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Labor Budget Cut 5%, Safety Spending Up in 2012 Plan

President Barack Obama proposed cutting the Labor Department’s budget 5.4 percent to $12.8 billion, cutting some job creation programs deemed redundant and adding support for mine safety and worker protection efforts.

Labor Department discretionary spending for the fiscal year beginning Oct. 1 would drop from $13.6 billion in 2010, the last time agencies had an enacted budget, according to Obama’s budget outline released today.

The savings reflect a shift in funding away from job- training programs that are “underutilized,” the administration said in its budget proposal.

The U.S. Chamber of Commerce, the nation’s largest business group and frequent critic of department initiatives from the Obama administration, said the proposed reduction was inadequate.

“Given the significant increases since 2008, five percent should just be the starting point,” said Glenn Spencer, executive director of the Chamber’s Workforce Freedom Initiative.

A program called Job Corps, which helps train low-income young people, gets a proposed 25 percent cut in its construction budget.

“Job Corps provides valuable education and career training for many disadvantaged young people, but as all agencies are working to identify savings, the budget reduces the program’s construction budget by 25 percent,” according to the budget.

Underfunded Programs

The budget proposes a boost in spending on “worker protection and mine safety programs that were underfunded in the previous administration.” Funding for the Mine Safety and Health Administration is increased to $384 million from $365 million, and funding for the Occupational Safety and Health Administration is increased to $583 million from $559 million. The agencies, known as MSHA and OSHA, are charged with penalizing companies that violate worker safety laws.

Increased MSHA and OSHA funding may lead to “much needed safety and health regulations,” said Peg Seminario, director of worker safety issues at the AFL-CIO, the nation’s largest union group. The budget shows “protecting the safety and health of Americans workers is a priority for the administration.”

The budget proposes raising premiums charged to employers by the Pension Benefit Guaranty Corp., which backstops private pension plans, by $16 billion for 10 years, and levy higher premiums on the riskiest companies. The proposal, which would have to be approved by Congress, wouldn’t take effect for at least two years.

The budget also boosts funding for programs that ensure “integrity” in the unemployment insurance program and avoid improper payments to unemployed workers. The budget proposal said that employers have faced higher taxes because states have had to finance high levels of improper payments.

The proposal also calls for helping states launch paid leave programs for workers who need to take time off to care for a child or other relatives.

To contact the reporter on this story: Holly Rosenkrantz in Washington at hrosenkrantz@bloomberg.net.

To contact the editor responsible for this story: Larry Liebert at lliebert@bloomberg.net

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