[Senate Hearing 113-]
[From the U.S. Government Publishing Office]



 
  DEPARTMENTS OF LABOR, HEALTH AND HUMAN SERVICES, AND EDUCATION, AND 
          RELATED AGENCIES APPROPRIATIONS FOR FISCAL YEAR 2014

                              ----------                              


                         THURSDAY, JUNE 6, 2013

                                       U.S. Senate,
           Subcommittee of the Committee on Appropriations,
                                                    Washington, DC.
    The subcommittee met at 11:07 a.m., in room SD-124, Dirksen 
Senate Office Building, Hon. Tom Harkin (chairman) presiding.
    Present: Senators Harkin and Moran.

                          DEPARTMENT OF LABOR

                        Office of the Secretary

STATEMENT OF HON. SETH D. HARRIS, ACTING SECRETARY AND 
            DEPUTY SECRETARY

                OPENING STATEMENT OF SENATOR TOM HARKIN

    Senator Harkin. The Subcommittee on Labor, Health and Human 
Services, Education, and Related Agencies of the Appropriations 
Committee will come to order.
    Apologize for being late. We had a couple of--two or 
three--votes on the Senate floor. I thank your indulgence.
    Again, I want to welcome Mr. Seth Harris back to the 
subcommittee. Two things I want to thank you for, Secretary 
Harris, is, one, for participating in that summit we had in 
Wilmington, Delaware, last week. I just thought your remarks 
were just outstanding.
    I also want to thank you again publicly for your 
stewardship of the Department of Labor during this period of 
time.
    Thank you for your long work with the Department of Labor, 
both in this administration and back in the 1990s, when I was--
well, let's see, I guess during most of that--well, some of 
that time I was chair of this subcommittee. Most of the time, I 
was ranking member, but I thank you for your service in both of 
those administrations.
    Our subject today is just the President's fiscal year 2014 
budget request for the Department of Labor, and it comes at a 
critical time.
    While the economy is moving, I think, in the right 
direction, too many people are unemployed or underemployed, and 
the Department plays a vital role in strengthening the middle 
class and getting people back to work.
    I understand the Department is celebrating its centennial 
this year, and I would say that its mission has never been more 
important.
    The President's request is roughly equal to the fiscal year 
2013 level. I am pleased, however, that within that the 
President has proposed increases for efforts to, one, prevent 
the misclassification of workers; two, to protect 
whistleblowers; and, three, to enhance oversight of the 
subminimum-wage program for workers with disabilities.
    So this funding will help continue the Department's 
excellent work to protect American workers. And the request 
also directs additional resources to helping veterans find the 
civilian jobs they've earned after serving their country.
    I just want to mention also that funding for operating the 
Job Corps' centers would rise slightly by $21 million. These 
centers play a crucial role in giving young people the training 
they need to enter the workforce.
    My experience with their work in Iowa has been very 
positive. So I'm pleased the Department recently lifted its 
freeze on enrollment at the centers and began accepting new 
students in April.
    I know that there were several reasons why the Department 
decided to take the cost-saving step of the freeze. I 
understand that, but, hopefully, we're past that now and we're 
moving ahead.
    The Job Corps centers are too important and dollars too 
precious to have mismanagement there and to have this freeze, 
so I look forward to hearing about what we're doing to correct 
these problems.
    So, again, I'll leave the record open for an opening 
statement by our Ranking Member Senator Moran.
    [The statement follows:]
               Prepared Statement of Senator Jerry Moran
    Thank you, Mr. Chairman.
    Nearly 4 years after the recession officially ended, the 
unemployment rate still remains high, at 7.5 percent. A greater share 
of the population is not working or stopped looking for work than at 
any time in the past 30 years. If the official unemployment rate 
accounted for these ``discouraged'' workers, the real unemployment 
would be 13.9 percent.
    In a time of high unemployment, I remain concerned about the lack 
of priority the administration has put on funding longstanding 
employment and training programs. Virtually level funding was provided 
for Workforce Investment Act programs--the cornerstone of our Nation's 
employment training. Instead, the Department chose to increase funding 
for programs that do not provide any direct services to American 
workers, such as the Workforce Innovation Fund, the One-Stop Center 
rebranding initiative, and the Bureau of International Labor Affairs.
    As more and more Americans are unemployed or underemployed, they 
are looking towards the Department of Labor to provide services to help 
them re-enter the labor force. We need to make certain funds are 
efficiently used and targeted to programs that are most effective.
    To that end, I am troubled by the Department's mismanagement of the 
Job Corps program. Since June 2012, the Job Corps program has endured 
three enrollment freezes, significant disruption to current and new 
students, and budget shortfalls totaling close to $100 million. The 
Department has never been able to provide a specific cause for the cost 
overruns or given a clear explanation as to why it happened. Even more 
alarming, to maintain level funding in fiscal year 2014, the budget 
request assumes the closure of at least three Job Corps centers.
    Mr. Secretary, this is not the way to run a program. The Department 
failed to anticipate the budgetary challenges it was facing, never 
determined the root cause of the shortfalls, and has not taken any 
significant action to stabilize the financial condition of the program. 
I do not have much confidence that this program is on stable footing or 
that the Department has addressed any of the systematic management 
issues that appear to be plaguing the program. I will have questions, 
as I am sure will the Chairman and other members of the subcommittee, 
on this important topic.
    Thank you, Mr. Chairman. I look forward to working with you and the 
Department to target funding that puts Americans back to work.

    Senator Harkin. And I'll turn now to Seth Harris, the 
Acting Secretary and Deputy Secretary of the Department of 
Labor.
    Prior to joining the Department, Mr. Harris served as a 
professor of law at New York Law School and director of its 
Labor and Employment Law Programs.
    Mr. Harris also served for 7 years at the Department of 
Labor during the Clinton administration, as Counselor to the 
Secretary of Labor and as Assistant Secretary of Labor for 
Policy, among other positions.
    And Mr. Harris is a graduate of the New York University 
School of Law and a very dedicated public servant.
    Mr. Harris, thank you, again. Your statement will be a part 
of the record in its entirety, and please proceed as you so 
desire.

                  SUMMARY STATEMENT OF SETH D. HARRIS

    Secretary Harris. Thank you, thank you so much, Mr. 
Chairman. Thank you very much also for those generous words. It 
was a privilege to be able to spend some time with you and 
Governor Markell in Wilmington.
    I thought that the event that your staff and his staff put 
together was outstanding. It was all the right participants 
talking about a critically important issue, people with 
disabilities in the workplace, so I appreciate your 
participation and your kind words about mine.
    Mr. Chairman, thank you so much for the invitation today to 
talk about the Labor Department's fiscal year 2014 budget 
request.

                     TRIBUTE TO SENATOR LAUTENBERG

    But before I turn to fiscal matters, Mr. Chairman, I hope 
you'll indulge a few words about your departed colleague, Frank 
Lautenberg. Senator Lautenberg, you may recall, honored me by 
introducing me to the Health, Education, Labor, and Pensions 
(HELP) Committee, which you chaired, at my confirmation hearing 
to become the Deputy Secretary of Labor, and I was privileged 
to have his support thereafter, and, more importantly, to have 
his support for the programs and policies of the U.S. 
Department of Labor.
    As you know, Mr. Chairman, because I know he was a good 
friend of yours, Frank Lautenberg never forgot his humble 
beginnings in Paterson, New Jersey. And he never forgot how his 
father labored in that city's silk mills or how the conditions 
in those silk mills contributed to his father's early death in 
Frank's teen years.
    Frank Lautenberg, as you know, had the wealth to retire in 
his early fifties, but his deep commitment to social justice 
and public service drove him to run for a seat in the United 
States Senate.
    And millions of Americans have lived better lives as a 
result, because he fought to raise the drinking age and won, 
because he fought to keep guns out of domestic-violence 
situations and won, because he fought to get smoking out of 
airplanes and won and because he fought to free Soviet Jews and 
other oppressed minorities to immigrate to the United States 
and won.
    And I know you were working right alongside him on all of 
those issues, Senator, when you were in the House and also here 
in the Senate.
    Senator Harkin. He was a great friend, if I just might 
interrupt, and a wonderful member of this subcommittee and the 
full Appropriations Committee, so we worked together all these 
years.
    Secretary Harris. He was, indeed. And if I may say, he was, 
for me, as a New Jerseyan, he was like New Jersey. He was 
tenacious. He was audacious. He was progressive and pragmatic. 
He was an ethnic, but also quintessentially American.
    And let me also say, Mr. Chairman, every time I got to see 
Senator Lautenberg, he joked with me that we didn't need the 
Bureau of Labor Statistics because his fifth child, ADP, gave 
us all the information we needed about the labor market.
    Of course, that was a joke, so I'm not urging that upon the 
committee, but he was a wonderful man and a wonderful Senator. 
And let me just say how proud I am, as a New Jerseyan, to have 
had him as my Senator, and I'll miss him.
    Senator Harkin. We'll all miss him, and we had a wonderful 
service. I know you were there and I was there yesterday in New 
York.
    And, as you know, he will lie in state in the Senate this 
afternoon and then will be interred in Arlington Cemetery 
tomorrow morning at 8:30 a.m., again, a fitting tribute to, 
again, such a great, great Senator. And I know all New 
Jerseyans are very, very proud of him.
    Secretary Harris. Yes, absolutely.
    Senator Harkin. Thank you, Mr. Harris.

                  FISCAL YEAR 2014 PRESIDENT'S BUDGET

    Secretary Harris. Thank you, Mr. Chairman.
    So in his State of the Union Address earlier this year, 
President Obama talked about his central goal, a rising, 
thriving middle class with ladders of opportunity available to 
everyone.
    He posed three questions that he said should guide all of 
our decisionmaking. First, how do we make America a magnet for 
jobs? Second, how do we equip U.S. workers with the skills to 
succeed in those jobs? And, third, how do we make sure that 
workers earn a decent living from an honest day's work?
    The Labor Department, in our fiscal year 2014 budget 
proposal, will play a critical role in answering each of those 
three questions.
    This budget proposal would make investments to grow our 
economy, create jobs, and strengthen the middle class while 
contributing to a balanced approach to deficit reduction.
    For those willing to work hard and play by the rules, it 
provides support to develop the skills they need to find good 
jobs with income security in fair and safe workplaces, and it 
does so while allocating resources responsibly.
    As outlined in my written testimony, our budget makes smart 
and responsible investments in four main areas.
    First, turning our unemployment system into a reemployment 
system with investments in reemployment assessments and 
services and a Reemployment NOW initiative that will allow 
States to connect people who are receiving emergency 
unemployment compensation with job opportunities.
    Second, building the skills of American workers with 
investments in innovation and evidence-based strategies for 
training and a new universal displaced-worker program which 
combines the best of two existing programs to accelerate the 
delivery of training and employment services to workers who 
lose jobs through no fault of their own.
    And let me say, Mr. Chairman, our skills agenda includes a 
commitment to increasing the employment rate of people with 
disabilities. I know that's a top priority for you as it is for 
me.
    Workers with disabilities want to pay taxes, and they want 
to support their families, but 80 percent are out of the labor 
force entirely. And among those who are seeking work, the 
unemployment rate is an unacceptably high 12.9 percent.
    So our budget proposal seeks increased funding for the 
Office of Disability Employment Policy and builds on past 
efforts that have gained the subcommittee's support.
    Third, helping veterans to find civilian jobs with roughly 
$100 million more to improve employment services for those who 
have served our country so selflessly and courageously.
    And, fourth, protecting American workers and their benefits 
with important increases to bolster workplace safety 
enforcement and wage-and-hour overtime protection.
    The economy has improved demonstrably in recent years. Last 
month, unemployment fell to its lowest level since December 
2008. So we've come a long way from the depths of the great 
recession, but our economy has not yet unleashed its full 
potential.
    The Federal Government, and the Labor Department in 
particular, have a critical role to play in catalyzing further 
growth and job creation and helping to build an economy that 
grows from the middle class out.
    The President believes, and his budget demonstrates, that 
we don't need to choose between job creation and long-term 
deficit reduction. That's a false tradeoff. We can and must 
have both.

                           PREPARED STATEMENT

    As you said, Mr. Chairman, the Labor Department celebrates 
its centennial this year, and for 100 years, through countless 
crises and economic transitions, we've risen to the challenge 
of empowering American workers and strengthening the U.S. 
economy.
    As we begin our second century, we're eager to work closely 
with the members of this subcommittee and the Congress as a 
whole so that we may continue that important work.
    So, again, Mr. Chairman, Ranking Member Moran, thank you so 
much for the invitation to testify today. I look forward to 
your comments and questions.
    [The statement follows:]
                  Prepared Statement of Seth D. Harris
    Chairman Harkin, Ranking Member Moran and members of the 
subcommittee, thank you for the invitation to testify today. I 
appreciate the opportunity to appear before you to discuss the fiscal 
year 2014 budget request for the Department of Labor.
    The President's fiscal year 2014 budget proposal invests in the 
things we need to grow our economy, create jobs, and strengthen the 
middle class while further reducing the deficit in a balanced way. The 
Labor Department budget request ensures ladders of opportunity for 
Americans striving to enter and stay in the middle class. For those 
willing to work hard and play by the rules, it provides support to 
develop the skills they need to find good jobs with income security in 
fair, safe workplaces. It is possible--and, in fact, imperative--that 
we make these investments at the same time that we allocate resources 
responsibly and make tough choices to live within our means.
    The economic situation has improved substantially, but we have a 
great deal more to do if our economy is to reach its full potential, 
particularly in relation to jobs. The Federal Government, and the Labor 
Department in particular, has a critical role to play in catalyzing 
further growth and job creation by equipping workers and job seekers 
with the skills they need to succeed in a 21st century economy. To make 
America once again a magnet for jobs, the budget invests in high-tech 
manufacturing and innovation, clean energy, and infrastructure, while 
cutting red tape to help businesses grow. To give workers the skills 
they need to compete in the global economy, it invests in education and 
job training. To ensure hard work is rewarded, it raises the minimum 
wage to $9 an hour.
    The budget does all of these things as part of a comprehensive plan 
that reduces the deficit and puts the Nation on a sound fiscal course. 
The budget also incorporates the President's compromise offer to House 
Speaker Boehner to achieve another $1.8 trillion in deficit reduction 
in a balanced way. When combined with the deficit reduction already 
achieved, this will allow us to exceed the goal of $4 trillion in 
deficit reduction, while growing the economy and strengthening the 
middle class.
    As outlined in the testimony, this budget invests in the future by 
working to make good jobs available for all American workers in a 
fiscally responsible manner through:
  --turning our unemployment system into a reemployment system;
  --building the skills of American workers;
  --helping veterans find civilian jobs; and
  --protecting American workers and their benefits.
       turning our unemployment system into a reemployment system
    As we work to strengthen and rebuild our economy from the worst 
economic downturn since the Great Depression, it is critical to provide 
a helping hand and a viable path back to work for those who have had 
their lives disrupted by unemployment. The fiscal year 2014 budget 
proposes a set of aggressive strategies to reduce long-term 
unemployment and speed reemployment:
  --Universal Displaced Worker Program.--The fiscal year 2014 budget 
        proposes a new Universal Displaced Worker program that will 
        reach more than a million workers a year with a set of core 
        services, replacing two more narrowly targeted programs (Trade 
        Adjustment Assistance and WIA Dislocated Workers) and ensuring 
        that all dislocated workers receive high-quality job search 
        assistance.
  --Reemployment Services.--To help workers receiving unemployment 
        insurance (UI) get the assistance they need to find work, the 
        budget proposes an additional $30 million for the Employment 
        Service Grants to States to fund reemployment services for UI 
        claimants who are likely to exhaust their benefits. Employment 
        services create a more efficient labor exchange that connects 
        workers and jobs within local and regional economies.
  --Reemployment and Eligibility Assessments.--The Department will 
        invest in research-proven methods by devoting $80 million for 
        reemployment and eligibility assessments that review 
        beneficiaries' efforts to find new employment, refer them to 
        reemployment services or training, and provide labor market 
        information in their job search. These services are projected 
        to save the State accounts in the Federal Unemployment Trust 
        Fund an estimated $315 million by helping beneficiaries find 
        jobs more quickly and eliminating payments to ineligible 
        individuals.
  --Reemployment NOW.--Continuing efforts focused on helping the long-
        term unemployed get back to work, the budget includes a 
        legislative proposal for a $4 billion Reemployment NOW program. 
        States will receive flexible funding to implement a menu of 
        innovative reemployment initiatives and design, develop, and 
        implement their own strategies to help UI claimants and other 
        long-term unemployed individuals get back to work more quickly.
  --Pathways Back to Work Fund.--Many Americans of all ages need 
        further education and training and better access to job 
        opportunities in order to succeed in today's economy. Building 
        on successful Recovery Act programs that provided employment 
        opportunities for the long-term unemployed and low-income 
        adults and youths, the budget includes a legislative proposal 
        for a $12.5 billion Pathways Back to Work Fund to make it 
        easier for workers to gain new skills for long-term employment. 
        This initiative will support various promising strategies 
        designed to lead to employment for low-income youth and adults.
  --Unemployment Insurance.--The combination of chronically underfunded 
        reserves and the economic downturn has placed a considerable 
        financial strain on States' UI operations. The Department's 
        fiscal year 2014 budget request continues our commitment to 
        strengthening the UI safety net by helping unemployed workers 
        return to work as swiftly as possible while putting the UI 
        system back on the path to solvency and financial integrity. 
        The request continues the administration's aggressive actions 
        to help States combat improper payments in their UI programs 
        with several additional proposals. Specifically, we provide 
        funds for the recently established UI Integrity Center of 
        Excellence and mandate State participation in the Treasury 
        Offset Program, State Information Data Exchange System, and the 
        Prisoner Update Processing System. In addition, the budget 
        proposes legislative reforms to put State UI systems on the 
        path to solvency.
                building the skills of american workers
    As job requirements change, training and employment programs must 
innovate and adapt to help American workers acquire needed skills for 
the increasingly knowledge-based economy. The following proposals will 
help strengthen American economic security by investing in innovation 
and skills for the American workforce:
  --Training and Employment Services.--The budget continues the 
        Department's commitment to those who are most vulnerable to 
        economic distress. In 2014, it will be critical to continue to 
        provide unemployed job seekers and underemployed workers the 
        services they need to find new jobs. The recession was 
        especially tough on disadvantaged and low-skilled adults, whose 
        immediate employment and training needs must be addressed to 
        prevent them from slipping further out of the middle class. An 
        increase in the Workforce Investment Act set-aside for 
        statewide activities to 7.5 percent from 5 percent will allow 
        Governors to increase oversight and accountability activities 
        and help improve performance in targeted local areas. The 
        budget fully funds this in order to protect funding for locally 
        provided services.
  --Disability Employment.--There are significant disparities between 
        the labor market outcomes of people with and without 
        disabilities. The fiscal year 2014 budget proposes $42 million 
        for the Office of Disability Employment Policy (ODEP). This 
        includes $5 million for a new Pathway to Careers Demonstration 
        Project to evaluate the use of coordinated service delivery 
        strategies that increase the number of youth and young adults 
        with disabilities who enter community colleges and complete 
        career and technical programs that provide industry recognized 
        credentials. Also included is an increase of $1 million to 
        implement the Integrated Employment Policy Change Initiative, 
        which will increase the capacity of Federal staff, service 
        providers, and States to implement integrated employment 
        practices. These increases are fully offset by reallocating 
        funds from the Disability Employment Initiative, which will 
        have a minimal impact on the program.
  --Workforce Innovation Fund.--The workforce system is more important 
        now than ever, but we need to make it more efficient, 
        streamlined, and targeted to serve our growing customer base. 
        To ensure that our investments in employment and training are 
        focused on reform, the budget request provides $150 million for 
        a competitive Workforce Innovation Fund (WIF). The WIF helps 
        States, regions, and localities to test and implement new and 
        evidence-based strategies, with an emphasis on ideas that 
        entail cross-program collaboration and bold systemic reforms. 
        Of this funding, the budget sets aside $50 million to test 
        approaches to help veterans and their families, as discussed 
        further below; and $10 million on strategies targeting 
        disconnected youth.
  --American Job Centers.--The system of American Job Centers is the 
        core delivery system for employment and training services. To 
        strengthen this system, the budget includes additional funds to 
        promote co-location of services and programs, create better 
        online tools that offer convenient, personalized services, and 
        increase public awareness and use of the American Job Center 
        network.
  --Community College to Career Fund.--Community colleges play a unique 
        role in creating a flexible, highly-skilled 21st century 
        workforce to help businesses meet the specific emerging needs 
        in their regions. The budget includes a legislative proposal 
        for an $8 billion fund administered by the Departments of Labor 
        and Education to provide funding for community colleges, 
        States, and the public workforce system to partner with 
        businesses to train workers in a range of high-growth and in-
        demand areas, such as healthcare, transportation, and advanced 
        manufacturing.
  --Builds Knowledge About What Works To Increase Employment for Ex-
        Offenders.--The budget devotes $50 million to test and 
        replicate innovative and evidence-based strategies for young 
        ex-offenders. In particular, the budget seeks to test if non-
        violent youth will reap the same benefits from the Youth 
        ChalleNGe program that other at-risk youth do--such as higher 
        rates of employment, high school or GED completion, and earning 
        college credit. To further spur innovation and direct funding 
        to effective programs, the budget also dedicates $10 million to 
        Pay for Success programs designed to improve employment and 
        reduce recidivism among ex-offenders.
                     putting veterans back to work
    Each year, the U.S. military discharges approximately 160,000 
active duty servicemembers and 110,000 Reserve and National Guard 
servicemembers. The unemployment rate for these recently discharged 
veterans is much too high--we must ensure that they have access to the 
job opportunities that they have earned. Through the Veterans' 
Employment and Training Service (VETS), the Department of Labor helps 
servicemembers and their spouses make the initial transition from 
military service to the civilian labor force by providing resources and 
expertise to assist and prepare them to obtain meaningful careers, 
maximize their employment opportunities and protect their employment 
rights. Our fiscal year 2014 request provides improved reemployment 
services to newly separated veterans and focuses resources on veterans 
with disabilities or other significant barriers to employment. Some key 
investments in this area are:
  --Veterans' Employment and Training.--The budget contains significant 
        expansion of services to veterans totaling nearly $351 million 
        across two DOL agencies. Over the past 18 months, the President 
        has announced a series of actions to combat the high levels of 
        veterans' unemployment and to provide greater support for 
        servicemembers seeking to transition to civilian education and 
        employment. Our request addresses the employment needs of 
        veterans, improves employment services for their families, 
        focuses resources on veterans with disabilities or other 
        significant barriers to employment, and provides improved re-
        employment services that enable individuals newly separated 
        from the military to successfully transition into civilian 
        careers. The budget includes $14 million to ensure that our 
        Transition Assistance Program (TAP) meets the estimated demand 
        of our Nation's transitioning servicemembers. We are also 
        requesting an increase of $38 million for additional Disabled 
        Veterans' Outreach Program specialists to enhance services to 
        transitioning servicemembers, wounded warriors and the spouses 
        and family caregivers of the wounded warriors.
  --Workforce Innovation Fund.--As mentioned earlier, $50 million of 
        WIF funding will be devoted to strategies targeting veterans, 
        family members of active duty personnel, and members of the 
        National Guard and Reserves. Examples of the type of innovative 
        practices that might be supported by these grants include: 
        closely assessing the gap between military training and 
        experience and State licensure and other certification 
        requirements and developing programs to provide early 
        intervention to meet the employment needs of claimants in the 
        Unemployment Compensation for Ex-Service members programs.
             protecting american workers and their benefits
    Worker protection programs are crucial to protecting the health, 
safety, wages, working conditions, and retirement security of American 
workers, and it is essential that we take steps to bolster these 
protections to ensure that our workers are not permanently affected by 
economic distress. The budget includes nearly $1.8 billion for the 
Department's worker protection agencies, preserving recent investments 
in rebuilding our enforcement capacity and making strategic choices to 
ensure funding is used for the highest priority activities. Some of the 
highlights of our worker protection request include:
  --Employee Benefits Security.--To protect Americans' health and 
        retirement benefits, the Department is requesting $179 million 
        for the Employee Benefits Security Administration. This money 
        will protect more than 141 million workers, retirees, and their 
        families who are covered by nearly 2.3 million health plans, a 
        similar number of other welfare benefit plans, and nearly 
        701,000 private retirement plans, which all together hold 
        combined estimated assets of $7.1 trillion.
  --Mine Safety and Health.--The Mine Safety and Health Administration 
        (MSHA) protects our miners from death, disease, and injuries. 
        The $381 million budget request for MSHA includes an increase 
        of $5.8 million for MSHA's Enforcement programs to enforce and 
        promote mine safety and health laws. The request also includes 
        an additional $2.5 million to implement recommendations from 
        the Internal Review conducted in the wake of the Upper Big 
        Branch mine disaster.
  --Occupational Safety and Health.--The Occupational Safety and Health 
        Administration (OSHA) must ensure safe and healthful working 
        conditions for working men and women by setting and enforcing 
        standards and by providing training, outreach, education and 
        assistance. The budget provides $571 million for OSHA, allowing 
        the agency to inspect hazardous workplaces and work with 
        employers to help them understand and comply with safety and 
        health standards. This includes an increase of $5.9 million to 
        bolster OSHA's enforcement of the many whistleblower laws that 
        protect workers and others who face retaliation for reporting 
        unsafe or unscrupulous practices.
  --Wage and Hour.--It is imperative that we maintain investments in 
        the enforcement of key laws that protect workers' wages and 
        benefits. In fiscal year 2014, the Department is requesting 
        $243 million for the Wage and Hour Division (WHD), including an 
        increase of $3.4 million for increased enforcement of the Fair 
        Labor Standards Act (FLSA) and the Family and Medical Leave Act 
        (FMLA), two laws that provide important protections to workers, 
        including women, who are struggling to balance work and family. 
        Of this increase, $2.5 million will be reallocated from the 
        Department's Women's Bureau. The WHD request also provides an 
        additional $5.8 million to develop a new integrated enforcement 
        and case management system. This would allow investigators to 
        capture and use higher quality data, conduct more efficient and 
        effective investigations, target compliance assistance and 
        investigations, evaluate the effectiveness and impact of 
        enforcement, and more easily share information and data with 
        the public.
  --Employee Misclassification.--When workers are misclassified as 
        independent contractors, they are deprived of minimum wage, 
        overtime, unemployment insurance, and anti-discrimination 
        protections to which they are legally entitled. 
        Misclassification, together with the underreporting of cash 
        income for those paid as independent contractors, also costs 
        taxpayers money in lost funds for the Treasury, Social 
        Security, Medicare, the State accounts in the Federal 
        Unemployment Trust Funds, and State programs. The fiscal year 
        2014 budget proposes nearly $14 million to combat 
        misclassification, including $10 million for grants to States 
        to identify misclassification and recover unpaid taxes within 
        the unemployment insurance system and $3.8 million for the WHD 
        to investigate misclassification.
  --Federal Contract Compliance.--Pay discrimination is a historically 
        under-investigated personnel practice but a critical issue for 
        women and minority workers--according to the latest Census 
        statistics, full-time working women earn 77 cents for every 
        dollar earned by men, and the gap is significantly more for 
        women of color. The fiscal year 2014 budget requests $108 
        million for the Office of Federal Contract Compliance Programs 
        (OFCCP) and makes important investments--including an increase 
        of $1.1 million to strengthen discrimination enforcement 
        efforts--to help ensure that women receive equal pay without 
        discrimination.
  --Defined Benefit Pension System.--The budget proposes to strengthen 
        the defined benefit pension system for the millions of 
        Americans who rely on it by giving the board of the Pension 
        Benefit Guaranty Corporation (PBGC) authority to adjust 
        premiums to take into account the risks that different sponsors 
        pose to their retirees and to the PBGC itself. This action will 
        both encourage companies to fully fund their pension benefits 
        and ensure the continued financial soundness of the PBGC. In 
        order to ensure that these reforms are undertaken responsibly 
        during challenging economic times, this proposal, estimated to 
        save $25 billion over the next decade, will require a year of 
        study and public comment before any implementation and the 
        gradual phasing-in of any premium increases.
  --State Paid Leave.--Too many American workers must make the painful 
        choice between caring for their families and earning a paycheck 
        they desperately need. While the FMLA allows many workers to 
        take job-protected, unpaid time off, millions of families 
        cannot afford to take advantage of this unpaid leave. The 
        Department's budget request includes a $5 million proposal for 
        a State Paid Leave Fund to provide technical assistance and 
        support to States that are considering paid-leave programs.
    In addition, the budget request includes legislative proposals to 
modernize two workers' compensation programs. Both reforms would 
produce Government-wide savings, and improve the operation of these 
programs for workers and families who suffer injuries and fatalities in 
the line of duty:
  --Federal Employees' Compensation Act (FECA).--The 2014 budget 
        proposal incorporates longstanding Government Accountability 
        Office, Congressional Budget Office, and Labor Inspector 
        General recommendations to reform FECA. The proposal would 
        amend FECA to establish a single benefit level, convert 
        prospectively retirement-age beneficiaries to a retirement 
        annuity-level benefit, establish an up-front waiting period for 
        benefits for all beneficiaries, permit concurrent receipt of 
        schedule awards and wage-loss compensation and expand assisted 
        reemployment authority. It would also permit the Department of 
        Labor to recapture the entire amount of compensation costs from 
        responsible third parties, authorize the Department to cross-
        match FECA records with Social Security records to reduce 
        improper payments, and make other changes to improve and update 
        FECA. The reform legislation will also include a provision to 
        allow the Department to add an administrative surcharge to the 
        amount billed to Federal agencies for their FECA compensation 
        costs, thereby shifting FECA administrative costs from the 
        Department to Federal agencies in proportion to their usage. If 
        enacted, the surcharge would not be applied until fiscal year 
        2015 to give agencies an opportunity to plan for the change. 
        This legislation is projected to save the Department more than 
        $460 million (and the entire Government more than $500 million) 
        over 10 years.
  --Defense Base Act (DBA).--The growth in Federal contractors working 
        overseas has brought into sharp focus the need for a more 
        efficient approach to the Defense Base Act. The budget proposes 
        a new Government-wide fund to replace the patchwork of contract 
        coverage now in effect under the DBA. Since 2002, the DBA 
        caseload has increased by almost 2,600 percent, from 430 in 
        2002 to over 11,600 in 2011. The Department has experienced a 
        number of administrative challenges in the wake of the 
        increased workload. Over the past several years, we have been 
        working closely with the Department of Defense, the Department 
        of State, and the U.S. Agency for International Development to 
        reform and improve the operation of the program, and the 
        proposal reflects the culmination of those collaborative 
        efforts. The reform would replace the current DBA program with 
        a new Government-wide self-insurance program that we're calling 
        the Overseas Contractor Compensation program. The financing 
        structure would be somewhat similar to FECA, with benefits paid 
        directly from a Federal fund administered by the Department and 
        agencies billed only for their share of benefits and 
        administrative costs. This proposal would improve service to 
        claimants and reduce the overall costs of the program.
                         additional priorities
    The Bureau of Labor Statistics (BLS) produces some of the Nation's 
most sensitive and important economic data. The budget request of $614 
million includes $1.6 million to add an annual supplement to the 
Current Population Survey that would collect information relevant to 
labor force trends, including data on contingent work and alternative 
work arrangements, and workplace flexibility and work-family balance 
issues. The BLS request also includes $2.5 million to modify the 
Consumer Expenditure (CE) Surveys to support the Census Bureau in its 
development of a supplemental statistical poverty measure using CE 
data.
              finding better and more efficient approaches
    The budget balances some of these investments with responsible and 
reasonable cuts and a continued focus on increased efficiency and 
effectiveness. In some cases, that means making difficult choices on 
funding reductions and realignments that will put America on a more 
sustainable fiscal course. Consistent with administration-wide efforts 
to improve efficiency and find savings, the Department's budget 
proposes to streamline operations by:
  --Modernizing the Delivery of Training and Employment Services.--The 
        administration continues to explore opportunities to modernize 
        the delivery of training and employment services, including the 
        possibility of reorganizing some of the existing training 
        programs that serve overlapping populations. The fiscal year 
        2014 budget requests funding to support co-location of 
        workforce investment partner programs and to increase access 
        for services, and also consolidate two more narrowly targeted 
        programs to create a Universal Displaced Worker program.
  --Eliminating Certain Overlapping Programs.--We appreciate the 
        support in the final Continuing Resolution to implement our 
        fiscal year 2013 request to eliminate the Veterans' Workforce 
        Investment Program (VWIP) and reallocate those funds to veteran 
        employment programs with stronger accountability measures and 
        better outcomes, including Transition Assistance Program (TAP) 
        employment workshops and the implementation of new veteran 
        activities mandated in the VOW to Hire Heroes Act.
  --Reforming Job Corps.--In support of the administration's continued 
        commitment to improving and reforming the Job Corps program, 
        the budget continues the plan to close a small number of Job 
        Corps centers that are chronically low-performing; identifying 
        and seeking to replicate the practices of high-performing 
        centers; and adopting cost-saving reforms. In addition, the 
        budget puts forward steps to strengthen financial and contract 
        oversight, so the program can continue to provide valuable 
        services to disadvantaged youth while maintaining strong 
        internal controls and ensuring that its contracts are procured 
        at the lowest risk and the best value to the Federal 
        Government.
  --Boosting Funding for Rigorous Program Evaluation.--During this 
        administration, the Department has made a significant 
        commitment to the evaluation of our programs, which over time 
        will allow us to drive more investments toward practices that 
        achieve better outcomes at lower costs. The fiscal year 2014 
        budget builds on this commitment by increasing to up to 1 
        percent the amount of program dollars that can be set aside for 
        evaluation, complementing funds provided to the Chief 
        Evaluation Office.
  --Modernizing Technology Infrastructure.--The Department's IT 
        Modernization program works across agencies to provide new 
        capabilities to help employees work more effectively and 
        efficiently. We are creating a modernized, standardized IT 
        infrastructure that streamlines operations, improves customer 
        service and collaboration opportunities, and maximizes 
        technology return on investment to support agency business 
        missions. In fiscal year 2014, the program will reduce costs 
        and increase efficiency through several initiatives and 
        improvements including as cloud email, web conferencing, 
        mobility, and IT integration.
                             sequestration
    Before I conclude my testimony today, I want to briefly address the 
impact--the significant and very negative impact--of the 2013 sequester 
on funding job training and worker protection. Arbitrary, across-the-
board cuts are not the best economic growth or deficit reduction 
strategy. We ought to be strengthening investments in those initiatives 
that create jobs and grow the middle class, while eliminating what we 
don't need. And this should be achieved in a common-sense, balanced 
way, so that low-income and middle-class families do not bear the 
entire burden and the most fortunate Americans pay their fair share.
    Sequestration has serious implications for my Department and the 
people we serve. These reductions impact our most vulnerable workers 
just as we are emerging from economic recession. They jeopardize our 
Nation's ability to develop and support a skilled workforce that can 
compete in the global economy, while also jeopardizing the conditions 
under which they work. While we made choices that protect our most 
mission-critical activities, it is impossible for the Department of 
Labor to manage cuts of this magnitude without severe impact on our 
ability to prepare and protect American workers. This has had a 
significant impact on our efforts to ensure safe and healthful 
workplaces, and to ensure that workers get the wages and benefits to 
which they are entitled.
    It's also important to note that even before the sequester, 
discretionary spending had already been cut in nominal terms over the 
past few years. Under the Budget Control Act targets, non-security 
discretionary spending is on a path to reach its lowest level as a 
share of GDP since the Eisenhower administration. So the impact of 
these significant cuts in Federal support for employment and training 
are magnified, coming on top of already lower levels of Federal 
workforce funding, as well as reduced State and local efforts as a 
result of the recent financial crisis and economic recession. At a time 
when we are just starting to see strong signs of renewed economic 
growth, this sequester undermines our progress.
    We all agree on the need for significant deficit reduction, but we 
want to work with Congress on a balanced approach toward this goal, 
combining fiscal responsibility with investments in American workers 
that will create jobs and strengthen the economy.
                               conclusion
    Promoting the welfare of American workers, job-seekers and retirees 
is the fundamental mission of the Labor Department, and is critical to 
the Nation's continued economic recovery and long-term competitiveness. 
The Labor Department budget calls for targeted investments and 
significant reforms to help workers gain new skills so they can advance 
in their current occupations or move into new and growing industries; 
the proposal would ensure the Department can maintain safe and healthy 
workplaces; it would strengthen worker voice in the workplace; and it 
will safeguard critical minimum wage and overtime protections for 
workers.
    The 2014 budget includes smart, evidence-based investments to 
support workers, and it continues critical funding for training and 
other resources for job seekers. Our efforts will help to get Americans 
into good jobs; foster safe workplaces that respect workers' rights; 
provide a level-playing field for all businesses; and help American 
workers provide for their families by keeping the pay and benefits they 
earn. I am committed to pursuing these goals, and I believe strongly 
that we can do so even as we take steps to reduce the Federal deficit. 
We at the Department of Labor are ready to work with you in the weeks 
and months ahead on a responsible path forward.
    Mr. Chairman, thank you for inviting me today. I am happy to 
respond to any questions that you may have.

    Senator Harkin. Thank you very much, Mr. Secretary.
    Senator Moran.
    Senator Moran. Mr. Chairman, thank you very much. I'm sorry 
I was slightly tardy. We had a markup in the Banking Committee. 
And I'm honored to be here, delighted to be here. I look 
forward to questioning the Secretary, appreciate your 
testimony, which I've read, and I'll forgo my opening statement 
at this point. We'll submit it to the record and proceed with 
the hearing.

               REEMPLOYING INDIVIDUALS WITH DISABILITIES

    Senator Harkin. Very well. Thank you, again, Mr. Harris. 
Let me just--we'll start a 5-minute round of questions here.
    Again, I want to thank you for attending that summit up in 
Wilmington. You're absolutely right, Governor Markell, as the 
head of the National Governors Association, has done a 
magnificent job of organizing the National Governors 
Association to focus on employment of people with disabilities.
    I like to point out that, in the recent downturn, 
statistics show that for every one nondisabled person that lost 
their job, three disabled people lost their jobs.
    So when we start getting employment back up again, which we 
are, and it's coming back, I've said many times, it's not 
enough for one to one. I mean, if there were three for one to 
go out, we've got to do a better job of reaching out to the 
people with disabilities who maybe were working before, got 
laid off and are having trouble getting back into the 
workforce.
    So we know the National Governors Association has focused 
on this now, and, as you know, we have a lot of employers that 
have stepped forward aggressively to champion this.
    The United States Chamber of Commerce committed a couple of 
years ago, and we're having another summit with them this July 
15, committed to hiring a million more people with disabilities 
by 2015, a year-and-a-half from now.
    So with all of that, what's the Federal role? The 
Department of Labor, what are they doing to support the State 
efforts? And the employer interests, and I said the employer 
interest is growing big in this, in improving employment rates 
for individuals with disabilities. Do you have any suggestions 
for us on what else we might be doing here?

                    DISABILITY EMPLOYMENT INITIATIVE

    Secretary Harris. Right. Well, I thank you very much for 
that question. As you know, this is a passion of mine as it is 
of yours, Mr. Chairman, and I, again, thank you for your 
outstanding leadership in this regard.
    Let me start by talking a little bit about the program that 
you initiated at the Labor Department, the Disability 
Employment Initiative (DEI), which I think is a critical 
partnership between the Labor Department, this committee and 
Governors to help to move people with disabilities into 
employment.
    We have already distributed $63 million to 23 States. We 
have another round of grants that we will make this fiscal year 
that we think will take the number of States participating in 
the DEI up to about 30.
    We have, as a consequence--and remember that the DEI takes 
young adults and adults who are currently on Social Security 
Disability Insurance (SSDI) and Supplemental Security Income 
(SSI) and tries to connect them with the employment and 
training opportunities that they need to get the skills that 
will allow them to get jobs in high demand occupations in their 
regions, working principally through the Workforce Investment 
System.
    And we are seeing a significant increase in the number of 
people with disabilities who are taking advantage of the Ticket 
To Work Program. Those who are on SSI and SSDI are getting the 
support they need because of the DEI. We're also serving a much 
larger number of people with disabilities and more of them are 
exiting our programs with the skills that they need to succeed.
    I'm sorry, Mr. Chairman.

               PATHWAYS TO CAREERS DEMONSTRATION PROJECT

    Senator Harkin. Well, let me stop you there and just ask 
about the DEI. You're right. We started that in 2010.
    The President's budget proposes to reduce the funding for 
this initiative by $6 million, and then taking $5 million of 
that, redirecting it to create a new Pathway to Careers 
Demonstration Project, which would help community colleges 
increase access and completion rates for students with 
disabilities.
    I'm not opposed to that. It sounds promising, but I'd like 
to better understand this proposed cut to the DEI--well, we're 
up to 30 States now, you say--and putting it into this Pathway 
to Careers Demonstration Project. Like I said, it might be 
fine. I just don't know.
    Secretary Harris. Well, let me explain it and see if I can 
persuade you on it. So we're beginning to feel like we're 
running out of dance partners with respect to the DEI.
    As I said, we'll be at 30 States by the--we think, around 
30 States by the end of this year. And then there'll be another 
round of funding, if this proposal is adopted, at a slightly 
lower level.
    So we have a few more States who want to participate, but 
we think we've covered the States that are most enthusiastic 
and a few more to come.
    So what we're doing rather than--I don't like to think of 
it as cutting the program. Instead, what we're doing is we're 
proposing to move that money over into two initiatives.

                COMMUNITY COLLEGE DEMONSTRATION PROJECT

    One is this community college demonstration project, which 
you reference, which is designed to assure that students who 
attend community colleges benefit from the services of those 
community colleges in the best ways possible.
    Community colleges are the number one providers of higher 
education to people with disabilities in our country.
    And because of the work of this committee and others on the 
Trade Adjustment Assistance Community College Program, we have 
invested, or will have invested over 4 years, $2 billion in the 
development of programs that tie community colleges closely to 
employers and employer associations in their regional 
economies, to help assure that workers who come out of the 
community colleges end up with jobs in high demand occupations.
    The task here is to assure that people with disabilities 
are reaping all of those benefits in the way that you were just 
describing.

                      EMPLOYMENT FIRST INITIATIVE

    Another part of the money will go to invest in the 
Employment First Initiative, which is designed to try to get 
States to focus on integrated employment rather than segregated 
employment for people with severe disabilities.
    And this is another area where Governors are taking the 
lead. That's why I appreciate----
    Senator Harkin. Is that where that extra $1 million----
    Secretary Harris. That's where that extra $1 million will 
go, yes.
    So Governor Markell has taken a lead at the National 
Governors Association (NGA), but there are a lot of Governors 
around the country who are trying to figure out how to 
structure their Medicaid and Workforce Investment Systems to 
move people with disabilities as early as possible, and as 
successfully as possible, into integrated employment. This 
money will help accelerate that effort.
    Senator Harkin. I'll follow up with--because, as you know, 
we're trying to get our WIA bill through, and part of that 
coincides with that in terms of using voc rehab and others to 
start getting young students involved in competitive, 
integrated employment, kids with severe disabilities. So we'll 
talk more----
    Secretary Harris. Happy to work with you in any way we can.
    Senator Harkin. Excellent. Thank you. Senator Moran.
    Senator Moran. Mr. Chairman, thank you.
    Your jurisdiction is a wide array of topics, and I 
appreciate the chance to have a little time to question you.
    And I would guess the Chairman may ask questions about the 
Job Corps. If he doesn't, I intend to pursue that, but I want 
to talk about a couple that he may not ask about.

                   REPROPOSING FARM LABOR REGULATION

    Back in April 2012, the Department of Labor withdrew its 
farm labor proposed regulation. And, at that time, in the 
announcement, indicated a willingness to work with farm 
organizations, 4-H, FFA, Farm Bureaus and others, the 
Department of Agriculture, and also indicated in that 
announcement, and I quote, ``To be clear, this regulation will 
not be pursued during the duration of the Obama 
administration.''
    I'm just asking you, Mr. Secretary, if you would confirm 
that the department has no plans to repropose that proposal?
    Secretary Harris. We have no plans to repropose it and we 
won't be reproposing it during the rest of the Obama 
administration.
    Senator Moran. Thank you very much. Thank you for your 
straightforward answer.

          DEPARTMENT OF LABOR REPROPOSING FIDUCIARY DEFINITION

    On another regulation that was withdrawn in regard to the 
fiduciary rule, I just wanted you to bring me up-to-date on the 
Department's efforts on reproposing a regulation regarding the 
definition of a fiduciary.
    It seems to me there continues to be some general concern 
about what the Department is trying to accomplish, and I would 
be delighted to hear what that is.
    How will this reproposed rule differ than the one from 
2010? And what's the relationship on this topic with the 
Securities and Exchange Commission (SEC) as you pursue this 
topic?
    Secretary Harris. Sure. Well, thank you very much for that 
question. Let me say we did not withdraw the proposal. We did 
put it out for notice and comment.
    We received a mountain, as you might imagine, a mountain of 
information. We're considering it. As we look through that 
information, we thought that a reproposal would make sense 
because it is a complicated and very, very important topic 
dealing with hundreds of billions of dollars in retirement 
savings for America's workers.
    Here's what we're trying to accomplish, and I'll try to get 
to each part of your question. I hope I do.
    Workers, throughout the course of their work lives, 
accumulate retirement savings. And they're relying on those 
retirement savings, along with Social Security and whatever 
personal savings they have, to support them throughout the 
course of their lives.
    And they turn to financial advisors to give them advice 
about how to invest sometimes fairly sizable, at least for 
these workers, pots of money, so that they will get an 
investment return that will allow them to survive throughout 
the rest of their retirement with a middle-class income.
    What we want to assure is that those financial advisors are 
giving advice that is in the best interest of the worker or the 
beneficiary, rather than in the best interest of the financial 
advisor. So we're trying to avoid conflicts of interest.
    We don't want financial advisors to give advice that puts 
more money in their pockets, rather than putting money in the 
pockets of the workers or the retirees, by steering them to 
particular products where there's an added fee for the 
financial advisor, or where there's a greater commission for 
the financial advisor.
    The idea is to avoid that kind of conflict of interest. We 
want the advice to be advice that benefits the worker in every 
case.
    We are working closely with the Securities and Exchange 
Commission, but just to make clear on this, our goal is to be 
consistent with the Securities and Exchange Commission. We're 
working with them to accomplish that result. They will publish 
a definition of fiduciary under the Dodd-Frank law.
    Their jurisdiction and our jurisdiction are different. The 
Securities and Exchange Commission does not regulate all 
retirement products. They only regulate securities.
    So, for example, an annuity, which is a very important part 
of a lifetime income package for many workers, is not a 
security and, therefore, would not be subject to the fiduciary 
protections under the securities law.
    Also, the SEC is only authorized to require disclosure of 
transactions. We haven't reached any conclusions in this regard 
because we're still working on the rule, but there may be some 
transactions that just shouldn't happen because they are so 
conflict-ridden, and even disclosure won't fix them. That's 
what we're looking at.
    So we're looking at the prospect of reproposing the rule so 
that we can collect even more information from all of the 
involved stakeholders, and then we'll consider that information 
in the analysis.
    There are hundreds of billions of dollars at stake for 
retirees, and we want that money in the pockets of working 
people. It'll help to drive the economy, and it'll assure that 
their money is available for their retirement.
    Senator Moran. Do you have a sense of how the rule may be 
different in its reproposed state?
    Secretary Harris. You know, I don't, because, honestly, the 
rule has not come to me yet, and we haven't had those 
discussions.
    The Employee Benefits Security agency is still working on 
the rule in cooperation with the SEC. So they are still in the 
drafting phase. It hasn't come forward to me, so I haven't had 
that discussion as yet.
    Senator Moran. Do you know a timeframe?
    Secretary Harris. Also don't know that yet. The Office of 
Management and Budget (OMB) will publish the Semiannual 
Regulatory Agenda I hope soon, and that will give us a sense of 
what timeline we've agreed to with them. That's still under 
discussion as well.
    Senator Moran. Mr. Secretary, thank you.
    Secretary Harris. Thank you, sir.

                 MANAGING APPROPRIATED JOB CORPS FUNDS

    Senator Moran. Bipartisanship at work. The Chairman is 
deferring--we both have Job Corps questions. I don't know 
whether they're similar or not, but I think you would expect us 
to be interested, particularly from an appropriations process, 
about what is occurring at Job Corps, and, as you know, there 
have been some challenges and problems in this regard.
    And so I guess what I'm looking for is an update. Let's 
start with there as to where we are in fixing the problem.
    What kind of assurances should we have that the request in 
this appropriation, the President's budget, is something that 
we can feel confident will be met?
    And if you'd explain what you now believe has gone on in 
the past that the--there's been a number of reports that 
indicate that the Department hasn't really solved this problem, 
don't know what went wrong, and I'm trying to make certain that 
you have solved this problem, you do know what went wrong and 
that you're correcting it.
    Secretary Harris. Right. Well, that's a perfectly fair 
question and would have been from anybody in the room.
    Senator Harkin. I had the same question.
    Secretary Harris. And perfectly understandable. So let me 
begin with an update, and, I think, in the process, try to 
answer some of those questions.
    So Secretary Solis, at my urging, asked the inspector 
general to investigate the Job Corps financial management 
system, because we were frankly having trouble getting to the 
bottom of why we had two financial crises, in program year 2011 
and then again in program year 2012, in the Job Corps program.
    So the IG has now issued its report. Let me say we agree 
with all the findings of that report. We cooperated fully with 
that report. We also agree with all the recommendations of that 
report.
    We had already begun implementing some of the 
recommendations even before they were issued by the IG. And my 
direction has been to implement all the recommendations that 
the IG has offered us.
    Here's what the IG found, and we agree with this: The Job 
Corps was planning to spend more money than it had. I can't, 
frankly, explain why that is true, but they were planning to 
spend more money than they had.
    They had bad cost projections on the contracts that they 
had. That was part of the problem, but not the entirety of the 
problem.
    We had a lack of financial-management controls in place. We 
had a lack of monitoring of contracts. We have cost-
reimbursable contracts with our contractors where whatever 
voucher they submit, as long as it's under the contract, they 
have to be paid, and the cost can skyrocket. You have to 
monitor that very closely. We didn't have sufficient monitoring 
in place.
    And, frankly, different parts of the organization and 
different systems within the organization were not talking to 
each other appropriately.
    But the biggest problem was the program was too big for the 
appropriation. So I believe, Senator, in response to your 
question, have we fixed it, I believe we have fixed that 
problem.
    So in cooperation with our contractors, we have reduced 
enrollment levels in many of the Job Corps centers around the 
country. Almost all of them have seen reduced enrollments, and 
that is to put us on a sustainable fiscal footing going 
forward, not only in program year 2012, but also in program 
year 2013.
    But we also understand that there is a need to put the 
necessary financial management systems into place to assure 
that our systems talk to one another and also make sure that 
our people talk to one another.
    We now have a senior career leader with experience in Job 
Corps, a former leader of Job Corps, who we brought back, 
who'll be leading the program. I think she'll do an outstanding 
job.
    And I have given clear direction that this is never going 
to happen again. It's certainly not going to happen during my 
time in the Department. So I think that we are moving in the 
right direction. There's more that we need to do.

              EFFECTS OF SEQUESTER ON JOB CORPS ENROLLMENT

    And let me first say the most important thing that Congress 
could do to help us would be to turn off the sequester. The 
combination of the sequester and the cut in the continuing 
resolution (CR), the last CR, cost the program $82 million. So 
the level of enrollment is affected significantly by that loss 
of $82 million.
    We have proposed in the 2014 budget an increase of $18 
million, but, together with the $82 million, that would be $100 
million more that we could use towards enrollment of students.
    We also have a plan to sit down with our contractors to try 
to find savings in the parts of the program that are not 
dedicated to the students. Seventy percent of the cost of the 
program is students, but there are administrative costs, and we 
want to bring those costs down, in cooperation with our 
contractors, and use that to bring up enrollment.
    So I think we're at the beginning of getting into a system 
where we're going to be able to expand enrollments slowly, 
responsibly, over time, but with the clear direction that we 
are never going to see a financial crisis again.
    Senator Harkin. I'm glad to hear that, because I know we 
both feel very strongly about Job Corps centers. They've done a 
good job around the country in the past.
    Quite frankly, I was kind of caught unawares of what was 
happening there also in the Job Corps centers. I mentioned 
before you came in that they've lifted the freeze on the 
students, right?
    Secretary Harris. We did, April 22.
    Senator Harkin. Yes, so students can now start coming back 
into the Job Corps center, so that's good, and I know that 
we'll continue to work with you and monitor this as we go into 
next year.
    I might just say I hope this sequester ends on September 
30. I don't think it'll end before then, realistically, around 
here, but, hopefully, we don't have it beyond September 30.

                  STATE UNEMPLOYMENT INSURANCE FUNDING

    The only other thing that I wanted just to bring up with 
you, Secretary Harris is this, and that is the State 
unemployment operations funding cut.
    The President's budget request includes a cut of $252 
million for State unemployment insurance (UI) funding. Now, 
that's the program that determines eligibility and pays 
unemployment insurance benefits, collects the UI taxes from 
employers, detects and recovers improper payments and 
facilitates reemployment for UI claimants.
    This proposed reduction of $252 million is the largest, by 
far, in the Department's budget. So I just want to make sure I 
understand the justification for it, and why can we afford to 
take a $252 million cut?
    Secretary Harris. Right. Well, the simple answer to that 
question is: because the unemployment rate is going down, and 
it's going down precipitously, or not as precipitously as we 
would like, but it's gone down significantly since 2010 by 2\1/
2\ percent.
    Senator Harkin. Is this anticipatory of further drops in 
unemployment----
    Secretary Harris. It's tied to workload. So there is a 
projection associated with workload that comes out of the 
midyear economic forecast by the Office of Management and 
Budget.
    But this is a pure formula cut. There's no discretion 
involved in it. The level of funding for UI administration is 
associated with the level of UI claims workload and the tax-
collection workload for the States. So that reduction is a 
consequence of this 2\1/2\-percent cut that we've seen in the 
unemployment rate overall since 2010.
    But let me say our proposal does include a trigger called 
the Average Weekly Insured Unemployment (AWIU) that assures 
that if there is a spike in unemployment--and I don't foresee a 
spike in unemployment, but in the event that there is a spike--
that States will get additional money to be able to handle that 
spike in their UI administration accounts.
    But I want to build on your larger point, which is a very 
important one, and that is that a lot of States are struggling 
with their information technology. Some of them are having 
trouble dealing with improper payments.
    But there are resources that we have made available to them 
over the course of the last 4 years to try to address these 
questions. There was a $500 million redact distribution. Under 
the Recovery Act, we have distributed $375 million in 
supplemental budget requests to States to deal with improper-
payments issues and also to deal with information-technology 
issues.
    But the information-technology challenge is a very 
substantial one. For even a single State it can cost as much as 
$50 million or $60 million to redo their UI IT system. And, 
frankly, we just don't have that money available to us, even if 
we were to recoup all of this money.
    So what we're trying to do is to push States together into 
consortia, so that they will find economies of scale by working 
together in their IT reforms which will allow them to do it 
cheaper.
    But there's a good bit more work for the States to do. They 
have some resources to do it. We're providing additional 
resources. My hope is that they'll be able to do it soon.
    Senator Harkin. Thank you very much, Mr. Secretary.
    Secretary Harris. Thank you.
    Senator Moran. I just want to raise one additional topic, 
Mr. Chairman, and then I'll be finished as well.

 SCIENCE, TECHNOLOGY, ENGINEERING, AND MATHEMATICS EDUCATION AND TRADE 
  ADJUSTMENT ASSISTANCE COMMUNITY COLLEGE AND CAREER TECHNICAL PROGRAM

    One of the areas that I've paid attention to as a senator 
is science, technology, engineering, and mathematics (STEM) 
education.
    Secretary Harris. Yes.
    Senator Moran. STEM training. The programs that I generally 
think of that promote STEM education are not within the 
Department of Labor. But I'd be interested in knowing if--in my 
view, much of the economic opportunity for people across the 
country in filling jobs are related to science, engineering, 
mathematics.
    Your thoughts. At the Department of Labor, is there a role 
that you're playing? Working with other agencies, have you seen 
an opportunity for us to increase our STEM education----
    Secretary Harris. Well, thank you. First of all, I agree 
completely that STEM education is a very important part of the 
economic future of the United States. And we are playing a 
significant role in STEM education in the higher education 
field particularly, and we work very closely with our 
colleagues at the Department of Education.
    We're now in discussions about the President's proposal to 
reform high schools, so that they produce students who are 
prepared with the technical skills they need for high demand 
educations, particularly in STEM, in their regional economies.
    But the Trade Adjustment Assistance Community College and 
Career Technical Program (TAACCCTP), which has already invested 
$1 billion in community colleges, now has an additional $474 
million available for community colleges. So get your State 
community colleges to apply for this money. We have another 
$500 million that we'll issue next year. That program is 
dramatically expanding STEM education in community colleges 
around the country.
    It is not STEM education in the way it's often discussed. 
It's not Ph.D.'s in physics or Ph.D.'s in computer engineering. 
It's workers getting trained in advanced manufacturing 
biosciences, other fields where there are jobs available in 
their communities right now and where economic development in 
their communities are premised on the growth of those 
industries.
    What's happened with this money is the community colleges 
are working together with local employers--in some cases, with 
international employers, most prominently Siemens working with 
Central Piedmont Community College in Charlotte. I've been down 
there a couple of times--to train workers in very advanced 
skills in these community colleges--computer-driven machining, 
very sophisticated lab work on biosciences that I've been able 
to see myself in these visits--that are immediately translating 
into middle-class jobs in the economy and often are leading 
students to proceed to a bachelor's degree, 4-year degrees, 
when they come out of the community colleges.
    So it's a dual-track approach. So you're available for 
employment right away. You're skilled and ready for employment 
right away. But you also can go out and get a stackable 
credential that allows you to get a bachelor's degree and maybe 
a master's degree in the field and continue to climb up the 
career ladder in that field.
    So I think the TAACCCT program has done a tremendous amount 
to enhance STEM education that's directly related to economic 
development and also directly related to getting workers into 
middle-class jobs.
    Senator Moran. Senator Harkin, we need to keep a secret 
here and let our community colleges know in advance of what the 
Secretary just said before others are told that.
    Mr. Secretary, thank you. I visited an employer, a business 
in Kansas, recently in which a lot of the demands for employees 
are related to phlebotomists, laboratory technicians. 
Healthcare is a significantly growing opportunity for 
Americans, and I appreciate your response to my question.
    Mr. Chairman, thank you very much.

                     ADDITIONAL COMMITTEE QUESTIONS

    Senator Harkin. Thank you, Senator Moran, and thank you, 
Secretary Harris, unless you have something else you wanted to 
add.
    Secretary Harris. No, I think that's a great job.
    Senator Harkin. Okay. Then the hearing record will remain 
open for 7 days for opening statements and questions for the 
record.
    [The following questions were not asked at the hearing, but 
were submitted to the Department for response subsequent to the 
hearing:]
               Questions Submitted by Senator Tom Harkin
  fiscal year 2014 increases to bureau of international labor affairs 
                                 budget
    Question. The President's budget includes $95,425,000 for programs 
and activities undertaken by the Bureau of International Labor Affairs 
(ILAB). This amount includes an increase of $2,500,000 and additional 
staff for monitoring and enforcement of labor issues with new and major 
free trade partners as well as trade preference partners. Please 
explain to the subcommittee why it is important for the United States 
to promote worker rights in countries around the world? How does that 
help U.S. workers?
    Answer. Promoting internationally recognized worker rights in 
countries around the world helps level the playing field for U.S. 
workers who face the growing challenges of an increasingly global 
economy. ILAB monitors and enforces labor obligations under U.S. free 
trade agreements and the labor eligibility criteria under trade 
preference programs and engages with U.S. trading partners to help 
remedy identified problems with worker rights and labor conditions. The 
additional resources requested will allow ILAB to better meet its 
various responsibilities, including receiving and investigating 
complaints under the Labor Chapters of existing Free Trade Agreements 
(FTAs), acting as the principal liaison with other governments for the 
administration of FTA labor subcommittees and labor cooperation 
mechanisms, and providing the research and analysis necessary to 
address labor rights concerns that arise regarding beneficiaries of 
U.S. trade preferences and U.S. FTA partners. These new resources will 
let ILAB increase its efforts to advance a fair and level playing field 
and encourage a more equitable and balanced system of international 
trade that helps ensure that the benefits of the global economy are 
more widely shared.
    Question. The budget also proposes to dedicate $10,000,000 of 
ILAB's appropriation to more closely integrated efforts to combat the 
worst forms of child labor and for other worker rights initiatives. 
Please describe how efforts to combat the worst forms of child labor 
will continue to play a significant role in these integrated projects.
    Answer. ILAB's technical assistance project implementation 
experience has demonstrated the importance of pursuing a multi-faceted 
approach to combatting the worst forms of child labor. ILAB child labor 
elimination projects combine support for improvements in child labor 
laws and government enforcement efforts with direct services, such as 
education for children withdrawn from child labor and other support for 
their families, so that households are not forced to rely on child 
labor to meet their basic needs. Strengthening respect for all worker 
rights is also an important aspect of improving conditions for 
vulnerable households and protecting children in those households. For 
example, efforts to promote workers' rights to organize and bargain 
collectively can contribute to increases in wages and household income, 
reductions in workplace discrimination, and improvements in workplace 
safety (which reduce occupational injuries that can limit or prevent 
parents from working), all of which can help reduce instances of child 
labor. Moreover, supporting broader worker rights helps ensure that as 
families and governments invest more in education and training for 
children, those children have better work opportunities as adults and 
can break the cycle of poverty that contributes to child labor.
    As this suggests, ILAB sees efforts to reduce the worst forms of 
child labor and to promote other worker rights as inherently linked and 
mutually supportive. ILAB proposes to fund projects within a 
comprehensive framework that emphasizes an integrated labor rights 
approach aimed at improving labor conditions for workers, guarding 
against and addressing cases of child labor, and promoting greater 
overall support for international labor standards among governments, 
employers, and other local stakeholders. The basic elements of these 
new comprehensive programs will include strengthening labor 
inspectorates, addressing gaps in labor legislation to increase 
protections for all workers, building the capacity of civil society and 
worker organizations, and assisting in the development of policy and 
social protection programs that target the most vulnerable members of 
society. These elements are similar to the criteria that ILAB uses to 
assess countries' efforts in eliminating the worst forms of child labor 
in its annual child labor report. ILAB believes that this integrated 
approach will be an effective strategy for promoting long term and 
sustainable change in countries, including a continued reduction in the 
worst forms of child labor.
       employment and training administration set-aside authority
    Question. The President's budget again proposes to include the 
Training and Employment Services, Office of Job Corps and State 
Unemployment Insurance and Employment Service in the evaluation set-
aside authority. Mr. Secretary, can you describe how the proposed set-
aside funding mechanism for employment and training evaluations will 
continue to support the Workforce Investment Act (WIA) Adult and 
Dislocated Worker Programs Gold Standard Evaluation?
    Answer. The Department proposes to set aside up to 1.0 percent of 
the amounts appropriated for WIA Adults, Dislocated Workers, Youth; 
Wagner-Peyser Employment Service; Job Corps; and Unemployment Insurance 
for research and evaluation activities. Currently 0.5 percent is 
available from a more limited number of accounts. While funding is not 
requested under the direct WIA Evaluation activity, this set-aside 
sustains sufficient funding for comprehensive, rigorous, and robust 
workforce system research and evaluation activities across all training 
and employment programs. Additionally, funding research and evaluations 
at the Departmental-level allows for the Chief Evaluation Office to 
more effectively coordinate a cohesive evaluations strategy among 
offices, including Employment and Training Administration (ETA), to 
improve the management and effectiveness of programs and activities 
conducted under WIA.
    Approximately 5 percent of the costs of the core evaluation (almost 
$1.26 million) will be paid for during program year 2014, using the 
proposed set-aside.
    Question. Please provide information on the costs associated with 
carrying out this activity as well as information on the status of the 
evaluation.
    Answer. As of June 2013, the random assignment evaluation of 
Workforce Investment Act (WIA) Adult and Dislocated Worker programs, 
also known as the WIA Gold Standard study, continues on schedule. The 
total cost of the evaluation will be more than $22.9 million over 9 
years, of which approximately $21.64 has been obligated to date and 
approximately $10 million spent. (The major cost of the study will be 
for the follow-up surveys, the first of which began in March 2013.) The 
evaluation contract has sufficient funds through fiscal year 2013 thus 
we do not expect to obligate additional funds for the evaluation until 
fiscal year 2014.
    Random assignment of approximately 35,000 individuals began in 
November 2011 and was completed in March 2013. Approximately 2,000 WIA 
applicants were randomly assigned to the core services only group; 
2,000 were randomly assigned to the core and intensive services only 
group and the remainder were randomly assigned to the full WIA services 
group. The latter group is eligible for all services available through 
the WIA Adult and Dislocated Worker programs.
    The study's implementation report will be submitted to the ETA in 
the spring of 2014, accompanied by the report on the Veterans 
Supplementary Study, which will provide information about the 
assistance provided to veterans under both programs, the issues WIA 
grantee site staff face in providing that assistance, how priority of 
service is operationalized, how veterans' representatives and other 
staff interact, and the characteristics and outcomes of veterans who 
receive American Job Center services.
    For the impact analysis, all study participants will be surveyed at 
15 and 36 months after random assignment. Administration of the 15-
month participant follow-up survey began in March 2013, and is expected 
to conclude in August 2014. The first impact report, expected in spring 
2015, will be based on data obtained through this survey. The final 
impact report is due in the fall of 2017, following administration of 
the 36-month survey and collection of State administrative data.
    The current contract for this evaluation ends in June 2015. The 
Department anticipates awarding a short-term contract (for 
approximately $1.26 million, which is included in the total cost figure 
of $22.9 million cited above) in program year 2014 for administration 
of the final stages of the 36-month survey, analysis of all survey and 
administrative data, preparation of the final report, and briefings on 
study findings.
                                 ______
                                 
                Questions Submitted by Senator Jack Reed
                              work sharing
    Question. My work sharing legislation was included as part of the 
Middle Class Tax Relief and Job Creation Act, which was signed into law 
in February 2012. Since then the Department of Labor has published 
several pieces of guidance, including most recently, in December 2012, 
model legislation for use by the States. With Wisconsin passing a work 
sharing law last month there are now 25 States with programs, but only 
a fraction of those have entered into 100-percent financing agreements 
or have brought their work sharing laws into conformity with the new 
Federal definitions.
    Since the release of the model legislation what has the Department 
of Labor done to encourage more States to adopt work sharing, 
strengthen existing programs, and save jobs?
    Answer. As you note, the Middle Class Tax Relief and Job Creation 
Act (Act) provides for 100-percent reimbursement for most State Short-
Time Compensation (STC) payments, not to exceed 156 weeks and until 
August 22, 2015. Additionally, the Act provides for the availability of 
grants to States with conforming legislation. The United States 
Department of Labor (Department), in both the national and regional 
offices, has been actively promoting STC and providing technical 
assistance to States regarding legislation, STC operations, the 
reimbursement agreement, the grant opportunity, STC program 
implementation and administration, and financial and reporting matters. 
Department staff also actively encourage States to enter into the 
reimbursement agreement and to apply for the grant when they are 
eligible.
    Recently, the Department reached out to individual States that have 
not yet signed the 100-percent reimbursement agreement or applied for 
the grant but are eligible to do so at this time. As a result, 
additional States submitted signed agreements for Federal reimbursement 
of STC costs. To date, the following 15 States have entered into 
agreements with the Department for the 100-percent STC reimbursement--
Arkansas, California, Connecticut, Iowa, Maryland, Michigan, Minnesota, 
Missouri, New York, Oregon, Pennsylvania, Rhode Island, Texas, Vermont, 
and Washington. A total of $129.9 million has been provided to States 
as of July 19, 2013, for reimbursement for STC benefits. We note that: 
(1) Due to sequestration, the reimbursement amount is 94.9 percent for 
fiscal year 2013; and (2) States may receive reimbursement for weeks of 
STC payments made before the agreement and addendum are signed, up to 
the maximum number of weeks of reimbursement available under the Act.
    To date, Michigan and Wisconsin are the only States with STC laws 
that have been approved as conforming to the new Federal definitions 
and, therefore, could receive the grants. Both States have indicated 
they will be submitting applications for the grant(s) in the near 
future. Additionally, Ohio recently enacted a new STC law and it is 
currently being reviewed by the Department.
    While not all existing STC States have enacted conforming 
legislation yet, many States have legislation moving through their 
legislatures and the Department expects that once the State laws 
conform to the new Federal definition of STC established in the Act, 
additional reimbursement agreements will be signed and the States will 
apply for the grant(s).
    The Department staff also have reviewed all State STC, or ``work 
sharing,'' laws and draft legislation, and have been providing 
extensive technical assistance to support States bringing their STC 
laws into conformity. The Department sent letters in December 2012 to 
the States that had an existing STC program explaining the new Federal 
definition of STC established in the Act and continues to offer States 
technical assistance in reviewing the State's draft legislation, and 
reminding them of the availability of the Federal reimbursement of STC 
benefits and that they can apply for STC grants as soon as their laws 
are in conformity with the new Federal definition of STC.
    As noted in your question, the Department issued guidance to 
States, including model legislative language (Unemployment Insurance 
Program Letter [UIPL] No. 22-12, UIPL No. 22-12, Change 1, UIPL No. 27-
12, and UIPL No. 03-13). The guidance and information regarding the Act 
and the STC program is posted on the Department's Web site. The Web 
site also includes a press release issued on June 18, 2012, and a fact 
sheet regarding the Act and Federal funding available for STC. The 
links are:

    Guidance: http://www.ows.doleta.gov/unemploy/jobcreact.asp
    Press Release: http://www.dol.gov/opa/media/press/eta/
ETA20121266.htm
    Fact Sheet: http://www.ows.doleta.gov/unemploy/pdf/
Factsheet_STC.pdf

    The Department followed up its December 2012 guidance with two 
Webinars to discuss the guidance with the States and respond to State 
questions. A transcript of the Webinars is available on Workforce3One, 
the Department's online technical assistance platform for workforce 
professionals, employers, economic development, and education 
professionals, at https://www.workforce3one.org/view/
5001301136981657606/info.
    The Department also disseminates information about the STC program 
to States via the Unemployment Insurance (UI) Community of Practice 
(CoP), a private online community available exclusively to State and 
Federal UI practitioners on the Department's online technical 
assistance platform, Workforce3One, https://
learnwork.workforce3one.org. The UI CoP is intended to expand 
opportunities for States to communicate and collaborate with each 
other, and to help the UI community in creating, building and sharing 
knowledge. In fact, States have used the UI CoP to post information 
about their STC program to share with other States.
    The Department's outreach and promotion efforts also have included 
presentations at conferences and seminars, specifically meetings of the 
National Association of State Workforce Agencies (NASWA) UI Directors 
Committee, NASWA's State administrators meetings, and at a National UI 
Conference held by Strategic Services on Unemployment and Worker 
Compensation.
    In order to further assist and encourage States to implement an STC 
program or expand upon an existing program, the Department is in the 
process of developing a Web site exclusively for State practitioners 
and the Department (see additional information provided below). The Web 
site will provide States with resources and tools to create and operate 
STC programs.
    In short, the Department has worked hard to ensure States are aware 
of the STC program, and available reimbursements and grants, and has 
provided extensive technical assistance to enable States to avail 
themselves of these opportunities.
    Question. Specifically, how is the Department of Labor using the 
quarter of a million dollars set aside by the law to reach out to 
States, encourage adoption of work sharing, and ensure States can tap 
into the generous financing and grants available under the law?
    Answer. Monies have been used to conduct Webinars (discussed in the 
previous answer) which outlined the benefits of STC program and 
provided information about the available incentives (reimbursements and 
grant funds).
    The Department has also added staff dedicated to the STC program. 
The monies have supported the addition of one temporary staff member. 
Staff has:
  --Drafted guidance for States to use to administer their STC 
        programs, including draft legislation States can use so their 
        State law will conform with the new STC requirement;
  --Provided one-on-one assistance with States with new STC programs to 
        help develop forms, procedures, and processes to administer 
        their STC programs;
  --Provided technical assistance to States with questions regarding 
        the new laws and/or policy questions;
  --Provided technical assistance on reporting and funding questions;
  --Ensured that the reimbursements to States are provided in a timely 
        and accurate manner; and
  --Provided subject matter expertise in the development of the content 
        information for the STC Web site.
    Additionally, monies set aside to the Department for STC are being 
utilized to develop a Web site dedicated to helping States with STC 
programs to improve their program and provide guidance to States that 
are contemplating and/or developing an STC program. The anticipated 
launch of the Web site is late summer 2013. A contractor has been 
engaged for the development of the Web site.
    The Web site will include:
  --The Department's Policies and Guidance related to STC;
  --Model legislation for States to use in implementing the Act's new 
        STC requirements;
  --Samples of State STC procedures;
  --STC ``toolkit'' which includes: sample employer plans, outreach 
        materials, claim forms, and messaging tools;
  --Collection of sample brochures, letters, and Frequently Asked 
        Questions;
  --Best practices, barriers to implementation, and lessons learned 
        from States who currently have STC programs; and
  --Testimonials from STC participants (both employers and workers).
    Question. And is there a point person at the Department that can 
work with States in advance of their next legislative sessions to 
ensure that work sharing is on the table?
    Answer. Yes. While there is a group of Department staff dedicated 
to State outreach and assistance with regard to STC who proactively 
offer assistance to the States at every opportunity, there are a few 
key point people States are working with primarily on legislative 
matters related to STC, States are in contact with Ms. Suzanne 
Simonetta, Chief, Division of Legislation.
    Department staff members are available to work with States on 
matters related to STC program operations. States can contact Ms. Lidia 
Fiore or Ms. Candace Edens for any questions related to STC program 
operations.
                    job corps funding and carryover
    Question. On May 31, 2013 the Office of Inspector General released 
its report that clearly identified multiple Departmental financial 
management deficiencies that led to the Job Corps' program year 2011 
and 2012 operational shortfalls. As noted in the OIG's report, after 
implementing various emergency measures, the Department ultimately 
failed to obligate $9 million by the end of program year 2011. If 
sufficient controls had been in place to account for this excess 
funding, it could have legally been obligated onto program year 2012 
contracts. These resources could have reduced Job Corps' program year 
2012 operational shortfall and allowed the program to serve more at-
risk youth. How will the Department ensure that any surplus program 
year 2012 operational funds are carried over prior to June 30, 2013?
    Answer. As noted by the inspector general (IG) in the audit report, 
at the end of program year 2011 the Office of Job Corps (OJC) had $9 
million in unexpended funds which could be used to cover any possible 
future invoices in the cost-reimbursable center operations contracts. 
This is a critical change from previous program years in that Job Corps 
now leaves a small percentage of funding reserved at the end of the 
program year. These funds are reserved for unrecorded obligations of 
cost reimbursable contracts. This practice is in line with normal 
government financial procedures and limits exposure of future year 
appropriations against the requirement to pay for legitimate expenses 
from prior year activities. If Job Corps contractors submit vouchers 
within the next 5 years for program year 2012 activities, procurement 
law allows the Department to pay these claims with the program year 
2012 funding, if available. Any unobligated reserve funding is not 
available for the next program year's activities, as this money loses 
its general availability for new obligations on June 30. Except for 
this ``reserve,'' as of the end of program year 2012 (June 30, 2013), 
the Employment and Training Administration (ETA) has obligated all its 
program year 2012 funds from the Job Corps Operations account.
    Question. Also, if an excess of funds are carried over for program 
year 2013 purposes, will those funds be used to increase enrollment 
capacity that was cut by more than 21 percent at all of the centers, 
including the Exeter Center in my State of Rhode Island?
    Answer. Job Corps may not carry over unobligated program year 2012 
Operations funding for program year 2013 activities, as this money is 
1-year money and loses its general availability for new obligations on 
June 30, 2013. Other than a small reserve set aside for costs not yet 
received for program year 2012, ETA has obligated all of its program 
year 2012 Job Corps Operations funds. In addition, funds already 
obligated on Job Corps contracts but not yet spent will remain 
available to those contractors for Job Corps activities until the end 
of their contract year. Additionally, because these unspent obligated 
funds will remain on contracts they would relieve the financial 
pressure from program year 2013 and could allow for program 
improvements and increasing On-Board Strength (OBS). As we begin 
program year 2013, we will look for ways to increase OBS in a 
responsible manner that can be maintained by future appropriations.
    Question. For the past several years, it seems as though the Job 
Corps budget request has been insufficient to operate the program at 
the level the Department described in its budget justification. Could 
you describe how this year's request is sufficient to meet the program 
obligations?
    Answer. The Department's fiscal year 2014 request is based on the 
work we did in program year 2012 to ensure that, going forward, the Job 
Corps program is solvent and structured to avoid the same financial 
challenges we experienced in the past 2 years. Working in partnership 
with Job Corps contractors, we were able to renegotiate contracts and 
make the necessary program requirement changes to ensure we did not 
overspend in program year 2012 and to start program year 2013 aligned 
with our appropriation. This change, along with the transfer authority 
in the fiscal year 2013 full-year continuing resolution (CR), provides 
us with a sound basis on which to move forward. In particular, reducing 
OBS was necessary to ensure that Job Corps program operations are 
aligned with its appropriated funding because student costs associated 
with OBS are a significant factor driving program costs. As the 
Department explores the possibility of increasing the number of 
students served by Job Corps within our appropriation, we will work 
closely with the Job Corps community and Congress.
    At the requested funding level for fiscal year 2014, we maintain 
our commitment to operating the program on sound financial footing. 
Together with an increase of $17.7 million over the fiscal year 2012 
enacted level, the request would add nearly $100 million to Job Corps 
Operations for program year 2014 over program year 2013 post-
sequestration level. The request reverses the cuts required under 
sequestration (and allows for growth in OBS from the post-sequester 
levels) and fully accounts for all costs of the program. Because of the 
controls we have put in place and since we have accounted for all costs 
of the program, we believe the requested funding level places the 
program on a sustainable path forward.
    Question. The Department has indicated that pending the results 
from the cost saving measures that have been initiated, restoring some 
of the slots that had been cut due to shortfalls and sequestration 
would be considered. How will the Department allocate new slots as 
funding becomes available?
    Answer. As the Department explores the possibility of increasing 
the number of students served by Job Corps within our appropriation, we 
anticipate that distribution of additional slots could be based on many 
criteria such as center performance, number of student slots available, 
and other center-specific factors, such as facility capacity. We will 
work with the Job Corps community and Congress as we take these 
considerations into account.
                                 ______
                                 
             Questions Submitted by Senator Jeanne Shaheen
             job corps center in manchester, new hampshire
    Question. The State of New Hampshire has been pursuing a Job Corps 
Center for more than a decade and this effort has been plagued by 
countless unnecessary delays that have deprived our youth of a critical 
opportunity to receive valuable education and training. Please 
describe, in detail, the Department of Labor's (Department) current 
timeline for constructing and opening the Manchester Job Corps Center. 
In addition, please include any factors or circumstances that could 
further delay the timeline requested above.
    Answer. As you know, the construction contract for the Manchester 
center was awarded in April, and the contractor is preparing to break 
ground this summer. Barring any unforeseen delays due to unusually 
severe weather or other unplanned interruptions, we expect to 
substantially complete construction of the Manchester Job Corps center 
by December 2014. We anticipate awarding the center operations contract 
in December 2014 or January 2015 should our current construction 
completion date remain unchanged. Under the current timeline, allowing 
for a mobilization period of 4 to 6 months, students are expected to 
begin arriving on center in the summer of 2015.
    Question. The Department of Labor (DOL) Inspector General's May 31, 
2013, report notes that, for program year 2011, the Department did not 
account for three facilities when preparing its cost projections for 
the program. Consequently, the Department did not request funding to 
operate these facilities, contributing to the shortfall that occurred 
in program year 2011 and the enrollment freezes that resulted. What 
steps has the Department taken to ensure that these mistakes will not 
be repeated as the Manchester Job Corps Center becomes operational?
    Answer. The Department has adopted a budgeting approach for 
operating Job Corps that ensures that the number of students served 
across the Nation is aligned with our appropriation. This budgeting 
approach will account for the Manchester Job Corps Center as it becomes 
operational. We will continue to evaluate the Job Corps operations 
budget to ensure the funding necessary to operate all Job Corps centers 
does not exceeded budgeted amounts.
    Question. Is the Department's fiscal year 2014 request for the Job 
Corps operations account sufficient to fund existing facilities and 
ensure that the commencement of operations and student enrollment in 
Manchester will immediately follow the completion of construction on 
the facility?
    Answer. The fiscal year 2014 request does contain the funding 
necessary to implement the timeline provided in response to your 
earlier question. In addition, we believe that the changes we have 
initiated to ensure that we build a Job Corps program that has the 
financial controls and tools to operate within its appropriation moving 
forward.
                                 ______
                                 
               Questions Submitted by Senator Jerry Moran
                      job corps funding shortfalls
    Question. Mr. Secretary, the Job Corps program is running its 
second year of funding shortfalls. Over the past year, the program has 
experienced three enrollment freezes. When the Department of Labor 
(Department) has been asked by this subcommittee why the program is 
running shortfalls, it has not received any significant information 
detailing how these shortfalls occurred. Of most concern, we have 
received no assurance that they would not happen again in the next 
program year. The audit released on Friday by the Inspector General 
stated that the Job Corps program ``could not demonstrate they 
established a sound budget or spending plan, and they did not reconcile 
all Job Corps financial systems to ensure financial data was complete 
and accurate.'' Therefore, for the subcommittee to better understand 
the fiscal year 2014 budget request for Job Corps, could you please 
provide the following information:
    How much money was saved on the two enrollment suspensions enacted 
in program year 2012?
    Answer. In program year 2012, the Department, with the support of 
the Job Corps community, successfully implemented numerous cost-savings 
measures, including the suspension of enrollment in late November to 
December 2012 and from January to April 2013. Both actions were 
difficult but necessary decisions made to ensure that we remained 
within budgeted levels for the program year and that we would be able 
to keep our commitment to students who are already in the program. 
During the second enrollment suspension the Department also took steps 
to focus on the long-term sustainability of the program. One of those 
steps involved a reduction to On-Board Strength (OBS), or student slot 
levels, at the centers, which had a direct impact on the related 
contracts. In March and April, the Department worked with the 
contractors to modify the contracts to capture the reductions in 
funding needed during the contract year, due to both the savings 
initiatives and the suspension of enrollment. As part of the contract 
modifications, the Department did not separate out the reductions 
associated with the enrollment suspension from the various other 
actions taken, but rather was focused on completing the actions and 
fully capturing the total savings needed to ensure we stayed within our 
program year 2012 budget.
    Following the contract deobligations, the Department provided the 
contractors funding for their program year 2012 operations. Following 
the suspension, the Department is continuing to monitor (1) the 
enrollment levels, and (2) whether there are any funds remaining on 
these contracts that may remain after the close of the program year, 
due, at least in part, to the slower than anticipated ``ramping up'' of 
student enrollment. Unspent obligated funds would relieve the financial 
pressure from program year 2013 and could allow for program 
improvements and increasing OBS. As we move into program year 2013, we 
will look for ways to increase OBS in a responsible manner that can be 
maintained within current appropriations.
    Question. Since June 2012 when the Department announced the Office 
of the Job Corps was running a budget shortfall, the Department of 
Labor has implemented numerous cost savings measures. How much savings 
have you recouped during program year 2012?
    Answer. In program year 2012, the Department, with the support of 
the Job Corps community, successfully implemented numerous cost-savings 
measures. At the end of April when the Employment and Training 
Administration (ETA) completed its contract modifications and achieved 
the savings needed to lift the enrollment freeze, the savings realized 
include:
  --$41.6 million from contract modifications to decrease the original 
        program year 2012 contract values. These include the reduction 
        of contractor administrative costs; reduction of the national 
        media buy contract; reduction in the Job Corps Data Center 
        contract; and modifications to center, Outreach and Admissions, 
        and Career and Transition Services contracts resulting from the 
        January to April 2013 student enrollment suspension.
  --$10.5 million from administrative cuts to reduce expected 
        operational costs. These include the reduction of student bi-
        weekly stipends, termination of student pay when ``Not Present 
        for Duty,'' reduction of U.S. Department of Agriculture 
        administrative costs, and reductions in expenditures for 
        student stipends during the suspension of enrollment in late 
        November through December 2012 and the suspension of enrollment 
        from January to April 2013.
  --$2.5 million from measures to help avoid or lower costs from 
        previous program years. These include the consolidation of Job 
        Corps center leases, reduction of the U.S. General Service 
        Administration fleet and conversion of the Job Corps accounting 
        services contract.
                       job corps center closures
    Question. The congressional justification for Job Corps states that 
at the end of fiscal year 2014, the targeted number of centers 
operating is 122. Does this figure mean that 3 centers will be closed 
in fiscal year 2014?
    Answer. The Department continues to finalize the closure 
methodology and has not yet determined the exact number of centers for 
closure or the individual centers that will be closed.
    Question. The Department has issued proposed methodology to close a 
``small number'' of centers this year. While outyear operating costs in 
theory would decrease if there were fewer centers, there would be a 
cost associated with closing a center this year. How much funding of 
the fiscal year 2014 request for the Job Corps program is associated 
with closing centers?
    Answer. Until we identify which centers will be closed, we are not 
able to identify precise costs.
    Question. How many centers do you expect to close?
    Answer. The Department continues to finalize the closure 
methodology and has not yet determined the exact number of centers for 
closure or the individual centers that will be closed.
    Question. What is the timeline for closures?
    Answer. We will implement the selection and closure process 
following the legislatively mandated activities, including 
congressional notification, pertaining to center closure required by 
section 159 of the Workforce Investment Act (WIA). We estimate that it 
will take a minimum of 6 months to execute closure of a center. If a 
contract center is selected for closure, we anticipate that the 
mechanism for closing the contract center will be through a decision 
not to exercise its option year or to renew a center operator's 
contract. If a USDA center is selected for closure, we will continue 
working collaboratively with the USDA to ensure adherence to the 
existing Interagency Agreement with USDA.
    Question. How many slots will be reduced?
    Answer. Until we identify which centers will be closed, we are not 
able to determine how many slots will be affected. The Department does 
not plan to reduce the total number of slots in Job Corps as part the 
center closure process in addition to the OBS reductions made for 
program year 2013.
    Question. Will slots at centers slated to be closed be 
redistributed to other centers?
    Answer. Students affected by the closures will be able to transfer 
to other centers in order to complete their programs. We are 
considering options for redistributing slots from the closed centers.
    Question. If slots are redistributed to other centers, how will it 
be decided which centers receive slots?
    Answer. We have not yet made a final decision about slot 
redistributions. However, a decision to redistribute slots could be 
based on a number of factors including costs of redistribution, 
facility capacity, and center performance. As we move forward with this 
process, we will work with the Job Corps community to take these 
considerations into account.
    Question. When will the Department publish its final closure 
methodology?
    Answer. The Department has not yet established a date for 
publication of the final closure methodology.
                      job corps funding transfers
    Question. The continuing resolution provided the Department with 
the authority to transfer up to $30 million in fiscal year 2013 from 
unobligated funds to fund the Job Corps program. The subcommittee was 
notified in May 2013 that you had transferred $10 million. Do you 
expect to transfer additional funds in the remainder of the fiscal 
year?
    Answer. The Department is evaluating the status of Job Corps 
operations as we finish closing the books on program year 2012. The 
Department will decide after the start of program year 2013 if it will 
transfer unobligated Employment and Training Administration funds to 
Job Corps to support operations activities for this program year.
                     job corps financial management
    Question. The Department of Labor's Inspector General issued an 
audit report of the Job Corps program on May 31, 2013. In part, it 
stated that the Office of the Job Corps (OJC) ``could not demonstrate 
they established a sound budget or spending plan, and they did not 
reconcile all Job Corps financial systems to ensure financial data was 
complete and accurate. Additionally, OJC did not routinely monitor 
budgeted costs to actual costs nor did they communicate the status of 
the budget execution to the appropriate officials, including the CFO.'' 
How has the Department addressed these significant financial management 
issues?
    Answer. We have accepted the OIG report's findings and 
recommendations and are implementing strong controls and cost-saving 
measures, which will help address the problems identified in the 
report. Regarding the audit report's identification of the events that 
unfolded around the program year 2011 shortfall, we took numerous 
actions to address those issues in 2012. In August 2012, ETA 
established the Office of Financial Administration (OFA), led by a 
Senior Executive Service (SES) level Comptroller. OFA instituted 
several initiatives to strengthen and coordinate existing controls and 
create new controls to ensure that obligations stayed within budget and 
to track contractor expenditures against their submitted spend plans. 
Working closely with ETA's Office of Contracts Management (OCM), which 
was created in 2010 as a SES-led office to consolidate all ETA 
contracting in the national and regional offices, OFA ensures that Job 
Corps more timely and accurately accounts for costs incurred in its 
cost-reimbursement contracts. The added cooperation between OFA and OCM 
has resulted in significant improvements in the financial oversight of 
Job Corps. In addition, we instituted a management oversight process to 
provide advice on short-term and long-term operational planning which 
included a series of high-level oversight meetings with senior 
officials throughout program year 2012. As noted in our audit report 
response, ETA is engaged in reinforcing existing controls and 
establishing new controls and reporting that will efficiently and 
effectively provide management with the information and assurances it 
needs to properly manage the Job Corps program. We are also committed 
to reviewing the contracting approaches for the program, and 
determining what type of contracts will allow us to deliver services at 
the lowest risk and best value to the Federal Government.
    Question. The Job Corps program uses cost reimbursable contracts 
for the majority of its operations costs and program requirements. In 
both program years 2011 and 2012, the Office of the Job Corps projected 
that the operations budget would exceed appropriations. In addition, 
the audit found that the Employment and Training Administration 
National Office did not monitor total projected Job Corps contract 
costs against actual contract costs for the period July 1, 2012-
September 30, 2012. Without adequate procedures to monitor projected 
expenditures to actual expenditures, the Department may not be able to 
respond with timely corrective actions. Therefore, what procedures have 
the Department put in place to fix this problem?
    Answer. The Office of Financial Administration (OFA) within ETA, 
established in August 2012, headed by a Senior Executive Service-level 
Comptroller, oversees the now-centralized budget and financial 
operations of Job Corps along with other ETA programs. OFA works with 
ETA's Office of Contracts Management (OCM), established in 2010, to 
ensure that Job Corps monitors costs incurred, and is continuing to 
improve the timeliness and accuracy of the reporting. The added 
cooperation between OFA and OCM has resulted in significant 
improvements in the financial oversight of Job Corps. Together, OFA, 
OCM, and the Office of Job Corps (OJC) provide a system of checks and 
balances on expenditures and obligations in the Operations account.
    In program year 2012, the Department began to use a control process 
for obligations that compared the actual obligations recorded in the 
Department's financial systems of record and a projection based on Job 
Corps history and current operating decisions to stay within the 
appropriation level. This comparative analysis was conducted monthly by 
the national office. In program year 2013 this process of comparing 
actuals versus educated projections will continue. Additionally, ETA 
has established budget targets for each center (in conjunction with the 
reduced student slot levels) and also for each national office contract 
prior to the start of the program year. This further refinement of the 
measurement of obligations and projections is a significant improvement 
that will allow Job Corps to start the program year with its total 
commitments for program year 2013 within the appropriation.
    In addition, during program year 2012, the Department implemented a 
new control process for expenditures. At the start of a contract year, 
center contractors are required to submit to ETA spend plans aligned 
with the value in their contracts. Each contractor then submits monthly 
expense reports for the center on the Job Corps Contract Center 
Financial Report (Report 2110), which is comprised of 29 different 
expense categories. The submitted monthly center financial reports are 
analyzed by OFA in the national office against the center's overall 
budget to ensure that they are within the contractor submitted spend 
plans. When OFA identifies a budget discrepancy, OFA requests the 
contracting officer (CO)--acting under the direction of the OCM at the 
national office and the contracting officer's representative (COR) at 
the OJC regional level--investigate the discrepancy and highlight any 
issues for the national office. In addition, contracting officer 
representatives--who are officially responsible for monitoring one or 
more contracts, including the financial aspects of those contracts--
compare the spend plan against the actual expenditures and monitor the 
centers' expenses on a monthly basis to ensure expenses are valid under 
the contract. The COR then compares this information with payment 
vouchers submitted by the contractor and either certifies the voucher 
for payment or returns it for correction. It is returned if it does not 
coincide with the information the COR sees on the financial report or 
if the voucher itself has unallowable or otherwise inappropriate costs. 
When a contractor unjustifiably exceeds its budget in any of its 
contracted budget lines, CORs are trained to alert their CO, so that 
the CO can address the matter with the contractor. This entire control 
process coordinated between the three ETA offices--OJC, OFA, and OCM--
provides assurances that spend plans submitted by contractors are 
aligned with the center's budget, the actual valid expenses, and the 
payments made to contractors.
    Together, these controls allow Job Corps not only to more 
effectively plan contracts and obligations at the beginning of the year 
to match its appropriation, but also to monitor spend rates throughout 
the year so that OJC is better able to identify and respond quickly to 
unpredicted changes and anomalies. In addition, for program year 2013 
we have negotiated a reduced On-Board Strength (OBS) for each center 
contract that will ensure that we are operating within our 
appropriations, and we will continue to monitor the actual budget 
against contract costs as well as analyze all contractor financial 
reports. We are also committed to reviewing the contracting approaches 
for the program, and determining what type of contracts will allow us 
to deliver services at the lowest risk and best value to the Federal 
Government.
    Question. In the budget requests for both fiscal years 2013 and 
2014, the Department proposed reducing the amount of funding available 
for Job Corps construction. In the Department of Labor's Inspector 
General's (IG) Semiannual Report to Congress, the IG found that Job 
Corps ``did not always ensure the timely repair of critical and funded 
maintenance deficiencies at its centers, which exposed students, staff, 
and visitors to potential safety and health hazards.'' Even more 
concerning, the audit revealed that $32.9 million in unused maintenance 
funds were expired or were approaching expiration because Job Corps did 
not effectively manage these funds. Is this the first year unused 
maintenance funds expired?
    Answer. Approximately $12.7 million in Construction, 
Rehabilitation, and Acquisition (CRA) funds, which is about 1 percent 
of total CRA funds from program year 2002 through program year 2011, 
have been canceled and sent back to U.S. Department of Treasury. ETA is 
committed to the effective management of CRA funding to ensure 
maintenance deficiencies are identified, tracked, and repaired in a 
timely manner, and has implemented better monitoring mechanisms and 
financial controls to ensure funds are utilized to the fullest extent.
    Question. How will the program make changes to ensure maintenance 
issues are addressed in an appropriate and timely manner?
    Answer. To ensure maintenance issues are addressed in an 
appropriate and timely manner, Job Corps has increased emphasis on 
tracking and monitoring deficiencies to assist centers in execution and 
completion of center maintenance and repairs. The Office of Job Corps 
(OJC) works closely with the Office of Contracts Management (OCM) and 
the Office of Financial Administration (OFA) to enhance processes and 
procedures to ensure Job Corps effectively manages center maintenance. 
Coordinated efforts among the three offices work to improve the 
timeliness of CRA obligations and management tools to monitor and 
manage deficiencies.
    Question. What changes are necessary to track and monitor the 
status of unobligated construction funds?
    Answer. ETA is committed to ensuring CRA funds are executed timely 
and appropriately, and to that end, the Offices of Job Corps, Financial 
Administration, and Contracts Management work closely to provide 
updated status of funding availability reports. These reports allow the 
three agencies to identify actions that need to be taken to obligate 
construction funds timely. Expiring CRA funds are regularly recaptured 
prior to expiration and reallocated to other projects that can be 
obligated in a timely manner.
    Question. In response to the IG's recommendations, the Employment 
and Training Administration has said it has taken or plans to take 
corrective actions to address the recommendations. What steps have been 
taken thus far and what actions does the Department plan to take?
    Answer. To date, the Office of Job Corps issued a directive to 
provide clear procedures to ensure centers are effectively managing 
center maintenance deficiencies, and to ensure deficiencies are 
accurately identified, tracked, and repaired in a timely manner. Job 
Corps is also requiring regional offices and centers to report 
deficiencies updates monthly to the national office. Further, the 
Office of Financial Administration, Job Corps, and the Department of 
Labor (DOL) Office of the Chief Financial Officer are working to 
determine and accurately report total deferred maintenance costs and 
repairs. Even before the OIG completed its audit, the Department began 
the process of working on the electronic reconciliation between the 
information systems used to monitor Job Corps activities. This is also 
an essential step in implementing several of the other recommendations. 
We are in the process of determining how best to respond to the other 
recommendations, and Job Corps will periodically report out on the 
progress it has made in their implementation.
          improving veterans' employment and training services
    Question. Over the past several years, the unemployment rate for 
veterans has been significantly higher than the national average. While 
veterans' unemployment rates are improving, the unemployment rate for 
veterans returning from Iraq and Afghanistan are particularly high, 
with those under age 25 facing over 20 percent unemployment. Therefore, 
it is critical that veterans transition effectively out of military 
service into civilian life. The Government Accountability Office (GAO) 
has issued several reports on how to better target and coordinate 
employment and training programs focused on our Nation's veterans. One 
of the criticisms that GAO cites is the lack of transparency with 
regard to the extent to which veterans' employment training services 
are meeting performance goals. In particular, questions were raised 
regarding whether outcomes are attributable to program participation 
and challenges with coordinating veterans' employment programs within 
the Department and across other Federal agencies. Mr. Secretary, can 
you discuss what the Department is doing to address these concerns?
    Answer. Before addressing the GAO report, it is important to note 
that the President's fiscal year 2014 budget request requests nearly 
$100 million for improved reemployment services for veterans. Over the 
past 18 months, the President has announced a series of actions to 
combat the high levels of veterans' unemployment and to provide greater 
support for servicemembers seeking to transition to civilian education 
and employment. Our request addresses the employment needs of veterans, 
focuses resources on veterans with disabilities or other significant 
barriers to employment, and provides improved re-employment services 
that enable individuals newly separated from the military to 
successfully transition into civilian careers. The budget includes $14 
million to ensure that our Transition Assistance Program (TAP) meets 
the estimated demand of our Nation's transitioning service members. We 
are also requesting an increase of $38 million for additional Disabled 
Veterans' Outreach Program specialists to enhance services to certain 
transitioning service members, wounded warriors and the spouses and 
family caregivers of the wounded warriors. In addition, $50 million of 
the increase for the Workforce Innovation fund will be devoted to 
building the evidence base on strategies targeting veterans, family 
members of active duty personnel, and members of the National Guard and 
Reserves.
    The Workforce Innovation Fund, which emphasizes cross-program 
comprehensive approaches, is one way in which we can respond to the 
findings of the GAO's its December 2012 report entitled, ``Better 
Targeting, Coordinating, and Reporting Needed to Enhance Program 
Effectiveness'', which recommends improved coordination among Federal 
agencies and reporting in veteran employment programs.
    However, the Department of Labor is not waiting for these resources 
to take steps to ensure that veterans are provided with the employment 
assistance needed to successfully enter the civilian workforce. The 
Department's Veterans' Employment and Training Service (VETS) and the 
Employment and Training Administration (ETA) have been collaborating on 
guidance to State Workforce Agencies, which will refocus the workforce 
system to better meet the needs of veterans. Once released, this will 
provide detailed guidance regarding the referral of veterans to the 
appropriate workforce program at 2600 American Job Centers nationwide. 
Additionally, it will clarify the roles and responsibilities of the two 
Jobs for Veterans State Grants (JVSG) staff positions, the Disabled 
Veterans' Outreach Program (DVOP) specialist and the Local Veterans' 
Employment Representative (LVER). Finally, it will reiterate the 
requirement for DVOP specialists to provide increased levels of 
intensive services to veterans.
    The Departments of Labor and Veterans Affairs have continued close 
coordination in administering the Vocational Rehabilitation & 
Employment program. In August 2012, VETS and VA conducted a survey of 
local partnerships to determine best practices and areas for 
improvement. Using the survey's results, in early fiscal year 2013, the 
Agencies' joint working group updated the program's technical 
assistance guide. This guide provides local staff with detailed 
information on the implementation of the Vocational Rehabilitation and 
Employment (VR&E) program, including the review and any needed update 
to the local Memorandum of Understanding with local partners. The 
workgroup is currently revising the data collection tool to enhance 
program monitoring and outcomes associated with the employment of 
veterans.
    The Department also continues to collaborate with its Transition 
Assistance Program partners, chiefly Veterans Affairs and the 
Department of Defense, as part of the Veterans' Employment Initiative 
Task Force. Over the past year, the task force has revised the 
curriculum delivered to all transitioning service members, and the 
Agencies are currently collaborating to develop a virtual TAP program 
that will expand the reach of the program to service members unable to 
attend TAP in a physical location.
    Regarding reporting, VETS continues to report program outcomes and 
activities in its Annual Report to Congress, the Uniformed Services 
Employment and Reemployment Rights Act Annual Report, the Department of 
Labor's Annual Performance Report, the Government-wide Performance.gov 
Web site, and as part of the President's Budget Request. Further, many 
of the performance indicators are Common Measures, allowing 
stakeholders and the public to compare outcomes across programs. The 
key measures for the Jobs for Veterans State Grants, which include 
Entered Employment, Employment Retention, and Average Earnings, are 
also tracked for other employment programs administered by DOL.
    Finally, the Department is committed to rigorous program evaluation 
to determine the impact of its employment programs. The Department's 
Chief Evaluation Officer works with all agencies, including VETS and 
ETA, to identify evaluation priorities. Currently, the Department is 
planning to conduct a statistical analysis of services to veterans, and 
their employment outcomes, using administrative data, and a non-
experimental evaluation of service provided to veterans in American Job 
Centers.
          veterans set-aside through workforce innovation fund
    Question. I am concerned with the request for a $50 million set-
aside for veterans through the Workforce Innovation Fund (WIF). In this 
constrained budget environment, shouldn't we use all available funding 
to provide direct services to veterans seeking employment?
    Answer. The Department of Labor (Department) is dedicated to 
ensuring that veterans have access to the employment assistance that 
they need to successfully enter the civilian workforce. The Department 
has adopted an ``all hands on deck'' approach to serving veterans, and 
in program year 2011, approximately 1.3 million veterans were served 
through the collective programs offered by the American Job Center 
Network. These Department of Labor (DOL) funded employment and training 
programs are required to provide veterans with priority of service and 
the Department has taken further steps to ensure veterans who are 
facing the challenge of transitioning to civilian life are being 
provided the resources they need. For example, the Department's Gold 
Card initiative, a joint effort between the Department's Employment and 
Training Administration (ETA) and Veterans Employment and Training 
Services (VETS), ensures all unemployed post-9/11 era veterans have 
access to the intensive and follow-up services they need to succeed in 
today's job market.
    The veteran-focused portion of the Workforce Innovation Fund 
request would be administered by ETA and VETS and is intended to build 
knowledge about what strategies are most effective in meeting the needs 
to veterans reflects the Department's comprehensive approach to serving 
veterans and This partnership will allow the Department to leverage 
VETS' expertise while utilizing ETA's robust grant management capacity.
    Examples of the type of innovative practices that might be 
supported by these grants include: closely assessing the gap between 
military training and experience and State licensure and other 
certification requirements and developing programs to provide early 
intervention to meet the employment needs of claimants in the 
Unemployment Compensation for Ex-Servicemembers programs. All projects 
will include a rigorous evaluation component.
                                 ______
                                 
            Questions Submitted by Senator Richard C. Shelby
                    job corps budget and enrollment
    Question. Mr. Secretary, the Job Corps program is experiencing its 
second year of budget shortfalls and has gone through three enrollment 
freezes in the past 2 years. Over the last 3 years, Congress has 
continued to appropriate funding at a level equal to the amount 
requested by the Department of Labor (Department) for this program. 
However, in both fiscal year 2012 and 2013, the amount requested has 
clearly been inadequate. Therefore, I would ask the Department to 
provide the subcommittee the following information:
    How much savings were generated with the two enrollment freezes in 
program year 2012 in aggregate?
    Answer. In program year 2012, the Department, with the support of 
the Job Corps community, successfully implemented numerous cost-savings 
measures, including the suspension of enrollment in late November to 
December 2012 and from January to April 2013. Both actions were 
difficult but necessary decisions made to ensure that we remained 
within budgeted levels for the program year and that we would be able 
to keep our commitment to students who are already in the program. 
During the second enrollment suspension the Department also took steps 
to focus on the long term sustainability of the program. One of those 
steps involved a reduction to On-Board Strength (OBS) at the centers, 
which had a direct impact on the related contracts. In March and April, 
the Department worked with the contractors to modify the contracts to 
capture the reductions in funding needed during the contract year, due 
to both the savings initiatives and the suspension of enrollment. As 
part of the contract modifications, the Department did not separate out 
the reductions associated with the enrollment suspension from the 
various other actions taken, but rather was focused on completing the 
actions and fully capturing the total savings needed to ensure we 
stayed within our program year 2012 budget.
    Following the contract deobligations, the Department provided the 
contractors funding for their program year 2012 operations. Following 
the suspension, the Department is continuing to monitor (1) the 
enrollment levels, and (2) whether there are any funds remaining on 
these contracts that may remain after the close of the program year, 
due, at least in part, to the slower than anticipated ``ramping up'' of 
student enrollment. Unspent obligated funds would relieve the financial 
pressure from program year 2013 and could allow for program 
improvements and increasing OBS. As we move into program year 2013, we 
will look for ways to increase OBS in a responsible manner that can be 
maintained within current appropriations.
    Question. Before the enrollment freeze was lifted, each center had 
to agree to a reduction in On-Board Strength (OBS). How much was OBS 
reduced within the program?
    Answer. For program year 2013, The Department has established an 
improved system to align contract values to the post-sequestration 
appropriation based on OBS. As a result, Job Corps will experience a 
reduction of roughly 9,600 student slots in program year 2013 from 
program year 2012 contracted levels. As we move into program year 2013, 
we will look for ways to increase OBS in a responsible manner that can 
be maintained within current appropriations.
    Question. Did all centers receive the same percent reduction?
    Answer. We reduced OBS in an across-the-board fashion to ensure all 
Job Corps centers maintained roughly the same percentage of the overall 
OBS from their previously contracted level.
    Question. Is the reduction in new enrollments and student slots 
specified in the Congressional Justification due to the OBS reductions 
implemented earlier this year?
    Answer. The enrollment and student slot (OBS) levels in the fiscal 
year 2014 request are a continuation of the actions taken during 
program year 2012 to relieve the financial difficulty Job Corps faced 
and to set the program on a sustainable path moving forward. The nearly 
$100 million in funding requested over the program year 2013 post-
sequestration level would allow Job Corps to increase OBS by over 2500 
student slots from the current program year 2013 levels, along with 
other important program improvements.
    Question. What financial accountability measures have you 
implemented to ensure that the program does not continue to run 
shortfalls?
    Answer. The Office of Financial Administration (OFA) within ETA, 
established in August 2012, headed by a Senior Executive Service-level 
Comptroller, oversees the now-centralized budget and financial 
operations of Job Corps. OFA works with ETA's Office of Contracts 
Management (OCM), established in 2010, to ensure that Job Corps 
monitors costs incurred, and is continuing to improve the timeliness 
and accuracy of the reporting. The added cooperation between OFA and 
OCM has resulted in significant improvements in the financial oversight 
of Job Corps. Together, OFA, OCM and the Office of Job Corps (OJC) 
provide a system of checks and balances on expenditures and obligations 
in the Operations account.
    In program year 2012, the Department began the use of a control 
process for obligations that compared the actual obligations recorded 
in the Department's financial systems of record and a projection based 
on Job Corps history and current operating decisions to stay within the 
appropriation level. This comparative analysis was conducted monthly by 
the national office. In program year 2013 this process of comparing 
actuals versus educated projections will continue. Additionally ETA has 
established budget targets for each center (in conjunction with the 
reduced student slot levels), and also for each national office 
contract prior to the start of the program year. This further 
refinement of the measurement of obligations and projections is a 
significant improvement that will allow Job Corps to start the program 
year with its total commitments for program year 2013 within the 
appropriation.
    In addition, during program year 2012, the Department implemented a 
new control process for expenditures. At the start of a contract year, 
center contractors are required to submit to ETA spend plans aligned 
with the value in their contracts. Each contractor then submits monthly 
expense reports for the center on the Job Corps Contract Center 
Financial Report (Report 2110), which is comprised of 29 different 
expense categories. The submitted monthly center financial reports are 
analyzed by OFA in the national office against the center's overall 
budget to ensure that they are within the contractor submitted spend 
plans. When OFA identifies a budget discrepancy, OFA requests the 
contracting officer (CO)--acting under the direction of the OCM at the 
national office and the contracting officer's representative (COR) at 
the OJC regional level--investigate the discrepancy and highlight any 
issues for the national office. In addition, CORs--who are officially 
responsible for monitoring one or more contracts, including the 
financial aspects of those contracts--compare the spend plan against 
the actual expenditures and monitor the centers' expenses on a monthly 
basis to ensure expenses are valid under the contract. The COR then 
compares this information with payment vouchers submitted by the 
contractor and either certifies the voucher for payment or returns it 
for correction. It is returned if it does not coincide with the 
information the COR sees on the financial report or if the voucher 
itself has unallowable or otherwise inappropriate costs. When a 
contractor unjustifiably exceeds its budget in any of its contracted 
budget lines, CORs are trained to alert their CO, so that the CO can 
address the matter with the contractor. This entire control process 
coordinated between the three ETA offices--OJC, OFA and OCM--provides 
assurances that spend plans submitted by contractors are aligned with 
the center's budget, the actual valid expenses, and the payments made 
to contractors.
    Together, these controls allow Job Corps not only to more 
effectively plan contracts and obligations at the beginning of the year 
to match its appropriation, but also to monitor spend rates throughout 
the year so that OJC is more able to respond should unpredicted changes 
occur. In addition, for program year 2013 we have negotiated a reduced 
On-Board Strength (OBS) for each center contract that will ensure that 
we are operating within our appropriations, and we will continue to 
monitor the actual budget against contract costs as well as analyze all 
contractor financial reports.
    Question. The Department has released proposed methodology to close 
a ``small number'' of low-performing centers. How many centers do you 
expect to close?
    Answer. The Department has not yet made any final decisions on the 
exact number of centers that will be selected for closure as part of a 
broader reform effort to improve program quality and strengthen 
accountability.
    Question. When do you expect closures to take place?
    Answer. We will implement the selection and closure process 
following the
    legislatively mandated activities, including congressional 
notification, pertaining to center closure as required by section 159 
of the Workforce Investment Act (WIA). We estimate that it will take a 
minimum of 6 months to execute closure of a center.
    Question. When will the final closure methodology be published?
    Answer. The Department has not yet established a date for 
publication of the final closure methodology.
    Question. How much cost savings would be achieved per center 
closure?
    Answer. Until the Department finalizes the closure methodology and 
identifies which centers will be closed, we cannot specify the savings 
associated with closure.
    Question. The Congressional Justification states a reduction in new 
enrollments from the program year 2011 level of 63,340 to a program 
year 2014 target of 49,091. This equates into a 22-percent decrease in 
new enrollments. Why is there such a significant drop in new 
enrollments over this period?
    Answer. The Job Corps program enrolls students on a rolling basis 
throughout the year. The program serves students who are currently 
enrolled and continuously admits new students throughout the program 
year as students graduate or exit the program. This reduction in the 
total number of new enrollments throughout the entire program year is 
caused by the decrease in the total number of students allowed in Job 
Corps at any given time, also known as OBS. The OBS reduction of nearly 
9,500 slots was made to ensure that in future years Job Corps would 
begin program year 2013 with its contracts below the program year 2013 
appropriation, including sequestration. The fiscal year 2014 request 
allows us to begin to increase these levels while also addressing other 
programmatic needs. As savings are realized from reform of the Policy 
and Requirements Handbook (PRH) and other changes, they will be 
reinvested into the program, including increasing OBS.
    Question. If enrollments will decrease by approximately 22 percent 
between program year 2011 and program year 2014, why is the Department 
requesting an increase in operations funding in fiscal year 2014?
    Answer. The enrollment levels reflect what the Department can 
actually afford, given the lessons learned from program year 2011 and 
program year 2012. The Department has proposed to increase OBS above 
what can be afforded at the program year 2013 post-sequestration level. 
However, the funding also provides for other important programmatic 
needs such as investing in more rigorous training and credential 
attainment measures, experimenting with different contract models, and 
responding to new developments in the field, including the significant 
changes to GED attainment slated to begin in January of 2014.
                               h-2b rules
    Question. Many industries, including the seafood and timber 
industries, rely on the Department of Labor's H-2B Visa program to find 
temporary, seasonal workers. The seasonal nature of these industries 
means that these businesses routinely face shortages of local workers 
during their peak season. The H-2B program not only keeps these 
businesses open, but also contributes to the creation of additional, 
year-round jobs for local workers.
    The Department has proposed H-2B rules that would add regulatory 
burdens and costs to American businesses. In particular, an H-2B worker 
would be required to receive a minimum of three-fourths of their wages 
for each 12-week period they are employed, even if they do not work 
three-fourths of the time due to weather or other unforeseen 
circumstances. Further, the rule requires employers to pay 
transportation and subsistence costs to and from the workplace for 
those workers hired under the program. Many small businesses that use 
the H-2B program cannot afford these regulations and will ultimately 
close, which will result in more job losses, including putting the 
American jobs at those businesses at risk.
    Mr. Secretary, what steps will the Department take to ensure valid 
methods are used to determine wage rates?
    Answer. With respect to wage rates in the H-2B program, on April 
24, 2013, the Departments of Labor and Homeland Security published an 
Interim Final Rule to bring the Department into compliance with a court 
order. Please see the response to Senator Graham's question on H-2B 
visas provided later in the document. Specifically, a Pennsylvania 
district court invalidated the provision formerly found at 20 CFR 
section 655.10(b)(2), which required the application of four skill 
levels when DOL issues a prevailing wage based on the Occupational 
Employment Statistics (OES) wage survey. The Interim Final Rule 
implements a wage determination methodology based on the mean of wages 
in that occupation, as compiled by the Bureau of Labor Statistics in 
the OES survey. The OES survey is a semiannual mail survey of nonfarm 
establishments selected in order to obtain data from every metropolitan 
and nonmetropolitan area in every State, across all surveyed 
industries, and from establishments of varying sizes.
                          governor's set aside
    Question. The Governor's Workforce Investment Act set-aside allows 
15 percent of Workforce Investment Act funding to be used by the 
Governor, at the State-level, to pursue creative workforce development 
initiatives. Over the past 3 fiscal years, the set-aside has been 
reduced to 5 percent. While I appreciate the fiscal year 2014 budget 
request proposes to increase the set aside to 7.5 percent, I think it 
should revert to its authorized level of 15 percent. By limiting the 
amount of funds to Governors' workforce training initiatives, State-
wide or regional efforts are stifled. Governors are equipped to 
identify and address the workforce training needs of their State's 
local employers and should be given the tools necessary to do so. Why 
does the Department not support increasing the set aside to 15 percent?
    Answer. The set-aside must be viewed in context of the funding 
level for the WIA formula programs. Without new resources, any increase 
in the Governor's set-aside would have to come from the local level, 
where services are delivered. The President's budget request, which 
includes additional funding to increase the set-aside from 5 percent to 
7.5 percent, balances the need for statewide funds with preservation of 
funding at the local level.
    The proposal to increase the statewide reserve funds to 7.5 percent 
will increase State oversight and accountability activities while 
ensuring that levels of service do not decrease in local workforce 
investment areas. If statewide reserve funds were increased to 15 
percent at the proposed funding levels without a large increase in 
overall funding, it would reduce the number of adults, dislocated 
workers, and youth served at the local level. The Department's proposal 
balances oversight and accountability responsibilities with the need to 
preserve services for our program participants.
    Question. Are you concerned that under the reduced set aside 
Governors no longer have the flexibility to implement innovative 
statewide projects?
    Answer. At the 7.5-percent statewide reserve level, Governors may 
still be able to implement innovative statewide projects. However, 
given budget constraints, the need to implement statewide projects must 
be balanced with preserving funds for local workforce investment areas 
to ensure that service levels of participants can be sufficiently 
maintained in a time of declining funding. In addition, the Workforce 
Innovation Fund (WIF) will provide the opportunity for Governors to 
test innovative strategies and replicate evidence-based practices in 
the workforce system, emphasizing cross-program collaboration and bold 
systemic reforms to improve education and employment outcomes for 
participants. The Round 1 WIF grants are starting the implementation 
phase, and the Department anticipates identifying promising practices 
that can be shared broadly with the workforce system in the next few 
months. The Department anticipates awarding WIF Pay for Success grants 
by September 30, 2013 and a subsequent round of WIF grants by September 
30, 2014.
                workforce investment act collaborations
    Question. In these difficult economic times, it is important for 
the Department of Labor to consider ways to better connect the 
workforce investment system with employers to meet local labor market 
needs. The Government Accountability Office (GAO) has recommended that 
the Department compile information on workforce boards that effectively 
leverage Workforce Investment Act funds with other funding sources and 
disseminate this information in a readily accessible manner.
    In the Department's response to GAO's recommendation, which were 
agreed with, the Department stated ``the Departments of Labor, Health 
and Human Services, and Education continue to seek opportunities to 
develop joint guidance with State and local grantees, and to implement 
cross-cutting demonstration projects that encourage partnerships.'' Can 
you share with the subcommittee details on these efforts?
    Answer. In April 2012, the U.S. Departments of Education, Health 
and Human Services, and Labor issued a joint letter to promote the use 
of career pathways approaches as a promising strategy to help adults 
acquire marketable skills and industry-recognized credentials through 
better alignment of education, training and employment, and human and 
social services among public agencies and with employers. In this 
letter, the Departments encourage States to align State resources to 
support integrated service delivery across Federal and State funding 
streams to ensure that interested partners and agencies are aware of 
the commitment to improved collaboration and coordination across 
programs and funding sources. This letter was distributed to the 
workforce system via a Training and Employment Notice (http://
wdr.doleta.gov/directives/attach/TEN/ten2_36_11.pdf).
    The Departments also partnered together to develop the Career 
Pathways Technical Assistance Initiative, which provided funds to nine 
States and two tribal entities to develop strategic plans to implement 
Career Pathways. Based on this initiative, the Departments developed a 
number of tools to help other States, local areas, and tribal entities 
develop career pathways systems. These tools are being shared 
extensively online through a Department of Labor Community of Practice 
(CoP) available on the Department's online technical assistance 
platform at https://learnwork.workforce3one.org. The CoP promotes peer-
to-peer knowledge sharing and linkages to subject matter experts. The 
Federal Career Pathways Interagency Team intends to conduct a national 
Request for Information (RFI) during Program Year 2013 (which begins on 
July 1, 2013) to elicit more detailed feedback from States and local 
areas on career pathways implementation, successes, and any obstacles 
to implementation. The Department of Education is leading the issuance 
of the RFI, and work will continue across the Federal partners and the 
State and local systems to support establishing and implementing career 
pathways.
         veterans' employment and training service performance
    Question. Providing meaningful training and employment services to 
our Nation's veterans should be a high priority for the Department of 
Labor. I remain concerned that both the Government Accountability 
Office and the Department's Inspector General have found that the 
Department is not accurately assessing veterans' needs, documenting 
intensive service activities, or using measurable performance goals to 
evaluate a program's effectiveness. Mr. Secretary, how is the 
Department responding to these issues?
    Answer. The Department's largest investment in veteran employment 
services is through employment and training programs at American Job 
Centers. These include the Wagner-Peyser Employment Services program 
and the Jobs for Veterans State Grant program. In program year 2011, 
more than 1.28 million veterans and eligible persons (primarily spouses 
of veterans provided with the same rights and benefits under the law) 
received services at over 2600 American Job Centers nationwide. 
Further, these persons receive priority of service in all DOL-funded 
employment and training programs.
    The Department agrees that it is imperative that the needs of 
veterans be accurately assessed to ensure that veterans are provided 
with the employment assistance needed to successfully enter the 
civilian workforce. To this end, the Department's Veterans' Employment 
and Training Service (VETS) and the Employment and Training 
Administration (ETA) have been collaborating on guidance to State 
Workforce Agencies, which will refocus the workforce system to better 
meet the needs of veterans. This release will provide detailed guidance 
regarding the referral of veterans to the appropriate workforce 
program.
    Additionally, it will clarify the roles and responsibilities of the 
two Jobs for Veterans State Grants (JVSG) staff positions, the Disabled 
Veterans' Outreach Program (DVOP) specialist and the Local Veterans' 
Employment Representative (LVER). Finally, it will reiterate the 
requirement for DVOP specialists to provide increased levels of 
intensive services to veterans.
    Regarding performance metrics for American Job Center services, the 
Department tracks both the level of services provided to participants, 
and the outcomes of those services. These metrics provide valuable 
information for stakeholders and policy makers in developing strategic 
course corrections or implementing new guidance. For example, given 
that the entered employment rate for JVSG participants decreased as a 
result of the economic recession, the Department has worked with State 
workforce agencies to increase the rate of intensive services provided 
to veterans with significant barriers to employment. Intensive 
services, which may include skills assessment, the development of an 
individualized employment plan, group or individual career counseling, 
and interview and communication skills development, assist veterans in 
overcoming these barriers. Over the last 5 years, the rate of JVSG 
participants receiving intensive services has increased from 20 percent 
to 31 percent. Recognizing that this rate still is far too low given 
the number of veterans who require these services to overcome barriers 
to employment, the Department has made an increase in intensive 
services a priority.
    Many of the performance outcome metrics are mandated Common 
Measures, allowing stakeholders and the public to compare outcomes 
across programs. For example, the key measures for the Jobs for 
Veterans State Grants, which include Entered Employment, Employment 
Retention, and Average Earnings, are also tracked for other DOL 
employment programs. These outcomes are provided to Congress and the 
public in a variety of formats, including the Annual Report to 
Congress, the Department of Labor's Annual Performance Report, the 
Government-wide Performance.gov Web site, and as part of the 
President's budget request.
    Finally, the Department is committed to rigorous program evaluation 
to determine the impact of its employment programs. The Department's 
Chief Evaluation Officer works with agency, including VETS and ETA, to 
identify evaluation priorities. Currently, the Department is planning 
to conduct a statistical analysis of services to veterans, and their 
employment outcomes, using administrative data, and a non-experimental 
evaluation of service provided to veterans in American Job Centers.
            workforce innovation fund for veterans increase
    Question. As more servicemembers transition to civilian life in the 
next several years, I am concerned that the budget requests a $50 
million increase for the Workforce Innovation Fund for veterans. This 
pot of funding will not provide training or employment services to 
veterans in a time when our veterans need employment services. Why was 
this increase not directed to the Veterans and Employment Training 
Service account instead?
    Answer. The Department of Labor (DOL) is dedicated to ensuring that 
veterans have access to the employment assistance that they need to 
successfully enter the civilian workforce. The Department has adopted 
an ``all hands on deck'' approach to serving veterans, and in program 
year 2011, DOL data show that approximately 1.3 million veterans were 
served through the Department of Labor-funded programs, in which 
veterans' eligible spouses have priority of service. The Department has 
taken further steps to ensure veterans who are facing the challenge of 
transitioning to the civilian workforce are receiving the employment 
services they need. For example, the Department's Gold Card initiative, 
a joint effort between the Employment and Training Administration (ETA) 
and Veterans Employment and Training Services (VETS), ensures that all 
unemployed post-9/11 era veterans have access to the intensive and 
follow-up services, including case management, skills assessment, 
career guidance and job search assistance, that they need to compete in 
today's job market.
    The requested $50 million increase in the Workforce Innovation Fund 
for veterans reflects the Department's comprehensive approach to 
serving veterans and will be administered through a partnership between 
VETS and ETA. This funding--which would in fact support services to 
veterans, military families, and members of the National Guard--will 
allow us to test the effectiveness of different strategies for meeting 
the needs of this population. What we learn from these grants would 
then help us improve services throughout the workforce system to better 
meet the needs of veterans.
    It is also important to note that this request is coupled with a 
request for additional funding within the VETS account. That request 
addresses the employment needs of veterans, improves employment 
services for their families, focuses resources on veterans with 
disabilities or other significant barriers to employment, and provides 
improved re-employment services that enable individuals newly separated 
from the military to successfully transition into civilian careers.
                                 ______
                                 
             Questions Submitted by Senator Lamar Alexander
                     finalizing the ``advice'' rule
    Question. In June 2011, the Department of Labor (Department) 
proposed a rule that would expand an employer's reporting requirements 
of activities undertaken in connection with a union organizing 
campaign, known as the persuader rule. When is the Department of Labor 
planning to finalize the ``Advice'' rule re-interpreting section 203 of 
the Labor Management Reporting & Disclosure Act?
    Answer. Because no final rule has been published, the Department's 
proposal to revise its interpretation of ``advice'' under the Labor-
Management Reporting and Disclosure Act (LMRDA) is an ongoing 
rulemaking. The Department's Spring 2013 Regulatory Agenda states that 
final action on the notice of proposed rulemaking (NPRM) is scheduled 
for November 2013. Additionally, future relevant action taken on this 
matter will be noted on the Office of Information and Regulatory 
Affairs (OIRA's) RegInfo.gov Web site.
    Question. What purpose does it serve to require employers to 
publicly report relationships and confidences where no persuader 
activity is taking place?
    Answer. Section 203 of the Labor-Management Reporting and 
Disclosure Act (LMRDA) requires employers and labor relations 
consultants to file public reports with the Department if they enter 
into an agreement or arrangement for the consultant to undertake 
activities with an object to, directly or indirectly, persuade 
employees about their organizing or collective bargaining rights. 
Section 203(d) explicitly states that reporting is not required if the 
employer and consultant do not enter into persuader agreements or 
arrangements.
    Question. Why shouldn't the proposed rule apply to worker centers 
and other third party labor-backed groups who are also persuading 
employees?
    Answer. Section 203 of the Labor-Management Reporting and 
Disclosure Act (LMRDA) applies to employers who enter into third-party 
agreements to persuade employees. Labor organizations already file 
detailed reports pursuant to LMRDA section 201, which requires the 
disclosure of payments to third parties. The Department has never 
applied section 203 reporting to labor organizations and their 
contractors, and the Department did not propose to do so in the notice 
of proposed rulemaking (NPRM). The Department received comments on this 
issue in response to the NPRM, and will consider them in drafting any 
final rule.
    Question. The American Bar Association and the Tennessee Bar 
Association oppose the proposed persuader rule because of concerns that 
it could force attorneys to disclose confidential information about 
their clients. As an attorney, do you agree with the Tennessee Bar 
Association that attorney-client communications and confidences should 
be protected?
    Answer. Yes, the Department believes attorney-client communications 
should be protected.
    The attorney-client issues you reference were raised in multiple 
comments to the notice of proposed rulemaking (NPRM). Labor-Management 
Reporting and Disclosure Act (LMRDA) section 204 exempts attorney-
client communications from reporting, which is defined as, 
``information which was lawfully communicated to [an] * * * attorney by 
any of his clients in the course of a legitimate attorney-client 
relationship.'' 29 U.S.C. 434. This law was cited in the June 2011 
NPRM, which also stated: ``By this provision, Congress intended to 
afford to attorneys the same protection as that provided in the common-
law attorney-client privilege, which protects from disclosure 
communications made in confidence between a client seeking legal 
counsel and an attorney'' 76 Fed Reg 36178, 36192.
    The Department will consider comments on this issue in drafting any 
final rule.
    Question. Another major concern with the proposed persuader rule is 
that it would deter many small and medium size employers from seeking 
outside counsel to advise them on labor issues, opening them up to 
violations. Do you think small businesses, who cannot afford in-house 
legal counsel, have a need to consult with attorneys or labor experts 
to ensure they are complying with the ever-changing interpretations of 
the National Labor Relations Act (NLRA)?
    Answer. The Department agrees that small businesses may have a need 
to consult with attorneys or labor experts to ensure compliance with 
the law. The deterrence-of-legal-advice issue you reference was raised 
in multiple comments to the notice of proposed rulemaking. The 
Department will consider these comments in drafting any final rule.
         companionship exemption under fair labor standards act
    Question. In December 2011, the Department of Labor proposed a new 
rule that would greatly narrow the application of the companionship 
exemption under the Fair Labor Standards Act (FLSA). Currently, 
individuals providing ``companionship services'' for the elderly or 
infirm are exempt from minimum wage and overtime provisions. The 
proposed rule restricts specific tasks such as meal preparation and 
laundry that an exempt employee may incidentally perform, thereby 
decreasing the number of employees who could be claimed under the 
exemption. It will also prohibit the exemption from applying to 
domestic service employees employed by a third party (i.e., staffing 
agencies). Is the Department of Labor planning to finalize the 
companionship rule, and if so, when?
    Answer. The Department continues to work with other Federal 
agencies on the final rule on companionship services. As announced in 
the NPRM, our goal is to finalize a regulation that reflects the 
original intent of the legislation to extend the FLSA's minimum wage 
and overtime protections to workers who perform domestic service while 
exempting only those workers who provide companionship services. These 
workers who perform domestic service are critical to helping persons 
who need assistance to remain in their homes. The need for a stable, 
skilled, trained home care workforce is essential to respond to the 
growing demand for long-term home care for persons of all ages. The 
Department's intent is that proposed reforms will bring the regulation 
in line with congressional intent that domestic workers be covered by 
minimum wage and overtime pay protections, while at the same time 
helping to ensure there is a stable workforce available to enable our 
loved ones to continue to live at home and participate in their 
communities. We have received numerous comments about the rule and will 
take those comments into account as we continue review.
    Question. While States are not required to cover in-home 
companionship under Medicaid, most pay a provider rate to agencies for 
these services. If finalized as proposed, the new rule will force 
States to either raise rates to continue providing these services or 
cut these services and push more seniors into expensive institutional 
long-term care settings--either way, increasing healthcare costs and 
burdens on State Medicaid programs. On March 14, 2012, I asked 
Secretary Solis in front of this subcommittee if she had consulted any 
State Medicaid Directors about the impact of the proposed rule and if 
not, whether she is willing to meet with them. She replied that she 
would be willing to meet with them. Did Secretary Solis meet with any 
State Medicaid Directors about this proposed rule?
    Answer. The Department has had numerous productive conversations 
with Medicaid program personnel, including State Medicaid directors, as 
it considered changes to the companionship exemption. The Department 
has worked closely with the Centers for Medicare and Medicaid Services 
(CMS) of the Department of Health and Human Services throughout the 
rulemaking process. During the public comment period, a number of State 
representatives submitted written comments to the agency for review 
including representatives from the States of Arkansas, California, 
Oregon, Tennessee, Virginia and Washington. Additionally organizations 
such as the National Association of Medicaid Directors submitted 
written comments.
    We also reached out directly to State Medicaid Directors to talk 
with them to make certain that we understood their programs. Last 
summer, the Department's Wage and Hour Division held a call jointly 
with CMS in which we invited all State Medicaid Directors to 
participate. Over 38 State Medicaid program representatives from 26 
States participated in that discussion.
    Question. Have you met with any State Medicaid Directors about this 
proposed rule since you became Acting Secretary?
    Answer. No. However, the Department has met with State Medicaid 
Directors as described above.
    Question. Is the Department willing to withdraw the rule to conduct 
a more comprehensive analysis of the impact on State Medicaid programs 
and budgets?
    Answer. The Department conducted an exhaustive economic analysis as 
reflected in the published NPRM and, during the ongoing review process, 
continues to examine and refine that analysis. The final rule will 
include a thorough analysis of the potential impacts of changes to the 
companionship exemption, including on State Medicaid programs.
     regulatory agenda requirement under regulatory flexibility act
    Question. The Regulatory Flexibility Act of 1980 requires Federal 
agencies to publish a semiannual regulatory agenda that lists 
regulations that are under development. Agencies must publish their 
agendas in April and October. Since 2009 the administration has only 
met the deadline twice. In 2012, the administration missed both 
deadlines, and finally issued an agenda in December of that year that 
included 2,387 items (68 from the Department of Labor) without any 
explanation for the delay. Last year, the Department of Labor missed 
the deadlines for publishing both Spring and Fall semiannual regulatory 
agendas. Please explain why the Department of Labor missed each of 
these deadlines.
    Answer. The Regulatory Flexibility Act of 1980 requires Federal 
agencies to publish a semiannual regulatory agenda that lists 
regulations that are under development. The Department of Labor 
prepares and submits its semiannual regulatory agenda to the Office of 
Management and Budget (OMB), which publishes the semiannual agenda for 
all Federal Government agencies.
    Question. When will the Department of Labor release its Spring 
Regulatory Agenda for 2013?
    Answer. The Department of Labor's Spring Regulatory Agenda for 2013 
is not published separately, but is published as part of the ``Unified 
Agenda of Regulatory and Deregulatory Actions,'' issued by the 
administration. The Office of Management and Budget determines when the 
semiannual agenda for all Federal Government agencies is published.
              expanding application of the davis-bacon act
    Question. On March 22, 2013, the Wage and Hour Division reversed 50 
years of precedent by loosening the standard to determine whether 
members of field survey crews are subject to the Davis-Bacon Act. Since 
1962, the Department of Labor has held that a determination of whether 
certain members of a survey crew were covered under the Davis-Bacon Act 
was a question of fact. Specifically, Department guidance found that 
generally, individuals that conduct the actual surveying such as rodmen 
or chainmen were not covered by the Act. Under the new guidance, the 
Department has expanded the application of the Davis-Bacon Act to field 
survey crew members who ``use tools or who are performing the work of a 
trade,'' a definition that would apply to all members of a field survey 
crew. Why is this guidance document not posted on the Department of 
Labor Web site?
    Answer. The Wage and Hour Division has historically recognized that 
members of survey crews performing primarily physical and/or manual 
work on a Davis-Bacon covered project on the site of the work 
immediately prior to or during construction in direct support of 
construction crews may be laborers and mechanics subject to the Davis-
Bacon Act. After a review of the Wage and Hour Division's policies and 
procedures, as well as information indicating that the composition and 
work of survey crew members have evolved with new technology that 
survey crew members use in their work, the Wage and Hour Division 
concluded that it should clarify the appropriate application of this 
policy. All Agency Memorandum No. 212, which provides the Wage and Hour 
Division's March 22, 2013 guidance on surveyors, is publicly available 
at http://www.dol.gov/whd/programs/dbra/Survey/AAM212.pdf and at http:/
/www.wdol.gov/Index.aspx.
    Question. Do you believe letters and documents like this are 
important to the public?
    Answer. Yes, which is why All Agency Memorandum No. 212, which 
provides the Wage and Hour Division's March 22, 2013 guidance on 
surveyors, and similar All Agency Memoranda are publicly available at 
http://www.wdol.gov/aam.aspx.
    Question. The guidance document was issued in direct response to a 
request by the International Union of Operating Engineers (IUOE). Was 
this the only request the Department of Labor received to change its 
guidance?
    Answer. The request from the International Union of Operating 
Engineers was the only request received by the Wage and Hour Division 
addressing this particular issue.
    Question. Did the Wage and Hour Division seek the input from other 
stakeholders on this issue?
    Answer. While the Wage and Hour Division did not solicit input from 
additional stakeholders in the development of All Agency Memorandum No. 
212, interested parties continue to have an opportunity to provide 
information and evidence to the Wage and Hour Division regarding the 
application of Davis-Bacon labor standards to survey crew members. In 
addition, because the ruling letter issued to the International Union 
of Operating Engineers constitutes a final ruling under 29 CFR section 
5.13, a petition for review may be filed with the Department's 
Administrative Review Board in accordance with 29 CFR section 7.9.
    Question. The decision by the Department of Labor to apply the 
Davis-Bacon Act to a privately-funded construction project in 
Washington, D.C. has elicited criticism from many different corners. 
The D.C. Attorney General's Office called the project ``privately 
financed, privately constructed, and will be privately owned, privately 
occupied, and privately operated.'' The decision could add $20 million 
to the overall costs of the project. Initially, the Wage and Hour 
Division's Branch Chief for Government Contracts ruled the Davis-Bacon 
Act did not apply. That decision was later reversed by the Acting 
Administrator of the Wage and Hour Division. Why was the initial 
decision reversed?
    Answer. The Wage and Hour Division relied on existing guidance in 
determining whether the Davis-Bacon Act applied to the City Center 
project. After the Branch Chief's initial ruling was issued, the 
requesting party appealed that determination and asked the Acting 
Administrator to reconsider it based primarily on the ground that the 
myriad public benefits that will result from the project render it a 
``public work'' under the Davis-Bacon Act. Upon a further examination 
of the entire record in the case, as well as the parties' written 
submissions (including submissions from the project developer, the 
District of Columbia, and the Carpenters following the initial ruling), 
the Acting Administrator determined that the project clearly 
constitutes a public work under the Davis-Bacon Act and its 
implementing regulations and that the District of Columbia is a party 
to the contract for construction. The Department's Administrative 
Review Board recently issued a Final Decision and Order that affirmed 
the Acting Administrator's ruling.
    Question. What new facts, if any, did the Acting Administrator rely 
on to reverse the initial decision?
    Answer. On reconsideration, the Wage and Hour Division carefully 
considered the written submissions supporting and opposing 
reconsideration, as well as the entire record in the case, and 
concluded that the project is a ``public work'' under the Davis-Bacon 
Act and the District of Columbia is a party to the contract for 
construction. We examined the agreements governing the project and 
determined that the project plainly is being carried on directly by 
authority of the District. For example, the City Center project exists 
solely because the District exercised its authority to enter into a 
development agreement and ground leases with the District's chosen 
developers, and those agreements give the District authority over such 
features as the number of residential units to be constructed, the 
amount of office and retail space to be created, and the specific 
design of a public park and other public areas. In addition, the 
District has continuing ownership of the land on which construction is 
taking place, as well as direct authority to ensure that the developers 
maintain the improvements at a level that satisfies ``First-Class 
Standards.'' We also concluded that the project will serve the interest 
of the general public. For instance, the District's various public 
space design requirements for the project, including the new park and a 
central plaza, are intended to benefit the public, as is the District's 
ongoing involvement in the City Center project over the course of the 
99-year lease terms--a circumstance that differentiates this project 
from other projects in which the District may sell property without 
retaining such extensive control over its use. Based on this analysis, 
we concluded that the project is covered by the Davis-Bacon Act because 
it constitutes a ``public work'' and the District of Columbia is party 
to the contract for construction. The Department's Administrative 
Review Board recently upheld this ruling.
    Question. Do you agree that the new standard by which the 
Department of Labor will determine whether the Davis-Bacon Act applies 
is whether the construction project provides an economic benefit, such 
as creating jobs or producing tax revenue?
    Answer. We do not agree that the CityCenterDC determination 
represents a new standard. The initial determination and the 
reconsideration both illustrate that many factors influence the 
decision about whether particular agreements are contracts for 
construction and public works under the Davis-Bacon Act.
    Question. Do you agree that this is an unprecedented expansion of 
the application of the Davis-Bacon Act?
    Answer. We do not agree that this decision represents an expansion 
of the Davis-Bacon Act. Our analysis and determinations were based on, 
and consistent with, existing guidance and interpretations of Davis-
Bacon Act coverage.
    union presence in occupational safety and health administration 
                         walkaround inspections
    Question. On February 21, 2013, the Occupational Safety and Health 
Administration (OSHA) issued an interpretation letter that a union 
representative who is not an employee of the company may accompany an 
OSHA inspector during a walk around inspection of the worksite and may 
even be designated as the employee representative in a non-union 
workplace. OSHA's regulations specifically state that, 
``representative(s) authorized by employees shall be an employee(s) of 
the employer,'' except for good cause. The interpretation letter 
provides a blanket affirmation that a union representative may 
participate in the walk around inspection. The new OSHA interpretation 
letter appears to conflict with existing regulations. Please state if 
you agree or disagree with this statement and explain why.
    Answer. The Department does not agree that the February 21 letter 
conflicts with existing regulations, or that it constitutes a blanket 
affirmation for any individual to participate in an inspection. OSHA's 
regulations allow compliance officers to permit third parties to be 
walkaround representatives if they will make a positive contribution to 
a thorough and effective inspection. Specifically, 29 CFR section 
1903.8(a)-(d), allows the compliance officer significant discretion as 
to who participates in inspections. Section 1903.8(c) explicitly allows 
walkaround participation by an employee representative who is not an 
employee of the employer when, in the judgment of the OSHA compliance 
officer, such a representative is ``reasonably necessary to the conduct 
of an effective and thorough physical inspection.''
    Worker participation in OSHA inspections is vital to a thorough and 
effective inspection. The February 21, 2013 letter clarifies that 
allowing non-employee third-party representatives (such as a union or 
community group) to accompany OSHA inspectors on walk-around 
inspections, if designated by workers at the worksite, is consistent 
with the intent of section 8(e) of the OSH Act which provides that 
``[s]ubject to regulations issued by the Secretary, a representative of 
the employer and a representative authorized by his employees shall be 
given an opportunity to accompany the Secretary or his authorized 
representative during the physical inspection of any workplace . . . 
for the purpose of aiding such inspection.'' 29 U.S.C. Sec. 657(e).
    Question. OSHA compliance officers who conduct the walk around 
inspections are explicitly prohibited by the agency's internal rules 
from becoming involved in an ``onsite dispute involving labor-
management issues or interpretation of collective-bargaining 
agreements.'' By allowing a union representative access to a non-union 
worksite, OSHA is putting its own compliance officers in a position to 
violate agency rules. Do you agree?
    Answer. The Department disagrees with this statement. Third party 
walkaround participation does not involve OSHA compliance officers in 
disputes involving labor-management issues or interpretation of 
collective-bargaining agreements. The participation of workers and 
their representatives in OSHA inspections is solely related to ensuring 
a thorough and effective health and safety inspection.
    Allowing third party representatives to accompany OSHA compliance 
officers on an inspection is also solely related to achieving an 
effective and thorough health and safety inspection. The purpose of a 
walkaround representative is to assist the inspection by helping the 
compliance officer receive valuable health and safety information from 
workers who may not be able or willing to provide such information 
absent the third party participants. The importance of this process to 
workplace safety was clearly established in the OSHAct and is not 
related to labor-management issues.
    OSHA's Field Operations Manual instructs OSHA Area Directors to 
thoroughly assess the credibility and veracity of any complaint filed 
during a labor dispute and states that ``During the inspection, 
Compliance Safety and Health Officers (CSHOs) will make every effort to 
ensure that their actions are not interpreted as supporting either 
party to the labor dispute.'' Furthermore, 29 CFR section 1903.8(c) 
states that ``Compliance Safety and Health Officers are authorized to 
deny the right of accompaniment under this section to any person whose 
conduct interferes with a fair and orderly inspection,'' which would 
include any union organizing activity conducted during the inspection 
process.
    Question. How will OSHA ensure that its compliance officers will 
not involve themselves in an employer's labor-management issues or 
collective-bargaining agreements?
    Answer. OSHA's Field Operations Manual clearly instructs OSHA Area 
Directors to thoroughly assess the credibility and veracity of any 
complaint filed during a labor dispute and states that ``During the 
inspection, CSHOs will make every effort to ensure that their actions 
are not interpreted as supporting either party to the labor dispute.'' 
OSHA management and staff are trained to comply with the Field 
Operations Manual and are required to follow its directions.
                                 ______
                                 
             Questions Submitted by Senator Lindsey Graham
                           h-2b visa program
    Question. Many small businesses rely on the H-2B Visa program to 
hire foreign nationals to fill temporary, seasonal, nonagricultural 
jobs to supplement their local workforce. The program provides small 
businesses an opportunity to maintain their operations with a legal 
workforce when American workers are unavailable. Over the past several 
years, both the Congress and the courts have invalidated the Department 
of Labor's intention to grossly increase wage rates in the H-2B 
program. Can you provide an update on the current emergency H-2B wage 
rule and what the next steps the Department will take to ensure this 
program remains an option for small businesses?
    Answer. The H-2B non-agricultural program allows employers to hire 
temporary foreign workers when there is not a sufficient supply of U.S. 
workers and when U.S. workers similarly employed will not be adversely 
affected. We appreciate the importance of the H-2B program to small 
businesses. The Department promulgated an Interim Final Rule to comply 
with a court order. On March 21, 2013, the U.S. District Court for the 
Eastern District of Pennsylvania issued a permanent injunction against 
the operation of one provision of the prevailing wage methodology that 
Department of Labor (DOL) has employed in the H-2B program since 2008. 
Comite de Apoyo a los Trabajadores Agricolas v. Solis (CATA v. 
Solis),--F.Supp.--, 2013 WL 1163426 (E.D. Pa. 2013). In response to the 
court's injunction, the Departments of Labor and Homeland Security 
issued a joint Interim Final Rule on April 24, 2013 to address that 
regulatory provision.
    The public comment period closed on June 10, 2013; more than 330 
comments were received. The Departments will thoroughly review and 
consider all comments received during this period in arriving at a 
Final Rule.
    Question. Will the Department move forward with its comprehensive 
H-2B rule?
    Answer. On April 26, 2012, the U.S. District Court for the Northern 
District of Florida, Pensacola Division, preliminarily enjoined DOL 
from implementing the 2012 H-2B comprehensive Final Rule in Bayou Lawn 
and Landscape Services v. Solis. On April 1, 2013, the Eleventh Circuit 
affirmed the preliminary injunction, upholding the lower court's legal 
conclusion regarding a lack of authority for DOL to engage in 
rulemaking in the H-2B program.
    This finding is in contrast to the decision issued on August 20, 
2012 by the U.S. District for the Eastern District of Pennsylvania in 
Louisiana Forestry Ass'n v. Solis, which rejected plaintiffs' challenge 
to DOL's authority to issue the 2011 H-2B Wage Rule. That court held 
that DOL has legislative rulemaking authority with respect to the H-2B 
program, and specifically with respect to setting H-2B wages, basing 
its finding on the statutory authority of the Department of Homeland 
Security to consult with appropriate agencies.
    The Bayou injunction prevents the Department from implementing the 
2012 H-2B comprehensive Final Rule.
    Question. Has the Department analyzed the effects of the recent 
emergency wage methodology rule on small business?
    Answer. On March 21, 2013, the U.S. District Court for the Eastern 
District of Pennsylvania issued a permanent injunction against the 
operation of one provision of the prevailing wage methodology that DOL 
has employed in the H-2B program since 2008. Comite de Apoyo a los 
Trabajadores Agricolas v. Solis (CATA v. Solis),--F.Supp.--, 2013 WL 
1163426 (E.D. Pa. 2013). In response to the court's injunction, the 
Departments of Labor and Homeland Security issued a joint Interim Final 
Rule on April 24, 2013 to address that regulatory provision; the public 
comment period closed on June 10, 2013.
    The Regulatory Flexibility Act (RFA) imposes certain requirements 
on Federal rules that are subject to the notice and comment 
requirements of section 553(b) of the Administrative Procedure Act 
(APA) and that are likely to have a significant economic impact on a 
substantial number of small entities. Under section 553(b) of the APA, 
a general notice of proposed rulemaking is not required when an agency, 
for good cause, finds that notice and public comment thereon are 
impracticable, unnecessary, or contrary to the public interest The 
Interim Final Rule is exempt from the requirements of section 553(b) of 
the APA because the Department of Labor and Homeland Security made a 
good cause finding, thoroughly discussed in the Interim Final Rule, 
that a general notice of proposed rulemaking was impracticable and 
contrary to the public interest. Because the RFA does not apply, the 
Departments were not required to, and did not, either certify that the 
rule would not have a significant economic impact on a substantial 
number of small entities or conduct a regulatory flexibility analysis. 
However, consistent with RFA, the Departments encouraged the public to 
submit comments that suggest alternative rules that accomplish the 
stated purpose of this interim final rule and minimize the impact on 
small entities. We are still analyzing more than 330 public comments 
received on these and other issues impacting all businesses as well as 
workers, and will consider these comments in arriving at a Final Rule.

                         CONCLUSION OF HEARINGS

    Senator Harkin. And, again, Mr. Secretary, thank you for 
your appearance here, and thank you for your outstanding 
stewardship of the Department of Labor. We appreciate it very, 
very much.
    Secretary Harris. Thank you. Thank you, Mr. Chairman.
    Senator Harkin. The subcommittee will stand adjourned.
    [Whereupon, at 11:43 a.m., Thursday, June 6, the hearings 
were concluded, and the subcommittee was recessed, to reconvene 
at the call of the Chair.]
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