Department of Labor

Executive Summary

Congress established the Department of Labor (DOL) as a cabinet-level agency in 1913 to foster, promote, and develop the welfare of the wage earners of the United States, to improve their working conditions, and to advance their opportunities for profitable employment. In today's economy, this mandate requires the department to find new ways to build a highly skilled workforce whose talents and productivity can compete in an international, high-technology market.

With more than 18,000 employees, the department has budgeted $42.9 billion in fiscal year 1993. For fiscal year 1994, the President has requested $40.4 billion. Although the majority of DOL's budget is expended on service and benefits, most department personnel work in enforcement.

The department's current challenge is to respond to the massive structural changes taking place in the U.S. economy and abroad. The 21 recommendations developed through the National Performance Review (NPR) and DOL's ongoing reinvention efforts provide the beginning of a blueprint for how the government can best respond to the fundamental changes workers and their employers face.

The report recommends ways to cut red tape by calling for changes in program design, processes for setting standards and resolving legal issues, and reporting requirements. The report encourages acceleration and expansion of DOL's programs to enhance reemployment programs for occupationally disabled federal employees--a focus that will better meet the needs of those employees and their employers.

Another goal related to the cutting of red tape is the development of a single, comprehensive worker adjustment strategy to replace the numerous categorical programs that currently impede service delivery.

Barriers to effectiveness are also present in the rulemaking and dispute resolution processes within DOL. The report proposes changes to lessen the adversarial nature of these procedures.

Two of the recommendations will reduce the red tape and cost involved in administering Employee Retirement Income Security Act of 1974 (ERISA), by improving the processes through which Pension and Welfare Benefits Administration (PWBA) obtains pension-related information.

Finally, redirecting the Mine Safety and Health Administration's (MSHA's) role in mine equipment regulation from prototype testing to on-site quality assurance will make it easier for equipment manufacturers to enter international markets. Establishing license and service fees to offset the costs of providing MSHA services is also proposed, as is providing MSHA with authority to determine the source from which it obtains research and development support.

Five recommendations represent bold departures from the past and introduce competition and market forces to crucial DOL activities.

The proposed One-Stop Shopping concept, based on service-integration concepts emerging in progressive state and local governments, uses information technology to facilitate access to job-related information. A related proposal would create a Workforce Development Council to implement these changes.

Market dynamics also underlie the proposal to shift more of the responsibility for ensuring workplace safety and health from the government to those directly involved in the workplace. The report also proposes that DOL contract out the federally operated Job Corps centers that are not already operated under contract.

Recommendations aimed at empowering employees to get results suggest shifts in management philosophy and program focus. As a first step, the report encourages the enforcement agencies within the department to use organizational networks to foster customer service, and recommends increasing DOL assistance to states in collecting delinquent Unemployment Insurance Trust Fund contributions.

The entire federal budget is affected by the Consumer Price Index (CPI), which needs to be updated. Research suggests that if a more recent CPI market basket had been used last year, the resulting 0.7 percent reduction in the CPI would have reduced the federal budget by more than $4 billion by more accurately reflecting inflation's impact on automatic spending programs.

To promote better service delivery, new management approaches are proposed for the Solicitor's office. Consistent with the recommendations to integrate employment and training services, the report recommends that the VETS program be consolidated into ETA.

The report also advocates the dedication of more resources to efforts to reduce fraud in the Federal Employees' Compensation Act (FECA) program.

Secretary of Labor Robert Reich has initiated projects focusing on the school-to-work transition, the needs of displaced workers, and the needs of employees for ongoing training and development opportunities.

Many of these issues were highlighted by the President at a Conference on the Future of the American Workplace, jointly sponsored by DOL and the Department of Commerce, during the week of July 26, 1993. DOL's internal teams will continue the work of NPR through implementation of the recommendations in this report.

DOL can save the federal government $252 million through fiscal year 1999 by updating its programs, conducting its work in less cumbersome ways, and designing its activities to respond to market forces. These changes will improve the department's ability to serve the needs of U.S. workers and provide more accurate data for entitlement and tax adjustments.

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