plans must file. This system is the cornerstone of Federal oversight and enforcement of the private pension system.

    Can you tell us what GAO's assessment is of the status of the Labor Department's efforts to improve the form 5500 process and will the implementation of the new system save money for both taxpayers and businesses?

    Ms. JOYNER. My understanding is that we do have a study underway on that right now and the results of that are not

available. I would be glad to provide for you some of the specifics of the time frames for completion if that would be helpful to you?
 Page 37       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    Ms. LOWEY. That would be very helpful. I appreciate it. We appreciate your work on that area.

    With regard to OSHA, a 1996 GAO report highlighted violations of safety and health regulations by Federal contractors and recommended several actions that would allow Federal agencies to take these records into account in awarding or terminating Federal contracts. I find this report very interesting and I would appreciate it if you could share with the committee some of the examples of companies that were major Federal contractors and, yet, had terrible health and safety records.

    What is needed to implement your recommendations, does it require action beyond OSHA, and frankly, why have not these recommendations been implemented?

    Ms. JOYNER. Taking them in reverse order, I could speak to those. I am wondering if Ms. Rectanus, from her work on that study, remembers the specific details of companies. You might add to that, I think what I would like to focus on most of all is the recommendations that we made and the status on that which I can give you, unless you have a particular example, you would like to give.

    Ms. RECTANUS. Well, I think one of the things we found from that review is that there are a number of issues concerning the IMIS data base. In our review, we did highlight several companies and since we have done that some things have come to light that have shown that there may be some difficulties in interpreting IMIS data.

 Page 38       PREV PAGE       TOP OF DOC    Segment 1 Of 2  
    And that is what Ms. Joyner referred to in the testimony when we talked about OSHA needs to improve some of its data. So, at this point I do not know whether we can talk about individual companies but we could certainly provide you that information, if you would like?

    Ms. LOWEY. That would be very helpful.

    [The information is in the Committee files.]

    Ms. JOYNER. And, so, what I would like then to build on most of all is the recommendation that we made which was that OSHA work with an intergovernmental group that is involved in the contracting, policy making and work with them on ways that they could share information about OSHA violations so that that could be taken into consideration in awarding contracts.

    We were not making a specific recommendation that a company not get a contract if they had a particular violation but we certainly thought it raised enough of a question that there ought to be some discussions about sharing that information and finding some ways to share that information and to take it into consideration.

    And OSHA agreed to do that and our most recent follow-up was that it had not been fully implemented but discussions were under way. We will be following up again soon to see what the result of those discussions have been.

    As Ms. Rectanus mentioned, we are concerned as well that OSHA make sure that the data in its management information system are complete and accurate enough that it can be used for a purpose such as this.
 Page 39       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    Ms. LOWEY. I thank you.

    And lastly, I am not sure if anyone has discussed the Bureau of Labor Statistics report on the CPI? No? Okay.

    In looking at that report it recommended that more frequent updating of market basket expenditure weights is needed. What are the resource requirements to BLS if they would implement your recommendation and would you recommend that this committee provide these additional funds in the BLS' budget? This has been a subject of discussion here for quite a while and we would appreciate your response. If you do not have the answer today, you certainly can forward it to us.

    Ms. JOYNER. That is what I would like to do is to submit that for the record that estimation.

    [The information follows:]


    According to Labor's FY 1999 Performance for BLS, $11,159,000 and 71 FTE's are committed to continue the Consumer Price Index Revision. This is a reduction of $4,271,000 and 154 FTE's from 1998.''

    Ms. LOWEY. Thank you and thank you, Mr. Chairman.
 Page 40       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    Mr. PORTER. Thank you, Ms. Lowey.

    Mr. Obey.

    Mr. OBEY. Thank you, Mr. Chairman. I apologize for not being here. There are several other hearings this week. With everything that is going on on Iraq, and a few other things, I have been misusing my time elsewhere instead of misusing it here.

    But rather than ask any questions, I would simply make an observation. I think Congress should welcome the analysis of performance of any of our agencies, and certainly it is useful to see the views of the GAO on the Labor Department and the programs under its jurisdiction.

    I guess what I would say is when you have reviewed all of the specific suggestions about improving this area here, or that area there, to me, the bottom line, the big picture is simply that this is the first time in all of the years that I have been in Congress, that we have had a systematic Government-wide effort to improve the operation of Government, to the delivery of service, to improve the quality of service, so that we can increase the quantity of service that we are providing our constituents.

    I think that while we should certainly examine the shortfalls in the operations of any program or agency, I

think we need to recognize that this is a work in progress. When you are trying to downsize Government at the very time that you are trying to increase the quality of services, that can sometimes be a very tough thing to do, especially if you are trying to manage agencies in a humane way, and I think that to be able to reduce the number of Federal employees in the workforce by 316,000, while we are doing this reinvention of Government across the board, while I think the title may be a bit pretentious, I think that the goal is, nonetheless, understood by people, and while you may not have pluperfect performance in every instance, we certainly have had a much more systematic effort on the part of virtually every agency to reinvent the way it does business than I have seen in the years I have been in Congress. I just think, for the record, that that needs to be noted.
 Page 41       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    What is important, in the end, is that the information that is being produced by these plans is something that the Congress can understand, that we can use to measure our progress, or the lack thereof, and give our constituents some idea of whether or not Government really is trying to perform in ways that will help meet the public agenda, rather than the agenda of any of the major or minor players on the stage here in Washington.

    So I appreciate your appearing here and I appreciate the efforts of the Labor Department to modernize the way it does business as well.

    Thank you, Mr. Chairman.

    Mr. PORTER. Thank you, Mr. Obey.

    Let me add something to that. I think that there has, in my judgment, been a sea change of attitude, both in the Congress and the executive branch, regarding how we look at what is being accomplished. I think the bottom line focus that has characterized the changes that have been made in the private sector—and they were painful changes, often leading to many people being laid off or losing their jobs in order to get private enterprise in America more competitive—were changes that led to some real economic recession but have paid off in terms of sustained, strong economic growth in recent years. These changes are now being experienced in Government, as they should be. How do we insure that the money we are spending gets results for people—real results?

    It used to be you would sit here, and say, ''well, we are spending so many more dollars,'' or ''we have got so many more people enrolled in the programs,'' and all kinds of other really irrelevant benchmarks. I think we are now replacing those terms. Are we getting people who are unemployed, and have no experience for the kinds of jobs available, into a program, through the program, successfully into a job, and keeping the job?
 Page 42       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    In other words, what do we want to achieve with this money? It is not just running a program. It is not just opening another one-stop center. It is getting people to the end goal. I think we are doing a much better job of that, and I think the attitude of most of the people coming before this subcommittee is much different than it was previously.

    Do you feel that the Department of Labor is capturing the spirit of this in what they are doing, or is it kind of slipping by them? Is there too much evidence of the old ways of thinking, that GPRA, and other formal changes in Government are designed to overcome, and change?

    Ms. JOYNER. I think there is at Labor, as you were making a general observation about Government-wide, that there is at Labor a realization that this is the way to go. That they are interested in the observations that we make about ways that they could improve, and that they have been listening to the observations they have been getting from the Hill, and the consultations here.

    I think that the attention the Congress has been giving to this has been absolutely crucial. That and the fact that while we were asked to look at the draft plans, make public what our observations were, that those that were used in hearings, that strategic plans—there has clearly been an interest in that on the part of your committee and other committees. There are hearings and we are asked these questions. I think that has made a big difference.

    I mean, that is my personal assessment, and I know that of many others in GAO; that it has sent a message that this has to be taken seriously, and I believe that it is being taken seriously.
 Page 43       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    Mr. PORTER. You have looked at two departments?

    Ms. JOYNER. Yes.

    Mr. PORTER. Is it taken more seriously at Education or more seriously at Labor? Of course, that is a leading question.

    Ms. JOYNER. Well, you have responsibility for both departments. I could not speak to the attitudes and opinions, and views of the officials at the two and make a comparison like that. The first plan that we reviewed from the Education Department was more in compliance with the requirements of the strategic, of the Results Act, than the first plan we reviewed from the Labor Department, and so in that sense they were more quickly at the right place, where it was envisioned that they would be.

    So I think that, you know, the leadership in the Departments is crucial in this, and it is hard for me to judge what messages they are getting, internally. What we are able, primarily to look at, is the quality of the written product, and the responsiveness at the staff level. When we give views to people, what kind of response do they give, and then how do we see that reflected in the next version?

    Mr. PORTER. Well, let me get to a bottom line. If I say to Secretary Herman, when she comes here, ''Madam Secretary, we know you are making some progress but we do not think you are doing as well as some of the other Departments of Government in terms of looking at results and being results-oriented as the law urges you to do, requires you to do, and GAO said so.'' Would that be an unfair statement?
 Page 44       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    Ms. JOYNER. I am not——

    Mr. PORTER. And I realize that there are people from the Department here who are listening to this.

    Ms. JOYNER. I do not think it would be accurate to say that I am saying Labor is not paying as much attention to this process as other Departments are. First of all, I would not have a basis to do that because of the limited number, and as I mentioned before, that the situation facing Education and Labor were both different.

    The other thing is that the earlier plan we reviewed was not conducted, if you will, on her watch. That the plan now, and what we are seeing of the evidence of strategic planning is definitely going in the right direction, and the earlier plans were not prepared under Secretary Herman's leadership.

    Mr. PORTER. I am not looking for blame. I am just looking for progress here.

    Ms. JOYNER. Yes. No, but I am saying I think that substantial progress has been made, and I guess my urging would be to say GAO says you are making progress, keep going in that direction, and we are not giving them a grade of any sort on their performance plans because we have not done that critique of those. We will be doing that later, and we will be providing that information to you as well as to others.

 Page 45       PREV PAGE       TOP OF DOC    Segment 1 Of 2  
    Mr. PORTER. All right. You mention in your statement the year 2000 computer system problem. Can you tell us today where the Department stands with respect to addressing the problem, and how does it stack up to other Departments who have the same problem?

    Ms. LEVIE. I can speak to that.

    Ms. JOYNER. Yes. We have some work underway on that.

    Ms. LEVIE. I cannot say in comparison to other Departments, but they have somebody in the Secretary's Office, who is working weekly with the various groups to monitor it. They do not have a written plan for it in their strategic plan, but we are working on this problem, not our particular group, and in consultation with our folks in GAO who are working on this problem. They told us that in fact Labor was addressing it with management attention at the Secretary level.

    Mr. PORTER. Did you not say in your opening, that they have a whole number of different systems?

    Ms. JOYNER. They do.

    Mr. PORTER. How many offices do they have?

    Ms. JOYNER. Well, there are 24 major units.

    Mr. PORTER. Yes, but how many——
 Page 46       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    Ms. JOYNER. And 1,000 field offices.

    Mr. PORTER. That is what I thought you said.

    Ms. JOYNER. Right.

    Mr. PORTER. 1,000 field offices.

    Ms. JOYNER. And 1,000 field offices.

    Mr. PORTER. And what about the systems in the field offices? Are they all the same, or are they different?

    Ms. JOYNER. Oh, they are different because the field offices are associated, in most instances, with a particular other component. It is an OSHA field office, or it is a Wage and Hour field office. So those would have—I know they are also, I am sure, different in how well they are integrated with the headquarters. This was something—for example, when we were doing our H–2A study, that they were not completely integrated between their field office and headquarters, even, in the data that they had available.

    So it is a very complex situation. That goes back to this issue, too, of the systems architecture, of trying to put in place—and I think it is fair to say that Labor does not have this in place now—an overview of, a blueprint for what are all the systems we have, what are the systems we need, and how do they need to fit together.
 Page 47       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    That is part of the mission of this chief information officer, and they do have a plan that they have put together on how they are going to get to where they need to be in terms of technology.

    What I was going to add about the year 2000 is GAO is doing some individual audits of particular units within Office of Worker's Compensation Programs. I think it is one—there are several, and at this point it is necessary, again, because of the decentralization, to look at each unit, and say, What are your plans? How close are you?

    Because it is not something that is known, or being done, Department-wide. It is being done unit by unit.

    Mr. PORTER. This is not a field of expertise for me. Do we have this same computer problem in every existing computer system, or are some of them designed to account for it?

    Ms. JOYNER. The year 2000 problem?

    Mr. PORTER. Yes. Does every one of them have the problem?

    Ms. JOYNER. Right. It is a potential problem in all of them. A part of what is required is to go in and see, do an assessment of the extent to which——

    Mr. PORTER. Have they done an assessment?
 Page 48       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    Ms. JOYNER. They have not assessed all of their programs yet.

    Mr. PORTER. Systems?

    Ms. JOYNER. Right. They have not finished assessing all of them, to my knowledge. I do not believe that they have. But the difficulty is first, finding out, and a schedule for finishing the assessments for each of them, to see what problems need to be fixed.

    Mr. PORTER. Is this a hardware problem, or as I understand it, a software problem?

    Ms. JOYNER. It is a software problem.

    Mr. PORTER. It is a software problem.

    Ms. JOYNER. It is the language.

    Mr. PORTER. In every case?

    Ms. JOYNER. Right. The coding that was written long ago.

    Mr. PORTER. It is not a hardware problem?

 Page 49       PREV PAGE       TOP OF DOC    Segment 1 Of 2  
    Ms. JOYNER. No. And so it is a matter of uncovering all the software, the language that was written, and then finding people who are still alive, who know those languages, and getting them to come work on your fix.

    Mr. PORTER. So you have actually got to check the overall program and each of the pieces of software program. You have to change each one?

    Ms. JOYNER. That is right. We have to find all the locations where it is not correctly worded, as I understand it.

    Mr. PORTER. All right.

    Ms. JOYNER. Do you want to add something?

    Ms. LEVIE. Yes. This is a good example of the particular challenges that Labor faces with this decentralized system, because with Labor, the issue is even identifying who has what, where. Whereas in some other agencies that are less decentralized, the information is not as hard to get, even to say, okay, let us identify what databases we have. Number one, let us identify what databases.

    In a decentralized system such as Labor has, just that is a major undertaking.

    Mr. PORTER. It is even a stretch to call it a system, if it is that decentralized.
 Page 50       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    Ms. LEVIE. Right. Certainly, there are no system——

    Mr. PORTER. You have got a number of systems.

    Ms. LEVIE. Right. You have many, many systems in the Department of Labor in terms of information management.

    Mr. PORTER. Ms. DeLauro.

    Ms. DELAURO. Thank you, Mr. Chairman.

    I just would like to make a quick comment, that the new plan was issued February 2nd, 1998, which—what is today's date, the 5th? So three days ago. Then evaluating what they

are doing versus what was in existence, we may be a bit premature on where we are going on this.

    And in terms of some of the data that I know was put together, you know, in good faith and all of that business—do not misunderstand me—but in fact we have a new document here, which needs to be reviewed.

    I think that that is important to keep in mind.

    Secondly, given the nature of this current discussion, it strikes me that you do have to consider the agencies, and how they have been structured, unless you want to go back and restructure every single agency to meet a new determination.
 Page 51       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    Also, if what you can make States do or not do, in collecting of data, and we have a very big emphasis here about turning over a lot of things to the States, in which case then you do not have the kinds of control that we seem to be asking for in terms of the data, and that is the problem that we create here. My question is: What would it cost—and this is both in dollar amount, and in burden on the data-gatherers—in your view, to get the information that we seem to be asking for?

    What will it cost? How much did that study cost, for the Department to contract out, if you will, to deal with the job training programs. I do not know what that cost, but it seems to have been a good study, that they paid for.

    What is your assessment, because you must have some idea of where we are asking people to do things, what it is going to cost to do that?

    Both as I said, there is a dollar amount, and then there is the burden on gathering the data, and what percentage of time, effort, et cetera, would it take to get what we think we need?

    Ms. JOYNER. I think at this point what is still not really defined is what do we need. That is to say—and you have referred to the plan that was just issued this week. They are asserting there, they are establishing, essentially, what they believe they need to obtain in order to answer the question of how well they are doing toward their major three goals, and so essentially, they are asking you for confirmation of whether, if these are the measures for which they held themselves accountable, will the Congress be satisfied, then, next year, when they come in, or the year later, and say, ''This is how I did on it.''
 Page 52       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    So the first part here is just establishing what are the measures on which they and you agree that they will be held accountable.

    Ms. DELAURO. Right.

    Ms. JOYNER. Then I think that has to be done first, before then, you can decide how would we get the data, and that would apply—what they have in that plan is primarily individual measures, but they also have in there a discussion of how they are going to get it, how they are going to make sure it is reliable, and that it is valid, and what resources would be required.

    It may be that, as there always are, that there are some tradeoffs. That to really establish as well as they would like to, and as well as you would like them to do, that they have achieved certain goals, there just may be a tradeoff to say, ''We are not willing to spend, you know, $2 billion, $2 million, evaluating every one of these programs. We are going to be more constrained and only look at Job Corps once every 10 years, instead of evaluating it more often.''

    There are those important tradeoffs that have to be made.

    Ms. DELAURO. Well, that is true, but you have a function to review where they are going, what they need, and to bring this effort up to a level of acceptance. We talked about computer systems differing wherever we go. We talk about Davis-Bacon in computer systems. We talk about hardware; we talk about software.
 Page 53       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    On the other hand, we also say this is the budget, knock it back so many millions of dollars. Again, cost. Cost and data that you want, what you are willing to put in to get out what you want to get out.

    Should we update every computer system that the Department of Labor has? Or should we then say—and maybe there are some here who would like to dismantle the Department of Labor, come back with a way in which it is not decentralized.

    I am trying to get at, when we talked about cost, somebody here asked about cost benefit. What kind of dollars are we talking about here, from your perspective, in terms of dollars and percentage of time that it takes to gather the data, and are we creating a false balance?

    Do we have to create some balance here, so that we are programmatically carrying out the mandate of what we set out to do?

    And final question: Should we, as a committee, be putting a hell of a lot more money into these areas, instead of cutting back on hardware, software?

    You know, we can lay out a whole bunch of things that we are asking these people to do. What are we willing to put up to get it accomplished? What do we need to put up to get this accomplished, in dollars and in cost to the data-gatherers? Those would be very interesting answers.

 Page 54       PREV PAGE       TOP OF DOC    Segment 1 Of 2  
    I would like to know, I would personally like to know what we believe it will cost, and then we have to face whether or not we want to take on the obligation to do it as a committee, as a subcommittee, as a total committee, as a Congress, to deal with this level of evaluation.

    You cannot answer my cost questions now?

    Ms. JOYNER. No, I cannot. I really cannot. It is a very important question and I guess I would go back to saying that this is a part of what Labor has been expected to lay out in considering its performance plan, and then to the extent that they get it, identify what they are planning to do and how much they think it would cost, if that should happen in the plan. Then we could comment on it.

    But the cost, in dollars and resources, to gather information has to flow from what the agreement is on what information is needed.

    Mr. PORTER. You see how the world——

    Ms. DELAURO. But it has got to be a component. In other words, if you have to have an agreement for where you want to go, you have to understand what the cost is in order to get where you want to go.

    Mr. PORTER. You see how the world has changed? A Democrat talking about cost, worried about cost. I mean, this is wonderful. [Laughter.]

 Page 55       PREV PAGE       TOP OF DOC    Segment 1 Of 2  
    I am kidding.

    Ms. DELAURO. I know you are, Mr. Chairman. But it is a good debate.

    Mr. PORTER. It really is a focus for all of us. We really are all focused on these things.

    Ms. DELAURO. And when we ask, we have to understand what it costs. You just cannot ask, you know, just because it sounds good, it reads well, and so forth.

    What does it cost to get us to where we want to go? Thank you very much.

    Mr. PORTER. A highly relevant question.

    Ms. Joyner, thank you. You and your team are doing fine work. We very much appreciate your advising us, and we have some questions for the record that we would ask that you answer. They are more technical in nature. We thank you very much for appearing here, and for the fine job you do for our country. Thank you so much.

    Ms. JOYNER. Thank you.

    Mr. PORTER. The subcommittee stands in recess until Thursday, February 12th, at 10:00 a.m.

 Page 56       PREV PAGE       TOP OF DOC    Segment 1 Of 2  
    [The following questions were submitted to be answered for the record:]

    "The Official Committee record contains additional material here."

Thursday, February 12, 1998.




Introduction of Witness

    Mr. PORTER. The subcommittee will come to order.

    Madam Secretary, I want to welcome you to your second appearance before this subcommittee as Secretary of Labor; you have been on the job for almost a year now. The committee looks forward to working with you and your colleagues at the Department on the fiscal year 1999 budget.

    I know that we can call on you for advice and assistance as we go through the appropriations process this year. It is going to be a short legislative year. We have a lot of work to do and not much time in which to do it.

 Page 57       PREV PAGE       TOP OF DOC    Segment 1 Of 2  
    Today we begin our hearings with our Cabinet departments and other agencies under our jurisdiction. These hearings are scheduled to continue until April 29th with a couple of breaks for congressional recesses. We hope to mark up the bill as soon after the hearings as possible, assuming we have a budget resolution and get on with our business.

    I yield to Mr. Obey.

    Mr. OBEY. Mr. Chairman, I don't see any need for a statement at this time. I just want to welcome the Secretary here and might as well hear what she has to say.

    Mr. PORTER. Madam Secretary. Please proceed.

Opening Statement

    Secretary HERMAN. Thank you very, very much, Mr. Chairman.

    To you, Mr. Chairman, and to the distinguished members of the subcommittee, I am pleased to be here today to discuss the work of the Labor Department and our 1999 fiscal year budget request. I would ask that my full statement be included in the record.

    As members of this panel may recall and as you have just said, this is the first congressional committee that I testified before soon after I was sworn in as Secretary last year; and I am honored to be the first Cabinet Secretary to appear before you about our fiscal year 1999 budget.

 Page 58       PREV PAGE       TOP OF DOC    Segment 1 Of 2  
    I might add, parenthetically, that you give new meaning to the words that the first shall be last and the last shall be first in my appearance here today.

    But this is certainly an exciting and historic period for all of us who care about improving the lives of America's working families. Working together with Congress, we have made enormous strides. We have the healthiest economy in a generation. The unemployment rate is the lowest since the 1970s. Inflation is the lowest since the 1960s. And just last week the Labor Department reported that our economy has created over 14 million new jobs in the last 5 years.

    We are clearly entering the 21st century with opportunity on our side. But where there is opportunity, there is also challenge. The workplace and the workforce are changing before our very eyes.

    Back in the 1950s, indeed, when I was at the Department just 20 years ago, the workforce was comprised of 20 percent professional, 60 percent unskilled and 20 percent skilled.

    By 1996, that picture has completely reversed itself as we now find that 20 percent of the workforce is still in professional occupations, 60 percent are literally now in skilled jobs, and only 20 percent are now in unskilled jobs.

    The workforce of the future is also changing in other ways. It will be older, and it will be more diverse. Women, for example, will account for a growing share of the workforce, over 60 percent.
 Page 59       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    Our workplace is also changing. We are utilizing more technology, and every day we are becoming more globally integrated. In the next 10 years, up to half of all of our manufacturing jobs will, in fact, be export related. Our challenge is to help every American manage change for the better, to help transform change from obstacle to an opportunity, from something to avoid to something to embrace.

    I see my job as making sure that the Department of Labor is an effective, efficient partner in helping Americans manage the change that is inherent in today's global economy. To do this, we must provide training and access to job information, retraining and job search assistance for those affected by changes in the marketplace, and a safety net for those who lose their jobs as a result of economic change. And, as we do that, I want to make sure that our initiatives are bottom-line and results-oriented.

    The Department of Labor has made a lot of progress since our team came into place nearly 9 months ago. We played a role in helping to bring labor and management together in settling the UPS strike. We attacked fraud and abuse in pension and health plans and recovered over $360 million for hard-working Americans.

    We were proud to report that the fatality rate from coal mining injuries for 1997 was the lowest ever recorded; and similarly, the injuries and illnesses rate in general industry for 1996, the last year in which we collected data, has been at a 23 year low.

    We know that a paycheck is the passport to dignity. Therefore, we have worked diligently to make sure that welfare recipients were well integrated into our workforce development systems. As a result, we now have $3 billion in grants to distribute to help long-term welfare recipients secure lasting, unsubsidized employment.
 Page 60       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    We want to build on that record and continue to work with every member of this committee to help workers manage change for the better. That is why we are working to raise the

minimum wage, to expand the Family and Medical Leave Act; and we want to work closely with Congress to pass legislation to enact the GI Bill for workers.

    I want to take this opportunity, again, to thank this committee and your leadership in getting the GI Bill passed through the House last year.

    As we go about our work, the Department has developed an effective strategy to meet our goals within the context of the Government Performance and Results Act, GPRA. This is reflected in the Department's fiscal year 1999 annual performance plan, which is tied directly to our budget request. This performance plan reflects a substantial revision and improvement on the Department's September Strategic Plan, which was largely developed prior to my arrival.

    In working to establish a unified Department of Labor, I have established three strategic goals which will bridge the Department's many agencies and programs that serve the common purpose of helping America's workers meet the challenges they face today and in the future.

    These three strategic goals are: A prepared workforce—to enhance opportunities for America's workforce; a secure workforce—to promote the economic security of workers and families; and quality workplaces—to foster quality workplaces that are healthy, that are safe and that are fair, meaning free of discrimination.
 Page 61       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    Allow me to briefly touch on each of these three goals before taking questions from the committee.

    Clearly, a prepared workforce, a workforce that we must have to enhance opportunities as we enter the 21st century, is critical as we pursue our mission at the Department of Labor.

    I want to, first of all, thank this committee for your support of the Opportunity Areas for Out-of-School Youth Program.

    As we look at that area and look at issues related to minority youth and African American youth in particular, we have seen the unemployment rate at 30 percent or more for the last 20 years. I am hopeful that, with this initiative, we will be able to relegate that statistic once and for all from the statistics books to the history books. I believe very strongly that we cannot accept the economic status quo in this area.

    We also want to thank the committee for their support and what they have done to help ensure that our welfare-to-work initiative is successful.

    I want to pay special tribute to Congressman Stokes for the opportunity to visit much of what is going on in the Cleveland community as I traveled there to examine firsthand the success that we are having with preparing individuals for the workforce of the future in the Cleveland Works Project.

 Page 62       PREV PAGE       TOP OF DOC    Segment 1 Of 2  
    Clearly a secure workforce that promotes the economic security for workers and families must also be a high priority for all of us.

    Our budget request includes an increase of $100 million in this area and this increase is estimated to help more than 40,000 dislocated workers manage the change as they are in between jobs and experiencing the many shifts that are taking place in the economy today.

    I also want to point out that an important focus for the Department is what we must do to continue the encouragement of all American workers to invest in retirement savings and our efforts to not only make sure that pensions are safe and more portable but that we do much more to encourage American workers to invest in the future through placing a greater emphasis on retirement savings.

    The last area, quality workplaces, is an area that certainly speaks to much of what the Department has been engaged in on the enforcement front, particularly as we look at strengthening our work in the area of the cooperative compliance programs under OSHA; and our budget request is clearly tied to in this area, increasing not only our enforcement actions but also what we can do to encourage a more cooperative compliance.

    There is also a request in this budget for additional funds for expanding work on the child labor front. In this area, we have a request not only to strengthen and to build on the work of this committee and assisting us to work with the ILO and the IPEC international organizations, but to truly be a leader in the effort to eradicate child labor in the ILO countries. We also must make sure that we are doing our work here at home by paying greater attention to our enforcement efforts in the United States. Particularly by strengthening enforcement actions in those industries where we believe there are more incidences of child labor.
 Page 63       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    Lastly, I would like to comment briefly on the GPRA process. Because I believe that the three strategic goals, which are embodied in our 1999 annual performance plan and are directly tied to our budget request, send the American public a clear message of the purpose and mission of our Department.

    The plan presents the programs, activities and achievements that the Department of Labor will strive to achieve in 1999, the means by which its performance will be evaluated and the standards to which it will be held accountable by America's public and certainly by this committee and by our distinguished Members of Congress.

    I thank you for the opportunity to make this opening statement, Mr. Chairman; and I will be happy now to respond to any questions that you may have.

    Mr. PORTER. Madam Secretary, let me thank you for an excellent opening statement.

    [The information follows:]

    "The Official Committee record contains additional material here."


    Mr. PORTER. If I could editorialize on one thing before we begin questions—I think that the best thing that we can do for America's workers regarding their security is to create now and have a national commitment to creating the kind of Social Security system we would have created in the middle of the Depression if we could have created it. This system would allow every worker to own their own account, invest it and watch it grow and have the ownership of that account and not simply a promise from government that they might get some benefits later on.
 Page 64       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    I think it is time that the American people and our government address this and give hope to young people that they will not simply be putting money into a plan that really won't materialize for them when they reach retirement age.

    I would also say, if we had such a plan, if everybody had their own public investment account, Individual Social Security Retirement Account, I think we would eventually decide that we don't need corporate pension plans and we don't need labor pension plans. All we need to do is have the employer pay their portion in addition to the employee's FICA tax portion into those own accounts so that you don't have to worry about vesting. With this system you would have total portability, and the worker would be in charge of their own retirement destiny.

    I think if we can do that, we would make a great deal of progress; and Social Security would be a program that not

only is as good as the one we have today, it would be many, many times better.

    That is my editorial comment.

    Now, some questions. As you know, last week, we heard testimony from the GAO. We are going to have this in respect to each Department that comes before us with their budget. They talked primarily about your Department's implementation of the Government Performance and Results Act, known as GPRA.

    Now quoting briefly from GAO's testimony, they said the following in their conclusion: ''Labor strategic planning efforts are still very much a work in progress. Like other agencies, Labor must focus more on the results of its activities and on obtaining the information it needs for a more focused, results-oriented management and decision-making process. Labor has begun to improve its management practices in ways that are consistent with that legislation. The benefits of the Results Act can be particularly important for a decentralized department such as Labor. However, such an organizational structure provides challenges in meeting the legislation's objectives.''
 Page 65       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    Basically, I think GAO told us that your Department was not doing a great job in implementing GPRA; but they also said that you were improving.

    Madam Secretary, how do you feel about the Department's GPRA implementation thus far? Do you feel that you are on the right track and proceeding in the best way possible?

    I think I will let you answer that part before I ask the next question.

    Secretary HERMAN. Thank you, Mr. Chairman.

    Well, I feel very positively about the work at the Department related to GPRA. I definitely believe we are on the right track.

    As I said in my opening statement, the strategic plan that was reviewed by GAO was largely completed before I arrived at the Department; and I think, in an effort clearly to meet the deadline that was imposed on all of the various departments and agencies, we did submit the plan that was due by September. But, since then, we have worked very, very hard, and I certainly have as Secretary, to become very clear on what the objectives are under GPRA, what it is we are trying to achieve overall in terms of outcomes and bottom-line results.

    And I purposely chose to use the performance plan for the 1999 budget process as a way of getting us better aligned with what the expectations and intentions are under GPRA. I conducted two staff retreats with my senior management team, from both here in Washington and in the field, to make sure that, first of all, we had a clear understanding of what the expectations were and then to lay out a process that we could all understand and begin to identify the cultural changes, quite frankly, that we are going to need in the Department to ensure compliance with GPRA.
 Page 66       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    To that end, I did lay out three overall arching strategic goals so that we can speak as one organization: a prepared workforce to meet the challenges of the 21st century; a secure workforce to make sure we are managing the change and desire of the American workers today; and, lastly, what do we mean when we say quality workplaces; and to have all of the agencies buy into those three strategic goals and to align their outcomes and results accordingly.

    It is a job—it is a big job to get away from what I call the stovepipe mentality, where we had good programs operating oftentimes as stand-alone functions and not looking at crosscutting activities and what we could do to speak as one unified department looking at overarching results with clear priorities that we are all focused on. I believe our performance plan reflects the work that we have engaged in recently to look at priorities, look at results, look at outcomes and to speak as one department against these strategic objectives.

    Mr. PORTER. I am glad to hear that that is the direction that you are taking your Department.

    I know it is historically a Department that has been, as the GAO said, very decentralized; and your reference to culture I think is a very important one. Often, you can have leadership at the top going one direction and people underneath who don't get it; and you need to have everybody in the Department get it. That is what we are looking for here, programs that work for people, money that is well spent in getting people a better chance in life and better prepared for a place in the workforce.

    GAO had concerns about the Department's evaluation of programs and how it relates to the Results Act. They believe that you are not doing adequate evaluation of programs and that you have not been specific in identifying the evaluations that you plan to do and when you plan to do them in carrying out the Results Act.
 Page 67       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    What is your reaction to that criticism?

    Secretary HERMAN. Well, I agree, actually, in part with what GAO has said in this area. I do believe, particularly in the employment and training administration, that we have made good and strategic use of evaluations to give us a better handle on outcomes and to be able to learn more from experiences and to evaluate those experiences to see how we can improve our own operations.

    We need to do that more broadly, in my view, in other areas of the Department; and I am looking to foster that kind of work in other areas of the Department as well, taking some of the lessons clearly that we have learned I think from the ETA experience here.

    We have to always, I think, be mindful of cost when we talk about engaging in evaluations. We want to make sure that it leads to the outcomes that we want to achieve in this area. But, also, as one who operated her own business for many years, doing this kind of work in the private sector, I am very mindful of the fact that, oftentimes, you can come back with evaluations that point to corrections and things that you really need to get a handle on and sometimes those documents can also be used against you.

    So when I talk about a cultural change I think a part of what we have to do is to understand that evaluations are to help us to get the data, positive and negative, and to be able to use both sets of data to improve program efficiencies.

    Mr. PORTER. That is my next question. GAO expressed concern about the Department's lack of reliable and consistent information needed to monitor performance of individual programs. Are you confident that the performance data that you have for your programs will tell us what we need to know to assess whether they are meeting their objectives or not?
 Page 68       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    Secretary HERMAN. What I feel better about, Mr.

Chairman, quite frankly, is that we are asking the right questions going into the future to get the desired outcomes. That is what I do think that we are doing differently at this point in time.

    I would not say clearly that all of our performance measurements are yielding the results and telling us the story that we want to get a handle on; but I do feel a lot more confident, based on the process that we have engaged in, that we are asking the right questions that will lead us in that direction.

    Mr. PORTER. Thank you, Madam Secretary.

    Mr. Obey.


    Mr. OBEY. Thank you, Mr. Chairman.

    Madam Secretary, just two questions.

    This country spent the last almost 60 years trying to build a set of rules domestically that reflect a certain sense of decency in their relationship between employers and workers. On issues such as child labor, on rights of workers to organize and bargain collectively. It encourages workers to organize and bargain collectively and to create safe workplaces.
 Page 69       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    In my view, we cannot allow our compulsion for globalization and free trade to push us into walking away from those values and tear down the social contract that has made this country a civilized place to live for all of my life.

    I am told that, worldwide, there are about 250 million kids who are in the workplace. Half of them work full time. And I am concerned that the fact that many of them work in near slave labor conditions which not only treats them as subhuman but also, in the process, undercuts our own wages and erodes our own sense of decency. I don't think America wants to build a yuppie life-style on the backs of the kids who are treated like dogs.

    You have got a $27 million increase in your budget, as I understand it, to deal with child labor abuses nationally and domestically. That is such a tiny amount, given the huge size of our economy, but I welcome the initiative nonetheless.

    I wonder, can you tell us exactly what you are going to do with that money and can you explain to us how that is going to be able to make a real difference in our ability to stand by the values that we profess in this country for about 45 minutes when we go to church on Sunday and then all too often ignore for all of the other hours of the week?

    Secretary HERMAN. Thank you very much, Congressman Obey. I am certainly not in the habit of correcting you, but I want the record to state that the request is $37 million——

    Mr. OBEY. 37 good.
 Page 70       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    Secretary HERMAN [continuing]. Not $27 million. And the initiative is divided into two areas, $27 million on the international front and $10 million on the domestic front. I will just speak briefly to both of those areas.

    You are absolutely right when you speak of the large numbers of working children that we have worldwide—250 million. I have often said that I don't think that American consumers want to wear or use products made by children who have been robbed of their own childhood. So this initiative seeks to continue the work of what this committee has supported historically and what we have done as a nation and that is to be an international leader on this whole question of eradicating child labor abuses.

    Specifically, with these funds, we wish to enroll 10 other countries in the work that we have been doing in our other technical assistance programs that we have engaged in in the Department. To date, we worked in countries like Thailand, where we have worked there to deal with the eradication of child labor abuses in the garment industry, more than 10,000 cases there. We have worked successfully in countries like Pakistan and Nepal.

    What we want to do now is to expand those technical assistance operations through the ILO, working with our child labor there to expand those efforts so that we can continue to be a world leader on this front but, more importantly, as we look at the globalization of our economy today, to make sure that we really are going to practice what we preach when we lay out principles that say we don't support any forms of child labor anywhere in the world. These funds will help to ensure that.

 Page 71       PREV PAGE       TOP OF DOC    Segment 1 Of 2  
    On the domestic side, it is also equally important to make sure that our domestic house is in order. So what we have asked for are two sets of dollars. One set will go to our Wage and Hour Division to be able to more effectively target our enforcement areas where we have knowledge that child labor violations may be on the increase, to make sure that we are doing in our own backyard what we want to do internationally; and the remaining $5 million will be attached to our migrant and seasonal farm worker program so that we will be able to actually follow many of our youth who are on the migrant streams and to expose them to alternative careers and other job opportunities.

    Mr. OBEY. Let me just make a suggestion. Because I am limited in time, I ask you not to respond now but for the record.

    We have often required report cards on the voting records of our countries in the United Nations to see how many times they have voted with us, how many times they voted against us. If we can get involved in that, why should not the Secretary of Labor have the ability to develop a report card on every doggone country in the world on issues of the reality of their labor markets, the rights of workers to bargain and the child labor practices for other countries and simply rank every country A through F?

    I personally don't see why any country that ranks F should be able to sell one dime of product in this country. I know that doesn't, again, comply with the compulsion for free trade, but it is conventional wisdom in this country. But I don't want free trade if it is perverted trade, and I would simply urge you to explore on your own how you can develop a report card to assess the performance of other countries in the world.

 Page 72       PREV PAGE       TOP OF DOC    Segment 1 Of 2  
    Another question and then a request.

    Democrats at our retreat last week heard from an amazing black woman who worked for a defense contractor in this country. That workforce voted to unionize. That company is consistently dragging its feet. They have appealed and appealed and appealed; and, during the process, she, who was a very active force in pushing to unionization, was fired by the company. They wound up handcuffing her and getting her tossed off the premises. Just an absolute wretched performance by a company that masquerades as a practitioner of free enterprise.

    I would hope that—while you are a patriot, I would hope this administration will not be intimidated by forces in this

Congress and in this society who want to prevent you from establishing good, tough rules; say if a corporation engages in that kind of conduct they can go straight to hell in a hand basket if they expect to get any Federal contracts.

    I mean, no company in America who treats workers like that ought to get one dime of taxpayers' money; and I hope that the administration will not be intimidated by the apologists for that conduct in the business community or in this Congress.

    Having said that, I have got one other request.

    I have got about six companies in my district that were closed in the past year and just walked away and paid virtually no attention to their obligation to the workers they left behind. I have one company in Ashland, Wisconsin, now. It is a very large company in this country. They decided to close the paper mill. Over 200 workers were thrown out of work.
 Page 73       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    That company was asked by the mayor of the town to at least have a discussion on the possibility of leaving some paper machines behind so that they could look at the possibility of other potential buyers for that plant. The mayor was told, in plain English, this is nonnegotiable. That discussion will not be held.

    I would like you to give me the name of someone in your Department who I can work with so that, between your Department and Treasury, we can draft an expansion of the Plant Closing Act which simply says that if any company closes down shop in this country and if they refuse to at least entertain requests from the community to leave equipment in the community so that they can try to find other employment opportunities for their people, that those companies will lose all ability to claim all depreciation rights anywhere for the next 10 years.

    I don't know who can be the most help on that. But I feel very strongly about it, and I would very much appreciate the help of your Department.

    Secretary HERMAN. Well, I would be happy to follow up with you on this, Mr. Obey.

    The whole question of what we are doing today to help workers really manage much of the change and dislocation is something that I am very committed to as Secretary, and I would be happy to follow up with you for ways that we can help create incentives as well as disincentives in this area.

    Mr. OBEY. Well, I recognize that there are good social and economic reasons for providing depreciation in this country. But companies who are receiving also have an obligation to give something back in return.
 Page 74       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    So I am not seeking administration endorsement for what I am trying to do. I endorse it. I am for it. That is all I care about right now. I am looking for a person to give me some technical help to draft it the way I would like to draft it. I would hope the administration would support it.

    Secretary HERMAN. I will follow up with you on that.

    Mr. PORTER. Thank you, Mr. Obey.

    Mr. Bonilla.

    Mr. BONILLA. Thank you, Mr. Chairman.

    Madam Secretary, I would like to start by thanking you for establishing a wonderful open line of communication with my office and other offices of other members on the subcommittee since the very first day I think you were designated to be the Secretary of Labor. I think that is very productive as we try to move through some problems that we all express to each other going both directions.


    I am also delighted about the signal that the Department is sending with the designation of work-flex demonstration sites, and we were delighted just a few days ago to learn that the State of Texas is going to be a designated site. That is in concurrence with my philosophy and the philosophy of many in this country that the more we can take the handcuffs off of small businesses and unload some of the burden of paperwork that is breaking their backs that the better off we are.
 Page 75       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    I concur strongly with our Governor of Texas and what the spirit of Texas is, that Texans know what's best for Texans. I think that the designation of this work site is a great move in that direction of allowing us to have more local control over our business situation.

    My question about this particular program is, since it will greatly benefit the six States that have been designated as demonstration sites, when will it be extended to all 50 States?

    Secretary HERMAN. Well, as you know, Congress gave us the authority to essentially authorize the six States that were part of the work-flex program. But we have also, as the result of much of the work that has gone on in Congress and with the Department, provided for general waivers to States in specific areas so that they could come into the Department and make requests in specific areas.

    I am pleased the States are taking advantage of this. As a matter of fact, we have had requests from over 41 States for general waivers in other areas; and 30 States are now participating in that waiver process. So it is working in terms of more flexibility, more creativity and States taking advantage of the overall principle.

    Mr. BONILLA. Are there some States that have not even requested to be designated?

    Secretary HERMAN. There are some States that have not requested, yes. But we have tried to respond to all of the States that have come in for a general waiver request in key areas.
 Page 76       PREV PAGE       TOP OF DOC    Segment 1 Of 2  


    Mr. BONILLA. In the Department's spirit of trying to lift some of these local regulations on local businesses, I am concerned this philosophy is not existent at OSHA. Specifically, I have said on this subcommittee many times that we are all concerned about worker's safety. I am concerned, however, just as much about new rules and regulations that are promulgated by OSHA that are not based on sound science or research.

    Specifically, I have a concern since we included language last year in a bipartisan agreement to stop any enforcement or promulgation of an ergonomics regulation. We inserted a provision in the bill which prohibits OSHA from issuing a proposed or final standard on ergonomics during this fiscal year. It also prevents OSHA from enforcing voluntary ergonomics guidelines through the general duty clause during fiscal year 1998.

    Again, this is a bipartisan agreement. But I am concerned that OSHA has chosen to completely disregard this provision in the bipartisan agreement and is citing companies through the general duty clause for ergonomic violations using vague justifications.

    I have an article I am sure you saw that is 2 months old about OSHA proposing a $840,000 fine against Hudson Foods. I

have a copy if you have like to see that, Madam Secretary. I am not a lawyer, but it looks to me this is a clear violation of this bipartisan agreement and Federal law.

 Page 77       PREV PAGE       TOP OF DOC    Segment 1 Of 2  
    My question is: Would you or would you not interpret OSHA's action in this case to be in violation of this—of the law? And do you think these actions should be reported to the Department of Justice? Because I do.

    Secretary HERMAN. My goodness. No, I don't think the actions should be reported to the Department of Justice.

    Let me just say, in terms of my own interpretation, I would be happy, Congressman Bonilla, to make sure we provide you with a full briefing from our own staff and our own legal counsel on this situation. Because I have been briefed; and my understanding, in terms of what happened specifically with the Hudson case that you are referencing, is that the rider, as we interpret it, the intent of the language from Congress, referred to the voluntary guidelines that could be promulgated regarding the ergonomics standard. But it did not refer to a prohibition in terms of OSHA exercising its legal authority under the general duty clause.

    So there is a clear legal distinction between saying, yes, the language says you cannot take guidelines that are out there and use those guidelines for any kind of enforcement or citation action. But what OSHA did in this instance was to use its authority under the general duty clause to cite the Hudson company.

    And, specifically, the general duty clause says that four criteria have to be met; and it was the opinion of OSHA and our own team that these four areas were examined very closely in the case of Hudson. Specifically, those four areas include: that workers have been exposed to hazards; that the hazard was recognized by the employer or by the industry itself; that it was likely to cause serious injury or in some cases death; and that there was a feasible means, a feasible way to correct that hazard. And the Hudson situation was evaluated against those four criteria.
 Page 78       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    I should also point out that, in April of 1997, we had a similar issue with another company that I won't bother to get into here, since you are not raising that issue, that challenged OSHA in a similar manner. Those actions were upheld, and it was decided that OSHA had the authority to act the way it did in the Hudson case.

    But I think it would be very useful if we could send a team up to your office to have a thorough review of exactly what happened in this situation.

    Mr. BONILLA. In this particular case—and I am aware of, of course, the four points of the justification that needs—they need to comply with before they move forward in this area, before OSHA moves forward in this area. But clearly the bill—and I know you have read it—references the general duty clause. The language here says, no funds made available in this act may be used by OSHA to enforce voluntary ergonomics guidelines through section 5, the general duty clause. And, in fact, the courts are throwing out OSHA's cases under the general duty clause because there is not enough evidence to support OSHA's involvement in this area.

    Again, I am not an attorney. But after reviewing the guidelines, the four points of justification and language in the bill, I saw it as a clear violation of the law.

    I am just concerned that OSHA—why would they push the edge of the envelope, going almost to the very—if not to the edge of the line, over the line in this area? That is—it is just a power-mongering attitude that exists at the agency.

 Page 79       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    In another area related to this, I am concerned about—continue to be concerned about the medical research and the scientific research behind the need for such a standard. My question in that area is, what are you doing to ensure that a comprehensive, thorough review of all available scientific and medical evidence is completed before OSHA moves forward on this rule?

    Secretary HERMAN. Well, Congressman Bonilla, as I told you last year when I came before this committee, I am going to make sure that we are doing the appropriate outreach and consult widely and broadly before we come forward with any rule in this area. We continue to do that with regional conferences and with consultation that is still going on in this area. Again, we would be happy to brief you on exactly what that has included.

    Mr. BONILLA. Do I have time—has my time expired, Mr. Chairman?

    Mr. PORTER. Your time has expired.

    Mr. BONILLA. Thank you, Madam Secretary.

    Mr. PORTER. Thank you, Mr. Bonilla.

    Mr. Stokes.

 Page 80       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    Mr. STOKES. Thank you, Mr. Chairman.

    Madam Secretary, welcome before our subcommittee.

    I would like to take a moment to thank you for your recent appearance in Cleveland, at our annual Urban League luncheon, and for the time that you took, while you were there, to visit our welfare-to-work projects. You referred to each of these events in your formal statement this morning.

    Let me begin by discussing with you an area of concern.

    While all of us are proud of the overall economic growth that is occurring in the country and the record low unemployment, an interesting phenomena that no one is talking about or discussing is the high unemployment amongst African American adults, males in particular, and also among African American teenagers. Can you give us some statistical data relative to that situation so that we can put it in perspective as we talk about the low 4.7 percent unemployment?

    Secretary HERMAN. Well, you are absolutely right in terms of the fact that we are not talking enough about the whole question today of what I call selective prosperity. Because, while it is true that we have the lowest unemployment rates that we have had in 2 decades in this country, we clearly have key populations, target populations, that still have excessively high rates of unemployment. And at the top of that list has been the historic and persistent unemployment rates of African American youth, in particular African American males.
 Page 81       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    When you look at that core population, ages 16 to 24 years of age, in terms of the overall young adult population, or in particular when you look at the 16- to 19-year-old teen population, we know that this is a group that has had unemployment rates that have been at 30 percent or higher for the last 20 years. It is almost considered to be an economic status quo that we can do nothing about.

    Of course, I reject that argument; and I believe that, with concentrated effort and concentrated work, much of what

this committee is being asked for in the out-of-school youth initiative can help us to once and for all eradicate these statistics.

    We know we have very definite models that are operating in the country, that when we make the real investment in our young people, when we give them the access to training, to education, when we put in the appropriate support systems, that we can get them into the economic mainstream. I began my own career working with this particular population in Mobile, Alabama, so I know it is possible.

    But you have to have both the national will and the resources to eradicate this problem.

    I am very pleased with what I have seen, quite frankly, in my own travels around the country for what we are doing in isolated pockets. But we clearly need to do more and be much more aggressive on this front.
 Page 82       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    I might add that linked to that is the tremendous need for education and training when we look especially at the large numbers of high school dropouts and the disproportionate higher rates of unemployment that show up especially for high school dropouts, particularly for African American and Latino youth in this area.

    Mr. STOKES. I am pleased to have that response from you. This, of course, is an area I have had discussions with Labor Secretaries now for more than 25 years, right here in this Subcommittee. Of course, as you said, this problem has persisted for 30 years, at about the same rate.

    Let's talk about employment training.

    Secretary HERMAN. Let me just add one other thing for the record.

    I never like to make much out of one set of data, because you certainly need a longer trend line to determine whether or not there is any significant movement. But I was pleased in last month's unemployment report to see that we did get a 4 percentage drop for the first time in a long time in this population. I am hopeful that that is a trend that we will continue, continue to see to be a downward trend. But I certainly recognize it is too early to suggest that we have a trend line there, but it bears watching.


 Page 83       PREV PAGE       TOP OF DOC    Segment 1 Of 2  
    Mr. STOKES. Let's talk about a related area. What percent of the eligible population is being served by the employment training program?

    Secretary HERMAN. Well, when we look at, again, the high needs of unemployment, particularly in key urban and key rural areas, there is no way that all of the programs of the employment and training administration can service those who both need training to access the new jobs that are coming on-line or oftentimes retraining assistance for those who are being dislocated in their present jobs.

    So what I would like to focus on are those key areas where we can make a significant difference in key populations if we target them. For instance, the out-of-school youth is one target population where, if we had the resources, we could do more to get that population in.

    What we are doing on the welfare-to-work front is another area where we can substantially increase that participation.

    And in the dislocated worker program, we are also looking to make sure that, through those new funds, we are able to get at least 40,000 to 50,000 more people served.

    Overall, we have had generally an estimate, nationally, that we serve about 5 percent of those who are really eligible, which is why I believe if we can go in a more targeted approach to work with specific populations that we will be able to get that number up.

    Mr. STOKES. Now, between your 1998 fiscal year request and the fiscal year 1999 budget request, am I correct that there is a reduction in the amount being requested?
 Page 84       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    Secretary HERMAN. In the disadvantaged adult and youth area?

    Mr. STOKES. Yes, under your employment training.

    Secretary HERMAN. In the employment and training area, we actually are asking for an increase over the FY 1998 appropriated amount. We are asking for an increase in our adult training program of $45 million; and we are also asking for $250 million in our out-of-school youth program.

    We did not ask for any additional increases in either our youth training or our summer youth program. So we didn't have any decreases there.

    What you may be referring to, Congressman Stokes, is the decrease, $75 million in the school-to-work initiative. There we do have a planned reduction, and that planned reduction is 38 percent. But that was actually a part of the statute that accompanied the school-to-work grants in terms of a mandatory phaseout. So in that area, yes, we do have a reduction in funds, as well as in our one-stop centers. But, again, that is a part of what was designed to be seed money on the part of the committee in Congress.

    Mr. STOKES. Can I have additional time, Mr. Chairman?

    Mr. PORTER. You have about another minute, yes.

 Page 85       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    Mr. STOKES. This is my last question to you during this round. In your professional judgment, Madam Secretary, how well is welfare-to-work working?

    Secretary HERMAN. In my professional judgment, I think that it is working. I think that we have a lot more that we have to do to meet the challenges that are in this legislation. But I am concluding, actually this week, a national fact-finding tour at the request of the President to go out firsthand and to examine, as you know, what is happening with this initiative.

    I would say that there are three big areas where we are making progress and where we have more to do.

    The first is the recognition that the individuals who are making this transition really do want to work and employers are stepping up, both large and small, to make those jobs available. But there is much more that needs to be done to provide the kind of infrastructure support to help them really become skill ready and job ready.

    Secondly, we have placed a lot of emphasis on getting the job. In my view, we are not placing enough emphasis on keeping those jobs. Therefore, the transportation strategies and child care strategies are going to be critical to ensuring the overall success for this effort for the long term.

    Just lastly, I would say that it is not going to work unless we have partnerships clearly beyond just the government, State and local municipalities of government. It is going to take the business community. It is going to take faith-based communities and other nonprofit organizations to really be in there to help to be the bridges that these individuals will need to make the change to sustain them for the long term. Otherwise, I believe that we will be in another cyclical pattern and not having a long-term institutional change.
 Page 86       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    Mr. STOKES. Thank you.

    Thank you, Mr. Chairman.

    Mr. PORTER. Thank you, Mr. Stokes.

    I would remind the committee members that we are operating today under the 8-minute rule, that we begin with going back and forth for those members who were here at the beginning of the hearing, and then we will recognize members as they arrive if they arrive after the beginning of the session.

    Mrs. Northup.


    Mrs. NORTHUP. Thank you.

    Madam Secretary, I had a couple of questions to follow up questions from last year.

    Last year, I spoke repeatedly in this committee and with my colleagues about the black lung provisions and regulations that have been rewritten by the Department. Specifically, I asked you about how the Small Business Administration felt about the regulations and how these regulations would affect the small business community; and, at that time, the Department of Labor believed that there would be no effect. I am pleased to see that the Small Business Administration did not agree and that they have raised their concerns to you.
 Page 87       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    I am also aware that several Members of Congress have requested that you withdraw these proposed regulations. I wonder with the controversy about these effects of these regulations unresolved, why we haven't withdrawn the flawed regulations; what is the status of the discussions with the Small Business Administration; and whether or not you have met with the House Small Business Committee regarding these issues.

    Secretary HERMAN. I have not met with the House Small Business Committee. I have spoken with the Small Business Administrator, and I will tell you that the current status regarding the regulations is that we are in active discussion with the SBA team. We are looking at what the SBRFA requirements are, and we want to make sure that we are doing all we can do to be sensitive in this area.

    I believe that when I did meet with you last year you did raise this issue with me. I did make two commitments to you at that time, that I would go back and personally take a look at the regulations to see, first of all, what we could do to extend the comment period to make sure that we were consulting as broadly as possible and that we would pay particular concerns to the small business community. We have done both of those things, and we continue to be in consultation presently with SBA on this regulation.

    Mrs. NORTHUP. I think we also talked at the time about what would be the reason to change the regulation considering that there seems to be no additional medical evidence that would invite these changes, and I am interested in whether or not you have looked at this. I guess the question that is raised here is exactly what is it that would cause us to change a 15-year-old regulation, considering that the incident of black lung has actually decreased rather than increased.
 Page 88       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    Secretary HERMAN. I think the impetus for the regulation initially, Congresswoman Northup, was the fact that it was 15 years ago and there have been several court decisions that actually impact on the regulations themselves. Clearly, the impetus, in terms of looking at this issue, was to see were the regs still in compliance, were there things that needed to be updated and strengthened in terms of ensuring greater protection and safety concerns.

    They have given me a note, and I don't know what it says, but that is my understanding. Let me see what the staff is saying. That is what they are telling me.

    Mrs. NORTHUP. Were those court cases in which workers did not receive benefits?

    Secretary HERMAN. In terms of the court cases, no, it is not my understanding.

    I will admit I am not versed in all of the case history on this, but it is my understanding that it was both an issue to take into consideration what some of those actions were, but also there was an emphasis on process in terms of what could be done in this area to make it more efficient.

    Mrs. NORTHUP. Well, I would just like to point out that there will be a lot lost other than efficiency if, in fact, you rewrite regulations that allow us to reopen 80,000 cases, including cases where people have died in the meantime. It will be those issues that will undo any sort of efficiency.
 Page 89       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    Secretary HERMAN. Let me just give you my assurances, again, Congresswoman Northup, that we continue to consult on this; and we continue to work slowly with the SBA and with the small business community. I am committed to ensuring that we still follow that path before we take any action in this area, and we will certainly be in touch with your office before we do.


    Mrs. NORTHUP. I think the concern by both officials and businesses in Kentucky where coal mining exists—where it is very much a part of our economy, is that the Department of Labor decided they wanted to do this and now is trying very hard to overcome any reasonable obstacle for not doing it. That, in fact, will have a tremendous cost.

    I would like to just follow up with the question about peer review of research. I am aware that NIH, for example, requires peer review of all research. And it is not just that peer review catches mistakes, it is that when there is a standard that every bit of research is held to, then people don't overstate what the results of their data might show. They don't allow their personal interpretations to come through, because they know that their peers will likely reverse those.

    It occurs to me that peer review would be something that would be important for all of the studies you conduct, and I wondered if you could give me a breakdown of the extent of peer review that goes on; where you don't use peer review; where you do; and what the criteria is for when you do. Particularly, I would like to know what type of research you are using for these black lung benefit changes would be and whether peer review exists for these regulatory changes.
 Page 90       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    Secretary HERMAN. I will be happy to supply you with that information for the record.

    But let me just say, philosophically, that I support the concept of peer reviews. I think it is very important as a part of what we are doing in applying any of our standards.

    But we also go beyond just peer reviews. I mean, there is a broad outreach and consultation process that really does go on when we look at proposing any standards, if you will, that includes peer review to the academic community. But to the specifics of the way that you would like to see it broken down, I will be happy to provide you that for the record.

    [The information follows:]


    There are two primary bases for the proposed changes in the regulatory definition of pneumoconiosis. The first is the result of judicial construction while the second is the result of studies and recommendations developed by the National Institute for Occupational Safety and Health (NIOSH).

    The statutory definition of pneumoconiosis at 30 U.S.C. 902(b), ''a chronic dust disease of the lung and its sequelae, including respiratory and pulmonary impairments, arising out of coal mine employment'', has been judicially construed to include both restrictive and obstructive lung conditions and to be progressive in nature.
 Page 91       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    NIOSH is a part of the Centers for Disease Control and Prevention of the Public Health Service of the U.S. Department of Health and Human Services. Its statutory mandate includes the study of occupational lung diseases and the preparation of recommendations to reduce their incidence. The current criteria for the medical tests to determine total disability due to black lung disease were established in consultation with NIOSH as mandated by 30 U.S.C. 902(f)(1)(D). These criteria were not changed in the proposed regulations. However, the regulatory proposal draws upon medical research summarized in NIOSH's September 1995 publication on ''Occupational Exposure to Respirable Coal Mine Dust,'' in support of the revised definition of pneumoconiosis.

    In addition to the peer review processes to which the individual studies cited in the 1995 NIOSH study were subjected, the 1995 study itself was also subjected to review by a six member External Review Panel and the submission of written comments from another twenty-two reviewing individuals and organizations. Included among the reviewing organizations were: the National Mining Congress, the Bituminous Coal Operators Association, the National Coal Association and the medical directors of two major coal mining companies, the Kerr-McGee Corporation and the U.S. Steel Corporation. The Director of the Education and Information Division of NIOSH has also submitted formal written comments and additional medical studies in support of the proposed regulatory changes.

    Mrs. NORTHUP. I would also be interested in the process. I think it is important that the process be objective and that the people that do the peer review aren't the same——

 Page 92       PREV PAGE       TOP OF DOC    Segment 1 Of 2  
    Secretary HERMAN. I understand.

    Mrs. NORTHUP [continuing]. And you know there isn't sort of a closer relationship to that.

    Secretary HERMAN. We will be happy to provide you with that.

    Mrs. NORTHUP. Mr. Chairman, is my time up?

    Mr. PORTER. No.


    Mrs. NORTHUP. Okay. I also asked you last year about the question of helpers under Davis-Bacon. Particularly, I noticed you stressed the importance of giving better opportunities to people who are just joining the workforce; and the helpers was part of the regulations. I think you all put a hold on that or said that there was additional information which came to light showing the regulations were not appropriate.

    I wonder if you could make available to this committee what that additional information was and whether it is any sort of different statistics or survey data that the Department cited in support of the regulation in 1989 and 1993. It seems like it is very important to help people who are just trying to get into the workforce have access to, really, some of the best-paying jobs that we have in our workforce.

 Page 93       PREV PAGE       TOP OF DOC    Segment 1 Of 2  
    Secretary HERMAN. Again, we would be happy to provide you with that information.

    But let me just say, because this was something that I did go back and take a look at personally when you raised it with me last year, there are two things that stand out in my mind that came in as additional data, but we can give you more information in this area. One was that the basic use of semiskilled helpers was not as widespread perhaps as it once was particularly 20 years ago when I was in the field working with helpers in the south; and, secondly, that the definition of a semiskilled helper seems to encompass a lot of definitions. So the question of how you would actually enforce it and how the appropriate determinations around it would be made were all questions that came into play here.

    But we can provide you with that information in terms of the additional data that did come into the Department.

    Mrs. NORTHUP. I would appreciate that.

    [The information follows:]


    The Department of Labor's proposed rule published in August 1987, projected that helpers would be determined to be prevailing in at least two-thirds of all craft classifications (52 FR 31369). This projection was amended in the final rule which indicated that the frequency of the use of helpers might be reduced somewhat to the extent that collectively bargained rates were recognized as prevailing and did not provide for use of a helper classification (54 FR 4242).
 Page 94       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    The Department's actual experience with the helper regulation presented a starkly different picture. In contrast to the estimate published in 1987 that helpers would prevail in at least two-thirds of all craft classifications, the Department found that use of helpers prevailed with respect to only 69—less that 4 percent—of the 1,763 classifications included in the 78 prevailing wage surveys completed during the period the rule was in effect.(see footnote 1) These numbers are even lower in just the nonunion sector—where it had been assumed that use of helpers would almost always be found to prevail. Of the 69 helper classifications found to prevail, 21 were based on the practice of union contractors.(see footnote 2) A total of only 48 open shop helper classifications were found to prevail.

    Furthermore, the Department found that use of helpers was not the prevailing practice in any classifications in 43 of the 78 surveys conducted, covering 229 of 328 counties surveyed.(see footnote 3) These included only two surveys in which the schedule reflected entirely collectively bargained rates, 10 surveys in which the schedule reflected entirely open shop rates, and 66 mixed schedules—51 of which reflected 50 percent or more open shop rates. In 13 of the 35 surveys where a helper classification was issued, the only helper classification found to prevail was a union helper. Open shop helper classifications were found to prevail in only 22 of 78 surveys conducted, covering only 52 of 328 counties surveyed.

    The extraordinary divergence between the actual data and the projection used as a basis for adopting the helper regulation clearly support the Department's conclusion that ''the basis and effect of the semi-skilled helper regulations should be reexamined.''
 Page 95       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    Data not previously available when the helper regulation was originally proposed and promulgated also show a lower use of helpers than was originally believed. For example, Bureau of Labor Statistics (''BLS'') tabulations from the 1995 Current Population Survey (''CPS'') show that helpers comprise only 1.3 percent of the total construction employment. Employment data from the Occupational Employment Statistics (''OES'') program, which formed the basis for earlier analyses of helper employment, show that helpers comprise 9.4 percent of the total construction workforce—higher than the CPS data but a much lower incidence than the Department's economic impact analyses in 1987 and 1989 would suggest.

    Mr. PORTER. Thank you, Ms. Northup.

    Ms. Lowey.

    Mrs. LOWEY. Thank you, Mr. Chairman.

    I want to join my Chairman and my colleagues in welcoming you before this committee as the first departmental hearing, our first witness. We do appreciate your being here today and responding to the many questions we have, and I just want to express to you that I personally appreciate the importance of your position in protecting American families. The Department of Labor has such a critical role in protecting our pensions, helping more people move from welfare to work, and to ensuring job security. We do appreciate your leadership of this agency.

 Page 96       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    I would like to follow up first, Madam Secretary, on the question of—I believe it was Mr. Stokes who asked you about your national welfare-to-work tour; and I know you have visited many of the sites and are going to report fully. But perhaps you can share with us some of your impressions of the skill training programs helping people get ready for work. I know we have often talked in this committee about the myriad of job training programs, and I know you have seen some that are particularly successful. Perhaps you can comment to this committee.

    Secretary HERMAN. I have seen several programs in the field that I have actually been very impressed with.

    I am impressed in part with what I see going on in many of our one-stop centers where the consolidation is working in terms of streamlining not only the types of programs that we are operating but the quality of the training and the quality of the services. It is very good to see how individualized much of the services have become because of the streamlining effects. I think the staffs in the field are able to be much more hands-on and much more tailored in meeting individual needs; and that is very, very important, particularly as we talk about this particular population of new workers who are trying to make that transition from welfare to work.

    The second thing that I am impressed to see is that we are doing a much better job, I believe, of linking training needs to where the jobs are going to be; and that is very, very important.

    I saw, for instance, a program in New York City, in Harlem, the Strive program.
 Page 97       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    I saw in Tampa, Florida, just 2 weeks ago, employees actually coming into the centers and helping the training programs, in the computer area in particular, and making sure that the basic fundamentals are being incorporated into our own programs so that we can get these individuals more job ready.

    There has been a big emphasis on just life-style issues, life-style training, attitudinal training in terms of what it takes to get a job, to be successful on a job, and going much more into those kinds of situations with individuals who are trying to make it today into the workplace. To see this kind of tailored assistance, to see employers actually coming into the center, working hand in hand with our training initiatives is very encouraging.

    I was in the State of Delaware where I had the opportunity to actually meet with business leaders throughout the State who have come together to identify on a Statewide basis where the jobs are going to be and to make commitments not only to the number of jobs that they will make available to welfare recipients but to clearly identify the training needs and to help to participate in the design and the delivery of those training needs through an employer council that was very encouraging.

    I think that businesses today, given the unemployment rates, are really looking for new pools of workers.

    Mrs. LOWEY. I thank you. And I just want to emphasize again, as someone who has been working with the job training programs since the 1970s, as I know you have, we both know that there are too many of these programs that lead to nowhere, nonexistent jobs; and yet there are some outstanding examples that are really doing the job. The challenge to all of us is to replicate the outstanding ones.
 Page 98       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    In my own district we have programs run by Westchester Community College where they are educating welfare recipients, preparing them for jobs, and they are 88 percent successful.

    So education is an important component, as is combining education with hands-on experience. In fact, what they are doing there is actually placing these people in jobs, 88 percent in jobs, earning over $25,000 a year; and, if they do not succeed, they can always come back and get additional placement.

    Mercy College, Pace College, I think there are tremendous resources in the community college network; and I would like to work with you on introducing legislation that focuses on the education component so we can be sure as we are reforming welfare we don't deny people, men or women, the opportunity to get the education they need to truly move from welfare to work.

    So I want to thank you, and I think it is absolutely critical that we figure out how we can replicate the successful programs and we just don't have spot successes here and there. Because this is the challenge to all of us, and I would like to continue that dialogue with you.


    In another area, last year's House report directed the Department, and I want to quote, to ensure that an appropriate portion of the funds appropriated for the Davis-Bacon wage survey program is expended to randomly sample all data submissions, to verify their accuracy. In addition, a sample of all data submissions should be selected for on-site data verification against actual payroll records.
 Page 99       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    Could you explain what you have done to implement this directive and what results has been achieved? And does this take care of the criticism that was leveled last year against third party submission?

    Secretary HERMAN. Well, what we have done in this area is to follow many of the recommendations that were made by the GAO and OIG in particular that spoke to verification of data from third party submissions. We have placed a clear emphasis on making sure that our systems are able to more adequately monitor and to audit that data for accuracy when it is submitted by third parties.

    In addition to that, we are working very closely with other organizations such as the Bureau of Labor Statistics now to examine what we are using as basic sources of data as we try to enlarge the picture so that we have a more accurate picture.

    Mrs. LOWEY. And you are satisfied with that.

    Secretary HERMAN. I am satisfied in terms of both what we have done with the funds and I think the results that we are getting.

    I am aware that the OIG itself is actually going to

submit a report to this committee shortly on the expenditure of those funds and what we have done in the specific areas of ADP to make sure that our overall data systems are upgraded, and what we are doing specifically on the reengineering front as it relates to data verification and working with other data sources that will be detailed in a full report to the committee shortly.
 Page 100       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    Mrs. LOWEY. Thank you.


    Lastly, another area that we address repeatedly is OSHA; and I do believe that most small businesses want to improve their working conditions. We are usually dealing with the minority of businesses that need an extra prodding. There are many businesses that want to improve their working conditions but need the technical expertise to do so.

    I know that OSHA has made a commitment to work with small businesses. Could you tell us specifically what OSHA has accomplished this year to improve its relationship with small business, what initiatives are under way to improve the health and safety of small business?

    Secretary HERMAN. Well, we have actually done several things to work with small business and OSHA.

    First of all, in terms of how we have tried to be much more expansive in our outreach, we have consulted with more than 20,000 small businesses as part of our overall OSHA efforts in 1997.

    I actually brought in an individual from the small business community, someone who is on the staff now at OSHA, that serves as a liaison, as an ombudsperson, to work closely with the small business community to address their concerns. We are strengthening both our voluntary compliance assistance program and our cooperative compliance program to make sure that we are bringing more small businesses in for consultation and a better understanding of how those programs work.
 Page 101       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    Specifically, when we set up the cooperative compliance program, we communicated with more than 90 trade associations so that they would be informed and very much aware of our efforts to work more closely with the small business community while, at the same time, being very mindful of the overall mandate and mission of OSHA, which is to protect the safety and health of America's workers.

    Mrs. LOWEY. I understand that. In fact——

    Mr. PORTER. Ms. Lowey, I am sorry.

    Mrs. LOWEY. I was just concluding in saying that I understand that the ombudsman for the SBA has actually commended OSHA for this work.

    I thank you, and I thank the Chairman.

    Secretary HERMAN. Yes, he did; and we were grateful for that commendation.

    Mr. PORTER. Mr. Istook.

    Mr. ISTOOK. Thank you, Mr. Chairman.

    Ms. Herman.

 Page 102       PREV PAGE       TOP OF DOC    Segment 1 Of 2  
    Secretary HERMAN. Congressman.


    Mr. ISTOOK. I would like to follow up on some things Ms. Lowey was saying regarding wage and hour and the Davis-Bacon in particular. If I understand it correctly, so far in the sense of dollars expended most of the funds for Davis-Bacon improvement have been spent on upgrading the computer systems with new file servers, desktop and laptop equipment to be shared by wage and hour and some other parts of the Department of Labor to enable them to try to do a better job of verifying the accuracy of the wage and hour submissions—I am sorry the Davis-Bacon submissions, the W–10 forms, the WD–10s. Is that generally true? Is that the major component of the expense?

    Secretary HERMAN. I wouldn't say the major component. You are speaking of the $3.75 million overall?

    Mr. ISTOOK. Yes, ma'am.

    Secretary HERMAN. More or less. In my own head, I break it up in sort of three areas.

    Mr. ISTOOK. I am talking about in the sense of dollars where most of it has gone.

    Secretary HERMAN. I said I generally break it up in three areas, not into one area. First, I break it up into the ADP systems in terms of what we have to do for upgrading, if you will, hardware and computer capabilities.
 Page 103       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    The second area, though, where we have had about $500,000, is to the overall reengineering efforts in terms of putting in more efficient systems, working on verification, trying to determine exactly the sources of the data and their accuracy.

    I believe it is around $300,000 or more that has gone to work with the Bureau of Labor Statistics just as a part of their own survey work. But it is my understanding, Congressman Istook, that the OIG is preparing, as I said to Congresswoman Lowey, a report to this committee that is actually going to detail those expenditures for you.

    Mr. ISTOOK. Sure. But in the sense of dollars I believe the contract with the Bureau of Labor Statistics is in the neighborhood of $300,000. The contract with an auditing firm to try to sample and verify the accuracy of wage submissions is in the range of half a million to $600,000, and then most of the rest is on the computer systems.

    Secretary HERMAN. Yes. They have just given me the breakdowns, which I will be happy to give you for the record.

    Mr. ISTOOK. Sure.

    [The information follows:]


    During FY 1997, Wage and Hour obligated $512,000 for an auditing contractor (under contract with the Office of the Inspector General) to review on-site contractors' payroll records to verify the data contained on forms WD–10, and to obtain information that will assist the Wage and Hour Division in improving the Davis-Bacon wage survey process.
 Page 104       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    Wage and Hour obligated $621,000 for a Davis-Bacon reengineering requirements analysis and work on a preliminary systems design.

    Based on the requirements analysis and preliminary design work, $2,186,000 was obligated for information technology (computer hardware and software) in support of WD–10 form redesign and electronic imaging, World Wide Web capabilities for WD–10 on-line transmission, and expert systems to assist in the effective management of collected data.

    Wage and Hour obligated $118,000 for system and LAN managers for its fair share of the costs of managing the additional workloads resulting from the Davis-Bacon ADP hardware and software purchases.

    Wage and Hour provided $314,000 to BLS as start-up costs for surveys of fringe benefit incidence and employer cost data for construction occupations.


    Mr. ISTOOK. Here is what I am getting to on that.

    First, on the scope of work with the contract with the Bureau of Labor Statistics—and I would appreciate getting the correspondence and whatever is the document that states the scope of work—as I understand it, BLS, the Bureau of Labor Statistics, is being tasked really to look at the gathering of fringe benefit information and also the union status information to try to see if, in a highly unionized area, the union wage rate would represent more than half of the workers in that area, which factors into your competition. Is that a fair description of the basic work the Bureau of Labor Statistics is doing or is it beyond that?
 Page 105       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    Secretary HERMAN. No, I don't think so, Congressman Istook. I think the basic work of the Bureau of Labor Statistics is to look primarily at the cost and impact of fringe benefits.

    Mr. ISTOOK. That is what I mentioned first.

    Secretary HERMAN. Right. But I am saying that is the primary focus here, because that is data we have not had historically. That is how I would characterize it.

    Mr. ISTOOK. But the Bureau of Labor Statistics is not being asked to look at the adequacy or accuracy of the overall system which is relying upon third party submissions to determine the prevailing wage rates. That is not part of their task. And the outside contractors that are doing some sampling of the accuracy of those, again, is not designing a system other than one that remains dependent upon the third party submissions. So that remains the common denominator, is that——

    Secretary HERMAN. Yes.

    Mr. ISTOOK. And yet the Office of the Inspector General, in part of their conclusions—and I will just quote directly from it—when they reported previously said, and I quote, ''we do not agree with wage and hour's objection to excluding third parties from wage surveys.''

 Page 106       PREV PAGE       TOP OF DOC    Segment 1 Of 2  
    I digress here. They wanted third parties excluded.

    Continuing to quote from them: ''Our audit indicated that third parties complicate the process of obtaining accurate data and contribute to significantly higher error rates. Additionally, third parties do not pay wages. Employers do. Data is usually more accurate when obtained from the original source rather than from a third party. Therefore, a statistical selection of employers would go far in solving both the coverage and the accuracy problems faced by wage and hour.'' And I end my quoting.

    So, as I understand it, there is no effort under way to go to the heart of the matter, which is that the system is still depending upon third party submissions, not upon submissions from people that are actually paying the wages.

    Am I mistaken or have you spent any of these resources in that area?

    Secretary HERMAN. Yes. We have spent resources in that area. And I would say that——

    Mr. ISTOOK. Since we have already described what is consuming almost all of them, what is left to be looking at this?

    Secretary HERMAN. Well, in terms of focus—and we will be happy to provide you with the details of the actual dollar amounts. But, as I was saying earlier, in terms of the three areas, conceptually, you have the ADP systems in term of the hardware-software——
 Page 107       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    Mr. ISTOOK. But is that a system that is meant to evaluate third party submissions?

    Secretary HERMAN. Well, it goes to the issue of verification, you see.

    I guess I differ with the statement you read this way: I don't think the issue is third party submissions. My review of it is that the issue has to go to verification of the data. That is where the problem has been. It is not so much where the data comes from.

    Because, quite frankly, oftentimes when you have more data in the sample, that can actually contribute to a healthier picture and a healthier indicator to get the information that you need to determine the prevailing wage. There is a real flaw——

    Mr. ISTOOK. Ms. Herman.

    Secretary HERMAN [continuing]. On the system of verification, Congressman Istook.


    Mr. ISTOOK. Yes, but you are contradicting yourself.

    A moment ago when I said, is it correct that you are still depending upon the third party, that you are not expending the resources to try to design a system that is not dependent upon a third party? You said I was wrong. Then you proceeded to explain how your whole system was again relying on these third party systems.
 Page 108       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    No matter what the computer system may be, if all you are doing is looking at the third party submissions that come in, rather than devising a system that actually goes to the employer records, not anecdotal submission signed by sometimes anonymous people, unless you are doing that, the computer systems are still not going to help you. As you may know the term, one of the original terms in the early days of data processing was GIGO—garbage in, garbage out.

    Secretary HERMAN. You are right about that.

    Mr. ISTOOK. And if your system is still dependent—everything you are doing remains dependent upon what the Inspector General said was the source of the problem, the third party submissions, all you are doing is building a larger structure based upon the same shaky foundation.

    Secretary HERMAN. That is not what I am trying to communicate, Congressman.

    Mr. ISTOOK. But tell me what you are doing——

    Secretary HERMAN. Let me say——

    Mr. ISTOOK [continuing]. To question whether you will continue to use third party submissions.

 Page 109       PREV PAGE       TOP OF DOC    Segment 1 Of 2  
    Secretary HERMAN. Let me speak to that issue, because for me it is not a question of either/or.

    First of all, third party data submissions are part of the process. And I didn't mean to suggest that we were relying exclusively on third parties. I am simply saying it is still part of the system.

    The issue for third party submissions, in my view, has been our inability to verify the accuracy of the data; and what we determined to do with these funds as a part of the overall reengineering effort is to make sure that we are putting in systems and approaches and personnel to help us with the verification of the data in terms of where it is coming from third party sources.

    Mr. ISTOOK. But were you using employers as sources to begin with, you would not require the same level of verification.

    Secretary HERMAN. Well, I think the issue is beyond just specifics related to the employer. There are opportunities,

as I said, to get the input from other areas. What we have to do is to stress the verification issue.

    Mr. ISTOOK. The report of the Inspector General stresses that there was a significantly higher error rate in submissions from third parties that are not paying the wages than in submissions from those who are paying the wages.
 Page 110       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    It certainly sounds to me like you are spending the money trying to create a structure based upon the same shaky foundation. Rather than going to the heart of the problem, that you are focusing upon data that has a much lower reliability factor; and instead of changing to start using more reliable data in the gathering process, you are trying to preserve the imperfect, inherently flawed process of the third party submissions.

    Secretary HERMAN. I would have to respectfully say that that is clearly where we would have some disagreement—just in terms of clarifying our conversation. Because you correctly point out that the OIG has said this data is flawed, which is why the emphasis is on verification as opposed to throwing out the entire system.

    I keep getting these notes.

    But I still want to stay with my point, because the fundamental difference here really is on the belief that I want us to be able to test the system to see if we can get verification of third party data. When you look at the entire effort, when you said are we dependent only on third party data, no, we are not. It is only 30 percent of the system. It is an important 30 percent of the system, I believe, but we have to make sure that the data is accurate, and that is what our efforts are driving towards.

    Mr. ISTOOK. I guess it is kind of like the NFL team that has to decide do you want to draft a quarterback that you know can throw the ball accurately or do you want to go ahead and draft a quarterback that has a history of being inaccurate and hope that maybe you can hire enough coaches to fix him.
 Page 111       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    Secretary HERMAN. That is one analogy. I wish I had one to come back on.

    Mr. ISTOOK. You will think of it, but it will be later.

    Secretary HERMAN. Give me time.

    Mr. PORTER. Madam Secretary, let me say we share Mr. Istook's concern in this area. It really is a policy question and one that we think can be greatly improved upon. If you want to submit any other data for the record as to the issue itself, we would be happy to see it.

    Secretary HERMAN. Thank you, Mr. Chairman.


    Mr. PORTER. Our colleague, Dan Miller of Florida, could not be here today because of a death in his family.

    He has been very interested, as you know, in the development of an electronic system for the filing of reports under the Labor Management Reporting and Disclosure Act and for developing a computer database of these reports. We included $500,000 at his request in last year's bill to initiate this process, and I wonder if you can tell us how much progress has been made to date on this area.
 Page 112       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    Secretary HERMAN. This is on LM–2.

    Mr. PORTER. Yes, this is on LM–2.

    Secretary HERMAN. We have made significant progress in terms of funds that have been expended in this area, and I believe by the end of this year you will have a full report on that.

    Mr. PORTER. You have asked for $500,000 more for the next fiscal year, and we can't tell from the budget documents any specifics about the Department's plan. What do you plan to accomplish with this additional $500,000?

    Secretary HERMAN. Well, with the additional $500,000 that is in the budget, we are now looking to expand much of the operations to our field systems to make sure that we can have a more unified, integrated system.

    What we can do is provide you with full information on that if Congressman Miller would like that.

    Mr. PORTER. We would like that. Thank you.

    Secretary HERMAN. Thank you.

    [The information follows:]
 Page 113       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

LM–2 $500,000 BREAKOUT

    In FY 1998, the Congress appropriated $500,000 to the Department for development of an alternative system for the electronic filing of LMRDA labor organization reports (Forms LM–2/3/4 and for an indexed computer database of the information from each report that is searchable through the Internet. There are three principal components of this project: electronic filing of union reports; design and implementation of the electronic public disclosure database; and electronic and Internet public disclosure. The plan will be implemented in stages over a multi-year period with full implementation culminating in Internet access to the indexed union report database.

    In FY 1998, the Department will initiate contracts to develop the following: electronic data entry versions of Forms LM–2, LM–3 and LM–4; an electronic reports submission system; electronic filing procedures; and design and programming of a computer database for the storage and retrieval of information on filed union reports. Estimated costs for project development in FY 1998 total $500,000.

    In FY 1999, contract work will continue on electronic data entry versions of the reporting forms and on the union reports database. Pilot testing of the electronic filing system is planned. Estimated costs for project development in FY 1999 total $500,000.

    As requested by the Congress, the Department will submit a multi-year plan for implementing the electronic filing and Internet public disclosure system.

 Page 114       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    Mr. PORTER. The GAO had some specific criticisms that I am sure you are aware of in regard to both what I call the 00 problem in your computers, which when it reaches the year 2000——

    Secretary HERMAN. The year 2000.

    Mr. PORTER. That is the 00 problem.

    Secretary HERMAN. I thought you were saying uh-oh.

    Mr. PORTER. I was. It is a play on words.

    Also, the GAO was very concerned that you have so many different computer systems and programs throughout the Department that you end up having a balkanized department with a lot of decentralization and not any real core information system. Can you comment on that and tell us what you are thinking about and what you may be doing?

    Secretary HERMAN. Well, we are very concerned about making sure we are in compliance, first of all, with all we have to do for the year 2000, so much so that effort has been actually upgraded to the Office of Secretary. Through our Deputy Secretary and our Assistant Secretary for Management Administration, all of those functions are being managed so that we can keep a critical eye on exactly what we are doing to monitor our own progress on a monthly basis.
 Page 115       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    We have actually revised our own targets internally to make sure that—and I want to state for the record—that we will be in compliance by March of 1999 on all of the critical systems that the Department is charged with. We have 61 systems that we are pulling in. They fall across five or six broad areas from our enforcement programs through our administrative programs, and we are looking in a very detailed fashion to make sure that all of those systems are in compliance by March of 1999. That is our goal, and that is my commitment.

    Mr. PORTER. What about long range planning in terms of hardware and software?

    Secretary HERMAN. We have looked at those units that have particularly unique problems, such as our UI system that has to dispense over 8 million claims in that area, and the combination of our black lung program and our other programs to make sure that their systems are ready. We have given special attention there to the hardware-software problems. Even in this budget we have asked for additional funds to make sure that our worker's comp program gets the additional resources that it needs to be able to work with its hardware and software problems as well.

    So we have a very detailed review, if you will, that we have taken on each of these systems. We are very much aware of what the needs are for each of them and what we have to do to get them in compliance. And I am actually pleased with the fact that of these 61 systems, about 21 of them are meeting our internal checklists for compliance, and we will continue that down that path.

 Page 116       PREV PAGE       TOP OF DOC    Segment 1 Of 2  
    Mr. PORTER. I am going to reserve the balance of my time. Mr. Dickey.


    Mr. DICKEY. Thank you, Mr. Chairman. Madam Secretary, I regret that I didn't—I couldn't take the opportunity of having lunch with you when you called, and I am worried that because now we are having this testimony, that you are not going to invite me again. Is there some chance that we can get that invitation back on the table?

    Secretary HERMAN. We will get it back on the table, Congressman Dickey.

    Mr. DICKEY. Even though we are finishing testimony?

    Secretary HERMAN. That is right.

    Mr. DICKEY. All right. Many in Congress and around the country are concerned about the ever-increasing scope of the Federal Government. Your department continues to expand its own definition of its mission with the help of the Administration. One area in which it seems the Department of Labor is doing this is through its assistance of the international program for the elimination of child labor. You are proposing increasing your donation from $3 million this year to $30 million next year. The next highest contributor is Germany at $7 million. Can you justify taking an additional $27 million from the taxpayers for such things as surveys of the labor force in a foreign country?
 Page 117       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    Secretary HERMAN. Congressman Dickey, I believe that the United States as a world leader has a special and unique role to play in doing what we can do to eliminate child labor abuses throughout the world. There are more than 250 million children who labor in these kinds of conditions. This committee historically has supported a cutting edge program in countries like Nepal, Pakistan, Thailand, where we have been able, working through the ILO organization for the elimination for child labor, to successfully bring down these incidences.

    I also believe that through my own work and just through what we know generally of consumers here in this country, that Americans are concerned about products, goods that they are purchasing that are made by children who have been robbed of their own childhood. I think that to the extent that we can continue to work with other countries on this issue, as we talk today about living and working in a global marketplace, what are the responsibilities that we have more broadly as a world community, that this is an area where the United States can be a leader.

    The funds that we have asked for would expand the work that we have been involved with into 10 other countries specifically. And in those 10 countries we would hope to do the same kind of work that we have been doing in the other countries where we have clear evidence of having made a difference.

    Mr. DICKEY. You know, I had that same process when I had to decide how to vote on MFN for China——

    Secretary HERMAN. Yes.
 Page 118       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    Mr. DICKEY [continuing]. Because of the same problem. Now, this question, as written, is aiming at another country. But what I am saying is, the administration was for MFN, it seems to me we could just by some other method, by just money, like withholding MFN from countries that in fact do have abuse.

    Secretary HERMAN. Child labor abuse.

    Mr. DICKEY. What is your idea about that? Could you take such a stand in your conversations in the administration?

    Secretary HERMAN. Well, I think as we look more broadly at what we are doing on the trade front and the attention that we are trying to give to labor standards, particularly child labor violation itself, that we can and ought to do more in this area. And I believe that as an administration we are doing that, whether it is the debate that is presently taking place on the IMF funding, or quite frankly my own work in terms of what I have been involved in, to make sure that in all of our international forums that we are doing more to raise this issue of child labor and child labor violations.

    Mr. DICKEY. Secretary Herman, I have only one other thing, and that is spending the money that is the problem and whether or not we are getting the proper return. There is something like $133,000 to support the President's civil rights agenda.

    Secretary HERMAN. Yes.

 Page 119       PREV PAGE       TOP OF DOC    Segment 1 Of 2  
    Mr. DICKEY. And I think we are all for that. And particularly those of us who voted against MFN, that was a tough vote for us. I am from Arkansas, and we have a lot of people who do business in China. We just can't continue going from, what, $3 million to $30 million is a drastic increase in a time of budget constraints. And I just would ask you to just please find other avenues if you can, though not to give up the idea of trying to help the rest of the world understand child labor, that we shouldn't use it. Thank you.

    Secretary HERMAN. Thank you, Congressman.

    Mr. DICKEY. Thank you. It is good to see you.

    Secretary HERMAN. Good to see you.

    Mr. PORTER. Thank you, Mr. Dickey.


    Madam Secretary, you have a new head of OSHA who replaced Joe Dear. We are going to talk to that individual later, but does that individual share Mr. Dear's philosophy regarding the Department and its role, or do we expect change?

    Secretary HERMAN. No. Our new Assistant Secretary, Charles Jeffress, very much shares Mr. Dear's philosophy. As you probably know, Mr. Jeffress comes from the State of North Carolina where he was the State director for OSHA, and, was involved in a number of reinvention efforts. He is very much in the tradition of what we call the new OSHA. And I expect that Mr. Jeffress will continue on the path that has distinguished his career and on the groundwork that Joe Dear laid.
 Page 120       PREV PAGE       TOP OF DOC    Segment 1 Of 2  


    Mr. PORTER. What agency heads of the department have you appointed since you took office besides Mr. Jeffress?

    Secretary HERMAN. Besides Mr. Jeffress, we have essentially completed all of our appointments in terms of recommendations to the White House and to the Senate for the Department of Labor. There is one person that I am actually focusing on this week. We had made a selection and that individual was not able to accept the job for the Chief Financial Officer. That is the only other position that I am having to go back on, and I am in the process of doing that.

    Mr. PORTER. How many are acting right now?

    Secretary HERMAN. Well let's walk through it. We have the Assistant Secretary for OSHA, Mr. Jeffress. We have acting Assistant Secretary for the Employment and Training Administration, Ray Uhalde, that we have named a permanent head there, Mr. Bramucci. We have an Assistant Secretary for Employment Standards who is permanent and not changing. We have the Assistant Secretary for Administration and Management who has been confirmed and is permanent. We have the Assistant Secretary for Public Affairs who is permanent. We have the Assistant Secretary for Pension and Welfare Benefits who is permanent. We have the Deputy Secretary who is permanent. We have the Solicitor who is acting, but we have a new Solicitor that has been named, is awaiting ratification by the Senate, Mr. Salono. We have—I believe I have done them all.

 Page 121       PREV PAGE       TOP OF DOC    Segment 1 Of 2  
    Mr. PORTER. So you have got four or five that are awaiting final——

    Secretary HERMAN. I am waiting on the Solicitor. I am waiting on ETA. I am waiting on Wage and Hour. I am waiting on the Assistant Secretary for Policy. Those are the big four on which we are waiting on Senate action.


    Mr. PORTER. In last year's bill, we provided $4 million, for Job Corps expansion. This was basically site acquisition and design money. What are the department's current plans for spending these funds, and how are you planning to proceed?

    Secretary HERMAN. The requested increase for the Job Corps includes virtually half of those funds going for the completion of the 5 new centers that were authorized by the committee, and the other half basically going to program services to support the infrastructure.

    Mr. PORTER. And you are talking about the $33 million that you are asking for?

    Secretary HERMAN. $61 million I believe is the total requested increase from the committee for Job Corps. $62 million.

    Mr. PORTER. $33 million is for construction.
 Page 122       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    Secretary HERMAN. For construction, yes.


    Mr. PORTER. Okay. As you know, Madam Secretary, the House has passed its version of the job training reform and consolidation bill, and it is pending in the Senate. Is the administration supporting this bill in its current form, or do you have some significant problems with it?

    Secretary HERMAN. We don't have significant problems. We obviously are pleased that the House has taken action and has passed the legislation. We are hopeful that the Senate will act expeditiously as well.

    Mr. PORTER. And if the Senate passed a bill substantially the same as the House version, would you urge the President to sign it?

    Secretary HERMAN. We are urging the President to sign the GI bill of Worker's Rights, and he called for it in the State of the Union. Obviously we recognize that there are some differences, but overall, we are hopeful that we can get a bill.

    Mr. PORTER. GAO has said that there are as many as 160 job training or related programs, depending on how you count them, throughout the government. Many of them, however, are not in your Department. What attempts is the administration making to address this problem outside of legislation? Do you discuss these matters with Secretary Riley and Secretary Shalala and others in the Cabinet to see what can be done to address the problem internally?
 Page 123       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    Secretary HERMAN. First of all I will take the latter part of the question. I have discussed what we can do to work together more closely, more efficiently, both with Secretary Shalala and with Secretary Riley, primarily as we have worked jointly on some of our education and training efforts in particular.

    With regard to what we are trying to do to foster greater consolidation and streamlining of our efforts, the waiver process that Congress granted both through the work-flex programs, as well as the general waiver authority that the department is now exercising, are also contributing greatly to streamlining and consolidation of efforts in the field.

    Mr. PORTER. I ask my colleagues if they have additional questions. Mrs. Lowey?

    Mrs. LOWEY. Yes. Thank you, Mr. Chairman.


    A couple of points, Madam Secretary. I just wanted to say that I hope to follow up with some questions for the record regarding third party data. I understand that the GAO did not recommend abandonment of third-party data, and I also understand that the OIG did not find that wages were affected by some of the errors. But I will follow up with some questions for the record.

 Page 124       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    The other point I wanted to make regards the computer system, and I have been asking questions related to that

since I got to Congress in 1988, and I know you—this mess was dumped in your lap. I find it extraordinary that there are 66 different computer systems at the Department of Labor. I also have found it, through the years, extraordinary that the computers in one department don't talk to the computers in another department.

    And I would just say, related to that, this is why I have real questions about the legislation on the floor today, in that the computers can't verify anything. But I probably shouldn't have brought that up. Let's not confuse the issue.

    I would just say that I look forward to hearing from you as to your efforts, because I think it is an outstanding investment, in making sure that the computer systems for the 66 programs not only will adjust to the year 2000 but they will adjust to each other. And I would think, and I know that many of my colleagues on both sides of the aisle think, investment in coordinating the computers in all the departments seems to me so basic that I can never believe we can't seem to accomplish it in spite of the millions of dollars put in that effort. So I commend you for your efforts and I look forward to following the progress.


    Another area that is been very important to me since I joined this committee is your department's commitment to pension security, and I am particularly interested in your work regarding women and pension issues. There are special pension issues regarding women, and I know you have been moving to address them. Could you just briefly discuss that with us for the record?
 Page 125       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    Secretary HERMAN. Well, we have been doing several things on the pension front as it relates especially to women. One, it has been a basic education and outreach campaign to inform women of the differentials between men and women in pension. As you know, women live on average about 4 to 5 years longer than men, so the fact that they will need a pension is greater. And the reality is also that, if you are lucky enough as a woman today to get any kind of retirement pension income, it is more likely that it is less than 50 percent of what a male receives today in retirement income. So getting the facts out to women in particular that they have to take a hold of their own futures and begin to plan and to invest now is very important.

    Secondly, we have—I have, in particular, tried to be very aggressive in working with the small business community to examine ways that we can expand pension coverage, to inform them of the actions of this Congress in particular as it related to the S.I.M.P.L.E. bill that was passed to make it easier for small businesses to cover workers so that they can get pension coverage.

    We know, in particular, that the job creation that is taking place in the labor market today is taking place in the small business sector in large numbers, and large numbers of those new employees are women. So you have got a compounded issue when you look at who is not getting covered, where the jobs are and what we have to do to expand pension coverage. I am holding round table discussions in the field with small businesses to hear their concerns firsthand, to examine what it is we can do to better meet their needs, to make pension coverage more affordable and more available.

 Page 126       PREV PAGE       TOP OF DOC    Segment 1 Of 2  
    Mrs. LOWEY. Because the hour is late, I just want to briefly mention two other points that I know you are addressing, and I look forward to continuing the dialogue. As a strong advocate of one-stop shopping, I feel the Job Bank is a very important part of that effort, and I know you have been focusing on this as well. And I would be interested in following your progress with the Job Bank because there is such a tremendous demand for this information, especially with the good news that the unemployment rate is so low. So I just wanted to mention that. I know there has been positive movement and I look forward to working with you on that.

    And then another area where I have been very much involved is genetic discrimination, and I was pleased that Vice-President Gore recently released recommendations of an interagency task force calling for legislation to protect workers from discrimination in the workplace based on genetic information, and I know that your agency has a lead role in this effort. Because of the lateness of the morning, I won't ask you to go into it, but I am also interested in following this because I think it has a great deal of potential in causing real problems in the workplace. And I thank you for your leadership on this, and I look forward to working with you.

    Secretary HERMAN. Thank you, Congresswoman Lowey.

    Mr. PORTER. Thank you, Mrs. Lowey.

    Mrs. Northup.

 Page 127       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    Mrs. NORTHUP. Ms. Herman, there were a couple of questions. I did want to follow up, though, just briefly and say that I meant to bring to your attention that there was report language in the bill that we passed last year urging the Department of Labor to implement the helper regulation by December 31st. So you know that certainly I hope the subcommittee will take into account the fact that you did not meet that deadline.

    I would also—last year when you testified, I had noticed that there was quite a bit of rhetoric regarding the Davis-Bacon, that it is so helpful for women and minorities to get into construction jobs, and I asked if you would help provide the information to substantiate that. That hasn't been my experience, and I would just like to know what sort of information could be found that would substantiate those claims that are very regularly made. And you all haven't replied to my office regarding that.

    Secretary HERMAN. I am sorry, Congresswoman Northup. You are saying that I made claims that that was helpful to women and minorities. I don't recall.

    It is regularly made in many of the debates, made regarding Davis-Bacon.

    You are saying general debates, not that I made.

    Mrs. NORTHUP. Yes. In fact, it is one of the 3 or 4 regular arguments that are made. And there is probably no other agency that could substantiate those claims. And I just think it is important we have the correct information.

 Page 128       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    I also, last year I asked Mr. Watchman of OSHA, when he testified before this committee, if OSHA covers the U.S. Postal Service, and do they have to comply with OSHA regulations which are required in the private sector, and he assured me that they did. However, the Director of OSHA later told the subcommittee that they had no enforcement powers in the Federal sector and could not propose a penalty against an agency like the Postal Service. And I just wondered, in fact he told us that lack of enforcement in the Federal sector was a big problem, so I wondered what your understanding of this matter is and if OSHA officials currently are monitoring the post office for safety violations.

    Secretary HERMAN. Mr. Watchman is here. We don't have, as you know, oversight in the Federal workplace, but there is latitude to go in and to inspect. But there is no formal oversight of Federal agencies, including the post office.

    Mrs. NORTHUP. But of course if there is no way to assess a penalty or enforce it, there is no cost that the Postal Service, for example, might incur if they are in violation of OSHA. And I think this is of particular concern in my district because the post office has gone into direct competition with UPS, and UPS has enormous OSHA enforcement efforts. And so I am sort of wondering, now that they are in the same business, whether this is a concern of yours. And I think we also had report language in the appropriations bill last year asking that inspections be increased, and I wondered what your office has done to comply with that.

    Secretary HERMAN. Well, I see what you are saying from a competition standpoint of view with UPS and the Postal Service.
 Page 129       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    Mrs. NORTHUP. And I would assume that UPS is so aggressively monitored because you consider it a high risk area and that—and your concern is for the safety of workers, not punitive. I am not suggesting that it is punitive, but rather out of your real concern for the safety in the workplace. And I am just sort of wondering if that same concern exists for Federal workers, and what sort of aggressive compliance you all plan for an exactly the same workplace.

    Secretary HERMAN. I can honestly say to you, Congresswoman Northup, we really don't have plans for that kind of action in Federal workplaces. It is not a part of the statute or mandate of OSHA.

    Mrs. NORTHUP. Are you as concerned about those workers you talked about as the workers you were talking about in the private sector?

    Secretary HERMAN. I am clearly concerned about them, but in terms of what our statutory obligations and responsibilities are, they do not cover Federal workplaces.

    Mrs. NORTHUP. Well, do you think it would be possible for you to make a recommendation on what, you know, since you—you are the lead agency to assure safety and worker safety. I would assume that you would be as concerned about Federal workers, and would maybe be able to recommend an initiative that would protect their well-being as well as you do in the private sector.

 Page 130       PREV PAGE       TOP OF DOC    Segment 1 Of 2  
    Secretary HERMAN. Well, I am concerned. And there have been situations that have arisen since I have been Secretary of Labor, where I have had the occasion to engage my counterparts, in areas under their jurisdiction to my own concern. I do not have the official authority to act. But I hear what you are saying in terms of examining that further.

    Mrs. NORTHUP. I am looking for a recommendation.

    Secretary HERMAN. Right.

    Mr. PORTER. If I can say to the gentlelady from Kentucky, she raises a very, very important point, I think, and one that this committee and the authorizing committee definitely ought to look into. If there is no agency except the Postal Service for examining the conditions in the workplace and the safety and health of its workers, and especially since they are in direct competition with the private sector, I think there is a serious problem. I think you put your finger on something we have to do something about.

    Madam Secretary, you have done an excellent job in testifying. We thank you for your forthright answers to our questions. We know that you are going to tell your agency heads that when they come in to testify before us very soon, that they should be more focused on results.

    The way I see this, we have seen a revolution in the private sector in terms of looking at the bottom line and have gone through some wrenching changes there that were difficult for everyone. But they were successful. And the economy is largely growing at the rate it is now because of those changes that were made over a 4, 5, or 6 year period leading up to this economic expansion.
 Page 131       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    Now government is in the same process of changing itself to look at the bottom line. How are we doing in helping people, and are we spending the money wisely and getting real results? Your department is on the forefront of that effort. The others that we have under our jurisdiction are as well. And what we really want to know is, are we getting our money's worth? Are we helping people with the money we are spending? And so I know you will tell them all to come here and be prepared to answer those questions. We thank you for the fine job you are doing.

    This subcommittee stands in recess until 2 p.m. on February 24th.

    Secretary HERMAN. Thank you, Chairman Porter. Thank you.

    [The following questions were submitted to be answered for the record:]

    "The Official Committee record contains additional material here."

Tuesday, February 24, 1998.




 Page 132       PREV PAGE       TOP OF DOC    Segment 1 Of 2  



    Mr. PORTER. The subcommittee will come to order. We're pleased to welcome Raymond J. Uhalde, Assistant Secretary for Employment and Training, from the Department of Labor, and—I'm going to try to pronounce this correctly—Espiridion ''Al'' Borrego, Assistant Secretary for Veterans' Employment and Training Services.

    And we thank you both for coming this afternoon to testify. We'd be pleased to hear your statements in that order, and then reserve the remainder of the time for questions. Thank you.

ETA Opening Statement

    Mr. UHALDE. Thank you, Mr. Chairman, and I appreciate the opportunity to appear here today. I'll summarize my written testimony. With me today is Mary Silva who's the Director of the Job Corps.

    The request before the committee totals $10 billion, of which $9.3 billion is for discretionary programs and $717 million is for our mandatory programs. Our request is tied to Secretary Herman's three strategic goals; those being to have a prepared workforce, a secure workforce, and a quality workforce.
 Page 133       PREV PAGE       TOP OF DOC    Segment 1 Of 2  


    Mr. Chairman, at last year's hearing, I addressed, at your request, the effectiveness of our employment and training programs, and I informed you about our progress we've made in implementing the Government Performance and Results Act. Today, nearly a year later, I'd like to provide you with an update.

    The Employment and Training Administration places a high priority on measuring and improving the efficiency and effectiveness of its programs. We do this by collecting detailed data on our program participants by monitoring program results through a performance measurement and management system, and by evaluating our programs through rigorous studies of our costs and net impacts. We routinely provide feedback to our State and local partners on their performance.

    For some time, ETA has been making investments in management information which provide taxpayers and the Congress, and the workforce development community with information on client characteristics and the services they receive, and the results in the form of employment, earnings, and educational attainments. This information is important for assessing our progress in meeting our performance goals under GPRA. It also enables State and local programs to compare performance results and set performance benchmarks when serving diverse populations and utilizing different service strategies.

    JTPA was one of the first Federal block grant programs designed to be results-driven, guided by a highly structured performance management system. Local programs must meet federally-defined, State-adjusted, minimum levels of performance. These standards help States identify high-performing programs that qualify for incentive awards, and low-performing programs that need technical assistance or reorganization.
 Page 134       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    The Department takes evaluation seriously. We attempt to use the most rigorous evaluation techniques possible, and currently, as you know, we're conducting at the committee's encouragement and support a major national evaluation of the Job Corps. Short-term impact results will be available late next year. We are also implementing a national random assignment study of JTPA's dislocated worker program.

    In general, our evaluations and data from program operatives show that our employability development programs can be effective in improving employment and earnings of participants. Our study of JTPA of 20,000 economically disadvantaged participants found that the increased earnings among the adult participants surpassed the costs of the program and paid the program back in two-and-a-half years.

    A favorable economy has contributed to unprecedented gains in our job placement rates for low-income participants, particularly our welfare recipients that were enrolled in JTPA. Our programs for dislocated workers and for youth have performed well over the last year, as described in my testimony.

    We are using our wealth of information and experience in performance measurement and management to meet the GPRA requirements. In drafting the five-year strategic plan and the first annual performance plan, which we submitted to Congress, we have solicited and received input from our partners and stakeholders in the workforce development systems, as well as other job training and employment stakeholders.

    ETA's Fiscal Year 1999 Annual Performance Plan consolidates activities into Secretary Herman's three cross-cutting departmental strategic goals that I mentioned earlier. The plan also establishes performance goals for each of the ETA programs that will lead to accomplishment of our strategic goals.
 Page 135       PREV PAGE       TOP OF DOC    Segment 1 Of 2  


    Mr. Chairman, President Clinton in December 1994, proposed to dramatically restructure the complex array of Federal job training programs into an integrated workforce development system with skill grants, or vouchers, coupled with consumer information available to adults who need training, and improved accountability focusing on results, rather than process. With last year's House passage of a bipartisan training reform bill and the anticipated Senate floor action in the next couple of weeks on a similar measure, we believe that Congress can complete action on job training reform before the summer. While we do not agree with every provision in the House and Senate bills, we believe the bills largely reflect the President's principles, and we're committed to working with Congress to obtain enactment of this legislation this year.

    Even without the new legislation, the Department has pressed ahead with reforms to job training, including implementing the authority you provided us, under the 1997 Appropriations Act, to waive Federal, legal, and regulatory requirements under JTPA and the Wagner-Peyser Act that impede State and local reforms. To date, 34 States have won approval of these waivers, and we currently designated six states to participate in a five-year work-flex demonstration that lets States waive selected requirements pursuant to requests from their local areas.


    The Department's Fiscal 1999 budget affirms the President's commitment to employment and training and builds on previous legislation. It is closely linked to the Secretary's strategic goals and ETA's annual performance plan under GPRA. Let me highlight a few items in our request.
 Page 136       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    The request includes $1 billion for JTPA training and employment assistance for disadvantaged, low-income adults, including welfare recipients. This is a $45 million increase from Fiscal Year 1998.

    Last year, Congress provided a $250 million advance appropriation for Fiscal Year 1999 for the President's proposed Opportunity Areas for Out-of-School Youth, contingent upon enactment of the authorizing legislation by July 1 of this year. An advance appropriation is requested again this year to fund the initiative in Fiscal Year 2000. This initiative concentrates time-limited Federal seed grants directly into high-poverty urban and rural neighborhoods, including designated and prospective Empowerment Zones and Enterprise Communities. It differs from other job training programs in that it concentrates a large amount of resources in these targeted communities so as to bring about a fundamental change in the neighborhoods that are served.

    The request also includes $1.3 billion for Job Corps, an increase of $61.4 million, that will continue much needed repairs and modernization of the centers, upgrade vocational courses, fund operating costs for 118 centers, and completion of five new centers to be initiated in 1998.

    The Fiscal Year 1999 budget request for the Employment Service is $816.6 million, including $20 million to administer the Work Opportunity Tax Credit and $31 million for State administration of Alien Labor Certification programs. The Administration is proposing to extend the Tax Credits through April of 2000. The Administration will also be proposing legislation which would establish user fees for the Alien Labor Certification program beginning in the year 2000.
 Page 137       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    Relating to the Secretary's goal for a secure workforce, we are requesting $1.45 billion, a $100 million increase, for retraining laid-off workers and help them return to work. This increase is part of the build-up which, by the year 2003, would more than triple the size of the dislocated worker program since the President took office.

    We are requesting $2.4 billion for State Unemployment Insurance program administration, $100 million below the Fiscal Year 1998 level. The reduction is due to the one-time increase of $200 million appropriated in 1998 for assisting the States to convert their computer systems to the year 2000 compliant. We are grateful to the Congress for providing us with these funds and are now confident we can achieve uninterrupted operation of State UI systems.

    The request includes an increase of $91 million for additional integrity activities in the States, as authorized in the Balanced Budget Act of 1997, to reduce errors in benefit overpayments and losses in collection of employer taxes. This increase in integrity activities will more than pay for itself in increased savings to the Unemployment Trust Fund.

    Our request also includes a major proposal to begin a process of UI program and financing reform; we call this the Unemployment Insurance Safety Net proposal. The legislative proposal will allow short-term improvements to the UI program to be made while we begin to discuss additional reform issues with all of our stakeholders.

    The request includes $360.7 million in mandatory funding for trade adjustment assistance and NAFTA-TAA programs. The authorization for these programs expires September 30 of this year and the Administration will be proposing legislation extending them for five years. We also propose to extend the eligibility for TAA to those who lose their jobs due to shifts in production abroad and make other changes in the program.
 Page 138       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    We have two initiatives for registered apprenticeship training for skilled child care development specialists, and another initiative to offer migrant youth alternatives to field work.

    Congress has already appropriated $1.5 billion for formula and competitive grants for the Welfare-to-Work programs in each of Fiscal Years 1998 and 1999. These programs are provided for the workforce development system to move the most difficult to employ welfare recipients into unsubsidized jobs. We've been working for five months to implement this authorizing legislation. We have made significant progress, including getting regulations published, setting into motion the process needed to award the grants, and hiring the staff that this committee approved.

    Mr. Chairman, in conclusion, I'd emphasize the importance of the investments we're discussing. These investments are essential if we are to have, in the President's words, ''a world-class system of education and training in place for Americans of all ages.'' In recent years, education and wages have become even more interconnected and the economy has divided along skill lines. To ensure that every American will have the opportunity to obtain the skills needed to compete and succeed in the new economy and that some are not left behind requires adequate levels of funding for training targeted to low-income youth and adults and dislocated workers.

    Mr. Chairman, this concludes my prepared statement. I would be happy to answer questions.

 Page 139       PREV PAGE       TOP OF DOC    Segment 1 Of 2  
    [The information follows:]


    Ofset Folios 503 to 518 Insert here

    Mr. PORTER. Thank you, Mr. Uhalde.

    Mr. Borrego.

ASVET Opening Statement

    Mr. BORREGO. Thank you, Mr. Chairman, Mr. Obey, and members of the committee. I appreciate the opportunity to present our Fiscal Year 1999 budget request for Veterans' Employment and Training. It is a personal honor for me to be the first Assistant Secretary for Veterans' Employment and Training to present our request in the context of a balanced budget submission.

    The Government Performance and Results Act has enabled our strategic and annual performance plan to be tied directly to our budget request. We now set performance goals, we benchmark efforts, we measure accomplishments; all of which are bringing better services to our Nation's Veterans. Our budget reflects the three strategic goals of Secretary Herman; a prepared workforce, a secure workforce, and a quality workforce.

    A prepared workforce means that veterans have the opportunity to acquire and use skills, to make them productive members of society; that veterans will have access to development, counseling, and placement services to move them into the labor market. We are no longer satisfied with just finding jobs; we are helping veterans build flexible, financially-sound careers. A prepared workforce means not having to sleep on the streets at night and our homeless programs are helping proud men and women regain their dignity, their livelihoods, and again become productive members of society.
 Page 140       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    A secure workforce means that reservists and national guard members like those being called to the Persian Gulf don't have to worry if their jobs are waiting when they get home. VETS ensures that the employment and reemployment rights of all service personnel are protected when they are called to serve our Country or to help keep peace in the world and that they do not suffer any form of employment discrimination because of military service.

    A quality workforce means veterans will not encounter discrimination because of service-connected disability and that they will have their pension and health benefits continued if they are called to duty; that they will receive preference for Federal government jobs and, if eligible, be afforded opportunity by Federal contractors and subcontractors.

    A quality workplace means that veteran service providers receive the best training available to meet the changing needs and career goals of today's veterans. The National Veterans Training Institute provides state-of-the-art courses for VETS staff, our State partners, and others working with America's veterans.

    I have given you a thumbnail sketch of how VETS serves America's veterans. But, a unique window of opportunity presents itself this year which could dramatically improve the lives of veterans well into the 21st Century. The President intends to propose legislation for a bold, new veterans employment initiative which would allow VETS to greatly expand its services to more veterans in each State: older veterans, homeless veterans, veterans on public assistance.

    The legislation would shift $100 million each year for five years from the VA into the JTPA 4(c) account. We project serving 40,000 veterans with at least 25,000 placed into quality jobs each year. We could provide services to older veterans and dislocated veteran workers forced by technology or global competition to change valued careers or to completely retrofit a lifetime of skills. Older veterans who can no longer do the physically-demanding construction jobs that served them so well when they were younger can now be trained for better jobs before suffering the pain of redundancy or the stigma of unemployment. We can provide expanded services to veterans who are without homes and who, nightly, wander our Nation's cities, suburbs, and rural areas.
 Page 141       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    This is an historic opportunity, much like the Congress that enacted the GI bill, to improve the lives of countless veterans for decades to come.

    Before I conclude, I would like to acknowledge that I am here today as part of a team; the agencies of the U.S. Department of Labor. Secretary Herman understands that veterans have special needs in the marketplace and she respects the unique contributions that veterans make to our growing economy. Secretary Herman knows that the rest of the Department of Labor affects veterans and that, as veterans, we care about more than just veterans' issues, that veterans working with the rest of the Department can improve the working lives of America's working men and women. In that light, VETS is now working better and closer with other agencies in the Department of Labor and other Cabinet-level agencies, such as the VA, HUD, or DOD.

    It has been a privilege to appear before you today and I'll be glad to answer any questions.

    [The information follows:]

    "The Official Committee record contains additional material here."

    Mr. PORTER. Thank you, Mr. Borrego.

    Mr. Uhalde, how long have you been with the Department?

    Mr. UHALDE. Since 1977.
 Page 142       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    Mr. PORTER. And Mr. Borrego?

    Mr. BORREGO. About three-and-a-half years, sir.

    Mr. PORTER. And prior to that time?

    Mr. BORREGO. I was at the University of Alaska in Juneau.


    Mr. PORTER. We now have an economy that is performing miracles. We thought that it would take another four years to balance the budget and it looks entirely possible, despite the fact that we won't enact the President's revenues, that we will bring the budget into balance this year or perhaps early in the next Fiscal Year.

    Mr. Uhalde, what differences do you see in terms of the Department's workload and efforts in this good economy where unemployment is maybe at a 25 year low compared to earlier times when unemployment was much higher? What differences do you see in the operation?

    Mr. UHALDE. I can remember in years past, in the early 1990's and again in portions of the early 1980's, when the question for employment training programs was, where are the jobs, training for what, why are we training people, why are we educating people? There were no job openings, no opportunities.

 Page 143       PREV PAGE       TOP OF DOC    Segment 1 Of 2  
    That's not the central question now. The central question now is where are the people with the skills for the jobs, vacancies that we have? And, it puts a very high premium on Federal and State and local investments in education and training, and also puts a high premium on doing it right the first time, on being efficient because both the participants as well as the taxpayers want us to have very effective programs that are able to match up with the needs of the workers and the needs of the employers and the economy. So, we're in a much better situation, obviously, in terms of not having to answer the question where are the jobs, but it also puts a very high premium on us doing a good job.

    Mr. PORTER. Is the Department able to respond to that change in environment effectively and quickly?

    Mr. UHALDE. We believe we are. One of the reasons that the employment and training system is really locally based is to make it responsive to the local needs and local economies. That's why it's a partnership between business and local elected officials and local communities, so that they can be responsive to the needs of employers because it's very difficult in Washington to anticipate all of the changes in labor markets. So, having a locally-based system helps us do that.

    It is important where local shortages tend to grow in industries for us to be sensitive to those, like in the information technology or in other areas, where there may be localized or even regional shortages to try and get more information out and make sure our systems are sensitive to those shortages.

 Page 144       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    Mr. PORTER. Mr. Borrego, do you see the same things or is it different for veterans than for others in the economy?

    Mr. BORREGO. We're facing the same set of dynamics. In terms of addressing the needs of employers who are looking for skilled employees, we're moving ahead on two fronts. There's about 250,000 members of the Armed Forces that separate each year. We train about 150,000 in our transition programs. We're moving ahead in the area of facilitating the certification of military skills for civilian employment on two fronts in those areas where the Federal Government provides licenses to certification; aircraft mechanics, air traffic controllers. And also, for telecommunications companies, we have a small grant where the communication workers would certify the telecommunication skills, and place separating veterans with these skills into telecommunications companies where they really need skilled employees.

    So, we're proceeding on those two fronts to take advantage of the skilled workforce that's coming out of the military. The other is I think that because our unemployment is low, we really have an opportunity to examine the way that we work, the way that we deliver service. What role does automation play? How do we automate? How do we deliver services better? When we talked about this shift from activities to outcome, how do we move from just putting veterans into jobs and move into getting them into careers? So, we have a little bit of opportunity that we should take care of to make sure that we better the system and when we have good people that we move them quickly and easily into industry.

    Mr. PORTER. There are more veterans coming out of departmental programs in times of a good economy, I assume, than there would be in times of a weak economy?
 Page 145       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    Mr. BORREGO. After the large downsizing, it's been holding steady at about 250,000. It seems to kind——

    Mr. PORTER. Regardless of the economy——

    Mr. BORREGO. Yes, sir.

    Mr. PORTER. Okay. How many programs do you administer, Mr. Uhalde?

    Mr. UHALDE. Gee, I've never counted.

    Mr. PORTER. Well, is it thirty——

    Mr. UHALDE. I'd——

    Mr. PORTER [continuing]. Or forty——

    Mr. UHALDE. Thirty or so.


    Mr. PORTER. Thirty or forty? What are your top three in terms of getting results for people? Which are the three best programs in terms of the investment that is made and your getting from where you are to where you want to go?
 Page 146       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    Mr. UHALDE. Well, the programs do a variety of different things so, it's difficult to compare. For example, we believe the Unemployment Insurance program that we administer with our State partners is a very effective program with timely results in terms of our payments, maintaining trust funds, and so forth. So——

    Mr. PORTER. That would be one.

    Mr. UHALDE. We believe that's a very important program. That's different than, say, the Job Corps which is another very highly effective program for at-risk youth. As this committee well knows, it serves the most disadvantaged young people and has been shown to be very effective.

    Our programs for dislocated workers, title III of the Job Training Partnership Act, has been very effective. 73 percent to 75 percent of dislocated worker participants have employment at 95 percent of their prior wage after they leave the program. So, I'd say those are three examples but they serve different populations.

    Mr. PORTER. Yes, I understand.

    What about the bottom three? Which three are we getting the least payback for?

    Mr. UHALDE. Well, I think we don't have a bottom three. [Laughter.]
 Page 147       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    We have——

    Mr. PORTER. That sounds like a political answer to me. [Laughter.]

    Mr. UHALDE. We have good programs, sir, and if we have——

    Mr. PORTER. You mean, none of them are operating——

    Mr. UHALDE [continuing]. Four operating programs——

    Mr. PORTER [continuing]. They're all evaluated at the same high level?

    Mr. UHALDE. We haven't evaluated every program.

    Mr. PORTER. Which programs have problems that you're concerned about?

    Mr. UHALDE. I would say that we've had the most difficulty in getting consistent sustained returns over time with our disadvantaged youth programs——

    Mr. PORTER. Okay.
 Page 148       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    Mr. UHALDE [continuing]. But, even there, we have identified a lot of very effective youth programs.

    Mr. PORTER. Yes, relatively speaking, they may all be effective, but which ones are less effective than others?

    Mr. UHALDE. Well, I mean, I give you one that we have had some difficulty in having consistent performance but——

    Mr. PORTER. No others?

    Mr. UHALDE. I would say that we have a range of programs that we have more or less effectiveness.

    Mr. PORTER. All right. Mr. Borrego, how many programs do you administer?

    Mr. BORREGO. We have—I'd put them in three categories. We have a large program where we fund staff in State employment offices to work with veterans. Then, we have our Federal administration where we protect the reemployment rights of reservist and national guard. And, then, we have a small JTPA Title IV–C program.

    Mr. PORTER. I'm going to get to more specific questions. I just wanted to get a feel for the answers you might give.
 Page 149       PREV PAGE       TOP OF DOC    Segment 1 Of 2  


    Are there any areas under your jurisdiction where you are having particular problems or where evaluations have shown weak results?

    Mr. BORREGO. No, sir.

    Mr. PORTER. They're all doing well?

    Mr. BORREGO. When we take a look at, for example, the people that we put in the 50 States, some States do better than others and the States that aren't doing as well, we have Federal employees who are directors in every State to work with them and that's what we try to improve within the program, the range of effectiveness but in terms—we serve very different areas with our programs. So we don't have the range that Ray does with his agency.

    Mr. PORTER. No, I understand that, but you still have different groups that you are working——

    Mr. BORREGO. Yes, sir.

    Mr. PORTER [continuing]. With in different ways.

    Mr. BORREGO. Yes, sir.

 Page 150       PREV PAGE       TOP OF DOC    Segment 1 Of 2  
    Mr. PORTER. And you're getting uniformly good results?

    Mr. BORREGO. Again, within each program, we may have a range of results in a program; one State may be doing better than another. We set performance targets, and if they're not meeting them, we have our State directors work directly with them. In terms of comparing one State program to the other, I don't know how to compare a program that gets jobs for veterans, with a program administered by Federal employees who protect the reemployment rights of National Guard and reservists and veterans. I don't know how to match or compare them in a way that compares apples and apples. So, they are very different programs within each program. We do assess the bits and pieces of each program——

    Mr. PORTER. Now, our job, of course, is to evaluate whether the money is getting results for people.

    Mr. BORREGO. Yes, sir.

    Mr. PORTER. And, obviously, we need your help in order to do that.

    Mr. BORREGO. Yes, sir.

    Mr. PORTER. And where we are spending money and not getting results, obviously, we don't want to continue to spend the money——

    Mr. BORREGO. Yes, sir.
 Page 151       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    Mr. PORTER [continuing]. We want to do something different——

    Mr. BORREGO. Yes, sir.

    Mr. PORTER [continuing]. So we're getting results——

    Mr. BORREGO. Yes sir.

    Mr. PORTER [continuing]. And that's the reason I'm raising these questions.

    Ms. Delauro.

    Ms. DELAURO. Thank you very much, Mr. Chairman. Thank you for your testimony.


    I'm interested in the increased funds for dislocated veterans. Obviously, that's the area in which my community has faced a lot of structural changes in the economy. I understand that the model for this program is the retraining for communities that are downsizing. I am wondering how the initiative will work.

 Page 152       PREV PAGE       TOP OF DOC    Segment 1 Of 2  
    Mr. UHALDE. The increase for dislocated workers, which is $100 million, will enable us to be able to make targeted investments for communities that are impacted by NAFTA, particularly, border communities, and workers who have been impacted by what we call secondary layoffs, where the trade impacts have been with primary firms, and their supplier firms are not eligible, typically, for trade adjustment assistance, and the secondary workers are impacted. It would be with national applications, as we do with the National Reserve now.


    Ms. DELAURO. Let me ask one question with a couple of parts that have to do with the joint effort between the Job Corps and Head Start. That's an area of interest to myself and Congressman Hoyer, as we're dealing with trying to coordinate these efforts with students who have young children and as we're looking at the new welfare reform requirements. The first priority for child care is given to former welfare recipients; the second priority for Job Corps is the working poor. The Job Corps is 60 percent young men and 40 percent young women. Is it your sense, or have you picked up anything like this, that the lack of child care services is a barrier to enrolling more young women in Job Corps? What is Job Corps doing to help these young women find quality, affordable day care, so that they can participate? Finally, if you can, give us an update on the progress of the collaborative partnership between Head Start and Job Corps that was urged by the language in the Fiscal Year 1998 report. Where does this collaboration stand? When can we expect to see construction beginning for Head Start centers on Job Corps campuses?

    Mr. UHALDE. I'll let Mary answer it in more detail, but, clearly, the issues with regard to child care are an issue with participation of young women, particularly single mothers in Job Corps to a full extent. We have been aggressive in trying to respond to the language the committee provided. The Department has talked with Head Start. We've had preliminary meetings with them. Head Start can't fund facility acquisition, but they can provide operations funding. Job Corps is not funded to operate child care centers. It's a good marriage, and we and HHS/Head Start officials agree that it's a good partnership arrangement, and they have an interest in partnering with us to set up some Head Start programs in Job Corps facilities.
 Page 153       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    Mary, do you want to talk about how many and where?

    Ms. SILVA. Okay. We certainly have found the lack of child care is a real barrier to young women being able to avail themselves of opportunities. We have had more success in finding child care for those who are participating as nonresidential students. Job Corps is 90 percent residential. And so for those students whom we enroll as nonresidential, we are able to have in some cases child development centers on our Job Corps centers or have them be able to take their little ones there before going as day students to Job Corps.

    We currently have seven Job Corps centers where we have single-parent dorms and we have child development centers on those facilities. That opens the opportunity for young women to participate on a residential basis. So this is something that we feel very strongly about, and we're very concerned about providing more opportunity for young women. We have met with Head Start officials, and we are trying to develop ways to use our shared resources to be able to actually provide more child care centers, particularly in urban areas where we have a nonresidential capacity initially, because that means that you do not put up a single-parent dormitory, which is a significant additional expense.

    So right now we are meeting with the Head Start officials. We hope to be able to identify specific centers where we will be able to get the local partners in those local areas to be able to work out details, so that we can get funding for the young women through Head Start and get facilities opened.

    Ms. DELAURO. Is it your sense or evaluation—the word ''processing'' is so insensitive. What's your capacity? Your capacity now is not meeting the demand, is that correct, in terms of being able to assist with the child care aspect of trying to get people to work, to get women to work? Is it overwhelming? Is it underwhelming? Are you moving in a direction quickly enough to help us, if you will, to get some sense of an evaluation of Welfare-to-Work? How well is it working? Are people getting jobs? Are they able to do what they need to be able to do? What we want with Welfare-to-Work is to get people to work; that's the goal.
 Page 154       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    Ms. SILVA. Exactly.

    Ms. DELAURO. I want to get some sense of where we need to go in this area in order to make Welfare-to-Work work.

    Ms. SILVA. I think we can't overestimate what a barrier child care is. But to young women who have one or two little ones, getting to a job training program is very difficult. There are lots of barriers for transportation. There are lots of barriers for health care for these little ones, for getting them up and ready. It's very difficult, and I think we need to be very sensitive to the size of that barrier. It is an enormous barrier.

    We find when we have child care available for nonresidential participants, that they avail themselves of that. We work very hard with them and have to provide additional support for them because they have more to do to get to that nonresidential program every day than someone without children, regardless of gender.

    Ms. DELAURO. So that the Job Corps/Head Start partnership is something that we need to nurture? It works?

    Ms. SILVA. I think it's very important, because the Job Corps program works in providing the opportunity for these young women to be in a program that has this level of service and level of intervention. I think it's very, very important to make sure that these young women get that chance to be self-sufficient.

 Page 155       PREV PAGE       TOP OF DOC    Segment 1 Of 2  
    Ms. DELAURO. Thank you, Mr. Chairman.

    Mr. PORTER. Thank you, Ms. DeLauro.

    Mr. Wicker.

    Mr. WICKER. To follow up, what portion of Job Corps participants are nonparticipatory?

    Ms. SILVA. About 12 percent.

    Mr. WICKER. Is that figure moving?

    Ms. SILVA. No.

    Mr. WICKER. It's staying at 12 percent?

    Ms. SILVA. Yes.


    Mr. WICKER. Mr. Uhalde, let me ask you about Job Corps facilities. In 1998, the committee instructed the Department to examine ways to expedite construction of these facilities. What progress have you made in this area?

 Page 156       PREV PAGE       TOP OF DOC    Segment 1 Of 2  
    Mr. UHALDE. Mary, do you want to take that? On the rehabilitation.

    Mr. WICKER. Yes, construction and rehabilitation.

    Ms. SILVA. Right. One of the things that we have done very specifically is we have embarked using design/build as a way of getting a project up and going under one contract, so that the effort is with one contract to have the same entity do both the design and the construction. We have that underway in five different centers where we're using that technique to do renovation of facilities.

    We are very interested in seeing how that works because we have heard that there are some significant advantages in terms of timeliness. Our effort is to try to examine our construction/rehab process to be able to streamline it. We have a working group that's had one meeting. They'll be meeting again next month to look at ways where we can streamline the process, so that when we get funds from Congress, we're able to get them to the centers in a timely way with a process, so that the construction and renovation can be done more quickly.

    Mr. WICKER. Well, I understand that it's been several years since any money was spent on construction. Is that correct?

    Ms. SILVA. No.

    Mr. WICKER. Well, tell me, then, how much construction of Job Corps facilities we're doing now. And, as a matter of fact, I'm going to ask you to provide a list of proposed construction rehabilitation projects by center and location.
 Page 157       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    [The information follows:]


    As a result of recent Congressional appropriations that have been provided for new center facilities, center relocations and reducing the backlog of facility construction and rehabilitation needs that had built up at existing Job Corps centers, the volume of Job Corps construction activity has been increasing substantially. The following table displays the dollar amount of contractual obligations that have been incurred in recent years for Job Corps facility construction, rehabilitation and acquisition.

Table 1

    Regarding the requested list of proposed projects by center and location, our process for allocating appropriated FY 1999 construction funds to specific projects at individual Job Corps centers will not be completed until early 1999. We will be pleased to share this list of projects with you as soon as it is available.

    Ms. SILVA. Okay. We have received funds from Congress, over the last several years to be able to help beat back a backlog of facility needs, and this includes some construction of new buildings on a center, not new centers necessarily, but construction of a new vocational building or an academic building or a new dormitory on an existing center, and we have other needs where we rehab existing facilities. But I will be able to provide you a list of the types of activities where we use our construction money.

    Mr. UHALDE. Last year the appropriation was $114 million for the construction part, not including any expansions.
 Page 158       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    Mr. WICKER. Okay. You mention these five projects using this innovative design-and-build program. I take it that's a very small percentage of the construction and rehabilitation that's going on.

    Ms. SILVA. Yes, it is.

    Mr. WICKER. Do you know offhand if any construction is planned for the State of Mississippi?

    Ms. SILVA. I don't know offhand, but I will be able to get you that.

    [The information follows:]


    The facility construction and rehabilitation projects that are currently underway at the three Job Corps centers in Mississippi are listed below. These do not include any new projects that might be initiated under the 1999 appropriation.

Table 2


    Mr. WICKER. Okay. Let me just ask one more question of Mr. Uhalde. The administration is asking for $8.2 billion for employment training in Fiscal Year 1999 from $8.14 billion. Of this money for training, how much of that is spent on a preset formula? How much of that is distributed, dispersed, based on a formula?
 Page 159       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    Mr. UHALDE. Of our programs, most, for example, are the dislocated worker money, which we're asking $1.45 billion. Eighty percent of that goes out to States on a formula basis; 20 percent is the National Reserve account for emergencies and floods and disasters and major plant closings. For summer jobs, 100 percent of it goes out to States, and down from States to localities by formula. It varies by program how much is retained as discretionary but, in the main, most of it, 80 percent or more of the money goes out by formula for these programs. The exceptions would be Job Corps, which is a nationally-administered program.

    Mr. WICKER. So there's a very small part of it that's discretionary?

    Mr. UHALDE. Yes.

    Mr. WICKER. Could you give me an idea of some of the groups and organizations who receive the discretionary funds, and specifically have you awarded any grants to SBDC, Small Business Development Centers?

    Mr. UHALDE. With regard to the SBDCs, I'm not sure whether we have or not. I know they are very interested in the competition under the Welfare-to-Work grant, which is now in play. Twenty-five percent of those monies are competitive, to be awarded, and I know SBDCs have been one of the sets of groups that have inquired about competing for the Welfare-to-Work grants.

    Types of organizations range from nonprofits to for-profit entities, community-based organizations. Discretionary monies for dislocated workers goes down to cities and communities that have major plant closings or mass layoffs, and might go to a consortium of business and communities for a major plant closing. So we run the gamut in terms of discretionary awards from for-profits, nonprofits, and public entities.
 Page 160       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    Mr. WICKER. Nonprofits, for-profits, and public entities? How about labor unions?

    Mr. UHALDE. Labor unions as well, that's correct. Labor unions and——

    Mr. WICKER. What percentage of discretionary funds go to labor unions?

    Mr. UHALDE. I wouldn't know the percentage, but I would be glad to provide you information on precisely that, yes.

    Mr. WICKER. I'd very much appreciate that.

    [The information follows:]


    In program year 1996, 2.5 percent of discretionary funds in ETA programs was awarded to labor unions. This inlcudes the Job Corps program.

    Mr. WICKER. Thank you, Mr. Chairman.

    Mr. UHALDE. Thank you.
 Page 161       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    Mr. PORTER. Thank you, Mr. Wicker.

    I would tell members that we are operating under the eight-minute rule, and we will have a second round.

    Mr. Stokes?

    Mr. STOKES. Thank you, Mr. Chairman.


    Earlier this afternoon, when the chairman was questioning you, he made reference to the wonderful economy we're now enjoying, along with a national low unemployment rate. Does this operate as it relates to all working groups in the country today?

    Mr. UHALDE. Clearly, it does not. We have a 4.7 percent unemployment rate nationally. We have, for example, for black teenagers, a 35 percent unemployment rate. Unemployment rate for high school dropouts in inner cities is over 50 percent. In high-proverty, rural areas, unemployment can be substantial. So while we have a generally robust and energized economy, there are areas of geographical and population groups that are having substantial problems, and where industry has long since moved out of certain areas.

    Mr. STOKES. I think it's precisely the recognition of that factor that this subcommittee put in $250 million in the appropriations in the Fiscal Year 1998 bill for the Youth Opportunities Areas Initiative; that, of course, is subject to authorization. But, what are we doing in terms of that particular area?
 Page 162       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    Mr. UHALDE. Well, that's, of course, an area that we're very appreciative of the committees for having advanced that appropriation. It's a high priority for this administration, for Secretary Herman particularly. Just to review it a moment, because we can target resources into high-poverty neighborhoods. The goal of this is to raise the employment rate of 16- to 24-year-olds in those neighborhoods so that they are equivalent to the employment rates in non high-poverty areas, so we can have a fully-functioning economy, where work is the norm for young people in that area. What our problem has been in the past is we deal with individual youth in a scattered area, and the peer pressure sometimes in these high-poverty areas just overwhelms the work ethic in the communities. So we're trying to concentrate on small neighborhoods.

    We've been doing some pilots with the discretionary pilot and demonstration money that the committee has provided over the last several years, trying to figure out these concentrated efforts. They seem to suggest encouragement to us.

    In the earliest of seven projects that we did, the dropout rates declined for young people in those communities and the teen pregnancy rate fell in those communities that we were dealing with. Now we can't attribute all of that to the intervention we had, but we believe that there is great promise in this concentrated approach in small areas, bringing together all the providers and bringing together all the resources from existing programs as well as these grants.

    Mr. STOKES. I noted this morning that you—this afternoon, rather—that you made the statement that the question is: Where are the people, the skills for the jobs? I quite agree with you. I'm just wondering if Congress and the Nation really know and understand the crisis that we're confronted with when we think about the fact that we're two years away from the year 2000. We're told that one-third of the new entrants in the workforce in the year 2000 and beyond will be minorities. They'll be coming into a workforce that will be the most highly-technical workforce known to mankind. It would seem to me that there is a very real urgency attached to the targeted approach that you've referenced here this afternoon.
 Page 163       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    Mr. UHALDE. Well, we would agree completely that there's a sense of urgency; there's a great opportunity. The pressures on employers now are such that they are, in fact, looking to sources of labor that they otherwise would not be looking for, and I think that's very exciting, and we need to take advantage of leveraging this opportunity and leveraging

the people that we've been traditionally charged with, helping and assisting by taking advantage of that. So we believe that the investments this committee makes now can leverage greater successes now than they ever have in the past, but this is precisely the time now to ratchet-up those investments in these populations.


    Mr. STOKES. Let me ask you about the school-to-work. It's been said that the school-to-work program trains students for specific jobs to fill workforce needs rather than training them in how to make career choices. Is this the case, and how do you explain this lack of choice perception?

    Mr. UHALDE. It's difficult to explain the perception because we've been fighting this argument for quite some time. It's clearly not the case that school-to-work is focused on tracking young people into specific occupations, specific careers over time. In fact, school-to-work is about broadening the horizons and the opportunities for young people throughout the schools. We know that it works particularly well on young people who are prone to drop out, young people who are prone to not be interested or be facile in a more academic approach, but we know it's very effective for those precise children in getting into high academic standards by using a more experiential approach to learning, a hands-on approach to learning.
 Page 164       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    But if anyone takes a serious look at the range of school-to-work programs that are going on around the country, they will see that it is about broad career opportunities, mixing work and learning, so that young people know the reason and the rationale for why they are learning something, and they see the application out in the real world.

    Mr. STOKES. I note in the Congressional Justifications here that funding for the school-to-work program would be reduced by $75 million. This reduction is also reflected in the Department of Education's component program, which is part of the State and local school-to-work systems. Are they ready to undertake the responsibility for this program?

    Mr. UHALDE. What we launched collectively in a bipartisan effort for school-to-work three-and-a-half, four years ago was an ambitious undertaking. We may have underestimated the task a bit, but we have made enormous progress. We have 37 States that have implementation grants around the country. We have 3,000 schools engaged, 1,000 local partnerships, and over 200,000 businesses that are actively engaged in helping young people work and learn.

    The agreement was, in this innovative approach, to provide seed funding and taper off States over a five-year period. We think the first set of States will be going off in 1999, and they face some challenges. We're going to redouble our efforts over this next year and work with them to expand and make sure that they have sustainable programs, and we're encouraged by it.

    Mr. STOKES. Thank you, Mr. Chairman.
 Page 165       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    Mr. PORTER. Thank you, Mr. Stokes.

    Mr. Miller?


    Mr. MILLER. Good afternoon. I would pursue, first, some of the same kind of questioning that Mr. Stokes and Mr. Porter were asking about. With low unemployment nationally, how does your work change and how do your programs change? Mr. Stokes talked about the type of areas where we have high unemployment. You mentioned rural areas, for example. Are we focusing more on those areas? Do you think you're being successful when we're still having these problems? We still have the tremendously high unemployment in the innercities. The program may not be working all that well, and yet we have full employment.

    Mr. UHALDE. I think that's a fair question, until one understands what the orders of magnitude are here. We do have a 4.7 percent unemployment rate. We have, for example, 5.3 million young people, ages 16 to 21, who are below the poverty line who are eligible for our Disadvantaged Job Training Program, JTPA. We can provide at best, with the summer jobs program, half a million summer jobs, plus 116,000 year-round training opportunities. We're talking about 10 percent penetration rate on summer jobs and 2 percent on our year-round training program for young people.

    For disadvantaged adults, there are eligible for our title II–A of the JTPA, 35 million Americans, and we will serve with our budget request about 400,000. So we're talking about 1 percent.
 Page 166       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    So the economy is terrific. We want to make sure that, for those 400,000 low-income adults we serve, we get every one of them a job that lasts; we want to make it right the first time. But to believe that with this order of magnitude we're going to completely change is a false——

    Mr. MILLER. Are there programs that, because of the good economy, you think should be de-emphasized now? With the good economy that we're having and low unemployment, are there any programs that you're downsizing and shifting those resources to the areas that need it? Or does everything just keep going full speed ahead and get automatic increases? I know school-to-work had a small decrease.

    Mr. UHALDE. Well, school-to-work and the one-stop implementation grants both have a phase-down starting this year. I believe what you do in an economy like this, for example, is our unemployment insurance proposal—you start looking to the future. At 4.7 percent unemployment, nobody wants to think about reforming the unemployment insurance system, but, in fact, this is the time to do it. You start looking to the future and anticipating what might happen in a decline.

    So we have spent a fair amount of time in this budget anticipating that we get that vital safety net in shape for the next downturn that may occur. So I believe those are the kinds of things, with the change in the economy, we're doing. Because what will happen the next time we have 7 percent unemployment is we'll be running around collectively, administrations and Congress, figuring out how to extend unemployment compensation in a very rushed manner, and we won't be thinking about building the strong fabric of that system.
 Page 167       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    Mr. MILLER. The dislocated workers' program has a large increase.

    Mr. UHALDE. Yes, sir.

    Mr. MILLER. What kind of an evaluation do you have? I note in JTPA you're doing——

    Mr. UHALDE. We are doing——

    Mr. MILLER. I want to make sure we're going to spend the money wisely on this.

    Mr. UHALDE. Well, we are doing, with the money appropriated by this committee, a very rigorous evaluation of the dislocated worker program, as we are with

Job Corps. Job Corps is farther along, was started sooner. We are doing that.

    But even with dislocated workers, in a thriving economy about 2.2 million workers lose their jobs permanently each year. During the height of the recession, permanent job losses were up to maybe 3 million. So there's still churning—births and deaths of firms, even in a lively labor market, and our job is to make a better match of workers and jobs.

 Page 168       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    Mr. MILLER. Change to another subject for a minute: the National Council of Senior Citizens

    Mr. UHALDE. Yes, sir?

    Mr. MILLER. Are you aware, as reported in numerous articles in the Washington Post and New York Times, about their involvement in laundering funding?

    Mr. UHALDE. I'm aware of what I've seen in the papers, yes.

    Mr. MILLER. It's been widely reported that this organization may have been involved in laundering money to teamsters and may get indicted. What do you do with something like that, an organization like that?

    Mr. UHALDE. Well, we have audits of organizations, obviously, going on. We would hope that if anything like that had happened, we would have detected it. If we didn't detect anything, we don't believe it would have been with our money. If, obviously, anything happens like that, we would take steps to suspend a program. But at this time, all I know of on that score is what I've read in the papers, as you have.

    The Inspector General has been doing a routine audit of the National Council of Senior Citizens.

    Mr. MILLER. These are fairly serious charges about money laundering, as reported by the Post and New York Times——
 Page 169       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    Mr. UHALDE. I'm not aware of any abuse of the Federal monies that we provide to the organization.

    Mr. MILLER. It wasn't Federal money, but it was—an organization that did this. Even though it wasn't your Federal tax dollars, what do you do with an organization like this?

    Mr. UHALDE. Well, we have a responsibility to review when we provide grants to any organization, and if the organization has any such serious problems like that, that certainly would influence whether or not we'd give a grant, absolutely.


    Mr. MILLER. Let me switch to one more subject. The consolidation bill that's passed the House, the Job Training Program is going to be consolidated. Where does that stand? Do you expect we're going to see that this year, realistically?

    Mr. UHALDE. I certainly hope it's going to pass this year. I've spent five years working on that. So I'd like to do something else over the next year.

    I believe it's going to pass. There is bipartisan support for it. There was a meeting yesterday at the White House with the governors and the President, and this topic arose, and I think there was consensus; they want to move forward on it.

 Page 170       PREV PAGE       TOP OF DOC    Segment 1 Of 2  
    I don't want to oversell this. It doesn't consolidate every job training program, by GAO's account, but it makes a major effort forward, and the one-stop centers that this committee has been proposing is the way for communities to integrate these programs at the street level.

    Mr. MILLER. What is the difference between the Senate and the House, money flows to the States—or wasn't there a difference?

    Mr. UHALDE. I think a major difference between the Senate and the House has been the relative authorities in the past years between the State versus the local. I think that, with their coalition agreement between States and locals, they've worked that out. States are now, in the Senate, arguing for yet more consolidation, and that means education programs with training programs, and that raises issues with regard to whether or not non-school entities are going to have some control over schools. It raises a lot of issues, and I know the education community wants to have less of that merger across these different domains.

    Mr. MILLER. Thank you, Mr. Chairman.

    Mr. PORTER. Thank you, Mr. Miller. Ms. Northup?


    Ms. NORTHUP. Yes, I'd like to go back to the Job Corps and the question of child care, day care, Head Start funds, and the availability of those. Can you explain to me if sort of the money stream that's involved there? In the Welfare-to-Work bill or in the welfare reform bill there was quite a lot of money appropriated for day care. Is that available to people that are in Job Corps programs?
 Page 171       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    Mr. UHALDE. I believe, yes, it is; those monies are available to them, as long as they meet the eligibility criteria under——

    Ms. NORTHUP. But, of course, I mean the fact that you're not sure sort of leads me to believe that maybe that's just for people that participate but don't live in the residential programs. I mean, if you're in the residential programs—what I understand from the State programs is that the day care money is fairly available. My question is, how much leeway is there for your participants in the job training, in the Job Corps, to access that money? I mean, maybe the 12 percent that are in nonresidential programs have access to it, but if they're in the residential programs probably not.

    Ms. SILVA. I'm aware that our centers that have single-parent dorms and child development centers are facing challenges in getting access for these funds for students.

    Ms. NORTHUP. Are those Federal challenges or just challenges for the local community? I mean, in Kentucky we receive funds block-granted to our local community. There's a board that then brings together providers with people that are entitled to those monies. Is that because you're just not at the table or because there are Federal prohibitions against that money being transferred intact to the Job Corps?

    Ms. SILVA. My understanding is that it's handled at a local level, and we may or may not be at a table. There are challenges here, and we are trying to deal with them at the local level, where our local centers are located, so that they go to meetings, so that they attend the sessions and engage in these discussions to make sure that we can work with communities so that these funds are provided and available for the young women.
 Page 172       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    Ms. NORTHUP. I think also what would be of interest to this committee is whether there are any prohibitions in our language that make it more difficult for you to access those funds since some communities are finding they have enough to stretch and be available.

    [Ms. Silva nods affirmatively.]

    Ms. NORTHUP. I also had additional questions about the welfare reform bill. Is it correct that the bill prioritized welfare recipients over previous welfare recipients, over Job Corps participants, or low-income adults? We prioritized former welfare recipients for the day care money or for the funds.

    Mr. UHALDE. I'm not familiar—you're talking about the Personal Responsibility Act?

    Ms. NORTHUP. I just wondered if within the labor camp whether there was any consensus that maybe that initial prioritization ought to be lifted, so that the money can be used for other individuals. For example, a Job Corps could consist of people that were welfare recipients and adults that were just unemployed or wanted additional skills. Yet, the total cost of providing day care for residential participants would serve everybody well. Let's say you have 40 percent former welfare recipients and 60 percent that aren't. If you can only provide a money stream to support day care for the 40 percent, because they're given priority, if that isn't an effective regulation at this point, particularly because Job Corps seems to have been so successful.
 Page 173       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    Mr. UHALDE. I will—I'm not familiar with that priority and how much it impinges on it, but we'll be glad to check, absolutely.

    [The information follows:]


    The Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA, or welfare reform bill) provides funding for the Temporary Assistance for Needy Families (TANF) block grant and the Child Care and Development Block Grant (CCDBG) programs. TANF replaces previous welfare entitlement programs and gives States the flexibility to establish eligibility criteria and the type and level of benefits for individuals to be served.

    Under the Child Care and Development Block Grant, States must use at least 70% of funds to provide child care assistance to TANF recipients, to those who are in work programs and attempting to leave welfare, and to those at risk of going on welfare. In addition, States must ensure that a substantial portion of funds are used to provide assistance to low-income working families.

    Neither TANF nor Child Care block grant funds can be transferred to the Job Corps program to provide child care for children of Job Corps students. Each State determines who is eligible to receive assistance under TANF, and who is eligible to receive child care assistance under CCDBG. Job Corps students are not automatically eligible for benefits under either program.
 Page 174       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    Some States consider Job Corps an approved education and/or training activity which counts toward work requirements for TANF recipients and therefore students enrolled in centers in those States can receive TANF benefits and be eligible for CCDBG child care support. Other States do not consider Job Corps an approved education/training activity and they reduce or eliminate student's TANF and/or CCDBG benefits when they enroll in Job Corps. Each Job Corps center has to deal with these situations at the State or local level as appropriate to try to ensure that young parents are not penalized by enrolling in Job Corps.

    Because of the issues of individual State-determined eligibility criteria for welfare assistance and child care benefits, we believe it is also important to pursue care for children of Job Corps students through Head Start. These children automatically qualify for Head Start because all Job Corps students are economically disadvantaged according to Federal poverty guidelines. Head Start offers quality programs which can be beneficial in meeting the developmental needs of the children of Job Corps students, who themselves have social, academic, and skills deficiencies which are major barriers to employment.

    Ms. NORTHUP. Well, I think it's very important that all the money that's out there is able to be used in the most effective manner, in the most effective programs.

    Mr. UHALDE. Right. We try very hard in Job Corps to leverage other resources. When we bring in foster children, for example, we try to leverage foster care money, and try and access child care and other resources. Sometimes it may be because of the residential nature of the program and some of the students are not from that area; they come from another area sometimes.
 Page 175       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    Ms. NORTHUP. Regarding Job Corps, did you say it was filled to capacity currently?

    Mr. UHALDE. Ninety-some percent.

    Ms. SILVA. I believe we're at 98 or 99 percent.

    Mr. UHALDE. Our objective is to hold down unit costs for youngsters, to keep it at full force.

    Ms. NORTHUP. I asked that question because you talked about the unemployment rate being so low, and yet there are pockets of unemployment that are very high. I wondered if any of your Job Corps centers were finding that, because they were in a very high employment area, low unemployment area, that the demand for those services has been reduced. Maybe the need is higher in some areas, and if there's any sort of changeover of resources or transfer of resources——

    Mr. UHALDE. We try to give priority to them within the Job Corps centers that are nearest where they reside, but Job Corps students can be assigned to more remote areas, and part of that is done to balance the need, because it is very important with the cost of the program to keep all the slots filled, so that costs——

    Ms. NORTHUP. Sure.

 Page 176       PREV PAGE       TOP OF DOC    Segment 1 Of 2  
    Mr. UHALDE [continuing]. So in some areas it's more difficult to recruit and we'll have to move students from other areas.


    Ms. NORTHUP. Finally, I thought it was very interesting that it showed here that the minimum wage—I mean the average wage—for welfare clients is $7.27, and that 75 percent of these clients are in full-time jobs and have access to benefits. When you talk about minimum wage that's something that is always used as an example. Everybody's moving to a minimum wage job, and, clearly, they're moving way above that, if that's the average.

    Mr. UHALDE. Yes.

    Ms. NORTHUP. That means for the majority of them, any change to the existing minimum wage wouldn't affect their jobs.

    Mr. UHALDE. That's correct, and our objective is to try to get as many of the welfare recipients well above the minimum wage, if we can, and we've, on average, been successful.

    Ms. NORTHUP. Thank you.

    Mr. PORTER. Thank you, Ms. Northup. Ms. Lowey?

    Ms. LOWEY. Thank you, Mr. Chairman. I thank you, Mr. Uhalde, for being before us.
 Page 177       PREV PAGE       TOP OF DOC    Segment 1 Of 2  


    There's been a good deal of talk about the success of the America's Job Bank, and I didn't get a chance, actually, to talk to the Secretary about it, to get an update. If you could share with us the progress Job Bank is making, what new initiatives are you undertaking, how are you measuring the success of the program, what changes you expect to make, how widespread is it——

    Mr. UHALDE. Thank you. America's Job Bank, first of all, is a partnership amongst the Federal Government and the State employment security agencies. Job Bank wouldn't exist if we couldn't get the jobs from the local employment offices, the job listings. But what we have been able to do most successfully over the last few years with the funding provided by this committee is grow that into the most actively-searched job bank on the internet. It lists any day 750,000 jobs on America's Job Bank. In the record month of January, we had 32 million hits, as they call it on the internet. It is an enormous amount of visits and traffic.

    And come the end of March, we are going to be launching the newest version of America's Job Bank with America's Talent Bank, and it will go nationwide. America's Talent Bank will offer the opportunity for millions of resumes by individuals to be listed, and these will be interactive, so that resumes can search jobs; employers can search resume banks, just as individuals are now searching job banks. It's a very exciting opportunity, and it is something that we're trying very much to make a complement to the local operations and the local employment service offices.

 Page 178       PREV PAGE       TOP OF DOC    Segment 1 Of 2  
    So, again, with this committee's one-stop investments, the local unemployment office or employment services, now the one-stop centers, have this electronic capacity in what they call resource rooms, and individuals are going in there and being able to get access to this information.

    Lastly, I would say, States are tailoring this to their needs. The State of Connecticut has branched out into 101 public libraries around the State, in putting in America's Job Bank in this electronic exchange. Maryland, in their nine one-stop offices, has had a 37 percent increase in productivity, and because of this capability, they've been able to serve over 16,000 more participants than they would have without this technology. So the marriage of the technology, the new offices, the better customer service is providing, I think, much more information and better access to more Americans.

    Ms. LOWEY. It's certainly very exciting, and I would hope that this also shows the connection between our training programs and the jobs that are available. Having lived through CETA and now JTPA, it's totally frustrating to me, and I share my colleague Mr. Stokes' frustration as well, in how important it is for us to somehow begin to replicate the successes of these training programs.


    To follow up on that, we just recently met with some people from our State delegation. What I'm hearing is, once someone is going off welfare, there really isn't much tracking, certainly on the Federal level and the State level. For those off welfare, what's happening to those people? Is there any tracking at the Federal level as to what's happening with them?
 Page 179       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    And then the follow-up question is: I believe in your testimony you noted that, once placed in a job, holding onto that job is a necessary step toward self-sufficiency. No. 1, I'm interested to know what's happening and to what extent you're keeping track of those going off welfare, and the kind of jobs they're moving into, if any. And, secondly, once someone is placed on a job, what kind of tracking is being done, and how long they're holding the job, and how long you actually track them?

    Mr. UHALDE. Well, of course, on the larger welfare reform effort and the implementation of that, HHS has had the primary responsibility, and sort of the caseload declines that are being experienced now, and where are those people going, they are responsible for that data collection.

    We are launching the Welfare-to-Work, the $3 billion, but we also in JTPA have served welfare recipients. We follow——

    Ms. LOWEY. May I interrupt at that point?

    Mr. UHALDE. Yes.

    Ms. LOWEY. You're saying, once they get off welfare, it's HHS's responsibility?

    Mr. UHALDE. Yes.

 Page 180       PREV PAGE       TOP OF DOC    Segment 1 Of 2  
    Ms. LOWEY. You have a coordinative responsibility between Welfare-to-Work and JTPA; is that right?

    Mr. UHALDE. Yes. On Welfare-to-Work, we have $3 billion, a billion and a half each year for two years. HHS is providing $16 billion a year out to the States, and has the data-tracking responsibility for that.

    For our $3 billion, plus the JTPA monies, we track welfare recipients and all our participants three months after they leave our program. Under the legislation on the Hill, the job training reform legislation, we will track for six months everybody who leaves the program. Currently, what we do is we recontact them by telephone, to determine whether they're still employed, what their wages are, and many of the localities use that to get customer feedback on their program.

    I can tell you for welfare recipients that we have been serving that we place 63 percent of them at termination. They were employed last year at an average of $285 a week. So we go from three months, hoping to go to six months to be able to track them.

    And with the Welfare-to-Work, we are hopeful that, with the wage record system that has been put in, we'll be able to follow administratively for up to a year or more.


    Ms. LOWEY. Thank you. There has been discussion about the fact that the reauthorization passed the House and not the Senate. Can you give us some information, in lieu of the legislation, what has been done in the Department to consolidate the workforce development programs, and in coordinating the Welfare-to-Work and the JTPA programs, could you give us some really good examples of a State or a locality which has done a particularly good job of integrating these services? As I mentioned, having worked for years in these programs, it is frustrating to me that there are some really outstanding programs. We've done some excellent one-stop shopping centers, and yet we still have 50 percent unemployment in the innercities. So that although we can always find outstanding examples, we don't seem to move forward, and it is very frustrating to all of us.
 Page 181       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    I hear the bell, but perhaps, with the chairman's graciousness, you can respond.

    Mr. UHALDE. Well, I believe there are excellent examples of where Welfare-to-Work and the job training and the TANF programs have been merged really into a much more seamless system. Work in Indiana and Michigan has been very successful in that regard. I just came back from California, and there in the Los Angeles area they were going to work very closely between the county welfare and the job training to merge welfare and Welfare-to-Work, TANF, and the job training efforts.

    Just one example, out in Los Angeles, of an excellent effort to join this with the criminal justice system, is Parents' Fair Share that has included the district attorney's office, the welfare office, and the JTPA system. Unemployed men who are not paying child support payments go before the courts, and are referred to this program, where they both get training and employment assistance, have peer counseling, have mediation services which are oftentimes needed, and for the first time providing support to their children, and dealing in a mature manner with their children as parents, and helping to raise their children, which they couldn't do without a job. And there's where they forge that link, and they're dealing with 400 a month in that program.

    Ms. LOWEY. I think I've used my time. Thank you, Mr. Chairman.

    Mr. PORTER. Mr. Bonilla.

    Mr. BONILLA. Thank you, Mr. Chairman.
 Page 182       PREV PAGE       TOP OF DOC    Segment 1 Of 2  


    Mr. Secretary, I'd like to start the day with the migrant seasonal farm worker program, specifically, the migrant child labor initiative that you referenced in your testimony on page 26, and the idea of offering migrant youth alternatives to field work using $5 million additional. It's my understanding—can you tell me what specifically these alternatives might be? Because, as you know from my history on this subcommittee, I'm very concerned that our dollars spent to help migrant seasonal farm workers are spent wisely. This is a culture that's very committed to work from sun-up to sun-down, and if necessary, traveling great distances, and it's a group that I want to make sure is targeted correctly. So if you'll elaborate on those alternatives, I'd appreciate it.

    Mr. UHALDE. Certainly. The project that you referenced is very important. It's a small expenditure, $5 million, but the issue is so many children of migrant and seasonal farm workers, as you know, move with the migrant stream; oftentimes, because of pressures of the family and income needs, are pressed into service and work in agricultural labor. They work for long periods of time quite often, and their schooling is often interrupted in that process, and because the schooling is interrupted and they're working in the fields quite often, they don't get the exposure to alternatives and alternative opportunities, and it almost becomes assumed that this is their approach.

    What we're trying to do with this initiative—and, admittedly, this is going to be very difficult because of the transient nature of the labor—is essentially to try to build alternative work experiences like school-to-work and learning. So that if we can identify through different providers work experiences that complement their education outside of agriculture, and expose these young people to alternative career opportunities, possibilities, much like one would do with our summer jobs program now, where young people get some remediation, some education, and they mix it with work and learning during the summer, and let them kind of explore other careers. Oftentimes, migrant children miss out on those opportunities. It's difficult to figure out how to do that logistically, but we're going to try.
 Page 183       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    Mr. BONILLA. One reason I ask the question is that the administration is choosing once again to level-fund migrant and seasonal farm worker programs. Wouldn't the money be better spent, this $5 million, for the basic program, and acknowledging that the alternatives might be a good idea to reach into areas that haven't been reached before, but wouldn't it be better, possibly, to put this into the basic program that's being level-funded already?

    Mr. UHALDE. It's a choice we had to make. This is an investment. Hopefully, if this pays off, it's an opportunity to expand this for migrant children into the future, and sometimes we have to make an investment and forego some additional operating money in that regard.


    Mr. BONILLA. I want to move now to the Job Corps program. As you know, I've been very proud of the Job Corps centers that we have in my congressional district, and also, I happen to believe that one of the reasons that they succeed is not just because of good instructors and the people committed to the program locally, but because of the great role played by the private sector in this program. In the private sector, performance equals success. There's no gray area; there's no two ways about it; if you're going to stay in business, you have to produce results.

    I appreciate the Department's investigation into low-cost options of expanding Job Corps to serve more at-risk youth, as requested by the subcommittee last year. As you stated on page 19 of your testimony, the Department plans to issue a request for proposal sometime in March. My question is, is there a specific date yet that you have in mind?
 Page 184       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    Mr. UHALDE. Do we have one?

    Ms. SILVA. Early in March.

    Mr. BONILLA. Like next week? [Laughter.]

    Ms. SILVA. It could be that early. I would certainly anticipate within the first two weeks in March, yes.

    Mr. BONILLA. What criteria will be incorporated into the Department's request for proposal?

    Mr. UHALDE. Well, we're certainly going to do it consistent with the congressional guidance that we received, and we are going to be looking at both stand alone and new satellite facilities. There will be an emphasis on having almost a turnkey operation because we have $37 million for the construction of five centers, and that's considerably less than we would have traditionally. So we need turnkey operations in these full centers.

    Do we have any other criteria we can speak of?

    Ms. SILVA. We'll include linkages with the local and the State areas, so that we can try to leverage resources. That would be an additional criteria. Also, need: the percentage of poverty youth in the State versus the capacity of Job Corps already existing in the State. In terms of following up on congressional guidance, we would be giving priority to States without Job Corps facilities, as well as low-cost facilities, including those that would be available through
 Page 185       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

the closing of military bases.

    Mr. BONILLA. Does the Department have a final goal as to when the new centers will be up and running?

    Mr. UHALDE. We plan to make the selections by the end of the year, by December. It will depend on the sites themselves and the physical condition of the sites.

    Usually these plans are thrown out of whack when you actually see the facility and you find out what you have to do for the facility.

    Ms. SILVA. This is the first time where we have really sought facilities that were turnkey to this degree, and to the extent that we're successful in this process, I would say a year, 18 months. It will depend, however, on the facilities.

    Mr. BONILLA. You've answered part of the next question I'm going to ask you here, but I'm asking specifically, as you see, because of the military base closing situation, and now we've explored the idea of having a center at Kelly Air Force Base, about how much weight will the Department give to those applications that use existing structures. You mentioned that there had to be a network already in place, an opportunity to have turnkey operations, specifically, existing structures, made available through military base closings. We have one at Kelly Air Force Base, as you know, which could potentially decrease the cost of developing the new Job Corps centers. Something like that, would that be of great significance, to have facilities in place already?
 Page 186       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    Mr. UHALDE. Yes, existing facilities are very important. We did go through a lot of military base closings, though, so there are a lot of existing facilities.

    It's also the quality of the facility. We go into facilities and we find out there's asbestos or there are other deteriorations, and it costs more. So it's the quality of the facility as well as the existence of it.

    Mr. BONILLA. Well, you finished right when the time ran out. [Laughter.]

    I suppose my time is up. I thank you for your time here today.

    Mr. PORTER. We will have a second round. I'd like to ask which members will stay for the second round. Two? Three? Including myself. So we have 26, 27 minutes. So we'll have eight or nine minutes each.


    Mr. Uhalde and Mr. Borrego, the GAO expressed concern in recent testimony about the Department's lack of reliable and consistent information needed to monitor performance of individual programs. Are each of you confident that the performance data that you have for your programs will tell us what we need to know to assess whether they are meeting their objectives? Because for us—and I want to repeat this—we need to know what gets results for people in their individual lives, and we depend upon you and the information you develop to tell us what works and what doesn't work. So are you confident in the information that you have?
 Page 187       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    Mr. UHALDE. For our job training programs, for JTPA, for example, we get a participant record report on each participant that is served. We get it on an annual basis. It gives all the demographics, plus appended to it, when they leave the program, are the earnings for the individual. So if we serve 700,000 in the dislocated worker program and 400,000 in the disadvantaged program, we have an individual record on 1.1 million individuals annually. That's what we produce in a detailed report back to every State, telling them performance, and that's what the States themselves use. So I think we have a very good record there.

    For unemployment insurance, we have a quality control system that is in place. It's a very detailed record. For some of the other, more direct grant programs, like the Indian and migrants, we have reports from the individual grantees. I would say we're very focused on performance and outcomes for each of these programs, and can produce more detailed reports on each of the programs.

    We do have State audits of the quality of the data, and that, we believe, is important. We also have routine edit checks of the data to make sure the data are good.

    Mr. PORTER. Mr. Borrego?

    Mr. BORREGO. We have two kinds of data. One had been the old activities data. Our legislation still requires us to collect it. It's good data, reliable data. We will continue to collect that data.

 Page 188       PREV PAGE       TOP OF DOC    Segment 1 Of 2  
    As we're moving into outcomes, we're doing a couple of things. One of them is, we made sure that the outcomes we're doing are the ones that we wanted; we work with our stakeholders. We've got good measures.

    The others—we're taking a look at doing a study on what's the most cost-effective way to measure data; do we need to do full, in-depth measurements or will indicators get us there? So depending upon which program that we're looking at, I think as we move forward, you'll find we need good, reliable data to manage the programs, to make sure that they're running well and they're effective. We will have the data. We're still working out the how and which is the best way, but I'm confident that we'll get there.

    Mr. PORTER. I would ask both of you if you will look at the testimony of the GAO before this subcommittee and then respond to the criticisms they have made, both as to the availability of information and to the evaluations of programs as that relates to the Results Act. Because I'd like to get you to answer specifically the criticisms that they've made of the Department and the programs under your

jurisdiction, particularly as to information and evaluations.

    Mr. UHALDE. I did look at the GAO's testimony with regard to the evaluations, and I guess I must say I'm mystified. I think, outside of medical research, job training programs have had more rigorous evaluation of their net impacts than most social programs I'm aware of, and I can give you a list of 20 that we have funded. I'd be glad to do that for the record.

 Page 189       PREV PAGE       TOP OF DOC    Segment 1 Of 2  
    Mr. PORTER. Yes, provide whatever comments you wish to make for the record, in response to what they have testified in respect to the Results Act and the criticisms that they have made.

    [The information follows:]

    "The Official Committee record contains additional material here."

    Mr. PORTER. I will also ask you, for the record, to describe what kind of incentives are available for your managers and senior executives and to describe how they are tied directly to the achievement of performance measures under GPRA, but you can do that for the record.

    Mr. UHALDE. All right.

    [The information follows:]


    ETA's mission is to be a high-performance, customer-focused organization that continues to use performance management to improve results and raise accountability in the provision of high quality job training, employment, and income maintenance services through State and local workforce development systems.

 Page 190       PREV PAGE       TOP OF DOC    Segment 1 Of 2  
    Beginning with the FY 1998 performance year, all performance management plans for the Executive Staff and managers and supervisors will reflect ETA's program goals and performance outcomes. ETA has developed a number of management strategies to achieve its performance goals such as increasing managerial accountability by more closely linking the personnel performance management system with the agency's annual plan through training and consulting.

    Monetary incentives for SES high performance includes level increases and bonuses. Under a unique performance focused performance award system, supervisors and manager's summary ratings are ''delinked'' from their awards. Their award is determined instead by performance on specific results and outcomes related to the ETA GRRA-based Annual Performance Plan. In FY 1998, performance awards tied to GPRA are expected to reach $203,000.

    ETA has an extensive non-monetary award system which utilizes local award teams who are encouraged to have ''just-in-time'' recognition for interim results.

    Finally, ETA has been very successful in achieving recognition for significant program accomplishments for an average of 50 managers and supervisors each year in the Secretary's Annual Honor Awards Program.


    The ASVET already gives weight to activities that lead to the organizational outcomes and impacts needed and noted in our Strategic Plan. This year we have asked our field managers to identify the activities necessary to achieve our Strategic Plan goals and make plans to carry them out. Their performance ratings, and thus awards and future compensation will give great weight to the achievements of such activities and on the outcomes attained by States and Regions. During the previous performance appraisal cycle the first standard of performance was ''Organizational and Programmatic Mission'' and for Regional Administrators they included elements such as:
 Page 191       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    Develops and promotes the long-term view, and initiates organizational and programmatic changes for the future.

    Anticipates and meets the needs of clients/customers. Set standards for customers' needs and satisfaction and meets them.

    Uses performance agreements and other management systems to link individual performance to outcome.

    Demonstrates, through specific action, advancement of either organizational or programmatic mission.

    These standards and others supported accomplishment of outcomes related to our strategic goals. Future standards of performance will tie elements closely to annual performance plan goals and to support of long-term strategic goals and strategies necessary for their accomplishment.

    Mr. PORTER. Mr. Uhalde, we've given you in recent years, through the appropriations process, a great deal of flexibility to transfer funds between certain JTPA programs. The administration has supported this. In your opinion, how useful have these transfer authorities been, and how much have they been utilized?

    Mr. UHALDE. The authorities have been very useful; I think particularly so between the two youth programs, between the summer program and the year-round program, much more so than between the dislocated workers and disadvantaged adults. My recollection is between the dislocated and disadvantaged adult program the transfer has been $15 million or so, but for the other one, they have been substantial. Over $100 million I think has been transferred between one youth program and the other, mostly from summer to the year-round program—very helpful.
 Page 192       PREV PAGE       TOP OF DOC    Segment 1 Of 2  


    Mr. PORTER. Mr. Borrego, Congress appropriated $3 million in Fiscal Year 1998 for the homeless veterans' program. This year you're asking for $2.5 million. What have you done so far with the $3 million?

    Mr. BORREGO. Sir, we're in the process right now of putting together a competition for grants awards that will be out on the street probably first part of March. We're soliciting grant proposals, and as soon as we get the grant proposals ranked, we'll evaluate them and fund them, and get that money out on the street.

    Mr. PORTER. Do you coordinate this program with the homeless programs administered by HUD?

    Mr. BORREGO. We work with HUD very closely and with the VA, because they also have programs for homeless veterans. In fact, in our grant—in our solicitation for grant awards, we place in there that there should be linkages, that where possible, to have HUD provide housing, the VA to provide the services, support services, that the veterans who are homeless may need. That's how we leverage that small amount of homeless money into a really successful program.

    Mr. PORTER. Isn't JTPA supposed to serve homeless veterans, and why do we need a separate small categorical program for this group?

 Page 193       PREV PAGE       TOP OF DOC    Segment 1 Of 2  
    Mr. BORREGO. JTPA IV–C in its authorization language targets special disabled veterans, Vietnam veterans, and transitioning veterans, but there are a large number of homeless veterans who do not fit those categories. And even when we've used JTPA money for homeless providers, it's excluded those veterans that don't fit the criteria in the 4(c) authorization.

    Mr. PORTER. Wouldn't it be better to amend that act and include them rather than to have a separate category?

    Mr. BORREGO. That's something that we can look at, and

I'll talk to the authorization committees.

    Mr. PORTER. You indicated in your budget documents, Mr. Borrego, that you expect to receive $100 million by transfer from the Department of Veterans' Affairs during the next Fiscal Year. How would this come about, and how would you spend the money if you received it?

    Mr. BORREGO. This is dependent upon legislation that the President will propose shortly, I think. The first thing that I did was to go over to the VA and meet with them and start putting together a working group to structure how we would fund this or how we would administer the funds, but I think there are some principles that, if we apply, will lead to a successful program.

    First, there should be some money in each State. All States have veterans with needs. The States should have some flexibility to meet the unique needs of each State. The States are doing very different things and are in different places. That there be performance measures, so that we have accountability built into the program; that we put some emphasis on placement, because a training program without the placement linkage means that people will get trained and won't go into jobs. We have a good history with that with the VA and the VOC rehab. And that we engage the employer community in a dialog about where those trained veterans will end up. So we need to train them for jobs that employees are looking for. So if we do that, I think we'll have a successful program.
 Page 194       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    Mr. PORTER. Thank you, Mr. Borrego.

    Ms. DeLauro.

    Ms. DELAURO. Thank you, Mr. Chairman.


    I have a couple of comments. Following up on Ms. Northup's questions about Job Corps and Head Start, as I understand—and I just want to be clear about this—in the welfare bill that passed there was not enough money for child care for welfare recipients, for the working poor, and for those who are categorized as students. And then when States receive their block grants, if they do not treat welfare recipients as their first priority, in fact, they are in danger of losing their funding.

    So to get back to what we were talking about, as I understand it, with regard to Job Corps, that in fact it's not revenue that comes through Job Corps for child care. But, in fact, your folks are students, and therefore, the students are making applications for child care funding. And if you take a look at that money that was part of the welfare bill that was passed, that in fact is almost nonexistent, if you're going to treat welfare first, working poor second, and students third. So, therefore, we talk with you about trying to make the link between child care for your students as a category and the job training. Is that accurate? I just want to get clear about it.

 Page 195       PREV PAGE       TOP OF DOC    Segment 1 Of 2  
    Mr. UHALDE. Yes, I believe that's accurate. The one qualification I'd give is that, depending on which State the students are resident in, they may or may not be also a welfare recipient. You used to be able to be eligible in AFDC and be resident in Job Corps. Now there's much more flexibility, so we don't know what the rules of the individual State would be.

    Ms. DELAURO. So, it's not in fact that you're not taking advantage of a source of money out of the welfare bill or looking for some way to do something else, but there's a source of child care money, a pile of money, for you to avail yourselves of. That money is being taken up by the States, and in terms of the welfare reform bill mandate that they have on how they hold onto their long-range funds?

    Mr. UHALDE. That's correct.


    Ms. DELAURO. We talked about, based on what Mr. Stokes has said and several of my other colleagues—you said there are 2.2 million dislocated workers every year, roughly.

    Mr. UHALDE. Yes.

    Ms. DELAURO. We're trying to address that problem. We don't meet the demand, if you will, in terms of summer jobs.

 Page 196       PREV PAGE       TOP OF DOC    Segment 1 Of 2  
    I want to get to Mr. Borrego and the veterans, and whether or not we're meeting the demand for jobs for veterans. Job Corps, as successful as it is, we're not able to take in everybody who could be eligible. What I'm trying to do is to get a sense of the dimension of our problems and the level at which we are addressing those problems in terms of resources. I'm not here to say that you just throw money at problems, but we do seem to have some disconnect between the level of the problem and how we're meeting it in terms of the very fundamental issue, which is someone being able to work when there's so much emphasis today on people working and exercising their responsibility to work.

    It's a question of how do we—because we don't have all the money in the world—how do we catch up to some extent here? What is it that we can help to provide? What should we be doing in order to get a handle on what I view as one of the most fundamental issues that we have to address in this country—how we get people to work, so that they can be gainfully employed, take care of their families, be contributors to the economy, and not a drain on our economy? How do we manage this and where should we be putting our resources?

    Mr. UHALDE. Well, I would say this committee has been very helpful in investing in some of the programs we know are effective, like Job Corps. We have been growing Job Corps in terms of center expansions. As we know, we'll go to another five. So there it's wise to put money where we know we have a substantial payback.

    We have dislocated workers. We have sort of a bipartisan consensus in investing money there. Our adult training program——

    Ms. DELAURO. Whether it's the insurance industry in the State of Connecticut that is consolidating or whether it's the defense industry, just on the downsizing, these are people who had great jobs.
 Page 197       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    Mr. UHALDE. Yes.

    Ms. DELAURO. These are not folks who we—you can comment all you want about they had great jobs, some in two-worker families, own homes, own their automobiles, paying substantial amount of taxes in property and in income. Today they're in serious trouble. How are we meeting, and are we meeting, that 2.2 million every year who are going by the boards? What percentage of these people are we getting back to work again, so that they can help with everybody else?

    Mr. UHALDE. Well, of the 2.2 million, we will serve about 700,000 with our budget request. And of the people that we serve with dislocated worker monies, 75 percent of them get jobs back and they get jobs at about 95 percent of their prior wage on average. So I think from those data, we know we're successful, but we're dealing with about 45 percent.

    Ms. DELAURO. We're dealing at the margins.

    Mr. UHALDE. And in our mind's eye, they are mostly successful people. They are clearly experienced workers.

They have mortgages. They've raised families, and the rug's been pulled out from under them, and this program has been enormously powerful for them.

    But, also, at the other end of the spectrum are dislocated workers who are in the garment industries in the South, textile, that have closed the doors, and they've been working all their lives, they're experienced workers, but at or near the minimum wage. So this program has been a godsend to them, too, but the losses monetarily that they have experienced probably have been as substantial, if not as much, in terms of their wage. So I think that's a program we have been investing more in and should continue.
 Page 198       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    As we're moving in this tight economy, the important thing is to be able to match up people to jobs, and our employment service is really the backbone of the funding for one-stop. As one-stop declines, what's going to stay to operate it in terms of the labor exchange is the employment services monies, and we have $780 million, roughly, we invest there. Employment services get about 2.5 or 3 million job openings a year and are able to fill about 48 to 50 percent of those job openings. That's an important resource and something that, as I said earlier, is the backbone of the electronic America's Job Bank. So we need to invest in our employment services to better match the technology and the people there.

    Ms. DELAURO. You want to talk about adult training?

    Mr. UHALDE. Adult training is important because, as we move on Welfare-to-Work and all the attention has been on Welfare-to-Work, and that's clearly important, and we've invested $3 billion in two years in this population, the low-wage worker, the textile worker, and those types of workers that are in and out of jobs, that's a labor market that's going to be under a lot of pressure with welfare workers going in to work. JTPA's disadvantaged program is really the only program that deals with people who are not welfare who are low income, and it, too, places two-thirds of the people in jobs at $300 a week on average around the country, and has been shown to return 8 to 10 percent of its investment annually. So it's a cost-effective program.

    Ms. DELAURO. Thank you.

    Mr. PORTER. Thank you, Ms. DeLauro. Mr. Stokes?

 Page 199       PREV PAGE       TOP OF DOC    Segment 1 Of 2  
    Mr. STOKES. Thank you, Mr. Chairman.


    Mr. Uhalde, let me start my next question with a reference to a statement that appears in your budget justification. It says, ''Out-of-school youth in many of our country's innercity neighborhoods currently have employment rates of less than 50 percent, contributing significantly to crime, youth gangs, welfare dependency, and drug abuse in these communities.'' The young people that we are talking about consider themselves to be in the basement of our society. They see themselves as being hopelessly unable to escape the economically distressed world in which they find themselves. Are we finding employment for them? Are we just putting them in jobs? Or, are we really trying to get them the kind of skills they need to work themselves permanently into the workplace?

    Mr. UHALDE. Well, clearly, our objective is the latter. First of all, in the discussion of the scarce resources, we can't afford to do it two or three times with participants. We can't have them get a job, stay a few weeks, then come back to a program. We need to be able to do it successfully. That means both getting them work, being able to help them build skills, and staying with them on a long-term entering capacity, like STRIVE in New York and others that stay with young people for one and two years, and they have an 80 percent retention rate with their young people. That's what we're striving to do.

    That also means we have to learn how to help people mix work and learning, and start that with young people, so that for out-of-school young people, we get them a job, involve some on-the-job training, and that may mean we'll also have to make available to them opportunities for schooling at night and weekends, and if they're willing to put in the time, we're willing to invest the money. That's the kind of bargain I think we want to make, if we want these jobs to last.
 Page 200       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    Mr. STOKES. That kind of leads me to my next question. I noted that the Department's overall budget justification speaks to its commitment to ensure a fair workforce, a secure workforce, and a quality workplace. There have been a number of articles and recent reports concerning the shortage of skilled, ready employees in the high-tech job market. What is the extent of this problem? What does your budget do to address the problem in the short- and the long-term, and what is the business community doing to address this growing problem?

    Mr. UHALDE. Well, there's some debate on the magnitude of the problem. The industry itself has produced some estimates of over 300,000 job vacancies. Job vacancies are not the same as a shortage, because in a growing industry, vacancies are going to occur because of turnover and because of new jobs. So what we are seeing is there are tight labor markets for this industry putting great pressure on employers to seek alternative sources of labor, and we're trying to make sure that's focused principally on domestic labor.

    There is some interest in the industry on immediately turning to foreign labor and raising the caps on the H1–B temporary skilled labor program. We are more interested in first having industry turn inward and invest in the education, training, and recruitment of domestic labor from sources they traditionally don't go after, so that we can get at these pockets that we haven't gotten to when we have 5 to 6, 7 percent unemployment. If we take the pressure off by allowing large numbers of foreign labor to come in, all those pressures will be at the detriment of those American workers who don't have a shot at these jobs.

    Mr. STOKES. Let me move now to a couple of other areas. The question of Job Corps, can you tell us the status of the Cleveland Job Corps relocation construction effort that is going on?
 Page 201       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    Mr. UHALDE. As you know, we've had some difficulty finding a suitable location for Cleveland. We have identified one, and I believe we are in the process of doing a site.

    Ms. SILVA. Site utilization.

    Mr. UHALDE. A utilization study to determine the cost of making that site available.

    Mr. STOKES. Is any progress being made there?

    Ms. SILVA. Yes. Yes, indeed. There have been a lot of efforts by lots of different people to come up with sites that we could look at, and we've looked at a number of them. We have found one which is a wooded lot. It does not have

any buildings on it right now. So we do have people out looking at it, doing an appraisal, and we anticipate in April being able to have the information.


    Mr. STOKES. Good. Let me move to the veterans' area now. Tell us, how is the rate of unemployment among our Nation's veterans compared to the national average?

    Mr. BORREGO. Overall, for veterans, the unemployment rate is about 1 percentage lower than for nonveterans, which is why we're there to make that difference. Using nonveterans as a baseline, we find that we are placing 150 percent of our veterans in terms of rate. But I think if you take a look at that overall picture, that we've got some high pockets of unemployment. Unemployment tends to be very high for young veterans, those that are just leaving the Armed Forces, and that's an effect that stays until veterans are about 35. Yes, young veterans, minority veterans, women veterans are suffering much higher than the overall rates of unemployment.
 Page 202       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    Mr. STOKES. You said 20 to 24, right.

    Mr. BORREGO. Yes, sir.

    Mr. STOKES. That is what I wanted to ask. I wanted to ask also about minority veterans and female veterans. What are the figures for them?

    Mr. BORREGO. What I have just in terms of the average for 1997 from the BLS—let's see if I can—black veterans—and this is overall—5.5; female veterans, 5 percent; hispanic veterans, 4.9. But when you take a look at the young veterans across the board, 20 to 24, it's over 10 percent, and then that drops down when they get about 25, 34, on up to 35, 44. Let me provide you what we've got in terms of BLS statistics, but, clearly, young veterans, women veterans, minority veterans are suffering much higher unemployment rates than their nonveteran colleagues who did not go into the military.

    Mr. STOKES. Please feel free to expand on that in the record for me.

    Mr. BORREGO. We'll do that, yes, sir.

    [The information follows:]


 Page 203       PREV PAGE       TOP OF DOC    Segment 1 Of 2  
    Mr. BORREGO. The most current Bureau of Labor Statistics data, calendar year 1997 current population survey annual averages, indicates the unemployment rate for the civilian labor force was 4.3%. For veterans, it was 3.4%, for Black veterans it was 5.5%, for Hispanic veterans it was 4.9% and for female veterans it was 5.0%. Veterans aged 20–24 years of age suffer a 10.05% unemployment rate.

    Mr. STOKES. Now, as you know, many of our Nation's veterans have fallen on hard times. What percentage of the Nation's homeless are veterans?

    Mr. BORREGO. We know that there's about 250,000 homeless veterans on any particular night. I do not know how that compares to the total homeless.

    Mr. STOKES. My time has expired. Thank you, Mr. Borrego, and thank you, Mr. Chairman.

    Mr. PORTER. Thank you, Mr. Stokes. I have a number of questions for the record that I would ask both of you to answer.


    I have a final question at the other end of the spectrum. I understand that the Department has yet to publish a final regulation clarifying that the so-called Hathaway decision on prevailing wages does not affect university researchers. As you know, this subcommittee has jurisdiction over NIH funding, and I'm concerned that biomedical research may be delayed because universities are having difficulty using the H1–B visa to hire highly skilled, international researchers. As I understand it, the public comment period on your Notice of Proposed Rulemaking on this matter closed on May 22, 1996, nearly two years ago. When can we expect to see a final regulation implemented?
 Page 204       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    Mr. UHALDE. We just recently got approval from OMB, and we should be issuing within two weeks.

    Mr. PORTER. Thank you very much. Let me thank both of you gentlemen for your good testimony this afternoon. Thank you very much.

    Mr. BORREGO. Thank you, Mr. Chairman.

    Mr. PORTER. The subcommittee stands in recess until 10:00 a.m. tomorrow.

    [The following questions were submitted to be answered for the record:]

    "The Official Committee record contains additional material here."

Thursday, February 26, 1998.




 Page 205       PREV PAGE       TOP OF DOC    Segment 1 Of 2  


    Mr. PORTER. We continue our hearings on the budget request for the Department of Labor for fiscal year 1999. We're pleased to welcome this morning Charles N. Jeffress, the Assistant Secretary of Labor for Occupational Safety and Health, accompanied by Edward L. Jackson, the Acting Director of the Office of Budget.

Opening Statement

    Mr. Jeffress, thank you for appearing this morning. We welcome you, and please proceed with your statement.

    Mr. JEFFRESS. Thank you for the invitation, Mr. Chairman. Before I proceed, if you would grant me a point of personal privilege, I have relatives in the room with me today, and I would like to introduce them to you. My mother came to make sure I was on my best behavior, Dot Jeffress, and her sister, my aunt and uncle, Ann and Frank Litchenton, are next to her.

    Mr. PORTER. Thank you for being with us also.

    Mr. JEFFRESS. Mr. Chairman, I'm pleased to come before the committee today to talk about occupational safety and health and our budget proposal and request for 1999. It's my first opportunity to appear before you and I look forward to working with you in years to come on occupational safety and health matters.
 Page 206       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    I come to you having had the experience of leading a State OSHA program in North Carolina, a State that learned some very difficult lessons following a terrible tragedy in 1991, where we, after 25 people died, realized that we as a State had to do more to protect worker safety and health in North Carolina.

    We realized the importance of having an effective enforcement program protecting workers. We also realized that inspections alone weren't enough to save lives, that we would save more lives through training and education and teaching someone to work safely than we would by enforcement alone.

    So in the last five years we made a major effort in North Carolina to have a balanced enforcement and education program. I'm proud to bring that same kind of outlook to the United States Department of Labor to follow up on the reinvention work of Joe Dear, and to continue the development of the new OSHA that President Clinton and Joe Dear started in the 1990s here.

    I'm also happy to come to you at a time when OSHA has developed a new strategic plan, and a new outlook on how we work, and the Department of Labor has developed a new outlook on how we will work. The Congress passed in 1993 the Government Performance and Results Act, mandating that every agency adopt a strategic plan. The Department of Labor worked hard last year, and OSHA worked hard last year, to develop a plan that makes sense, that measures performance.

    And what you will hear and what you see in our fiscal year 1999 budget proposal builds on Secretary Herman's mission to foster quality work places in this country that are fair, healthy and safe. And of course, OSHA will be focusing on the safety and health portion of that mission.
 Page 207       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    I also mentioned that OSHA has had a positive impact in this country on safety and health. In the 22 years prior to OSHA's establishment, employers and employees in this country worked together to reduce the injury and illness rate on the job by nearly 38 percent. In the 22 years following OSHA's establishment, that reduction in illness and injury rate increased to over 60 percent.

    So we believe OSHA has had a positive impact on the injury and illness reduction in this country. And I'm happy to tell you, the last four years have seen a steady decline in the injury and illness rate to the point where in 1996, we had the lowest rate ever on record. You have before you a chart that shows the decline in the injury and illness rate for the last four years. In 1996, the last year we have numbers for, 7.4 out of every 100 workers suffered an injury on the job, which is the lowest rate ever in the history of this series.

    However, a note of caution. While we're doing very well, and that's the lowest rate ever, that still translates into 6 million workers being hurt on the job every year in this country. So there is still work to be done.


    Our strategic plan, which shows where we're heading in OSHA, will focus on injury and illness reduction as the performance measure for Congress and the public to use, and ourselves to use, in measuring our success. We have set as a goal over the next five years to reach 100,000 work places in this country to assist employers and employees to bring the injury and illness rate down by 20 percent. We have a very measurable, specific goal. We will identify specific work places to work with. And we will work to achieve a 20 percent reduction in each of those work places.
 Page 208       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    We have particularly targeted, in addition to 100,000 work places, the hazards of silicosis, lead poisoning and amputations, and some particular industries where rates are particularly high. We need to work with industries such as nursing homes, food processing, shipyards, logging and construction, particularly on the causes of fatalities.

    And let me encourage you to also consider that while Federal OSHA will focus on these areas in the 29 States where we have private sector jurisdiction, there are 21 States in this country (excluding Puerto Rico, Virgin Islands, Guam, Samoa and the District of Columbia), where State governments operate the OSHA program and have private sector jurisdiction. Our mission this next year is to work with those 21 States to develop strategic plans that also address injury and illness reduction as a performance measure and address specific things that need to be done.


    I mentioned the balanced approach that we have in North Carolina. We will be continuing that approach here with Federal OSHA. We have had a lot of success with that program the last few years, with the new OSHA that Joe Dear started. In particular, in nine States across the country, we experimented with an approach to working with employers in partnership, where we identified employers with high rates of injury and illnesses and said to them, work with us in a partnership. Let's try to bring your injury and illness rate down. Moving away from just enforcement, just traditional inspections, to a partnership to work together to bring rates down. The results have been very encouraging. In those nine States, in anecdote after anecdote, employers tell us, yes, they've brought their rates down, yes, they've brought their workers compensation costs down. It's a win-win program. Everybody wins.
 Page 209       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    We are working to implement the Cooperative Compliance Program nationally. I'm very proud of what we've done. A court has stayed this to hear suit on it to make sure that it is in fact in keeping with the law and the constitution. We expect to succeed on that suit. We're proud of what we've done, and believe that we will have great success.

    I could mention to you EZ Paintr Company in Milwaukee, which cut its injuries and illnesses by 60 percent, cut its workers compensation costs by 80 percent. I could mention to you Clayton Homes, a housing manufacturer in my home State that had similar success.

    I could mention to you the shipyards in southern Alabama and the area around Fort Worth, Texas. We had a Cowtown project. Example after example of places across this country where we've worked in partnership with employers and achieved demonstrated success in bringing injury and illness rates down.

    Another way we have worked in partnership with employers is the Voluntary Protection Program, where we recognize employers with exemplary safety and health records. Over 400 employers have now earned this designation from OSHA. It's growing at a rate of 25 percent per year, and recognizes people who have done an outstanding job.

    Not only do we recognize them, but these employers turn around and mentor others and extend our outreach, if you will, in selling safety and health and convincing people that it makes sense for the bottom line.

    We have also gone online, through the internet, with expert advisors which are interactive computer programs to help employers. People can also dial up and request some material and have it faxed to them on demand. We have a number of different ways to assist employers throughout this country to reduce their injury and illness rates, which again is our bottom line.
 Page 210       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    We have made a great effort over the past three years to work with our stakeholders. We hold meetings whenever new standards are under consideration with trade associations, unions, public interest groups, members of Congress and others who are interested in our policies and procedures. We talk about what it is we're doing, how we can do better, and listen to suggestions people have and accept their input.

    And you will find in the standards that we have developed over the last three years, you will find specific places, in methylene chloride, in respirators, where we've taken information from the people we've met with and in fact changed our proposal based on that.

    I would also like to point out to you something we have just received this morning, and passed out to you, a new brochure that is developed specifically for small businesses, to give them information and advice on how OSHA works and what they can do to make their work places safer. Part of this is to help inform small employers of the Small Business Regulatory Enforcement Fairness Act, and what we are doing to comply with that Act, and to give small businesses access to what we're doing and input into what we're doing.

    On the inside flap of this brochure are the requirements of SBREFA and how we're going to work with them and how they can work with us.

    One more word on the Cooperative Compliance Program. Through that program, for the first time we identified specific work sites in this country that had high injury and illness rates. Prior to the development of this program, we were conducting a lottery, drew a name out of a hat. And if you won the lottery today, your prize was an inspector showing up on your doorstep.
 Page 211       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    Through the Cooperative Compliance Program, we had data from employers themselves on their injury and illness rates at 80,000 work places, and we identified the 12,000 work places where people were most at risk. And those were work places that through the Cooperative Compliance Program we expect to target, expect to work with, expect to extend partnership to.

    And I'm happy to tell you, we've sent letters to all 12,000 of those folks, and more than 9,000 of them signed up to join with us in this effort. So I believe it holds great hope for the future.


    The last general area I want to speak on, Mr. Chairman, is standards. One thing I want to submit to you is that OSHA will continue to develop common sense standards. We will continue to develop standards that are written in plain English that people can understand.

    One standard that has attracted a lot of attention and concern in recent years is ergonomics. It really addresses issues of musculoskeletal disorders. And I'm going to use the term MSDs when I'm talking about ergonomics and the disorders related to that.

    More than one-quarter of all the work place injuries in this country are musculoskeletal disorders. More than one-third of the workers compensation dollars that are spent by private businesses are spent on these injuries and illnesses. It's important that business, employers, and government move together to address this area.
 Page 212       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    You have directed us not to issue citations based on voluntary guidelines in this area this year. We are not doing that. We are proceeding, however, to develop information and to talk with stakeholders to ask how we should address this area. And we are focusing in this area on the particular processes that we know cause problems and where we know there are successful solutions.

    We will continue to work on the focus areas where we know we can make a difference. Perhaps as the years go along and we learn more, we can expand the approach to other areas. But right now, we will focus our attention and research on specific areas where we know we can make a difference, where private businesses have demonstrated solutions that have made a difference.

    We also will be working this year on a standard for safety and health programs. This is an area where, if we look at a work place and say, what is the most important factor in making a work place safe and healthy, it is probably not addressing a single hazard. It is not addressing just electrical safety or just ergonomics.

    Probably the most important thing an employer can do is to develop a safety and health program to demonstrate some leadership in what makes his work place safe, to involve employees, have employees looking out for one another. In short, to have a program that underscores all of the hazard abatement that they may do.

    So we will be proceeding to develop a standard, to develop a requirement that employers across this country have a safety and health program in their work place.
 Page 213       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    In conclusion, Mr. Chairman, let me thank you for the opportunity to be here. And I pledge to you my cooperation in working with you towards our common goal of having healthy, safe and good quality work places in this country.

    Thank you.

    [The information follows:]

     Offset folios 912 to 915 insert here

Next Hearing Segment(2)

(Footnote 1 return)
Not included are instances where the number of helpers actually used or the number of contractors using helpers was insufficient to determine a prevailing rate.

(Footnote 2 return)
Fifteen of the 21 union helper classifications were elevator constructor helpers—a classification historically recognized nationwide in the union sector of the elevator constructor trade.

(Footnote 3 return)
Note that the survey results have been re-examined and these numbers revised slightly since publication of the proposed rule (compare 61 FR 40367). Both the ABC and AGC questioned the results obtained in the 78 surveys, citing a 1996 GAO report on the Davis-Bacon wage determination process (GAO/HEHS–96–130, May 1996). It is inappropriate to draw conclusions concerning the accuracy of survey results based on the GAO report. The report did not examine or verify the accuracy of wage determination data, survey response rates, or calculation or prevailing wages. It focused on the policies and procedures utilized to prevent the use of inaccurate data, and proposed changes to strengthen those policies and procedures.