[House Hearing, 114 Congress] [From the U.S. Government Publishing Office] REVIEWING THE PRESIDENT'S FISCAL YEAR 2016 BUDGET PROPOSAL FOR THE DEPARTMENT OF LABOR ======================================================================= HEARING before the COMMITTEE ON EDUCATION AND THE WORKFORCE U.S. HOUSE OF REPRESENTATIVES ONE HUNDRED FOURTEENTH CONGRESS FIRST SESSION __________ HEARING HELD IN WASHINGTON, DC, MARCH 18, 2015 __________ Serial No. 114-6 __________ Printed for the use of the Committee on Education and the Workforce [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT] Available via the World Wide Web: www.gpo.gov/fdsys/browse/ committee.action?chamber=house&committee=education or Committee address: http://edworkforce.house.gov ______ U.S. GOVERNMENT PUBLISHING OFFICE 93-704 PDF WASHINGTON : 2016 ----------------------------------------------------------------------- For sale by the Superintendent of Documents, U.S. Government Publishing Office Internet: bookstore.gpo.gov Phone: toll free (866) 512-1800; DC area (202) 512-1800 Fax: (202) 512-2104 Mail: Stop IDCC, Washington, DC 20402-0001 COMMITTEE ON EDUCATION AND THE WORKFORCE JOHN KLINE, Minnesota, Chairman Joe Wilson, South Carolina Robert C. ``Bobby'' Scott, Virginia Foxx, North Carolina Virginia Duncan Hunter, California Ranking Member David P. Roe, Tennessee Ruben Hinojosa, Texas Glenn Thompson, Pennsylvania Susan A. Davis, California Tim Walberg, Michigan Raul M. Grijalva, Arizona Matt Salmon, Arizona Joe Courtney, Connecticut Brett Guthrie, Kentucky Marcia L. Fudge, Ohio Todd Rokita, Indiana Jared Polis, Colorado Lou Barletta, Pennsylvania Gregorio Kilili Camacho Sablan, Joseph J. Heck, Nevada Northern Mariana Islands Luke Messer, Indiana Frederica S. Wilson, Florida Bradley Byrne, Alabama Suzanne Bonamici, Oregon David Brat, Virginia Mark Pocan, Wisconsin Buddy Carter, Georgia Mark Takano, California Michael D. Bishop, Michigan Hakeem S. Jeffries, New York Glenn Grothman, Wisconsin Katherine M. Clark, Massachusetts Steve Russell, Oklahoma Alma S. Adams, North Carolina Carlos Curbelo, Florida Mark DeSaulnier, California Elise Stefanik, New York Rick Allen, Georgia Juliane Sullivan, Staff Director Denise Forte, Minority Staff Director C O N T E N T S ---------- Page Hearing held on March 18, 2015................................... 1 Statement of Members: Kline, Hon. John, Chairman, Committee on Education and the Workforce.................................................. 1 Prepared statement of.................................... 3 Scott, Hon. Robert C. ``Bobby,'' Ranking Member, Committee on Education and the Workforce................................ 4 Prepared statement of.................................... 7 Statement of Witnesses: Perez, Hon. Thomas, E., Secretary, U.S. Department of Labor, Washington, DC............................................. 16 Prepared statement of.................................... 20 Additional Submissions: Kilili Camacho Sablan, Hon. Gregorio, a Representative in Congress from Northern Mariana Islands: Statement for the record................................. 66 Chairman Kline: Letter for the record from ACCI.......................... 64 Questions submitted for the record by: Davis, Hon. Susan, A., a Representative in Congress from the State of California................................ 77 Chairman Kline........................................... 71 Rokita, Hon. Todd, a Representative in Congress from the State of Indiana....................................... 76 Messer, Hon. Luke, a Representative in Congress from the State of Indiana....................................... 77 Polis, Hon. Jared, a Representative in Congress from the State of Colorado...................................... 78 Walberg, Michigan, Hon. Tim, a Representative in Congress from the State of Michigan............................. 76 Secretary Perez: Response to questions submitted for the record........... 79 REVIEWING THE PRESIDENT'S FISCAL YEAR 2016 BUDGET PROPOSAL FOR THE DEPARTMENT OF LABOR ---------- Wednesday, March 18, 2015 U.S. House of Representatives Committee on Education and the Workforce Washington, D.C. ---------- The committee met, pursuant to call, at 10:01 a.m., in Room 2175, Rayburn House Office Building, Hon. John Kline [chairman of the committee] presiding. Present: Representatives Kline, Foxx, Roe, Thompson, Walberg, Salmon, Guthrie, Messer, Byrne, Carter, Curbelo, Stefanik, Allen, Scott, Davis, Courtney, Polis, Wilson of Florida, Bonamici, Takano, Jeffries, Clark, and DeSaulnier. Staff present: Lauren Aronson, Press Secretary; Andrew Banducci, Professional Staff Member; Janelle Belland, Coalitions and Members Services Coordinator; Ed Gilroy, Director of Workforce Policy; Christie Herman, Professional Staff Member; Marvin Kaplan, Workforce Policy Counsel; Nancy Locke, Chief Clerk; John Martin, Professional Staff Member; Zachary McHenry, Legislative Assistant; Daniel Murner, Deputy Press Secretary; Michelle Neblett, Professional Staff Member; Brian Newell, Communications Director; Krisann Pearce, General Counsel; Molly McLaughlin Salmi, Deputy Director of Workforce Policy; Emily Slack, Professional Staff Member; Alissa Strawcutter, Deputy Clerk; Juliane Sullivan, Staff Director; Loren Sweatt, Senior Policy Advisor; Alexa Turner, Legislative Assistant; Joseph Wheeler, Professional Staff Member; Tylease Alli, Minority Clerk/Intern and Fellow Coordinator; Austin Barbera, Minority Staff Assistant; Denise Forte, Minority Staff Director; Melissa Greenberg, Minority Labor Policy Associate; Carolyn Hughes, Minority Senior Labor Policy Advisor; Eunice Ikene, Minority Labor Policy Associate; Brian Kennedy, Minority General Counsel; Richard Miller, Minority Senior Labor Policy Advisor; Amy Peake, Minority Labor Policy Advisor; Kiara Pesante, Minority Communications Director; and Veronique Pluviose, Minority Civil Rights Counsel. Chairman Kline. A quorum being present, the Committee on Education and the Workforce will come to order. Well, good morning, Secretary Perez. Welcome back to the Education and Workforce Committee. Thank you for joining us for this hearing on the President's Fiscal Year 2016 budget proposal. We have much to discuss in a short period of time. The American people have been through a lot since the recession began more than seven years ago: millions of jobs destroyed, household incomes plummeted, hard-earned savings wiped out, hopes and dreams shattered. We all welcome the progress seen in recent months, but make no mistake, we still have a long way to go before every American is able to get back on a path to a lifetime of success. Right now, roughly 15 million workers are in desperate need of full-time jobs, and that does not include the millions of individuals so discouraged by meager job prospects that they have simply dropped out of the workforce. Meanwhile, working families face high health care costs and stagnant wages, and they are struggling to send their kids to college and plan for retirement. As policymakers, we have an obligation to these men and women to do better. They are not willing to accept a new normal of anemic growth and flat incomes. Neither should we. Yet, that is precisely what the President's budget would force us to do. As is often said, a budget reflects priorities, and it is clear that the President's priorities continue to be more spending, more taxes, and more debt. The facts speak for themselves. The President's budget includes $547 billion in new spending and a $1.8 trillion tax increase--$1.8 trillion. Despite taking more money from hard-working Americans, the President's budget never balances--never balances. In fact, over the next 10 years it would add $6.7 trillion to the national debt. This is not a roadmap leading to a stronger middle class, but a blueprint for more government at the expense of the middle class. This flawed approach is reflected in the President's budget for the Department of Labor. The administration is requesting an 11 percent increase in discretionary spending for the Department and an astounding $41.5 billion in new mandatory spending. Will these additional taxpayer dollars be spent reducing regulatory burdens, streamlining the bureaucracy, and encouraging better enforcement of Federal laws? Not likely. Instead, the new money will be spent imposing more rules on more Americans, including workers employed by Federal contractors, the elderly, and those with disabilities who rely on in-home companion care, and men and women who need help saving for retirement. It will also be spent creating new programs and layers of bureaucracy. For example, we recently passed bipartisan legislation streamlining the workforce investment system, and already the President is demanding five new workforce development programs. Congress made it easier for job seekers to acquire new skills and get back to work, yet the President is determined to make a maze of programs more complex and confusing. The President's budget is one of misplaced priorities and missed opportunities. We can invest in policies and programs that will make a real difference in the lives of countless Americans without growing the size, cost, and reach of the Federal Government. Middle-class families are being squeezed, and the last thing we should do is double down on failed policies. We can do better and we know how to do better. Last year, Republicans and Democrats came together to enact meaningful job training legislation that will put Americans back to work, and we passed important reforms to strengthen the financial security of workers and retirees in the multiemployer pension system. Secretary Perez, I want to take a moment here to thank you for your work in that effort. As you know, this was truly a bipartisan effort. It was crucially important to the futures of literally millions of Americans, where we had to fix those multiemployer pension plans. And you were absolutely true to your word. You said you would step in and help us get some Senate Democrats and, by golly, you did. So that was very, very important work, and I want to thank you for your work there. It is time to find other areas of agreement, like modernizing an outdated multiemployer pension system--still more work to be done on that multiemployer pension system-- simplifying the regulations surrounding Federal wage and hour law, and opening new markets for American-made goods. Let's ensure the people's priorities are our priorities by rejecting the President's budget and embracing pro-growth reforms that help every American enjoy a lifetime of opportunity and success. I will now recognize the committee's ranking member, Mr. Scott, for his opening remarks. [The statement of Chairman Kline follows:] Prepared Statement of Hon. John Kline, Chairman Committee on Education and the Workforce Good morning, Secretary Perez, and welcome back to the Education and the Workforce Committee. Thank you for joining us for this hearing on the president's fiscal year 2016 budget proposal. We have much to discuss in a short period of time, and I intend to keep my opening remarks brief so that each member may have an opportunity to ask questions. The American people have been through a lot since the recession began more than seven years ago. Millions of jobs destroyed. Household incomes plummeted. Hard-earned savings wiped out. Hopes and dreams shattered. We all welcome the progress seen in recent months, but make no mistake, we still have a long way to go before every American is able to get back on a path to a lifetime of success. Right now, roughly 15 million workers are in desperate need of full-time jobs, and that does not include the millions of individuals so discouraged by meager job prospects that they have simply dropped out of the workforce. Meanwhile, working families face high health care costs and stagnant wages, and they are struggling to send their kids to college and plan for retirement. As policymakers, we have an obligation to these men and women to do better. They are not willing to accept a new normal of anemic growth and flat incomes. Neither should we, yet that is precisely what the president's budget would force us to do. As is often said, a budget reflects priorities, and it is clear the president's priorities continue to be more spending, more taxes, and more debt. The facts speak for themselves. The president's budget includes $547 billion in new spending and a $1.8 trillion tax increase. Despite taking more money from hard-working Americans, the president's budget never balances. In fact, over the next 10 years, it would add $6.7 trillion to the national debt. This is not a roadmap leading to a stronger middle-class, but a blueprint for more government at the expense of the middle-class. This flawed approach is reflected in the president's budget for the Department of Labor. The administration is requesting an 11 percent increase in discretionary spending for the department and an astounding $41.5 billion in new mandatory spending. Will these additional taxpayer dollars be spent reducing regulatory burdens, streamlining the bureaucracy, and encouraging better enforcement of federal laws? Not likely. Instead, the new money will be spent imposing more rules on more Americans, including workers employed by federal contractors, the elderly and those with disabilities who rely on in-home companion care, and men and women who need help saving for retirement. It will also be spent creating new programs and layers of bureaucracy. For example, we recently passed bipartisan legislation streamlining the workforce investment system, and already the president is demanding five new workforce development programs. Congress made it easier for job seekers to acquire new skills and get back to work, yet the president is determined to make a maze of programs more complex and confusing. The president's budget is one of misplaced priorities and missed opportunities. We can invest in policies and programs that will make a real difference in the lives of countless Americans, without growing the size, cost, and reach of the federal government. Middle-class families are being squeezed, and the last thing we should do is double- down on failed policies. We can do better and we know how to do better. Last year, Republicans and Democrats came together to enact meaningful job training legislation that will put Americans back to work, and we passed important reforms to strengthen the financial security of workers and retirees in the multiemployer pension system. Secretary Perez, thank you for your support as Congress worked on these bipartisan efforts. It is time to find other areas of agreement, like modernizing an outdated multiemployer pension system, simplifying the regulations surrounding federal wage and hour law, and opening new markets for American-made goods. Let's ensure the people's priorities are our priorities by rejecting the president's budget and embracing pro-growth reforms that help every American enjoy a lifetime of opportunity and success. I will now recognize the Committee's ranking member, Congressman Scott, for his opening remarks. ______ Mr. Scott. Thank you, Mr. Chairman. And thank you, Mr. Secretary, for being with us this morning. The United States has emerged from the depths of the Great Depression--from a Great Recession, and job creation has resumed at a consistent but not robust pace. The question before us is whether we will choose to pursue prosperity economics or austerity economics. What will the new jobs look like? Will they be living-wage jobs or poverty-wage jobs? Will our priorities concentrate the wealth in the hands of the top 1 percent, or will our policies grow and strengthen the middle class? The choices that we make here in Congress and here in this committee will shape that answer. The President's budget recognizes this reality and proposes a way to make the investments our country needs by responsibly ending sequestration. Democrats and some Republicans agree that making mindless cuts mandated by sequestration would be a bad policy and would not benefit our economy or our national defense. Now, cuts are fine in the abstract, but when you start naming them then it becomes clear how bad this policy actually is. As we are extending tax cuts for the wealthiest Americans, we are also robbing the country of resources needed for education, infrastructure, and research. Keeping the sequester means Federal support for pre-K to 12th grade would be less than we spent back in the year 2000. On the other hand, if the automatic spending cuts required by sequestration were cancelled, employment would be higher by approximately 300,000 to 1.6 million jobs, according to last year's CBO analysis. The Department of Labor's budget comes to us at a time when the private sector has experienced 60 consecutive months of job growth, the longest uninterrupted stretch of private job growth on record. The economy has created over 200,000 private sector jobs for 12 consecutive months, a growth unmatched since the 1970s. All of these statistics clearly show that we are on the right track, but despite this progress, some 17.5 million Americans remain unemployed or working part time when they are seeking full-time work. Meanwhile, the inequality in this country has grown. Most new jobs are low-wage jobs, and the fruits of the economic recovery have flowed almost exclusively to the top 1 percent, who captured 95 percent of the income gained through the first three years of the recovery. Department of Labor's priorities and budget request seek to narrow this extreme and growing economic inequality in our country by closing the pay gap between men and women. The link between productivity and wages in our economy has been broken for Americans for the past generation. We have a chart that shows that up until--from 1973 to 2013, hourly compensation for a typical worker rose about 9 percent in real terms while productivity increased 74 percent. This means that workers have been producing far more than they receive in their paychecks and the benefit packages from their employers. Prior to that time frame, as productivity went up wages were going up. Standard and Poor's, one of the companies that rates the credit-worthiness of the government and corporate debt for Wall Street, has studied whether the U.S. economy would be better off with a narrower income gap. Standard and Poor's has reduced its projections for annual growth from 2.8 percent down to 2.5 percent due to widening inequality. Again, economists on Wall Street are telling us that extreme inequality is holding back economic growth. The next chart we have illustrates the extraordinary rapid growth of annual wages for the top 1 percent compared to everybody else. Top 1 percent wages grew 138 percent, while the bottom 90 percent grew just 15 percent, from 1979 to 2013. What we are discussing today is whether we need to change the policies that caused the majority of the gains of our economy to concentrate disproportionately at the top on the premise that it eventually trickles down to the rest of us, or whether we need to adopt policies and budgeting that will make public investments in training, infrastructure, and research in order to produce sustainable growth. We know that there are concrete steps that we can take in order to move in the right direction, which should be the national policy that anybody working full time should be able to earn enough to be above the poverty line. A raise to the minimum wage would do this, and it is the right thing to do. The minimum wage adjusted for inflation would be over $18 an hour, had it kept pace with productivity. Another concrete step we can take to protect retirees and their hard-earned income is to ensure that fellow Americans can rest with dignity after a lifetime of hard work. While still on the job, we need to make sure workers enjoy protections they need to stay safe and healthy. Economic growth and strong regulatory protections are not mutually exclusive. And let's not forget that it was the absence of regulation that allowed Wall Street to run amuck and cause the credit freeze in 2008 and destroyed millions of jobs. And finally, I know that the secretary remains focused on what works to prepare our nation's workforce for the jobs of today and, more importantly, the jobs of the future. These priorities are reflected through the Department's budget, which focuses on expanding the middle-class in many ways, including funding summer jobs, opportunities for disconnected youth, apprenticeships, and programs that expand access to in-demand jobs. So, Mr. Secretary, we look forward to learning more about your department's agenda and your vision for a more prosperous economy and a more prosperous middle-class. Thank you, Mr. Chairman. I yield back. [The statement of Mr. Scott follows:] [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT] Chairman Kline. I thank the gentleman. Pursuant to committee rule 7(c), all members will be permitted to submit written statements to be included in the permanent hearing record. And without objection, the hearing record will remain open for 14 days to allow such statements and other extraneous material referenced during the hearing to be submitted for the official hearing record. It is now my pleasure to introduce our distinguished witness. As I said, Mr. Secretary, welcome back. I think you are well known to all members of this committee. I was looking here and it says that you were sworn in as the 26th U.S. Secretary of Labor on July 13, 2013. The time is flying by. And prior to this confirmation, Secretary Perez served as assistant attorney general for civil rights at the U.S. Department of Justice and as the secretary of Maryland's Department of Labor, Licensing, and Regulation, and those are just two of his many assignments in a very distinguished career. As is now the practice House-wide, I will ask our witness to stand and raise your right hand. [Witness sworn.] Let the record reflect the witness answered in the affirmative. And I am sure ``absolutely'' is exactly the right response, Mr. Secretary. Before I recognize you to provide your testimony let me briefly remind you of our lighting system. And I know you know very well about the green, yellow, and red lights; this is more for my colleagues than for you. I will be very, very tolerant for your opening remarks and your responses. We really do want to hear what you have to say. As disappointed as many of us may be with the President's budget, we nevertheless are really looking forward to your testimony. But, I will remind my colleagues that when we get to questions and answers, I will be strictly adhering to the five- minute rule unless we actually reduce the time. We have a hard stop for this hearing at 12 o'clock. The secretary has to leave. So please, my colleagues, be aware of that and be thoughtful of your colleagues. Mr. Secretary, you are recognized. TESTIMONY OF HON. THOMAS E. PEREZ, SECRETARY, U.S. DEPARTMENT OF LABOR, WASHINGTON, D.C. Secretary Perez. Good morning. And thank you, Mr. Chairman. And thank you, Ranking Member Scott, and all the members of the committee. It is wonderful to be back with you. And as you correctly point out, we have been able to find common ground on a lot of areas of critical importance to this nation, and I look forward to continuing that effort moving forward. I appear today with a great sense of optimism about the direction of our economy and the role the Department of Labor can play in sustaining and accelerating this recovery. We have come a long way since the Great Recession. As has been noted, private employers have now added 12 million jobs over the last 60 months. That is 60 consecutive months of private sector job growth. Last year was the best year we had since the late 1990s. The unemployment rate is now 5.5 percent, its lowest since the spring of 2008. And especially when we look at the last couple years, not only the quantity of jobs, but the quality of jobs are moving in the right direction. So without question, the wind is at our back. But we also know that it is not time to spike the football because there are many pieces of unfinished business, including putting more people back to work, growing real wages to higher levels, and providing continued help for the long-term unemployed. We need to make sure that the economic progress that we are seeing results in shared prosperity for all, and that is exactly what the President's budget is seeking to do: to create an economy that works for everyone--an economy based on broad prosperity. And that prosperity and that vision starts with helping people get the skills and training they need to succeed in 21st century jobs. Each year, on average, our network of roughly 2,500 American Job Centers serves about 14 million people, including a million veterans, through our core workforce programs. And we are serving them well. Fifty-five to 60 percent of those who come to AJCs without a job are working within three months of leaving our programs. The outcomes are even better for those who get training through the workforce system. About 80 percent of them find work within three months. In 2014, we put roughly $1 billion in job-driven grant money on the street, all of it designed to help people upskill in a way that helps them move into jobs that are available now or will soon be available. We are doing more to coordinate and integrate our workforce programs with those of other Federal agencies. We are imploding stovepipes to make our government- wide efforts that much more efficient and effective. Last July, Congress passed in overwhelmingly bipartisan fashion the Workforce Innovation and Opportunity Act, which is really the most significant reform of the workforce system in 15 years. I want to again thank Chairman Kline, Congresswoman Foxx, and all the members of this committee--Ranking Member Scott-- for your efforts and leadership. It is further proof that cultivating our human capital is not a Democratic idea or a Republican idea, but it is simply a good idea. And I know that many stakeholders are anxiously awaiting our proposed WIOA implementation rules. They are at the Federal Register and we expect to have them published very soon, and we look forward to people's input on those proposed rules. It has been a remarkable labor on behalf of so many people at the Department of Labor. This work will allow us to continue the transformation of the workforce system to prepare people for the jobs of tomorrow. It helps us to continue building what I call the skills superhighway, with on-ramps and off-ramps, where people can pick up skills and credentials on their way to the destination, which is a middle-class job. And with WIOA we are further strengthening our job-driven approach to training, building unprecedented partnerships with employers, connecting businesses that want to grow with workers that want to punch their ticket to the middle class. We are match.com, Mr. Chairman. That is what we do at the Department of Labor. We connect job seekers who want to punch their ticket to the middle class with businesses who want to grow, using the secret sauce of training, community college, other partnerships, your great offices, and that is why we are moving in the right direction. And one of the things that WIOA is going to help promote is one of the most effective strategies I have seen for workforce, and I have chatted with Congresswoman Foxx a lot about this, and that is apprenticeship. Despite the effectiveness of apprenticeship, for all too long I believe that we have devalued apprenticeship in this country, especially relative to our global competitors. And the fact of the matter is you don't necessarily need a four-year degree to punch your ticket to the middle class. I refer to apprenticeship as the ``other college,'' except without the debt. And later this year we are going to award $100 million in American apprenticeship grants, which are designed to kick-start new apprenticeship programs and take successful models to scale. With these apprenticeships, we are looking to expand not simply in the traditional skilled trades, which have great application, but in emerging fields such as I.T., cyber security, health care, logistics, and the like. So we will continue that work, and I think that is work that we can continue on a bipartisan basis. Even as the economy has recovered impressively, we still have a lot of work to do lifting wages, and to create that opportunity and shared prosperity I believe it is more important than ever that we address wages in a number of different ways, starting with raising the minimum wage. Public opinion is strongly in favor of it. Last November, red states and blue states, voters expressed very strong support for increasing the minimum wage. Nobody who works a full-time job should have to live in poverty. And we are continuing to work through executive action and through work with our state and local partners to raise the minimum wage, but still, there is no substitute for Federal legislation that would give low-wage workers in all 50 states a hard-earned, well-deserved raise. We are also working to modernize the nation's rules on overtime, which haven't kept up with inflation or with changes in the economy. Too many people are getting a raw deal, working 60-, 70-hour weeks and not getting that time-and-a-half. In the coming months we will release a new overtime proposal, one that reflects broad input from a range of stakeholders, and we look forward to hearing comments from all key stakeholders. We are also charged at the DOL with protecting workers on a number of fronts. We enforce the nation's wage and hour laws, and we do so in the most strategic way possible, combining aggressive enforcement with compliance assistance and aggressive education. To ensure that we are using our resources efficiently, we use data to identify those workers who are most vulnerable and employers most likely to be violating the law. And the results have been very, very telling. Since Fiscal Year 2009, we have recovered a total of over $1.3 billion for more than 1.5 million workers. Our Occupational Safety and Health Administration and our Mine Safety and Health Administration continue their critical work to make sure we prevent workplace injuries, illnesses, and fatalities. One of the basic rights that every worker has is that when they go to work in the morning they ought to come home safe and sound, and that is exactly what we do through the work of OSHA and MSHA. Helping people secure a dignified retirement after a lifetime of hard work is a critical element of our mission. And toward that end, we are working on an updated regulation to ensure that financial advisors provide retirement advice that is in their client's best interest. The biggest decisions in life fall into one of three categories, I have often found: medical, legal, and financial. Your doctor and your lawyer are obligated to give you informed, unbiased advice, to look out for your interests. You should have the right to expect the same from the professional whom you have trusted with your retirement planning. Many financial advisors already have taken this oath to look out for their customers first, and we think every financial advisor can and should do this. And we look forward to hearing input from everybody--continued input--when we put our rule out. In conclusion, thanks to the resilience of our workers, the ingenuity of our businesses, leadership from every level of government, including this committee. We have emerged successfully from the worst times of our economic crisis of our lifetime. But we still have a lot of work to do, and we can't settle for an economy that simply provides an opportunity for a few. Shared prosperity is, indeed, our north star, and America's promise has always been that everyone, through hard work and responsibility, should have an opportunity to succeed. Keeping that promise is what gets me out of bed every morning and what makes me love my job. And with that, Mr. Chairman, I look forward to hearing and answering any questions that you and members of the committee have. Thank you very much. [The statement of Secretary Perez follows:] [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT] Chairman Kline. Thank you very much, Mr. Secretary. I will start questioning. We have already talked in opening comments and brief discussion before the hearing started about the Multiemployer Pension Reform Act and the work that was taken to get that done. You are the chairman of the Pension Benefit Guaranty Corporation's Board of Directors, in your role as Secretary of Labor, and so you are watching the health and welfare of the PBGC as well as looking at the health and welfare of these retirement plans. Based on recent reports from the PBGC and the Congressional Budget Office, even after the enactment of the Multiemployer Pension Reform Act, further reform in this area is needed to strengthen and modernize the system, and we have talked some. Can you take a minute or two here and tell us what you think will happen if we are unsuccessful in our efforts to modernize the system and put PBGC on sounder financial footing? Secretary Perez. There is indeed, I think, a multiemployer crisis, and I have had many conversations with you and with Republican and Democratic members. And time is not our ally. As you and I have discussed, we have what I call about four options: We have a bad option; we have a very bad option; we have a very, very bad option; and then we have the cataclysmically bad option. And as time goes by, the bad option gets removed from the table and we have a discussion about whether we should do the very bad option or the very, very bad option or the cataclysmically bad option. And I appreciate the actions that were taken last year. You and I have both had discussions about the fact that there is still more work to do, and we look forward to working in a bipartisan fashion and in an inclusive fashion to make sure we hear the views of all stakeholders, because as the chair of the PBGC I take that responsibility seriously, and I think, working together, we can address these issues in a way that is fair to everybody. Chairman Kline. Okay. I think that, I mean, we took some steps in the Multiemployer Pension Reform Act to increase premiums for the PBGC and put it on sounder footing, but it is this report from the CBO and the PBGC that--pointing out how still deep in the hole they are. Secretary Perez. There is more work to do. It is undeniable that there is more work to do, Mr. Chairman. Chairman Kline. Okay. Thank you. Let me move to something else you and I have talked about. It is not fair to everybody because you and I have had some of these discussions, so the advantage for you, Mr. Secretary, is you have had a preview. The disadvantage is I still don't have the answer I like. We held a hearing--the committee held a hearing on the so- called Fair Pay and Safe Workplaces Executive Order, which some of us have taken to calling the Blacklisting Executive Order. We heard from witnesses who raised really serious questions and concerns about the proposal. Witnesses raised legitimate questions about the need for such a proposal since there is already in place longstanding, well-defined procedures for evaluating Federal contractors and, if necessary, preventing them from getting Federal contracts. We also heard concerns about the process--about due process, and about the process, and unreasonable burdens and how this would even work. And again, you and I had a discussion. This is not entirely in your basket, but there is a substantial piece here. What sort of analysis has the Department of Labor done to ensure that this new bureaucracy doesn't overburden contractors and disrupt the whole Federal procurement system? Secretary Perez. The executive order that you are referring to is predicated on the notion that procurement is a privilege, not a right. And if you are engaged in bad behavior, you should forfeit that privilege to do business with the Federal Government. The vast majority of contractors comply with the law, and so, as I understand the process that will be underway, you will be required to answer a question, ``Do you have compliance issues in the area of labor laws and other related laws that are outlined in the executive order?'' For the vast majority of contractors the answer will be no, so their responsibility will be to check a box. For others, there a whole scheme of compliance, and the goal here is to actually promote compliance with the law, as opposed to do the gotcha game. And that is why these compliance officers are, I think, a very important part of the process moving forward. And part of the role at the Department of Labor is not only to have a cadre in the Department of Labor--but to work across the Federal Government to ensure that compliance. Chairman Kline. Mr. Secretary, I am not sure that is the level of analysis I was looking for, because I really do have some great concerns about how this is going to work, where you have contractors and subcontractors, and they have got subcontractors. A contractor has to be responsible for the performance of the subcontractor. I just think it is very, very complex, and I hope that the Department--your department--will look into the details of this. Secretary Perez. Well-- Chairman Kline. My time has, indeed, expired. And I will yield to Mr. Scott for five minutes. Mr. Scott. Thank you, Mr. Chairman. Mr. Secretary, can you--one of these days we are going to get around to comprehensive immigration reform. Meanwhile, can you tell us what happened to the H-2B program and what you are going to do about it? Secretary Perez. Sure. On March the 4th a Federal court in Florida ruled that we lacked the authority at the Department of Labor to issue regulations in the H-2B program. As someone who was a former labor secretary in Maryland, I am very familiar with the H-2B program. It has been an important part for folks working on the eastern shore. And what we did was we have immediately taken steps working with the Department of Homeland Security, and we have done three things. We filed a motion day before yesterday to stay the proceeding--to stay the court's ruling so that we can permit those who have already been in the application process to continue to apply--because every day that the program is shut down is a day that can have significant economic harm. We have also made a commitment to putting in place an interim final rule by April the 30th, and then once that rule comes out, then that would enable the program to operate. And the ``we'' in that sentence is it would be a joint rule with the Department of Homeland Security and the Department of Labor. And then thirdly, the Department of Homeland Security has, as of, I believe, yesterday, reopened their application process, because they had a lot of applications that we had approved, but then when the court shut it down they had to shut down, as well. And yesterday they reopened so that there are roughly 1,000 or 2,000 applications that were stuck that we hope to unstick. So this has been subject of litigation since about 2008. H- 2B has been a lawyers' full employment act. Our goal is to try to fix the problem once and for all. We are very mindful of the time sensitivity and we think that these actions will enable us to get a program up and running as soon as possible. Mr. Scott. Thank you. Can you mention what the research shows about minimum wage, in terms of not only getting people above the poverty level, but also the effect on the economy and what research shows about potential job loss? Secretary Perez. Well, the, you know, minimum wage--you know, when people get an increase in the minimum wage, what they do is they spend it. It is very much akin to what Henry Ford did over 100 years ago when he doubled the wages of people on the assembly line. He did that for two reasons: He had over 300 percent attrition; and he understood that when people make more money, they spend it in their communities and it creates a virtuous cycle. There are literally hundreds of studies that document the issue of minimum wage and job loss, and the overwhelming weight of the evidence demonstrates that when you have reasonable increases in the minimum wage, such as the bill that was proposed in the last Congress, you have literally little or no effect, and at the same time, you are helping millions of workers who can get above the poverty line. Mr. Scott. Thank you. What does your budget do to help at-risk and disconnected youth, particularly during the summer? Secretary Perez. We have several areas of focus. Our WIOA youth formula--we are requesting $873.4 million, and under the new WIOA bill, 75 percent of these funds must be spent on out- of-school youth. Our request for YouthBuild is $84.5 million. YouthBuild is critical. Obviously Job Corps is a huge asset for what we do for at- risk young adults. Our Reintegration of Ex-Offenders serves both adults and youth. And WIA formula dollars can be used in the summer job context. So that is an area where local workforce boards can make those decisions and help for the summer job programs. Mr. Scott. Can you say a word about what sequestration will do to your ability to protect workers, worker safety, develop regulations and inspections, and generally protect workers? Secretary Perez. Well, sequestration, I mean, for instance, in the workforce context, you know, we have got a lot of folks who are still coming to American Job Centers, and sequestration meant that there were about a million people who wanted our services who couldn't get our services. In a time when we are talking about jobs, jobs, jobs, you know, match.com wants to be match.com. But, you know, when you have a size 12 need and a size eight budget, there are people who are in need who don't get that. And similar situations in other aspects of our DOL work. Mr. Scott. Thank you, Mr. Chairman. Chairman Kline. Thank you. Dr. Foxx, you are recognized for five minutes. Secretary Perez. Morning. Ms. Foxx. Good morning. Secretary Perez. Good to see you again. Ms. Foxx. Thank you, Mr. Chairman. And thank you for being here, Secretary Perez. I want to follow up on your mention of Job Corps, actually. Recently, it has come to the committee's attention that since the passage of WIOA, approximately two-thirds of the competitively bid Job Corps contracts have been or are being scheduled for contractor selections in advance of the law's effective date and promulgation of regulations implementing the new statutory requirements for contractor quality. As noted in the letter Chairman Kline and I sent you earlier this week, we are concerned the Department has not begun implementing these enhanced selection criteria when selecting entities to operate Job Corps centers. One only need look at the recent contractor performance at the North Texas Job Corps Center to fully realize the devastating problems that can arise when a contract is awarded to a company ill-prepared to successfully operate a Job Corps center. It is critical that the new statutory provisions be implemented as new contracts are being awarded. And I have always found that when you need new money you look within your own organization for ways that you can more effectively deliver the services, rather than asking for new money. And so we would like to know from you--what is your response to our request in the letter and the need to have more accountability and more effective programs run by Job Corps. Secretary Perez. The letter you are referring to I received last night and we will certainly respond in a timely fashion. It was slid under my door, Mr. Chairman. Chairman Kline. [Off mike.] Secretary Perez. Okay. I just wanted you to know that. Chairman Kline. [Off mike.] Secretary Perez. No, by my staff it was slid under the door. And let me say I totally agree with you, Congresswoman Foxx, that Job Corps contractors need to be subject to accountability, and when they don't do a good job we need to take action. The North Texas center that you are referring to, we revoked that contract as a result of serious issues of safety. I also agree wholeheartedly with what is in WIOA. One of the provisions in WIOA basically says that contractors that are high-performing should be able to compete. I completely agree with that proposition. As I understood the letter--and again, I haven't had a chance to digest it fully--I think it says that--or I think it is concerned that we are speeding up the letting of contracts to get in before the effective date. I am flattered that there is a perception that our procurement process is moving with undue alacrity. Chairman Kline. [Off mike.] Secretary Perez. I can assure you that, you know, we are making no effort to speed up contracts in an effort to avoid a new provision of WIOA because I think it is a good provision. And we will give you a much more robust response. I also believe in accountability, and we have taken a number of steps. That is a very important question that you ask. When I was in state government we regulated the state banks, and we instituted a--what I call a risk-based assessment system, because not all banks are created equal. Some have more risk factors than others. Similarly, when I got here, Job Corps--every Job Corps center was looked at on the same timeframe. Not all Job Corps centers have the same risk factors. And so we have put in place a risk-based assessment system that I think will better enable us to spend more time with the centers that need our attention and less time with the centers that are firing on all cylinders. That is what risk-based accountability and oversight, I think working at its best, does. Ms. Foxx. Well, you anticipated the next question I was going to ask, actually. So I just want--quickly--so do you then have in your risk-based management system a time to cut these people off, in terms of saying, ``Okay, there is going to come a time when we don't think you can be fixed''? Secretary Perez. Oh, well, as you know, one Job Corps center was shut down as of February the 28th in Oklahoma. We are currently reviewing, and our goal is to make sure that everybody can succeed. I don't want anyone--I don't want to set anyone up for failure. We want to give tools to everyone to help them succeed. And I have seen improvement in a number of centers. But when there is chronic underperformance, we will not hesitate to take action. And I don't want to prejudge the process, but I expect that we may be making further recommendations in the context of chronically low-performing Job Corps centers. Because it is all about the kids. I mean, we have got to make sure everybody--anywhere you go, you should be getting top-flight service. Chairman Kline. Gentlelady's time has expired. Mr. Polis? Mr. Polis. Thank you, Mr. Chairman. Thank you, Mr. Secretary. Secretary Perez. Morning, Congressman. Mr. Polis. Welcome to the committee. As we all know LGBT Americans still face historically-- historic and current discrimination in the workplace, and I want to acknowledge your great work and show appreciation on behalf of the LGBT community for the effort the Department of Labor, under your leadership, has gone through in implementing the President's executive order to prohibit Federal contractors from discriminating on the basis of sexual orientation and gender identity. Can you speak to how the work you did issuing a final rule in December of last year helped to fully implement and comply with your duties and responsibilities under the law? Secretary Perez. Yes. First of all, I want to thank you for your leadership in this area. You know, I believe that people should be judged by the quality of the work they do in a workplace, and not by any other irrelevant factors. And I think this is--the work that we are doing in this area is critically important. And the executive order was July of last year, and we have been moving forward through our OFCCP office to help contractors prepare for compliance. And I am confident that they can come into compliance. When we worked on other issues, we have been able to work very effectively to help educate. Because I would much rather prevent than have to come in at the back end and enforce. So I am very confident that we can do that in this context. Mr. Polis. Thank you. And your task is assisted by the fact that such discrimination is against the law in 20-some states already, where contractors in those states, at least, would already presumably comply with this. I wanted to talk about civil penalties for a moment. Your budget proposes to strengthen several of the civil monetary policies that the DOL could impose when a law is violated. You are acting on recommendations by the GAO and the Administrative Conference of the United States by proposing to improve the Federal Civil Penalties Inflation Adjustment Act. As one example, FLSA has a $1,100 maximum fine per willful and repeat violation, which is ridiculously low. And is DOL considering whether to raise that fine? And if so, to what level? And can you speak to the importance of having civil monetary penalties to deter bad behavior and to ensure that our workforce protection statutes like FLSA, OSHA, and ERISA are followed across our country? Secretary Perez. I very much appreciate that question, and I think our civil money penalties need to be modernized to reflect the realities of the 21st century. Too often, our civil money penalties are cost-of-doing-business fines. In the whistleblower context, Congress has acted in a bipartisan fashion to modernize whistleblower laws so that they have gotten better and better and given more rights to courageous whistleblowers. There is still work to do there. But we had a case in 2001--an OSHA case--where a tank full of sulfuric acid exploded in a refinery. The victim's body was literally dissolved. And the OSHA penalty was $175,000. The same incident, some of that sulfuric acid flowed into a nearby stream, killing fish and crabs. The EPA fine was $10 million. The fine for the dead person was $175,000. I think we need to correct that. And when I talk to businesses who play by the rules, they tell me that we need to correct this because they are playing by the rules, and those who cheat do so because of the cost-of- doing-business fines. We don't pack enough punch. Mr. Polis. Speaking of playing by the rules, another area that some businesses don't play by the rules is by misclassifying their employees as independent contractors. And I am sure you are familiar with the Oak Grove Cinemas, Barrington Management, and Barrington Venture LLC case, where employees doing general maintenance and construction were working 60 to 68 hours a week, being allocated to different entities that were all under the same ownership under one contract, were denied overtime. The employer was fined $512,000 in back wages. And this is far too common. So how can we do more to deter this kind of activity, rather than just try to chase after the fact? Secretary Perez. One thing we have been doing is working very closely with states, and we have entered into MOUs with 20 states, ranging from Utah and Alabama to Massachusetts, because this problem is not a red or blue problem, it is a national problem that has three sets of victims: the worker him- or herself; the employers who play by the rules--they can't compete for contracts, they can't compete for businesses because they pay their taxes; and then the tax collector, because when a business is cheating, they are not paying their workers' comp taxes, my U.I. taxes go up because the pool has gotten smaller. And so those three types of victims are why we are working with states across the country on this issue. It is a very significant problem. I believe that there is an important place for independent contractors, but I also believe that there is ample evidence that has been abused. Mr. Polis. Thank you. I yield back. Chairman Kline. Gentleman's time has expired. Dr. Roe, you are recognized. Mr. Roe. I thank the chairman. And-- Secretary Perez. Morning. Mr. Roe.--thank you, Mr. Secretary, for the work you helped us with on the multiemployer pension plan. I think that was a great piece of work. I want to reaffirm what the chairman said, and I appreciate that we still have a lot of work to do. One of the things I want to talk about is to go to the rulemaking that we are looking at with the fiduciary rule. And we wrote a letter, the chairman and I did, to your department asking for information. And we got back a letter that just gave some dates that you met with the SEC chair or talked to her, but really no information. We have a constitutional responsibility for oversight, and so we would like to get some data, what happened in those meetings. Would be good for us to know what went on, and would you please provide those documents? That would be number one. Number two, have you read the Furman Memo? The Furman Memo, from the-- Secretary Perez. I have read the report from the CEA on the costs of conflicted advice. Mr. Roe. Well, exactly. That is what this memo is. And basically, what it says--I have read this memo, and basically what it says, out of the Council of Economic Advisers, is that investment advisors basically move this money from, say, a 401(k)--I mean, from a company-owned plan to a 401(k) or an IRA basically just to make money. They encourage people to do that, they churn the accounts, obviously buy and sell. And there are several types of advice that you can get. I have all three of those accounts. I have a managed account, I have just a standard 401(k), and then I have one here as a congressman. And the least advice I have gotten, and I think the poorest result I have had, is the one I have here in Congress, where I can't--I basically can't talk to anybody. So the question is, do you believe what that memo said about what the investment advisors are actually doing--that they are doing that? And look, there are bad actors out there. We all know Bernie Madoff exists, and we know that people still rob banks and there are laws against that. But most of these advisors I think act in the best interest of their clients or their clients move when they see what the results are. So the free market system works. And this Furman Memo I thought was outrageous when I read it. Any comments on that? Secretary Perez. Sure. I wrote down all of your questions. Let me first start by saying I have been thinking and praying for you over recent weeks. Mr. Roe. Thank you. Secretary Perez. Secondly, we look forward to working with you on the request for documents. And I certainly respect the oversight responsibilities of committees. I also, as someone who entered Federal service in the Bush Administration, worked in Republican and Democratic administrations, I also know that--and I know you appreciate--that when you are having deliberations on what to do and you are having conversations, that there is also deliberative process issues, and we look forward to continuing those discussions with you. I believe that financial planners can and ought to do what lawyers and doctors do. I am the youngest of five, a lawyer; and I have got four siblings and they are all doctors. And we are all required to--I promised I would never be a plaintiff's personal injury lawyer, and I did keep my promise. Mr. Roe. Thank you. Only one turned to the dark side. That is good. Secretary Perez. And my dad was a doctor, and I was the one black sheep, I will concede for the record, Congressman. And, you know, lawyers and doctors look out for their clients' best interests. If I were afflicted with a serious illness I don't want my doctor telling me what is suitable for me; I want my doctor telling me what is best for me. And that doctor has that requirement to do that. And I talk to people in the financial space who are already doing--have--they are certified financial planners, they have taken the oath to look out for their clients' best interests, and, you know, they tell me that the playing field isn't level. And Jack Bogle, I think, said it best--the chairman of Vanguard, or founder of Vanguard. ``I have been in the business 64 years,'' he said, ``and I learned that when you take care of your customers and put them first it is best for the customers and it is great for business.'' Mr. Roe. My time is about to expire, and the CEA memo said the IRA marketplace lacks meaningful regulation. Well, what about FINRA and the SEC? And I think probably your department should work with the SEC if there is going to be a change in the fiduciary rule and not just unilaterally do it. I think the SEC really is the place that should be done more than DOL. Any-- Secretary Perez. Well, our letter certainly outlines the extensive collaboration we have had with the SEC and will continue to have with the SEC in this process. As Chair White said yesterday at a meeting she was at, we have worked together. In the end, we have statutory schemes that we need to make sure we are vindicating. Mr. Roe. Okay. Well, other than this memo, I have been able--I tried last night for hours on the Internet to try to find out where the data came from that was in this CEA memo. I couldn't find it. Secretary Perez. Well, I look forward to talking to you about that, because I actually think it-- Chairman Kline. Gentleman's time has expired. Ms. Wilson, you are recognized. Ms. Wilson of Florida.--thanks to the ranking member for today's hearing. Mr. Secretary, I am so pleased to see you today. I have worked so closely with you since I have been in Congress, and I look forward to working with you as we move forward. I want to thank you for coming today and speaking to us about these very important issues, especially extending emergency unemployment compensation and raising the minimum wage. I love what you have presented regarding community colleges and also reintegrating ex-felons back into the workforce, which is so, so important. Everyone needs a job, and I think the mantra of this Congress should really be ``jobs, jobs, jobs.'' I have said it so many times on the floor. Congress needs to get real about passing a serious full employment agenda, paying workers a fair wage for the hours worked, and raising the minimum wage. That is the least we can do. Now is the time to invest in the people who keep our economy running. If we raise the minimum wage people will have more money to spend, companies will be able to create more jobs, people will have higher salaries and pay more in taxes, and American workers will be happier and healthier. Everyone wins. America wins. I hope as a body we can come together and do that. Mr. Perez, last year I shared with you my concern that the Department of Labor should be very, very careful in crafting a fiduciary rule that would not impact the availability of affordable investment advice. As you know, I represent South Florida. It is a retirement community. And so retirement security is an important issue for me and for my constituents. We have a better chance of protecting our retirements when we sit down with a trained professional who can answer the complicated but important questions we have about our savings. So, as always, I plan to work with you on the proposed rule very closely, and I want to make sure that I have an open line of communication with you as I work with any ongoing concerns I may have. I want to be able to hear from you as I hear from my constituents, and we can become a team to work out a solution. The President's budget points out that many of our employment and safety laws lack strong civil penalties, and I have a bill that I am filing called Protecting America's Workers Act. Many of these rules are woefully out of date. The maximum penalty for repeated and willful violations of Federal minimum wage and overtime laws is only $1,100. The maximum OSHA fine for a serious violation that causes an injury or death is only $7,000. In fact, the last time OSHA's penalties were increased was back in 1990, and they have not been adjusted for inflation in 25 years. Do we need to update OSHA's penalties, Mr. Secretary? What about updating penalties under our wage and hour laws? Secretary Perez. Great. Well, I look forward to working with you on all the issues you addressed. I agree with you about small investors. I think small investors are people who are most in need of advisors who are looking out for them because the margin of error for them is zero. So I look forward to working with you on that. As I said to Congressman Polis before, we have to bring civil money penalties into the 20th century--21st century, and that includes wage and hour, that includes OSHA, and I look forward to working with you on those issues. Ms. Wilson of Florida. Thank you. We will be talking. Chairman Kline. Gentlelady yields back. Mr. Thompson, you are recognized. Mr. Thompson. Thank you, Chairman. Mr. Secretary, thank you so much for being here. Secretary Perez. Morning, sir. Mr. Thompson. Good morning. Thank you for your comments regarding apprenticeship programs, too. Certainly that is a great opportunity to-- Secretary Perez. I agree. Mr. Thompson.--great pathway to opportunity, and I look forward to working with you on that, as well. I am hoping that we can see you do something rather robust as we look at reauthorizing the Perkins Act, too, in terms of apprenticeships. Secretary Perez. Absolutely. Mr. Thompson. I have got--one was--is just a request, a follow-up request, and the other a question for you. Kind of a unique situation, that your office, I think, is currently--we haven't heard back from yet on--November 18th of last year my office--we initiated a request for a formal ruling regarding the MSHA issue, actually affecting Old Order Amish contractors who are to wear hard hats on job sites despite religious objections. It is a confusion within the Department that our inquiry was based on. MSHA's ruling runs contrary to the existing OSHA ruling exempting the Amish from wearing hard hats, and that dates back to 1994. Mr. Secretary, my constituents being affected by the MSHA regulation are committed to following the law. However, the discrepancy between MSHA and OSHA is not just an issue of religious freedom; it seems like one hand is not talking to the other. It has been five months since any inquiry, and I have a copy of the letter with me and available. I would just appreciate you looking into the issue so we can--whatever the response is--we can just get a more timely response back to the constituents. Secretary Perez. Well, first of all, I owe you an apology because the delay is unacceptable and that is my responsibility. And I am going to get back to you in no more than a week. Mr. Thompson. Okay. Secretary Perez. When this came to my attention--it is a fascinating issue. There are two very compelling, competing considerations. I take a back seat to no one in my commitment to respecting religious freedom. At the same time, workplace safety is a pretty big thing too. And so I commit to getting back to you in the next week. We have a team of folks who are not only looking at the MSHA issue that you presented, but looking at our entire array of workplace safety rules because we want to get it right. Again, I appreciate the patience that you have shown and I apologize for the delay. Mr. Thompson. Well, I appreciate your due diligence. It is not an easy question, there is no doubt about it. Not an easy-- to resolve. So thank you for that. Wanted to touch on--September 12, 2013, OSHA proposed to reduce the silica permissible exposure limit to 50 micrograms of silica per cubic meter of air for all industries. Last week, NIOSH published a silica report showing a dramatic downward trend in incidents of silicosis. In the regulatory proposal that OSHA had they stated that 30 percent of silica samples in the general industry were above OSHA's current limit, and the construction industry sampling demonstrated 25 percent noncompliance. Mr. Secretary, can you tell me how many silica-related inspections OSHA conducted in the past two fiscal years, and what is the agency doing now to ensure compliance with the current silica permissible exposure limits? Secretary Perez. I don't know the answer to your first question, but I will get back to you. When you go to a construction site there is a pretty good chance that part of what you are going to be looking at there may be items that relate to silica. So I will make sure I get back to you on that. What I can say regarding the rule is that there has been a very, very extensive process that included a series of hearings where we heard from a wide array of stakeholders ranging from, you know, the fracking industry to construction companies to large businesses to small businesses. We have a voluminous record in this matter because it is a big rule and it is a big proposal, and we want to make sure we get it right. Our goal here is to make sure that our workplaces are safe and, you know, as way back as 1937 I have an audio recording of Frances Perkins talking about the dangers of silica. So these issues have been well-known for quite literally decades, and our goal is to try to thread the needle appropriately so that we have safe workplaces and do so in a way that is fair to all sides. That is our goal. Mr. Thompson. Well, I appreciate that, and I thank you. I appreciate seeing the NIOSH published report that the incidents have--the downward trend that is there on silicosis. That is a good thing for us, so thank you. Secretary Perez. Thank you. Mr. Thompson. I yield back. Chairman Kline. Gentleman yields back. Mr. Takano, you are recognized. Mr. Takano. Thank you, Mr. Chairman. Mr. Secretary, welcome. Secretary Perez. Morning. Mr. Takano. Thank you for being here. I want to talk to you about overtime pay this morning. Americans are working longer hours and are more productive, yet their wages are largely flat. And one reason Americans' paychecks are not keeping pace with their productivity is that millions of working-class and even middle-class workers are working overtime--more than 40 hours a week--and not getting paid for it. Today, the threshold for overtime pay is only $23,660 per year, or $455 per week for a salaried worker. Only about 11 percent of the salaried workers are eligible for overtime. Back in 1975, some 65 percent of salaried workers were eligible for overtime pay. Now, if the overtime salary threshold was raised to the 1975 level after adjusting for inflation, millions of lower- paid white-collar workers would be guaranteed the right to overtime pay if they work more than 40 hours a week, regardless of the nature of their job. Now, I sent a letter earlier this year with more than 30 colleagues urging the Department to raise the income threshold for overtime pay so that more salaried workers qualify. I was pleased to receive a response from the Wage and Hour Division, last week. But what I want to ask you, Mr. Secretary, has the President called upon the department to review the overtime white-collar exemption last year? And I know you have been working diligently. Can you tell me more about how the department plans to address this issue and what is your timeline for doing so? Secretary Perez. Well, we are actually working overtime on this, Congressman. And basically, you know, the overtime rule stands for a very simple proposition that was enshrined in the Fair Labor Standards Act: If you work extra, you should be paid extra. And as you correctly point out, we have met people who are working 60 hours a week, 65 hours a week, who are making $455. That is the salary threshold that equals the amount that you said. And you do the math on that, we have quite literally had cases where the supervisor was making less than the person they supervised. That is not fair. So the President directed us to figure out what is fair. You know, how can we adjust this threshold to reflect the fact that it has not kept up with inflation? How can we adjust the threshold that reflects the fact that if you work overtime you should be paid overtime? And how can we simplify the process, which would be helpful for employers and workers alike? And so, I have personally participated in literally, oh, probably 15 to 20 meetings with various stakeholders, including but not limited to employers, across an array of sectors to get their input. And I am hopeful that sometime this Spring we will be in a position to put a proposal out. And then once that proposal is out, there will be a notice and comment--there will be a comment period, and we will have another round of opportunity to get feedback. But our goal is to make a rule that is fair and make a rule that is--that facilitates compliance and is simpler. Mr. Takano. Well, thank you for that answer. What is your response to those who say that this will hurt workers that we want to help? If employers don't want to pay extra overtime, won't they logically increase the hours of those working part time and hire more workers? Secretary Perez. If you are working 70 hours a week and you are making $455, this is just fundamental fairness to me. And we see too many people who have been, in fact, left without those protections of overtime. And by the way, these are some of the most valuable workers in a workplace. These are the folks who have the keys. They are opening and closing places. They are going to the bank with the money. And they ought to be treated fairly. Mr. Takano. Do you think that we might look to--once you get this resolved and propose a new rule, or propose an updating of the rule, that we might want to index--you know, find some way to index the threshold to inflation? Secretary Perez. In the informal feedback that we have undertaken as part of our listening tour, that issue has come up and a number of people have raised that issue. And so, again, we will put a proposed rule out and then we will put it out for comment, and we look forward to getting comments, including comments, I am sure, from members of Congress. Mr. Takano. Well, we look forward to working with you, and I appreciate the hard overtime--the work you are doing on overtime to get this done. Secretary Perez. Thank you. Mr. Takano. And it always seems--I agree with you. I think it seems fundamental fairness that we--that Americans get paid for the work they do. Thank you, Mr. Chairman. My time is up. Chairman Kline. Gentleman's time has expired. Mr. Walberg, you are recognized for five minutes. Mr. Walberg. Thank you, Mr. Chairman. And-- Secretary Perez. Morning, Mr. Chairman. Mr. Walberg.--Mr. Secretary, thank you. Certainly appreciate your openness, your willingness to be in front of us, openness to have calls from us, take those calls, and respond. I appreciate that. Secretary Perez. My pleasure. Mr. Walberg. In order to continue and keep the respect of my chairman, I want to stay within the five-minute time limit, so there are basically three questions I have. I think you have addressed, to a great degree, one of those questions already relative to overtime regulations. You indicated that sometime this Spring, which thankfully has come, sometime this Spring that rule will be put forward as a proposal. I would just say I hope, in context with that, not only do we look at the wages relative to the hours, but we also look at those other--I guess it would be considered quantifiable factors of respect, of the opportunity for individuals to be in a situation where on their resume there is leadership shown, the ability to expand and move forward, and it is not just the money in their cases. It really isn't just the money; it is the opportunity to expand. The other two question areas that I did want to talk to you about are relative--one area would be the SHARP program and the VPP program, they kind of combined. And my question, the other, is in reference to wellness plans. Let me ask these questions and then get out of the way to let you address those, so we will stay within the five-minute time period. Recently, I sent a letter to Dr. Michaels urging him to rescind the November 2014 OSHA guidance document related to the size standard for a Safety and Health Achievement Recognition Program, SHARP. The guidance suggests companies with over 250 employees be encouraged to move to the Voluntary Protection Program, VPP. However, Dr. Michaels has also suggested, as he has back and forth, VPP should be eliminated--limited and ultimately terminated. We went through that with him in a hearing some time ago and got VPP extended, and now it is going the other way. When questioned about compliance assistance the agency always holds up these two programs as stellar examples of helping employers and employees. The Department can't have it both ways, and so why does OSHA seek to limit participation in both of these programs, SHARP and VPP? Secondly, the wellness plans. ACA encourages employers to offer wellness plans, yet EEOC has gone after employer wellness programs. The question I have is, does the administration support employer wellness plans? And if so, why is the EEOC acting to the contrary to--on the desire for employers, employees, and ACA? I guess those two questions I would love to have your answer, and then we may go to another issue. Secretary Perez. Great. On overtime, I agree with the issues of respect and leadership, by the way, and we have had that conversation in our outreach, so I just wanted to mention that very briefly. As it relates to the SHARP program and VPP, the SHARP program, which stands for Safety and Health Achievement Recognition, is an important part of what we have been doing at OSHA. That program was initially designed to help small businesses. And what happened over time was that a lot of large businesses who have subsidiaries that are under them who are small were getting into that program. And so, just as a matter of how we deal with limited resources, our goal was then to move the subsidiaries of large businesses from SHARP into VPP. What we have done in response to your feedback is to make sure that, you know, everybody who is currently in SHARP will stay in SHARP, so nobody is kicked out, for lack of a better term. And so that program will continue. Our aim for 2016 is to expand VPP because we think it is a great program. And just to clarify, I don't believe we have ever made any statement saying that we are going to eliminate VPP because I think it is a good program, and our goal in 2016 is to continue to do-- Mr. Walberg. We may have misunderstood-- Secretary Perez. Okay. Mr. Walberg.--Director Michaels' statements, but most recently it has moved the other way toward elimination, so if you can clarify that with me I would certainly-- Secretary Perez. Okay. We think, and I am confident that Dr. Michaels agrees, that VPP is a--and SHARP are very important programs, and I look forward to working with you to make sure that they achieve the purpose that I think we both believe that they should have. Chairman Kline. Unfortunately, the gentleman's time has expired. Mr. Jeffries, you are recognized for five minutes. Mr. Jeffries. Thank you, Mr. Chair. And thank you, Mr. Secretary, for your testimony and for your presence. When the Obama administration came into office in 2009 the President and the administration inherited a train wreck of an economy as a result of the Great Depression. Since then, the economy has gotten back on track through the leadership of the President, with the able assistance of yourself and other members of the administration. Yet, it seems like we consistently hear every time the administration has taken a step forward or plans to take another step forward there is a gloom and doom scenario and vision--the sky is going to fall, the world is going to end in some way, shape, or form. We first heard that in connection with the passage of the Affordable Care Act. We were told it was going to end health care as we know it. Instead, more than 16 million previously uninsured Americans now have affordable health insurance. And, in fact, the cost trajectory of health care has slowed in a way that is positive for all of America. We heard that when Dodd-Frank was passed it was going to end Wall Street productivity as we know it. Instead, we have got a stock market that is way up, CEO compensation is way up, profitability amongst Wall Street institutions is way up. That is a good thing for America, for New York City, where Wall Street is based. But Wall Street as we know it wasn't ended. Then, of course, I think we heard when the progressive tax code was put into place, consistent with the fiscal cliff agreement at the beginning of 2013, that the job creators would be hurt in an incredible way. Yet, we have had 60 consecutive months, I believe, of private sector job creation continuing through that period when the fiscal cliff deal was put into place, 12 million private sector jobs have been created. So we have heard now, consistent with some of the things that you have attempted to do with respect to Federal procurement, your support of the minimum wage, that we are going to grind the economy to a halt, the sky will fall. And so I just want to get into a little bit of the facts, if you will, related to why you are supporting a minimum wage increase, for instance. We have got a consumer demand problem, I believe, in America that we have been attempting to address moving forward, correct? Secretary Perez. Well, I support a minimum wage because, number one, it is fundamentally fair. Nobody who works a full- time job should have to live in poverty. I support it, number two, because it is smart. You know, when you put money in people's pockets they spend it. Employer after employer tells me, ``Tom, this is a consumption-deprived recovery.'' And that is because folks don't have enough money in their pocket. And so it is the fair thing to do and it is the right thing to do, and that is why voters in Nebraska, Arkansas, Alaska, and elsewhere have voted increases in the minimum wage, you know, and New Jersey, as well, because it is an idea that has had bipartisan support in this body. Whether it was Newt Gingrich in the 1990s, George W. Bush, his father, every President except two since FDR has signed an increase in the minimum wage. Mr. Jeffries. Right. And Americans both on the left and the right--blue states, red states--get it. If you put more money in the pockets of everyday Americans they will spend more. If you spend more you are going to yield economic growth. That, of course, is going to be good for the country. In terms of Federal procurement, there seems to be this argument that access to Federal procurement is a right, not a privilege. Seems to me that it is a privilege that should be earned, as it relates to whether contractors are doing the right thing by standards that already exist in law. Could you speak to sort of the efforts that the administration has taken to try to level the playing field so that good actors are getting access to Federal procurement and bad actors are not abusing taxpayer dollars? Secretary Perez. It is important to note that contractors already are--contracting officers are already required to assess a contractor's business integrity and ethics before awarding a contract. And when you are a contractor competing for business, you have got to do the same thing if you have subs. And by the way, that is not simply the right thing to do, it is the smart thing to do. No one wants to associate with a sub who has a bad rep. And so what we are simply doing in this rule is clarifying that breaking labor laws, if you have had multiple, you know, labor violations in safety or wage and hour, that is not consistent with business ethics. And there is a provision in this--in our regulatory structure here whereby after the rules are final and before they go into effect, there is a period of time that we have set up by design where businesses who think they have questions can come and get those questions answered, because our goal is compliance. Mr. Jeffries. Thank you, Mr. Chair. Secretary-- Chairman Kline. Gentleman's time has expired. Being mindful of the hard stop at 12:00 p.m., the chair will reduce to four minutes the time for question and answers on each side for the remaining members, and I think that will allow everybody to get a chance to ask their questions. So unfortunately, Mr. Guthrie, you are going to be limited to four minutes. We are starting with you, and you are recognized. Mr. Guthrie. Too bad I just have four minutes because I was going to praise working here together. And the chairman said this when he was giving his opening remarks, and he used the comment about you, said ``true to your word.'' And if you remember, when we had a--I guess this hearing last year, we had some concerns that I had of an example of the ESOPs in my area, which, I explained, particularly one, that allow hard-working taxpayers to create real wealth. And that is what we all want--people not just to survive, but to create real wealth for themselves and their families, as we discussed, hopefully be able to afford to send their kids to college, right? Those types of things. And you said sitting there, ``Well, I want to meet them.'' And for about a year, the place does work sometimes. You came to my office with your staff. My constituents came, explained their position, and we left with, there are some areas that we can agree and work on, and we have done that. And I really appreciate that because it was true to your word. You know, sometimes you hear things and you go for meetings and we all get busy. It is not that somebody is trying not to work it out together, but we really have, and I really appreciated you, my people that work in my office working with your office to hopefully to come to some agreement that is moving forward. And we talked earlier about ESOPs, and I would just like to give you a few moments to talk about ESOPs. And we said earlier, how do we create pathways and policies, not just through ESOPs, but any way, for hard-working taxpayers, I think you said middle-class, to earn--working people to earn real wealth? And so I'll just give you a couple opportunities to talk about, from our meeting to now, what you kind of discovered or maybe reacquainted yourself with ESOPs. And I guess I am running out of time, so I want to turn it over to you-- Secretary Perez. Sure. No, well, thank you. You were concerned that we had a provision in the proposed conflict of interest rule that--from 2010 or 2011 relating to ESOPs. You thought that was not a good idea to have it in there. Others agreed with you, and upon reflection, we agreed with you, as well. So the rule that will come out will not include the ESOP provision or proposal from before. What I have learned about ESOPs--we have a shared interest, Republicans and Democrats alike. We want to figure out how we build an economy that works for everyone. And as you saw with your constituents and as I have seen across the country, employee stock ownership programs are very effective ways of helping people across, you know, whether it is the cashier at the grocery store or--to the owner of the grocery store, giving them opportunities not only to build a nest egg, but when you have skin in the game in your job--and many ESOPs, their governance structures, they are giving people skin in the game. I am always happiest in my jobs when I feel like my voice is heard, and that is what so many ESOPs are doing. And that is why I think it can lead to this sense of shared prosperity. And I look forward to working with you, Congressman, moving forward to see, is there public policy that we can undertake that can help, you know, promote and expand a model that I think has had, you know, real success in building wealth for working people across this country in places like Kentucky, in places like Colorado. Anyone who has had the New Belgium Brewery, one of--it is the second-largest U.S. brewery in America, after Sam Adams, and, you know, that is an ESOP. And the CEO, she is a remarkable person who believes that we all succeed when we all succeed. Mr. Guthrie. Well, thank you. And you were sincere in all your efforts to work, and your staff was great to work with. And appreciate the result that we got. Secretary Perez. Thank you. Mr. Guthrie. I yield back, Mr. Chairman. Chairman Kline. Gentleman yields back. Ms. Bonamici, you are recognized for four minutes. Ms. Bonamici. Thank you, Mr. Chairman. Mr. Secretary, I have a list of thanks and two questions. First, thank you for your testimony and for your--the great work of your department. Thank you for your visit to the West Coast to help facilitate what I hope will be a lasting solution to the labor dispute at the West Coast ports. Thank you for your support for Job Corps. I have a great Job Corps program in my district up at Tongue Point in Astoria. And finally, thank you for your focus on paid family and sick leave. It is clear, as you recognized in your written testimony, that our policies have not kept pace with our workforce. As you note in your testimony, the United States is the only industrialized nation on Earth without paid family leave. I am beginning to, as you indicated in your testimony, see business support, because businesses recognize that these policies help with retention and recruitment. Intel in my district just implemented an eight-week paid time for new parents. I applaud them for that. My first question has to do with workforce development programs, which, of course, play an important role in our communities. Department of Labor grants have helped workforce programs in my district develop innovative partnerships. And I applaud the passage of WIOA last Congress. So can you first address what the Department's plans are to provide technical assistance to states and localities in implementation? And then my second question I will give to you and you can respond to both. Last Congress, I introduced a bill to reauthorize the Older Americans Act, and we have talked a lot about the importance of having policies that help support people creating secure retirements. But for many, as you know, staying connected to the workforce is necessary for achieving economic security. And I talk to constituents. The more mature constituents in my district really perceive that there is a lot of age discrimination out there. So can you talk about what the Department is doing and intends to do to support older workers and to make sure that they are not left behind in workforce issues? Secretary Perez. Sure. Ms. Bonamici. Thank you. Secretary Perez. I will take your questions in the order that you asked them. The Workforce Innovation and Opportunity Act is a great opportunity. It is well named. And we have spent a significant amount of time, and I am really appreciative of the work of our dedicated staff at the Department of Labor. We have done outreach to states; we have traveled the country. Frankly, Congress asked us to do about 18 months' worth of work in about 6 months, and we didn't quite do it in six months, but we did it in about 8 or 9. And we were meeting regularly with staff, and they understood that we were not asleep at the switch. Quite the contrary. And as a result, the rule--the proposed rule is at the Federal Register. And we really look forward to the comments, because this can be and it will be game-changing. I think there is so much we can do in this space. This is what it is all about, taking match.com to scale, recognizing that you take the job seeker where you find them. Some have a college degree or above and we need to just do a few things to help them get back in the workforce; some are coming out of prison; some are a person with disabilities; some are veterans. And we need to have tools in our toolkit to help everybody. And that is exactly what WIOA does, and I am very excited about the work that has been done and the work that can be done. It is all about scale and sustainability. Ms. Bonamici. Thank you. Secretary Perez. As it relates to the--your question about the Older Americans Act, we are going to be having a summit on older Americans. We did the working families summit-- Ms. Bonamici. Right. Secretary Perez.--that you were involved in last year. This year the White House will be doing a summit on older Americans that is going to deal with a wide range of issues relating to older Americans including retirement security, making sure that you can retire with dignity, and when you invest your hard- earned money, that you can make sure that somebody is looking out for you. The Community Service Employment for Older Americans program, our budget proposes a number of changes all designed to make the program work better. And I certainly look forward to working with you so that your interest and leadership we can put to bear. Ms. Bonamici. Thank you, Mr. Secretary. I yield back. Chairman Kline. Thank the gentlelady. Mr. Carter, you are recognized for four minutes. Mr. Carter. Thank you, Mr. Chairman. Secretary Perez. Morning, Congressman. Mr. Carter. And thank you, Mr. Secretary, for being here. As a new member of Congress, let me say that it is quite encouraging to hear all the compliments from the committee members about how you have obviously given a concerted effort to try to work with everyone here, so thank you-- Secretary Perez. There is a lot of common ground, and I want to find it and work with it. Mr. Carter. Well, as a long-time mayor and as a long-time state legislator, I can tell you that I am one who believes that a lot of our social ills can be resolved by jobs, so that is-- Secretary Perez. I worked in local government as well, so I know the rubber hits the road back in your old job. Mr. Carter. Absolutely. Secretary Perez. Yes. Mr. Carter. Well, listen, I want to talk to you real quickly about the H-2B program. That is something that I have an interest in, and it is particularly important in my district. And, you know, Congress, of course, has instructed the Department of Labor to work with Homeland Security on this, and I know that for many years the Department of Labor performed that role without formal rules. And in 2008, I believe you implemented some formal rules. What was the need for the formal rules at that time? Why was there a need for that? Secretary Perez. You need to have rulemaking authority to implement the underlying guidance. I mean, there is--the one thing--I don't know a program, Congressman, other than the H-2B program, where there has been literally more litigation, dating back to the Bush administration, and a host of decisions, one of which said that we, the Department of Labor--two of which now have said we, the Department of Labor, lack rulemaking authority to regulate in this space. And then in other settings--and I think this gets to your underlying question--we have attempted to, in related settings, issue guidance and administer the program through guidance. And there has been litigation in that setting. And on I think two different occasions courts have said, ``No, you can't simply run the program through the issuance of guidance; you need to have a notice and comment period if you are going to do that, as well.'' So this has been a, quite frankly, a frustrating enterprise because I recognize the importance of the program, as someone who had the eastern shore of Maryland, and we want to try to get it right. And that is why we have outlined, in a very short timeframe, a series of steps designed to get the program up and running, make sure it is fair to American workers, because that is part of our responsibility, and then also make sure it is fair to employers. Mr. Carter. Can you give me an update about where we are with the program? When do you expect it to--right now I think that it has been suspended, or-- Secretary Perez. Right, it has been--three things. We filed a motion to stay the court's ruling day before last, and it was unopposed by the other side. And that goal is to make sure we can get the program up and running right now. And then by April 30th we have committed to having an interim final rule in place so that rule will go into effect immediately, there will be a comment period, but while that comment period is in place the program is up and running. And then thirdly, the Department of Homeland Security, we had our-- we had gotten roughly 1,000 or more applications off of our assembly line over to DHS, you know, as of March the 4th, and they were in limbo, and that assembly line over there is already up and running again. So those are three very concrete steps designed to get the program moving again expeditiously. Mr. Carter. Great. Well, thank you. It is a good program and we hope that you will be able to get it up and running. Thank you, Mr. Chairman, and I yield back the remaining time. Chairman Kline. I thank the gentleman. Ms. Clark, you are recognized for four minutes. Ms. Clark. [Off mike.] Secretary Perez. Good morning. I think your microphone-- Ms. Clark. Newbie on the committee. Thank you for being here today. And thank you, Mr. Chairman. As you and I had a chance to discuss, I believe it is critical as we move forward to address income inequality in this country that we ensure that low and middle Americans still have the access to affordable, quality retirement savings options. And I appreciate the dialogue you have had with several of my colleagues here today and I really look forward-- and thank you for your time yesterday--on continuing to work with you as the department goes through its rulemaking process. So thank you for that. The issues that I want to focus on today are with equal pay and medical leave. As you know, women are still paid 78 cents to a man's dollar; and for women of color that gap--that wage gap is even greater. Nationally, that is a wage gap of more than $10,000 per year between working women and men. That is the equivalent of 86 weeks of groceries. So my first question for you is if you can tell me specifically how the Department of Labor is working to close this gap. And in the same line as my colleague from Oregon raised, only 13 percent of Americans have paid family and medical leave through their employers. And often we are finding--I hear from my constituents--that working families are being forced to choose between their economic security and the health and wellbeing of their families. Several states, including Massachusetts, California, Rhode Island, and New Jersey, have recently instituted paid leave and/or paid sick day programs. Is this a policy that you believe can be replicated in other states? And specifically, what initiatives is the Department undertaking to promote paid leave? Thank you. Secretary Perez. Thank you for both of your questions. And I certainly enjoyed our meeting yesterday. You know, equal pay, as the father of three kids, two of whom are daughters, is very near and dear to my heart. And we issued a report, as you know, to highlight the fact that working women still earn only 78 cents on a dollar. First law the President signed when he became President was the Lilly Ledbetter Act, but that is not enough. And that is why, as part of what the President did last year, he proposed--he directed us to issue an NPRM, which we have done, which proposes that covered employers would have to submit information relating to employee compensation. Lilly Ledbetter only found out she was getting taken advantage of when someone passed her an anonymous note, and so we have gotten a lot of comments on this proposed rule and we are working through those with an eye toward getting that finalized as soon as possible. With respect to paid leave, I have traveled the world on this issue--Australia, Canada, U.K., Germany, and elsewhere-- and whether it is a conservative ruling government or a progressive ruling government, they all embrace it. They recognize that we all succeed when women succeed. If our labor force participation rate was even, women-- female labor force participation, U.S. and Canada, in 2000 we had the same rate. Now they are eight points higher than us, roughly. That translates to, if we had kept pace we would have 5.5 million more women in the workplace. That is why we are working with states to--and local governments to help correct this. And through our grant-making and technical assistance we are going to continue to do just that. Ms. Clark. Thank you. Chairman Kline. Gentlelady's time has expired. Mr. Allen, you are recognized for four minutes. Mr. Allen. Thank you, Mr. Chairman. And, Mr. Secretary, thank you for-- Secretary Perez. Morning. Mr. Allen.--being here. I, too, am a new member of Congress. Secretary Perez. Congratulations. Mr. Allen. I, for 30 years, had the privilege of allowing folks to have a good job and be able to support their families, and I can think of no greater privilege for anyone to have that opportunity to create jobs and give folks the dignity of a good job. And with that respect, one--course, I am from Georgia, and we have, of course, had tremendous job growth. We lost about 360,000 jobs in 2008 because we were so dependent on one particular industry, and we have just about replaced those jobs with a diversity of jobs. And one of the things that we run into--two questions I want to ask you. One of things we are running into right now because of the growth in our state is getting skilled workers. And everybody I talk to--I don't know--welders are needed everywhere, apparently. And the other issue in our state is in our agriculture program. And, of course, we use the H-2A temporary agricultural worker visas. And, you know, I talk to our farmers and it is a real hassle to deal with that program. I mean, your folks seems to be making it almost impossible to use that program. And have you talked to any of our farmers about that program and how that program could be improved so that it is a little easier to use that program in our fruit and vegetable industry? Secretary Perez. I haven't talked to farmers in Georgia, but look--I am always looking for ways to make every program we operate more effective, and that is why I sat down with Congressman Guthrie's constituents to talk about ESOPs. They educated me a lot and I always look forward to listening and learning, whether it is H-2A, whether it is any issue before this committee that affects working people. As it relates to your skills issue, I hear that everywhere. And the challenge for us in the implementation of WIOA is really the challenge of we have got a lot of promising practices out there; we have got to take them to scale. We also have to build some new--build and/or fortify on-ramps to this skills superhighway, because we have five million job openings right now, and-- Mr. Allen. And these are not minimum-wage jobs. Secretary Perez. No, no, 500,000 are in I.T. Mr. Allen. We are spending energy talking about raising the minimum wage when we have got great-paying jobs out there. We just need to get folks to learn those skills to fill those jobs. Secretary Perez. I don't think those are either/or strategies. I think those are both and then some. There are 500,000 I.T. jobs right now, and that is why what we are trying to do through our investments in apprenticeship and elsewhere to build those pathways to prosperity. And again, this is not partisan stuff. If we fortify our community college system, if we build solid on-ramps for people to go into apprenticeship in I.T. or apprenticeship in health care--in South Carolina they are using tax credits--CVS is using tax credits-- Mr. Allen. We are doing the same in Georgia. Secretary Perez.--and put them into pharmacy tech programs, where they are paying, you know, good, solid jobs. So a lot of opportunity-- Mr. Allen. Yes. We have got a number of those programs going on, but also, if you would make time available for my farmers I think they would like to talk to you about that program. Secretary Perez. I would look forward to it. Mr. Allen. Good. Thank you. I yield back my time. Chairman Kline. Gentleman yields back. Mr. Courtney, you are recognized. Mr. Courtney. Thank you, Mr. Chairman. And thank you, Mr. Secretary-- Secretary Perez. Morning, Congressman. Mr. Courtney.--for your great service. Yes, good morning. Again, just want to thank you for, on page three and four of your testimony, telling the story of Katherine Hackett, my constituent who was, you know, in my opinion, almost an iconic example of how, number one, her determination combined with the assistance that the Department of Labor provided, you know-- Secretary Perez. Match.com at work. Mr. Courtney. It reset her life. You know, and I think it is also important just to flesh out a little more of her story. She is the mother of two sons who are serving in our military--one is Special Forces and another who is a physician down at Fort Hood. Again, at one point she and her family were feeling a little sort of let down because her unemployment ran out, but again, because of a lot of concerted effort by your team and-- Secretary Perez. And you, sir. Mr. Courtney.--and, you know, we were able to get her at Norwich Orthopedics, where--I just wanted to read to you--I sent her a quick note that you mentioned her in today's hearing, and this is the note that her employer just gave her a couple days ago, which is, ``You have exceeded my expectations as the operations manager. I can honestly say that you are the best operations manager we have ever had. Keep up the good work.'' You and I visited that facility. It is a sprawling orthopedic practice. I mean, it is just a beehive of activity, and she is kind of the quarterback, making sure people find their way. Again, a year ago she was basically living at home with 58 degree temperatures trying to save money and electricity costs because she was, again, disconnected from the workforce for no fault of her own. And it just shows that supportive employment, which is what you guys stepped up with to get that sort of bridge for her to establish herself, is a model that can work. So WIOA obviously was all about trying to use that kind of collaboration, and I think you called it partnerships with employers. And maybe if you could just spend a minute talking about the implementation of the regs and the rollout that is hopefully going to take place this year? Secretary Perez. Well, will take place. And, you know, the proposed rules are at the Federal Register. Those rules will not be a surprise to people, I think, because they are the product of a tremendous amount of collaboration. The Thanksgiving and religious holidays of December were nonexistent for a lot of our staff because they were working day and night to get those done, doing a lot of listening at the state and local levels, here with your teams. And I--again, I think we have to--this is what we have to do now with WIOA implementation, it is partnership at scale, match.com at scale, building these new on-ramps. Because we met with 50 employers at the White House last week to figure out this strategy for tech, because we have got 500,000 tech jobs right now. And employers were saying, you know, ``We have on-ramps that aren't existent right now, and if we don't do this, shame on us, and we can do it.'' And so I am looking forward to taking the WIOA framework and making sure that we can scale-- because, you know, Katherine Hackett is a great success story, and there are literally millions of Katherine Hacketts out there that we need to reach, and millions of employers who want to hire the Katherine Hacketts, and we have got to do that match.com work at scale. Mr. Courtney. The appetite for this, in terms--because most employers I talk to have no idea WIOA was signed into law. I mean, it was amazing. Mr. Kline was there. I think there was one TV camera. The media just don't like to see-- Secretary Perez. We have a marketing challenge, yes. We have got to get the word out. Mr. Courtney. But when the word gets out I think it is going to be just a smashing success. I yield back. Chairman Kline. I thank the gentleman. Mr. Messer, you are recognized for four minutes. Mr. Messer. Thank you. Thank you, Mr. Chairman. Secretary Perez. Morning, Congressman. Mr. Messer. How you doing? Secretary Perez. I am doing well, sir. Mr. Messer. I had a couple different topics--I am trying to find it here, but a couple different topics I wanted to chat with you about briefly. And thank you, again, for your testimony in front of the committee. First I wanted to ask you a quick question about stop-loss insurance. As you know, it is a financial risk management tool that allows self-insuring employers to protect themselves against unusually high health care claims. Over the past few years this administration has repeatedly signaled interest in regulating stop-loss insurance as health insurance even though this coverage does not pay medical claims directly, doesn't have a network of physicians, or perform any of the traditional functions of health insurance. And I was wondering, are you aware of any attempts to regulate stop-loss coverage by this administration? Secretary Perez. I would have to get back to you on that. Our Employee Benefits Security Administration is the entity in the Department of Labor that addresses issues relating to, you know, health care, and ERISA plans, and things of that nature. And what I would like to do is talk to them so that I can give you an accurate answer. Mr. Messer. Okay. Thanks. If you could get that back to us in writing-- Secretary Perez. Sure. Mr. Messer.--I would appreciate it. You know, stop-loss insurance is important sort of umbrella coverage for those that provide self-insured plans. The second question I would like to ask you about is, with so much of the burden for accumulating retirement assets shifting to the individual, as well as understanding how to convert those assets to guaranteed income that can't be outlived through increasingly longer times in retirement, it strikes me that more advice is needed for American workers, not less. I worry about expanding the definition of--I worry about what expanding the definition of ``fiduciary'' will mean to fewer--that it could mean fewer advisors will offer advice on retirement assets and fewer people will receive it. It is that simple to me: more need and less capacity. And people want advice about all of their financial picture, not just their non-retirement assets. Secretary, what assurances can you give that the rule your office is on the verge of releasing will lead to more advice for American workers and not less? Secretary Perez. Well, I agree with you that we want to make sure that more people have access to good advice. And it has to be sound advice. And, you know, I have had a--I have participated in many, many outreach sessions and they have all been very, very helpful, with industry and others. And, you know, folks have said that--and these are folks who have been doing this for a living, and they are fiduciaries right now, and they deal with large investors and small investors, and they say, ``We treat them the same.'' And the concern that they express to me is, consumers don't know when they walk in the door whether someone has taken an oath to look out for their best interest or whether they haven't. Now, that is not true for lawyers and that is not true for doctors. You know, when you go to your doctor they--you know the oath they have taken. And that creates uncertainty. And I think for small investors it is doubly important that the advice they are getting is in their best interest. And as I said earlier, Jack Bogle, the founder of Vanguard, who has been in this business 64 years, said, ``I learned early on when you take care of your customer and put their interest first it helps the customer--it is good for the customer and it is good for business.'' Mr. Messer. Well, yes. I think we all agree with that. I think the question is, will the unintended consequences of this decision be that people get less advice, not more? Chairman Kline. The gentleman's time has expired. Mrs. Davis, you are recognized. Mrs. Davis. Thank you, Mr. Chairman. And, Mr. Secretary, thanks for being here, for always standing up and working hard for the-- Secretary Perez. Look forward to coming out to your neck of the woods. Mrs. Davis. Yes, absolutely. Just for the record, and as background, as well, we talked earlier today, but I wanted to ask you to respond to what is a time-sensitive issue in California. As you know, in 2013, the Department of Labor held up public transit grants to all California transit systems because of a dispute over whether or not a 2012 state-passed pension law violated the so-called Section 13(c) labor protections for transit workers. So all of those transit grants, as you know, were put on hold, pending the outcome of a Federal court case. And that case, California v. the U.S. Department of Labor, was decided in California recently and the funds were ordered to be released, but the department has plans, as I understand it, to appeal that. I wanted you to, if you could respond and perhaps get back to us in a timely fashion. What does the department plan to do with the transit funds in the interim as the appeals process makes its way to the court? Secretary Perez. Well, thank you for your question, and we did chat briefly about this earlier, and I certainly understand the importance of FTA transit grants. I think I was three days on the job when I had my first conversation with Governor Brown. And if it wasn't three days it was early on. I knew where the bathroom was, but I was still learning the job. And I have learned a lot about 13(c) since then. It is really, you know, it is a law from Congress which says--it is really a promise to bus drivers and other employees who work for federally funded transit agencies. We have been in litigation, as you know, for some time. We have not denied any certifications to any transit agencies since the court issued its opinion. Our team has been in touch with California as recently as yesterday. Our goal is to work out a solution that works for everybody, and I personally--as I said, I have spoken to the governor, I have spoken to his chief of staff. And while it is still in litigation so there are limits to what I can say, I can certainly tell you that we are looking for solutions that will allow us to certify transit grants during the pendency of the litigation, because I recognize, as a local government guy, that is pretty important. Mrs. Davis. Yes. Is it realistic to look at a timeframe of about two weeks to have a written response, at least to the committee, in terms of where we are and what the plans are-- Secretary Perez. Well, I will do my best to get you a response that is accurate and expeditious. Mrs. Davis. Okay. Thank you. Thank you, Mr. Secretary. And, as well, there is, as you know, another issue in California. California is helping to develop an automatic IRA, and I would like to ask for your help in doing that so that we are true to ERISA, as I know we need to be, and are able to move forward with that. Secretary Perez. I have had a number of conversations with stakeholders in California and elsewhere, including Maryland, who want to certainly help promote alternative ways of encouraging people to retire--or save for retirement, and we want to make sure that we do that in a manner that ensures the proper consumer protections, and that has been a very robust and I think productive and constructive process. And I look forward to continuing that. Mrs. Davis. That is great. And finally, I know you have dealt with the conflict of interest rule while you have been here today, and certainly there are lots of best practices that are out there in the industry, as you noted earlier, as well as work that consumer groups have done. And so I hope that we can move forward and try and get the best result out of that. Secretary Perez. I agree. I think we can thread the needle-- Mrs. Davis. Thank you. Secretary Perez.--as long as we listen. Chairman Kline. Gentlelady yields back. Mr. Secretary, I think we are going to make it. Pending the length of the ranking member's closing remarks, we will be out of here before 12:00. Mr. Scott, you are recognized for any closing remarks? Mr. Scott. Thank you, Mr. Chairman, and I will be brief. I just wanted to thank the secretary. Particularly, he mentioned the sensitivity of H-2B visas on the eastern shore. Certainly in Hampton, West Virginia, it is a huge issue and we appreciate your expeditious work on that, and on pensions. Having people get ripped off of their life savings by unscrupulous advice I think is something we need to protect against--and pensions generally, because you mentioned the multiemployer, all the pension--many pension funds are at risk and we need to make sure that they are protected. The economy is on the right track. We are going in the right direction. The growth has been consistent but, as we have said, not quite robust enough, so we still need to do more work. But we don't want to go backwards, and we need to make sure that we have an effective Department of Labor so that you can continue the good work that you have been doing. That is going to require appropriate budget, and we will be reviewing that budget on your behalf. So thank you, Mr. Secretary, for being here. Yield back. Chairman Kline. I thank the gentleman. Thank you again, Mr. Secretary, for being here. I think we have had a pretty robust discussion, covered a lot of ground. I appreciate your prompt and frank responses to questions on a wide variety of issues. Your department covers so many areas. It is very clear that we are going to disagree--probably you and I, and on each side of the aisle--on some of the issues about whether minimum wage should be established by states or the Federal Government, and so forth. But, I think the level of cooperation is very encouraging. We have got some very, very big jobs in front of us, including the continuing work to complete the work on the solvency of the PBGC and the multiemployer pension plans. I am looking forward to that work, and I thank you very much for being here today. There being no further business, committee stands adjourned. [Additional submission by Chairman Kline follows:] [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT] [Additional submission by Mr. Sablan follows:] [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT] [Questions submitted for the record and their responses follow:] [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT] [Whereupon, at 11:50 a.m., the Committee was adjourned.] [all]