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1975/04/11 - President and Secretary Dunlop
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1975/04/11 - President and Secretary Dunlop
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James Cannon's Meetings Files
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The original documents are located in Box 43, folder "1975/04/11 - President and Secretary
Dunlop" of the James M. Cannon Files at the Gerald R. Ford Presidential Library.
Copyright Notice
The copyright law of the United States (Title 17, United States Code) governs the making of
photocopies or other reproductions of copyrighted material. Gerald Ford donated to the United
States of America his copyrights in all of his unpublished writings in National Archives collections.
Works prepared by U.S. Government employees as part of their official duties are in the public
domain. The copyrights to materials written by other individuals or organizations are presumed to
remain with them. If you think any of the information displayed in the PDF is subject to a valid
copyright claim, please contact the Gerald R. Ford Presidential Library.
Digitized from Box 43 of the James M. Cannon Files at the Gerald R. Ford Presidential Library
2PM - Meeting with President
and Sec. Dunlop
Friday, April 11
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-
GLEATE FORD FIBRAST
THE WHITE HOUSE
WASHINGTON
April 10, 1975
MEMORANDUM FOR:
JIM CANNON
FROM:
ROGER D. SEMERAD RMS
SUBJECT:
LABOR ISSUES
The attached material should be helpful in your preparation for
tomorrow's Presidential meeting with Secretary Dunlop. This
information (in a different format) was submitted to the President
March 20, by Director Lynn. It is my understanding that Jim Connor
had this material for use in developing the President's briefing paper.
Attachment
Labor-Management Relations
Responsibility for Policy, Communications, and Operations
Four executive branch agencies have major roles in labor
relations:
Federal Mediation and Conciliation Service -- deals with
private sector labor relations (legislatively) and public
sector labor relations (by policy determination). All
industries are covered except airlines and railroads.
Functions are limited to mediation, encouragement of
arbitration, and technical assistance.
National Labor Relations Board -- treats with the representa-
tion (determining appropriate bargaining units and worker
choice of unions) and unfair labor practices.
National Mediation Board -- treats with labor relations for
airlines and railroads, including mediation, representation,
unfair labor practices, and grievance resolution.
Department of Labor -- The Department administers the Landrum-
Griffin law and the executive order governing Federal employee
labor relations. It has no specific authority to engage other
major labor relations activities.
Mr. Usery, Director of the Federal Mediation and Conciliation
Service, was also appointed a Special Assistant to the
President for labor relations on January 5, 1974. The
description of his responsibilities included energy related
labor relations, coordination of all mediation and other
labor relations activities in both public and private sector,
and long-range development of programs to promote labor-
management peace.
Historically, Secretaries of Labor have been appointed from
the academic or legal community rather than from the labor
movement. Due to their stature and neutral position past
Presidents have looked to them as the informal coordinators
of labor relations policy. Former Secretary of Labor Peter
Brennan came directly for the labor movement.
Executive branch labor relations policy can be viewed as
having two facets: mediation of major labor disputes and
long term structural and legislative policy.
2
You may wish to make the following gross distinctions:
1. Look to Dr. Dunlop for advice on matters of long-term
policy affecting labor relations in his capacity as a
member of the Economic Policy Board and the National
Commission on Productivity; as Chairman of the President's
Labor-Management Committee and the Collective Bargaining
Committee in Construction; and as Secretary of Labor.
Legislative policy development would clearly fall within
his responsibilities, as well as the focal point for
communications with labor and management on labor
relation policy matters (other than productivity - Vice
President Rockefeller).
2. Look to Mr. Usery for the settlement of major disputes,
recognizing that it is inappropriate for him to take
public policy stances that would adversely affect his
"neutrality," which is the essence of the effective
mediation function, or to deal with labor and management
on major policy questions. Mr. Usery should look to
Dr. Dunlop for advice on long-term policy problems.
Labor-Management Relations (cont.)
Legislation
Farm labor relations
Agricultural labor relations is excluded from the National
Labor Relations Act (NLRA) In recent years, an increasing
number of bills have been introduced in Congress to cover
agricultural workers. The most recent public position
taken by the Administration was in a statement by then
Secretary of Labor George Shultz, in a statement before
the Senate Labor subcommittee, on May 6, 1969, in which
he endorsed the notion of creating a body under NLRA to
handle agricultural labor relations.
The Department of Labor has consistently favored obtaining
coverage of farmworkers under NLRA which would provide
for regulation of union organizing and the adjudication of
unfair labor practices before the National Labor Relations
Board (NLRB) Cases before the NLRB are closely watched
by opponents of coverage extension to be sure the Board
does not exceed its authority. Last December, Labor stated
that it was developing a new draft bill but had not yet
discussed it with Agriculture.
The Department of Agriculture has favored the need for
Federal legislation to establish a legal means of settling
labor disputes in agriculture. However, the Department
opposes efforts which would extend the NLRA in its current
form to agriculture because of the unique characteristics
of that industry, and the need to establish mechanisms to
protect the welfare of farmers and the consuming public.
DOL and USDA are negotiating on a possible bill, but no
draft bill has been submitted.
Response
Seek the Secretary's views on the likelihood of such legislation.
Ask that he submit a draft bill as soon as possible so that
the major issues can be brought out for Administration decision-
making with the views of all the involved agencies fully
considered.
2
-- Federal labor relations
(See Item III-B in March 20 package) .
-- State-local labor relations
(See Item III-C in March 20 package)
-- Construction labor relations
Dr. Dunlop has had a deep and long-term involvement in
construction labor relations and wishes to pursue some
issues. The President recently granted him a charter in
this area -- the Collective Bargaining Committee in
Construction. In fulfilling this charter he may wish to
suggest legislation to regionalize collective bargaining
perhaps to spur the parties. This may be a useful technique.
Labor-Management Relations (cont.)
Additional issues
We do not know what Secretary Dunlop has in mind for long-
term structural reform in the maritime, cement, and food
distribution sectors. In construction, he already has a
charter on construction. In addition, a major de-regulation
effort is underway in the transportation sector (CAB and ICC)
as well as the reorganization of the Northeast Railroads.
There are many complicated labor relations facets which
Secretary Dunlop could usefully pursue, particularly in the
railroad sector. You may wish to ask him to assist Secretary
Coleman as a priority effort.
It might be appropriate to ask Secretary Dunlop to prepare a
major paper outlining the major problems in various sectors
and suggesting alternative strategies and priorities for
approaching them.
2.
Coordination of EEOC, OFCC and Federal Contracting Agencies
Secretary Dunlop suggests that there is a need to coordinate
the EEOC, the OFCC and Government contracting agencies, and
that such an opportunity is at hand. Secretary Dunlop's
conversation with Cap Weinberger concerning this matter, as it
relates to universities, involves HEW's final regulations on
Title IX of the Higher Educ. Act of 1972. The regulations will
enforce the Federal law banning sex discrimination by educational
institutions receiving Federal aid.
The pension benefit provisions under the new regulations,
however, conflict with those under EEOC regulations.
Secretary Weinberger in order to resolve these conflicting
policies has recommended that the President direct the Domestic
Council to convene HEW and Labor, in conjunction with EEOC, to
develop immediately a single approach to the pension benefits
issue. (OMB is doing an issue paper to the President on this
subject). We concur with Secretary Weinberger's recommendation.
A related matter, discussed in Item IV-A in the March 20 package
concerns the proliferation of programs using the Federal
procurement system to attain socioeconomic objectives. E.O. 11246
was the first program to require Federal contractors to take
affirmative action to increase employment for minorities. Now
there are similar programs for women, the handicapped, and
veterans. One function of the newly created Office of Federal
Procurement Policy is to coordinate policies and procedures
involving the Federal procurement system. Since the Office's
creation, Hugh Witt, Director of OFPP has met with the contracting
agencies as well as DOL and believes that a framework has been
set-up in which conflicting policies and rulings concerning the
Government contracting agencies can be resolved.
However, there will be continuing problems of conflict between
different negotiations affecting the same private entities who
both are Government contractors and recipients of Federal aid
(e.g., universities). DOL fears such a conflict in HEW regulations
respecting the handicapped under a proposed executive order. HEW
has proposed that the Civil Rights Act of 1964 should be amended
to add HEW to the Equal Employment Opportunity Coordinating Council
(now consisting of Justice, EEOC, DOL, and CSC) in order to provide
a continuing forum to resolve such conflicts.
3.
Follow-up on Education and Work
Background
Your Ohio State speech highlighted the need for better fusing
education and work and in particular easing the transition
from school to the workplace. For some years, Administration
task forces have had difficulty in clarifying these and
related issues and developing plans that detail appropriate
Federal responsibilities. Following your August speech, the
Departments of HEW, Labor, and Commerce commenced to develop
an action plan. You also charged the National Commission for
Manpower Policy to look into this area. The Secretaries
recommended a series of approaches which required further
refinement and cost analysis. A follow-up paper was submitted
calling for the creation of a cabinet committee, a Presidential
council and other structural overlays. Your commitment was
also sought for specific concepts (e.g., career education,
competency based education) and specific program techniques
(use of television by HEW, pilot labor market data collection
by the DOL). The combination of concepts and tools did not
add up to a practical plan of action.
Domestic Council and OMB staff then met with agency personnel
to seek ways of recasting recommendations that would define a
Federal role more clearly, translate concepts into concrete
initiatives, avoid duplicative overhead, and eliminate possible
new spending items. A revised set of recommendations has not
yet been submitted.
Next step
The Secretaries of HEW, Labor and Commerce with the advice,
as appropriate, of the National Commission for Manpower Policy,
should be directed to complete a revised paper that articulates
a reasonable Federal role, provides a unified strategy, specifies
achievable objectives, and gives cognizance to budgetary
constraints. A completion date of June is recommended. Emphasis
on the coordinated and effective management of existing programs
is of foremost importance.
4 (a)
Permanent Unemployment Insurance (UI) Legislation
(See item I-A in March 20 memo)
The Department of Labor wishes to recommend several major
changes to the UI law. The most recent proposal had a
projected annual cost of $3.5 - $4.9 billion for FY 78-80.
The Department has not furnished the analyses needed to
answer basic questions.
Extend coverage to farmworkers, domestic workers, and State
and local employees
Such extensions are rational and would preclude future special
assistance provisions in times of economic stress. There is
no substantial opposition to these extensions either by labor
or business. This area should be pursued with the following
caveat -- coverage of State and local employees under the
minimum wage law is under review by the Supreme Court and an
adverse constitutional ruling may result. Although the lead
constitutional issue may not be present in a UI extension of
coverage, it will be a hard policy issue since it involves
a Federal imposition of costs on State and local governments.
(Less contentious methods of achieving this objective might
be possible, such as conditioning the provision of temporary
UI benefits for State and local employees after a specified
date on the enactment of permanent State law).
Increasing the Federal Unemployment Tax Act (FUTA) Wage Base Rate
Labor Department staff is actively promoting a raise in the
FUTA wage base (from $4,200 to $6,000) and the tax rate (from
.5% to .55% - .77%). FUTA finances most extensions of benefit
duration and the administrative costs of the State unemployment
insurance and employment services. Currently, the benefit
extensions are financed by repayable general fund advances.
At some time in the future, action will be required for added
revenue. At this time it would be inconsistent with the
recent enactment of tax reductions and needs analysis. Key
unanalyzed issues are: (1) what is the effect of the change
on State UI experience rating systems, (2) should State
administrative costs be 100% Federally financed, especially
when many of the beneficiaries do not pay FUTA and State
interest in the management of the program is lacking, (3) is
it more desirable to raise the wage base than increase the rate,
2
(4) should the wage base be indexed or should more frequent
Congressional review be prompted by a fixed wage base/rate.
Benefit duration
Currently, regular benefits are available for 26 weeks and under
the permanent law. They may be extended to 39 weeks on a State
by State basis under specified economic conditions. Labor
proposes to introduce a whole new concept of extended individual
duration not tied to economic conditions. Key issues are: What
is the "need" for the change; what effect will it have on worker
behavior.
Weekly benefit amount standard
Labor seeks to mandate a Federal benefit amount standard that
would require States to provide compensation of at least 50%
of the worker's former weekly wage up to a maximum of 66 2/3%
of the State average weekly wage. While this appears like a
substantial reduction from the worker's previous wage it is
about 70% of previous take home pay, according to a study by
Professor Martin Feldstein. This study based on work done
for the JEC shows that more analysis is needed to permit
informal judgments on the proper balance between income
replacement and work incentives. This work and similar
analyses is ignored by the Department of Labor staff.
Recommendation
We recommend the development of legislation be limited to the
following:
-- Extension of coverage to all workers.
-- Legislation to establish a national commission along the
lines recently recommended by the UI Advisory Council
including a short-term financing study.
Such a package will demonstrate the desire of the Administration
to move progressively, based on facts and data, into reform of
unemployment compensation.
4 (d) . Workers' Compensation Issue
See Item I-C in the March 20 package.
Item I-B, "Black Lung Legislation Threat" is related.
5 (a).
Quality of administration -- OSHA, (Five items in
the Mar. 20 package V-A through E.)
Later information:
-- Attachment V-B, "Health Standards." The DOL request
for an exemption for OSHA from the Executive order
requiring inflation impact statements has been denied.
An anonymous DOL official has been quoted in the trade
press that the Executive order was intended to harass
OSHA. A DOL-requested meeting with OMB and the Wage
and Price Council was held this week to give clarifica-
tion and assistance regarding the special problems of
OSHA.
-- Attachment V-C, "Interagency Jurisdiction Problems."
Despite agreement between the Undersecretaries of
Labor and Transportation, OSHA is refusing to respond
to DOT proposed agreements. (DOT has also not responded
to OSHA's proposal.)
-- Attachment V-E, "Federal Enforcement Staffing." OMB
has just received a letter from Secretary Dunlop re-
porting very little activity toward refining the system
approved by OMB in January, and almost no specific plans
on target dates. It also noted that the Secretary's
office should be included in the further OMB/OSHA work
on the system. OMB will shortly prepare a reply to the
Secretary's letter.
5 (a)
Quality of Administration - Pensions
(See Item III-A in March 20 package)
In addition, the DOL has requested a Level IV position for the
Pension Benefit Guaranty Corporation. This request was denied
on the grounds that it would be contrary to Congressional intent
that the Corporation's employees be non-political, and the
limited supply of Presidential pool positions must be reserved
for his most urgent needs. Also, Secretary Dunlop in a
conversation with Paul O'Neill suggested that a Level V position
is needed to get the pension program moving. We believe that a
new Level V position is not the answer. What is needed is
utilization of existing positions and an implementation plan
keyed to the resolution of basic issues. Raising grade levels
does not provide solutions.
5 (a) Quality of administration -- OFCC
This program has been a perennial concern of the Department's
and OMB's since its inception in 1966. This program, that
requires Federal contractors to take affirmative action to
increase employment opportunities for minorities and women,
has received increasing budgets with few visible signs of
impact. A large part of the program's ineffectiveness can
be directly related to poor management. There has been no
effective management control within OFCC and no OFCC leader-
ship of the government-wide affirmative action program. An
attempt has been made to strengthen OFCC's leadership through
the development of a Program Guidance Memorandum for the
agencies and evaluations of the agency's affirmative action
efforts. This past budget season, the PGM was sent to the
agencies too late to impact on their budget planning cycles.
No reliable evaluations have taken place. In the FY 1976
allowance letter, OFCC was directed to develop by March 7,
1975, a strategy for carrying out evaluations of the compliance
agencies. As of April 10, 1975, OFCC has not submitted their
evaluation strategy.
If the OFCC program is allowed to continued as is, we can
anticipate continued pressures from Congress similar to that
of a recent GAO report which amounted to a documented indict-
ment of DOL's performance in the implementation of the executive
order.
Response
Secretary Dunlop should be encouraged to give a high priority to
improving the management of this program.
5 (d)
Work with Productivity Commission on Long-term Growth
of Productivity
Background
The Commission's work has a major labor relations component.
Secretary Dunlop was chairman of the Productivity Commission
and has a long-standing interest in this issue. In your
speech on the economy last October, you highlighted the
importance of a continued effort on improving productivity,
singling out the areas of health, construction, State and
local government, transportation, and food. You also advocated
stimulation of development of labor management committees to
explore the issues. A bill to extend authorization for the
Commission for three years was sent up on March 20 by
Secretary Simon. Mr. Dunlop was somewhat involved in the
bill's drafting. There are two competing bills, authorizing
broader programs at higher spending levels. Hearings have
been held.
Response
The President could reaffirm his commitment to the pursuit of
ways to improve productivity and express his conviction that
Secretary Dunlop will work closely with the Vice President,
the key person in this area.
THE WHITE HOUSE
WASHINGTON
April 10, 1975
MEETING WITH SECRETARY OF LABOR JOHN T. DUNLOP
Friday, April 11, 1975
2:00 p.m. (60 minutes)
The Oval Office
From: James E. Connor of
I.
PURPOSE
To meet with Secretary Dunlop in order to discuss several broad
issues of mutual concern.
II.
BACKGROUND, PARTICIPANTS & PRESS PLAN
A.
Background: This is your first private session with Secretary
Dunlop since his swearing in on March 18, 1975. You have
met with him several times, however, in Economic-Energy
sessions.
This will be the fourth in a series of meetings with your new
Cabinet officers. It is intended to enable you and the Secretary
to get to know one another better, and to enable each of you
to indicate general policy areas and approaches you consider
important.
B.
Participants: Secretary of Labor John Dunlop, James Connor
and James Cannon.
C.
Press Plan: Announcement to the Press. Press Photo
opportunity at opening of meeting and David Hume Kennerly
photo.
- 2 -
D.
Discussion: The Secretary has suggested several items he
would like to raise with you.
1. The title and role of the Special Assistant to the President
for Labor Relations.
In January 1974, William Usery, in addition to his duties as
Director of FMCS, was appointed Special Assistant to the
on
President for Labor Relations. His mandate is the:
"coordination of the Government's mediation activities
and other labor relations activities involving the public
and private sectors of the economy, including airlines,
railroads, trucking and Federal, state and local governments.
The President has also asked Mr. Usery to submit to
him recommendations for the systematic development
of long-range governmental programs to promote
labor-management peace in each of the sectors of his
assigned responsibilities. In carrying out this
responsibility, Mr. Usery will work closely with all
appropriate governmental agencies.'
Mr. Usery will be meeting with you following the Dunlop meeting.
2. National Mediation Board.
The Railway Labor Act established the National Mediation
Board as an independent agency in the Executive Branch of
the Government. The Board is composed of three members
appointed by the President by and with the advice and consent
of the Senate. No more than two members can be of the
same political party.
The Board was established to mediate disputes arising in
the transportation industry, specifically railroads and airlines.
The Board differs from the Federal Mediation and Conciliation
Service (FMCS) in that it exercises greater control over when
the parties may be released to engage in economic actions
against each other. The Board can, to some degree, control
the timing of a work stoppage; however, it cannot prohibit one.
FMCS has access to persuasive powers only.
It appears that the law does not provide the Secretary of Labor
with any designated mediation function, nor any regulatory
control over either FMCS or the National Mediation Board.
LD FORD THE
P
"As publy or we can"
P 4
- 3 -
3.
Coordination of Federal Civil Rights Efforts.
The Secretary suggests that there is a need to coordinate
the EEOC, the OFCC in the Labor Department and government
S,
contract letting agencies. He thinks that present conflicting
policies and rulings are undesirable and that an opportunity
is at hand for coordination. He has spoken to Cap Weinberger
about this matter as it relates to Universities and to
Bob Hampton insofar as it relates to policies for government
employment and the need to revive coordinated procedures.
news
4. Legislative Priorities.
The Secretary would like to discuss broadly a number of
possible legislative matters in order to get your sense of
priorities. The items he has suggested are:
Fed is
a. Longer term revisions of unemployment compensation.
b. Farm labor relations. working wp Eal
c. Federal labor relations.
d. Construction labor relations.
5. Administrative Priorities.
The Secretary wishes to inform you of his administrative
Comittent
priorities within the Department of Labor. These include:
fath DENT "te
a. Improving the quality of administration with OSHA,
the Labor-Management Services Administration (pension
reform) and the Office of Federal Contract Compliance.
b. Improving communications with both labor and
management.
you
c. Long term structural reform in certain collective
bargaining sectors particularly construction, maritime,
cement and food distribution.
an Curt lot butes
d. Working with the Productivity Commission on ways
of improving the long-term growth of productivity.
a put orr Then trup
Coor K agrees after, mu iffer why to GSA,
eth
FORD & 07V830 LIBRAR
- 4 -
6.
The Secretary would also like to discuss his approaches to
Congressional and press relations and to solicit your
reaction.
7.
OMB has prepared a substantial background paper
covering Department of Labor issues (TAB A). In it
they make several points which parallel the areas
Secretary Dunlop wishes to raise. These are:
with 1/15 jun werry written late wefore dury
a. Unemployment insurance. The Labor Department
study of Unemployment Benefit exhaustion, requested
on March 5, is needed promptly in order to develop
an appropriate Administration position. Preliminary
results were requested by March 28.
per
&
The Department is pushing for its draft bill for changes
in the permanent unemployment insurance law.
Experience under the present temporary program, and
workin
a much more solid analysis of the need and effect of
the proposed changes, are needed before a good bill
can be prepared.
Rdadh
b.
Occupational Safety and Health. The many conflicting
to its in complain
pressures on this program require sensitive management
to assure that actions taken will decrease accidents
and disease, and yet not cause unexpected adverse
results in the economy. Almost 4 1/2 years after
passage of the Act, DOL has not been able to reach
agreement with other agencies having similar or
1)need vaint a for suiv wain new type
overlapping authorities. Employers and employees
cannot be sure which regulations apply to them, who
will inspect them, and where to register complaints.
Effort by the Secretary will be necessary to resolve
these problems.
c. Pension Reform. DOL's implementation of the
sciend piz J
fiduciary, reporting, and disclosure aspects of this
new law is excessively slow: no implementation plan;
manager
no work priorities; unresolved issues; slow staffing.
This area needs top management attention to avoid
2
embarrassment.
GERALD R. FORD
Aso stop Cup Pots reported ~ labor status
Activate
Deat going 70 the winn from and the * lo rounding
- 5 -
w 8. poopre In of
addition to the above, OMB has suggested that you
might wish to stress to the Secretary the importance
implementing CETA quickly and effectively.
Apred
9.
The Department of Labor has an extremely large role
in Federal regulation. You might wish to discuss with
the Secretary your views on the potentially harmful
Dulop
effects of regulation on economic activity. (The Secretary
had not been sworn in by the time of the Cabinet session
act
at which you discussed the catalytic converter.)
non Poura then
10.
In your meetings with Attorney General Levi and
Secretary Coleman you discussed areas in which they
work
person
might cooperate with Secretary Dunlop. Attorney General
Levi was concerned with illegal alien immigration and
find ours
Secretary Coleman with mass transit contracting provisions
P'
and railroad work rules. Secretary Dunlop indicates that
3
he has had discussions with both Levi and Coleman. You
are
Jim
might wish to ask him to give mu you a progress report in
Upiced for
these areas.
18-orin
UP are
Develop chaims
TALKING POINTS
leps
2
valm
Inh
3
resulvation
and m ( (op / oud
morton
1.
John, I've had a meeting with each of my new Cabinet officers
to discuss broad policy questions. I'd like to get your views Hills
and to give you my own.
MO
Sective
2.
I understand there are several areas you would like to discuss
simon
Let's start with them.
3.
John, I think that the administrative problems you've discussed
relating to OSHA, OFCC and the pension area are of extremely
high priority. I also think it is important that we make sure
that we start out on the right foot with the CETA program. I
hope you give it your personal attention.
4.
John, I don't believe you had yet been sworn in when we discussed
the catalytic converter at a Cabinet meeting. That case
provides a good example of how we can lose control of the
regulatory process and wind up paying an enormous price for
our mistakes. I hope you will be sensitive to the problem and
personally make sure that the regulatory process is continually
examined to make sure that we don't continually pile costs
unnecessarily on the American people.
GLEATE FORD LIBRUS
- 6 -
5.
When I talked with Ed Levi and Bill Coleman they indicated
that they wanted to work with you on some issues. How's
that coming?
6.
I want you to know that you will have access to me when
you need it. I've asked Jim Connor to meet with you
regularly. If you need quick answers or want to see me,
let him know.
Philomothy
4
.
a P Jep an our from step law puppers longen
FORD : LIBRARY
I-A
Income Maintenance
Unemployment Insurance
(Manpower Administration)
Permanent Law - Changes
The Department sought clearance for substantial amendments
to the present law, among them: mandating coverage for
farmworkers and some groups of State and local education
and hospital workers; increasing permanent benefit dura-
tion to 39 weeks for some workers with Federal cost sharing;
increasing the weekly benefits of workers by a Federal
standard; revising the trigger for extended benefits; and
increasing the Federal Unemployment Tax Act wage base and
rate to improve the financing of the program. In January,
after the recent enactment of a temporary law extending
coverage, you enunciated a policy of no new spending pro-
grams and consequently consideration of the Labor proposal,
which would take effect in 1977, was deferred pending an
evaluation of the operation and costs of the temporary law.
Little supportive material other than "soft" rationales was
provided for the amendments. Costs associated with this
proposal are $3.5 to $4.9 billion annually.
Temporary Law
We are presently faced with special interest legislation to
provide health insurance either through continuation of pri-
vate employer coverage or Medicare for unemployed workers.
Both Labor and HEW'have testified in opposition. Soon we
will be faced with: (1) extension of the Special Unemploy-
ment Assistance Program (SUAP) which provides temporary
coverage for up to 26 weeks to workers not covered by per-
manent law and terminates on December 31, 1975, and (2) pos-
sible increases in the maximum number of weeks the benefit
can be paid:
-- for covered workers from the present 52 to
65 weeks
-- for "uncovered workers" from 26 to 39 weeks.
Policy has not been developed on the proper relation of
benefit duration to economic conditions, or the distinction
between UI and welfare. You recently asked for analysis of
the problem of workers exhausting unemployment insurance
benefits. This information will be needed to effectively
address these and other potential legislative proposals.
I-A-2
Recommendation
That you urge Mr. Dunlop to assure that preliminary results
of the analysis are ready by the end of the month.
I-B
Income Maintenance
Black Lung Legislative Threat
(Employment Standards Administration)
The Federal Coal Mine and Safety Act of 1969 (FCMSA)
provides Federal benefit payments for underground coal
miners disabled by "black lung." Through 1972, the
Social Security Administration was responsible for the
program. Since then, DOL has been charged with deter-
mining eligibility for benefits, locating responsible
coal mine operators, and assessing costs of benefits to
them or their insurers.
The law is designed to make it easy for miners to qualify,
and includes medically dubious "rebuttable presumptions",
and limits the medical evidence that can be used to dis-
qualify living or dead miners who worked at least fifteen
years in underground mines.
The DOL administration of the program, although apparently
well run and sensitive to potential beneficiary filing and
adjudicatory problems, has not been able to settle claims
fast enough for the unions and their supporters in Congress.
However, major responsibility for current backlogs comes
from delays in getting private doctor reports and a large
volume of industry initiated appeals.
The House Labor Committee is now considering bills to add
still more questionable medical presumptions - even to the
point of effectively creating a Federal pension for some
miners - and to change the nature of the program from a
Federally enforced program of industry financed insurance
or self-insurance to a permanent, Federal trust fund
financed by a production tax.
This further Federal initiative into disability compensation
would provide disincentives for State reform of workers'
compensation and would be contrary to the Administration's
efforts to work with them for reform of the existing systems.
The looser presumptions and fundamental change to a per-
manent Federal program are unnecessary given the expectation
of a drastically declining claims load (under current
legislation) throughout the 1970's.
I-C
Income Maintenance
Federalization of Workers' Compensation
(DOL led inter-department task force)
The National Commission on State Workmen's Compensation
Laws was created in 1970 to study State programs compen-
sating workers (or survivors) disabled or killed in the
workplace. The Commission recommended in 1972 that the
States' primary responsibility for the program should be
retained, but that State programs be improved by increasing
coverage, benefit payments, medical care, and rehabilita-
tion. It recommended that if States had not improved by
July 1, 1975, the Federal Government should by law "guarantee"
the improvements. A Williams-Javits bill in the last Congress
would have set Federal standards for State programs and DOL
preemption, in case of unmet standards, of State compensa-
tion insurance regulation. The Administration alternative
to this attempt at Federalization took the form of an
Inter-departmental Workers Compensation Task Force with
inputs from Commerce, HEW, and HUD and led by DOL. In
addition to giving technical assistance to the States as
recommended by the Commission, it was given a research
mandate for problems not thoroughly covered hv the Commis-
sion. These include the excessive proportion of premiums
collected going to administrative and legal costs and to
compensation for minor injuries. The task force has a small
staff (26 DOL and other agency personnel) and is lightly
funded ($700 thousand for research in FY 75). It has been
so slow in arrangements for its contract research that the
planned January, 1976 report to the President will probably
be late. Limited State adoption of the recommendations of
the Commission can now be reported. Very few States can be
expected this year to extend coverage (especially to domestics
and agriculture workers), or increase benefits to the extent
recommended by the Commission, because of economic conditions
and reluctance to increase the cost of hiring more workers.
The work of this task force is still the Administration's
principal response to premature Federalization of workers'
compensation. Although the legislative threat might have
receded somewhat for 1975, the task force work must not be
allowed to further lag in time and thoroughness if credi-
bility is to be maintained.
II-A
Manpower Programs
Public Service Employment (PSE)
(Manpower Administration)
We are now committed to the expenditure of about $4.1 billion
for PSE in FY 75/76. These funds follow a program design
created to meet many conflicting goals, but with the emphasis
primarily on transitional employment opportunities leading to
unsubsidized private or public sector employment.
In the Congress and elsewhere, PSE is also being advocated as
(1) a substitute for the "dole" (unemployment compensation or
welfare) ; (2) essential job creation, regardless of economic
conditions; (3) fiscal relief for States and localities;
(4) a vehicle to get the disadvantaged into the stability and
good pay of the public sector work force; and (5) a device to
counter excess unemployment. In the aggregate it can be
shown that some of these are mutually exclusive goals, but
that has not detracted from the power of the drive for more
PSE.
The Labor Department has not done any serious in-depth analysis
OI potential economic and social policy goals, where and when
PSE might fit into plans to meet the goals, and what types of
PSE designs are therefore needed.
Without this kind of analytical framework, we are unable to
provide more than a range of generic rebuttals to PSE advo-
cates, and are therefore in a weak position from which to
pursue our overall strategy of private sector job development.
II-B
Manpower Programs
CETA Implementation
(Manpower Administration)
The Comprehensive Employment and Training Act of 1973 as
amended (CETA), set up a nationwide network of State and
local government prime sponsors responsible for planning
and operating manpower programs, under broad Federal
direction. The Labor Department performed very well in
negotiating prime sponsorship agreements and subsequently
has executed each successive grant or funding agreement
(about 10 different sets in the last year) with reasonable
efficiency.
Several significant problems seem to be developing. Activity
reporting by sponsors is delinquent and inaccurate in many
instances. Federal staff are devoting substantial time and
effort to sponsor plan drafting and modification. The trend
in regulation revision and field guidance is toward greater
specificity, narrowing the area of sponsor flexibility.
Despite the availability in the field of more than one full-
time professional per sponsor, the Department continually
requests more Federal staff to monitor sponsors. It took a
major initiative from OMB to bring about a CETA evaluation
plan that might make possible the development of data which
is relevant to policy choices.
The Federal Government retains the ultimate responsibility to
ensure that manpower funds are being used efficiently to meet
the needs of the eligible population. This did not change with
CETA. Federal staff should be focusing on providing quality
technical assistance to sponsors so that they do not repeat
the learning process the Federal Government went through since
1962. Staff must also ensure compliance with the Act.
Apparently, some local responsibilities are being assumed by
Federal staff, probably at the urging of the less experienced
sponsors. It is also likely that the Federal staff are still
inclined to focus on issues of a procedural nature rather than
on program results. The pace at which we have put out ever
greater increments of funds may be the cause of much of this.
However, unless careful attention is given to these initial
symptoms, the CETA program may lapse back into tight Federal
controls over both major and minor operating strategies and
tactics. The expected advantages of decentralization and
decategorization will not even have been tested, much less
realized.
II-B-2
Recommendation
It could be useful to our entire policy of greater reliance
on State and local governments if you asked Mr. Dunlop:
1. to take a fresh look at CETA implementation to assure
that the Federal Government is not assuming duties
that properly belong to State and local governments,
2.
to assure that the evaluation can tell us how
decentralization and decategorization works and,
over time, what measurable impact manpower programs
have on the employment and earnings of participants.
II-C
Manpower Programs
Work Incentive Program (WIN)
(Manpower Administration)
The WIN program, administered jointly by DOL and HEW, is
intended to get recipients of Aid to Families with Dependent
Children (AFDC) into jobs. The law, as modified in December,
1971, requires all AFDC recipients, unless exempt for such
reasons as health or children under six, to register for work
or training. HEW has the responsibility for providing child
care or other supportive services needed to enable AFDC
recipients to accept work or training. DOL has the responsi-
bility of helping registered AFDC recipients, certified by
HEW as ready for work or training, to find work. It also
provides for on-the-job training, classroom training, or
subsidized public service jobs to help registrants prepare
for the regular job market.
For a year and a half, the two Departments have been trying
to develop new joint regulations to change the program. The
primary aim of the proposed changes is to increase the chances
of placing AFDC recipients directly into jobs without going
through the more expensive training or subsidized employment
programs. The proposed regulations resulted in many public
comments, including challenges to their legality. The agen-
cies cannot agree on final regulations. The major issue is
whether AFDC recipients registered for WIN should be required
to look for a job before they have been certified as ready
for work or training. OMB has prepared a decision paper for
you on this issue.
In the meantime, the long wait for the new regulation has
caused some confusion and demoralization in the Federal and
State WIN staffs, and program operations are beginning to
suffer.
More basically, we do not have good evidence that the WIN
program can place significantly more AFDC recipients in jobs
than would find jobs on their own. The most optimistic esti-
mate of savings in welfare payments due to the WIN program do
not approach the cost of the program. A major evaluation is
underway, with preliminary results expected this summer, final
results after the first of the year.
II-C-2
Recommendation
It may be appropriate in your meeting with Mr. Dunlop to
stress:
1. The need for quick resolution of policy problems with
HEW so that the best possible WIN program may be
operated.
2. The need to complete as soon as practicable a meaningful
evaluation of the program that will enable you to judge
whether it is worth continuing at its current cost of
$315 million a year.
II-D
Manpower Programs
Employment Service (ES)
(Manpower Administration)
The Federal-State Employment Service (ES) in existence since
1933, which is 100% Federally financed, has been faltering.
The proper role of the ES in today's labor market is not
clear, and the Labor Department has as an objective the
determination of its mission. A vast series of legislative
and administrative policies have resulted in overlapping
and conflicting goals and objectives making impossible any
meaningful approach to measuring ES performance. The Depart-
ment of Labor now allocates funds to States based on a method
that provides incentives to increase placements. Not only is
it not certain that placements are the best measure of ES
accomplishments, but the placement data used is not good.
Placements vary with respect to job duration and quality,
yet there is no measurement of actual job retention. The
sparse data collected on an ad hoc basis indicates that job
retention is low. For example, a 1973 study indicates that
only 43% of the employees placed in jobs with a reported
duration of 150 or more days were on the job after 30 days.
As the ES does not charge either employers or employees for
its services one would assume that if it effectively per-
forms there would be high utilization. In all but a few
States, mostly in the Southeast, there is little employer
use of the ES.
With the enactment of CETA, the ES is no longer mandated to
be the presumptive deliverer of services to manpower training
programs. But the Manpower Administration using the slogan
"to avoid the duplication of services" has put extreme pres-
sure on CETA prime sponsors to use these services (and finance
the costs) in spite of many sponsors' desire either to provide
the services themselves or contract elsewhere.
A key question for the future of the ES is whether a
nationally directed and funded program should be maintained,
or whether States should share in its direction and funding.
Associated with Federal direction is substantial enforcement
activity: inspection of migrant housing, assuring safe and
healthful workplaces, and compliance with other Federal labor
laws. This has set up a basic conflict between the role of
ES as a service agency called upon by employers and its role
as policeman.
II-E
Manpower Programs
Manpower Administration Management Problems
(Manpower Administration)
1. The Manpower Administration (MA) administers over
$21 billion in various programs of which $17 billion is
unemployment compensation benefits. The MA was created in
the sixties in a shotgun wedding between bureaus conducting
traditional employment service, unemployment insurance, and
apprenticeship activity with a bureau created to operate
poverty programs. In December 1973, the Comprehensive Em-
ployment and Training Act (CETA) did away with some 20
categorical programs operating through 10,000 direct Federal
contracts and set in place block grants to about 400 States
and localities.
Until CETA, MA was organized along categorical
program division lines in headquarters. The personnel
system was based primarily on a career series that offered
near automatic grade increases annually feeding into the
many divisions. The structural change force by CETA has
left a sharply over-graded and apparently over-staffed
organization.
Since the FY 74 Dudget (the first post-CETA budget)
the MA has not been able to provide justification for its
personnel levels. Most effort has gone into supporting
current levels, not developing workload factors. As a
result there has been considerable pressure to reduce staf-
fing. The MA has not responded with a manpower development
program keyed to new responsibilities.
2. In the process of CETA development, we had urged
development of an MA strategy that would take into account
its full responsibilities: manpower policy development,
training and employment programs, WIN, ES/UI, apprentice-
ship. The Department successfully argued that the process
of obtaining basic decategorized manpower legislation could
be muddied by dealing with these other issues. There has
been little evidence in the post-CETA period of this strategy
question being addressed.
III-A
Labor-Management
Pension Reform
(Labor-Management Services Administration)
The new pension reform law that was signed September 2,
1974 gives the Secretary of Labor new responsibilities
affecting over 35 million participants and beneficiaries
in over 750,000 welfare and pension plans. Implementa-
tion of these responsibilities is the subject of close
business, employee and congressional scrutiny and has
important implications for Federal administrative expenses,
employer costs and cash contributions, assets management
practices, and employee benefits.
DOL's first six month implementation effort has been
dangerously slow. For example, no overall implementation
plans exist, no workload priorities have been established,
major substantive issues remain unresolved, and staffing-
up for this new activity has been sluggish.
The FY 1975 budget estimate for the implementation of the
new pension reform law is $14.7 million and 435 positions.
The DOL requested an additional 529 positions in FY 1976,
but was denied because of the lack of workload data to
justify such an increase. However, the DOL was informed
at that time that if workload data becomes available which
shows that the present resources are not enough to carry
out the Department's responsibilities under the new law,
we will consider requesting a supplemental appropriation
for FY 1976.
III-B
Labor-Management
Federal Labor-Management Relations
(Labor Management Services Administration)
Background
The Assistant Secretary for Labor-Management Services has
responsibilities under E.O. 11491 dealing with labor-
management relations within agencies of the Federal Govern-
ment. As a result of recommendations by the Federal Labor
Relations Council, E.O. 11491 was amended by E.O. 11838
issued on February 6, 1975. The amendments to the execu-
tive order should go a long way towards quelling the
criticisms of some of its opponents, expanding the scope
of bargaining, and permitting the Assistant Secretary to
take a more active role in unfair labor practice cases.
However, the amendments stop way short of what some union
officials would like to see, such as giving the Assistant
Secretary the prosecutorial role, the creation of a tri-
partite Federal Labor Relations Board and more flexible
provisions regarding unlawful job actions. Therefore we
can expect the reintroduction of legislation to replace
Executive Order 11838.
Recommendation
Secretary Dunlp should be made aware of the authority of
the Assistant Secretary under the new executive order, and
that the effective use of this authority is the Administra-
tion's best way to avoid legislation in this area. If
additional resources are needed to carry out the new execu-
tive order, a supplemental appropriation should be requested.
III-C
Labor-Management
Federal Law for State and Local Public
Sector Labor Relations
(Special Departmental Task Force)
There has been substantial pressure building in recent
years for a Federal statute to regulate State and local
government labor relations. This is partly in response
to the pace of public sector unionization and also to
the perceived proliferation of public employee strikes.
The basic alternatives have been (a) simply applying
intact the provisions of the current National Labor
Relations Act, or (b) drafting a discrete statute tailored
to this sector.
Administration spokesmen have consistently argued against
any Federal law in this area on the grounds that we do not
know enough about the appropriate path to take in light of
the wide variance in State and local laws now on the books,
the impact of such a Federal statute on State and local
policy setting and budgetary systems, and the generic ap-
propriateness of Federal regulation in this area.
However, internally we have recognized the growing need
for substantive analysis that might suggest acceptable
positions on key points should legislation become desirable
or inevitable.
To this end, the Department of Labor was asked last fall to
undertake the necessary analysis. A Labor task force had
apparently already started work. To date nothing has been
forthcoming from the Department.
There is a court case pending that re-raises the issue of
the constitutionality of Federal regulations of State and
local employment (in the context of the Fair Labor Standards
Act) which may be delaying Labor's response. The analysis
needs to be pursued without regard to the case, since the
pressure for enactment of a statute may produce the need for
Administration positions before the case is decided.
III-D
Labor-Management
Labor-Management Reporting and
Disclosure Act (Landrum-Griffin)
(Labor Management Services Administration)
The National Commission on Industrial Peace, of which
Mr. Dunlop was an ex officio member, recommended a
"comprehensive review and examination" of LMRDA, par-
ticularly Title I, to see if it inhibits the exercise
of leadership by labor representatives. Some argue
that these "union democracy" provisions permit small
minorities to impose their wills and prevent settle-
ments of labor disputes. Mr. Dunlop may wish to
initiate such a review.
IV-A
Employment Standards
Eliminating Discrimination and Setting Wage
Levels Through the Procurement Process
(Employment Standards Administration)
Background
The Employment Standards Administration (ESA) is responsible
for implementing several social-economic programs using the
Government's procurement system. These include: (1) setting
of wage levels and (2) the elimination of discrimination.
The magnitude of the Government's outlays for procurement
creates ample opportunity to use the system to accomplish
selected national goals unrelated to the primary purpose of
the procurement. However, this process is not without its
problems. Its effectiveness in accomplishing these goals
is perhaps over-rated. Each new program dependent upon the
procurement system adds an additional burden to Federal con-
tractors and becomes more costly and time consuming to
administer.
Wage Determinations
The Davis-Bacon and related Acts and the Service Contract
Act are intended to insure that the purchasing power of the
Government is not used to support wage rates and labor stan-
dards below those prevailing in the various localities where
the contracts are performed. Government-set wage and fringe
benefits under both programs are frequently criticized by
labor organizations, employer associations, Government agen-
cies and other interested parties as being too low or too
high.
The ESA wage determination program under the Davis-Bacon
and related Acts has been one of the causes of rapid wage
escalation in the construction industry, with its resulting
inflationary pressures, and greater costs to the Government.
Because of its inflationary nature, the President suspended
the Davis-Bacon provisions for six weeks in 1971. The sus-
pension was rescinded in March of 1971 and a wage-price
stabilization mechanism was set up, including a tripartite
Industry Stabilization Committee, with John Dunlop as Chairman.
While the DOL's administration of the SCA has been under
just as much criticism as that of the Davis-Bacon Act, some
movement has been made towards resolving the problems it
has generated.
IV-A-2
DOL and the major procurement agencies have formed a task
force to study the problems and have developed proposals
for their solution.
Elimination of Discrimination
E.O. 11246, Section 504 of the Vocational Rehabilitation
Act, and Title IV of the Vietnam Era Veterans' Readjustment
Assistance Act all require Federal contractors to take
affirmative action to increase employment opportunities
for selected groups of people. Such action must now be
directed toward increased employment of minorities, women,
handicapped, and veterans. All of these programs are
based upon the Federal contract compliance program for
minority employment, whose impact after eight years of
operation is questionable. A large part of the program's
ineffectiveness can be directly related to poor manage-
ment. However, continuing to add requirements for other
groups dilutes the effort and makes accomplishment of
employment goals for any one group more difficult. Yet
the number of programs modeled after this first Government
compliance effort continues to grow despite the burden
they place on Federal contracts, increasing cost to the
Government and lack of visible signs of impact.
V-A
Occupational Safety and Health
General
(Occupational Safety and Health Administration)
There are severe pressures on the DOL administration of
the Occupational Safety and Health Act. Its management
will have to be extremely sensitive because of the high
levels of concern and criticism from organized labor,
industry, small business, States, and other Federal agen-
cies.
Organized labor can be expected to exert pressure to
impede transfer of enforcement authority to the States
under the Act, or to end DOL support of State programs
altogether. They will urge strengthening of Federal
enforcement powers, increases in numbers of inspectors,
and faster issuance of standards. They can be expected
to strongly criticize the Administration requirement to
study inflationary impact as it affects OSHA regulations.
They may object to occupational safety and health enforce-
ment activities by agencies other than DOL (by DOT, for
example).
Industry will continue concern about the cost of compliance
with OSHA standards and the effect of DOL actions on labor-
management relations. They can be expected to continue
exhaustive court challenges to OSHA enforcement actions and
regulations and to strongly criticize it through the media
and political channels.
Small business interests and agriculture will continue to
complain about DOL "harassment", their special difficulties
with the Act, DOL administration, and cost of compliance.
They will seek special assistance or exemptions from coverage
even though a large proportion of occupational accidents and
illnesses occur in small workplaces.
States are concerned about continued Federal support, fear
excessive Federal monitoring, and will consider dropping
out of the program, thus increasing Federal costs. Con-
flicts with other agencies will continue because of over-
lapping authorities regarding the same items in differing
situations (e.g., hazardous materials) or regulations for
different purposes (e.g., public safety and worker safety).
V-A-2
About 100 bills were introduced into the 93rd Congress to
amend the broad powers of the OSH Act and a large number
of these would have amended the OSHA relationship to small
business. Many have been reintroduced. DOL has taken the
position that any amendments to the Act would be premature
before several years experience in administering this dif-
ficult program. Although hearings have not been held on
any of these bills, FY 75 appropriations language was
passed to limit recordkeeping requirements for small busi-
nesses and $5 million was earmarked for consultative ser-
vices to small business, evidence that pressures to amend
the Act have grown. The Senate Committee on Labor and
Public Welfare began oversight hearings last year and sent
DOL for comment many GAO criticisms of program operations.
Oversight hearings will be held again this year.
Almost every public action of this small and highly visible
program is carefully watched by the interested groups for
possible challenge. DOL should be aware of the difficulty
of providing responsible management of such a program at a
time of increasing public awareness of workplace hazards
and the need to balance safety and health protection with
its costs.
V-B
Occupational Safety and Health
Health Standards
(Occupational Safety and Health Administration)
Except for the early adoption of national concensus standards,
DOL has not been able to develop timely, widely acceptable
workplace health standards. Much of the delay is due to
the inherent difficulties in the occupational health field.
Nevertheless, these problems have been enhanced by manage-
ment problems, the fear of legal challenges, problems of
coordination or agreement with other agencies regulating
similar areas, and the OSHA relationship with the National
Institute for Occupational Safety and Health (NIOSH) in
HEW. NIOSH does most of the research upon which new OSHA
standards are based. Cooperation between DOL and NIOSH is
critical to progress in this area, and the DOL/HEW record
of agreement on objectives has been dismal. (However, there
are some signs of a better working relationship at the
OSHA/NIOSH staff level on standards-related research.)
DOL has completed promulgation of only three new health
standards (asbestos, fourteen carcinogens, vinyl chloride)
and portions of two of these are being challenged in court.
Eight have been proposed and a few more proposals are ex-
pected soon, but the backlog of hazards under study and of
NIOSH research not yet converted into standards is huge.
Another embarrassing problem is the EPA/DOL disagreement,
in full public view, over DOL's proposed noise standards.
DOL has requested that OSHA standards be exempted from the
executive order and OMB circular requiring inflation impact
studies. (They did not assert that the requirement would
impede standards development.) OSHA currently performs
some economic impact studies for proposed standards but
does not compare benefits with costs or measure inflationary
impact. OMB believes that the E.O. requirements are not in
basic conflict with DOL practices or needs.
V-C
Occupational Safety and Health
Interagency Jurisdiction Problems
(Occupational Safety and Health
Administration; Office of Solicitor)
The Occupational Safety and Health Act of 1970 states DOL's
broad safety and health regulatory powers do not apply where
other Federal agencies exercise jurisdiction. The law also
required the Secretary of Labor to report to Congress in
April, 1974 his legislative recommendations to avoid duplica-
tion and achieve coordination. Since passage, differing
agency interpretations of legal powers and duties have fore-
stalled most efforts to define interagency jurisdictional
boundaries and eliminate gaps and overlaps. DOL has opposed
any amendments to the OSH Act. OMB has encouraged negotiated
jurisdictional agreements to give employers and employees an
understanding of which Federal agency is responsible for what.
Only one such agreement (with MESA in Interior) has been
reached and DOL has shown some reluctance to follow it.
The DOL draft report to Congress, now almost one year over-
due, was strongly criticized by other departments (Commerce,
Defense, Interior and Transportation). It reflects an apparent
strategy of relying on a series of court cases to resolve
jurisdictional issues. In the absence of interagency agree-
ments OMB has not cleared the report. A recent meeting among
DOL, DOT, and OMB resulted in agreement on a method to resolve
the issues between the two Departments. DOT is now taking
positive actions to regulate worker safety and health in
transportation areas, which may speed up agreements with six
agencies of that Department. However, previous difficulties
between the Departments suggest that some degree of OMB or
other intervention may be necessary to achieve formal agreement.
V-D
Occupational Safety and Health
State Programs
(Occupational Safety and Health Administration)
The Occupational Safety and Health Act allows States to
take over Federal occupational safety and health regula-
tory jurisdiction and receive up to 50% Federal financing
under OSHA approved plans. OSHA monitors State operations
to assure program effectiveness equal to the Federal occu-
pational safety and health program. Organized labor has
led opposition to the State programs because of the
generally poor State performance prior to the OSH Act.
DOL has encouraged the States to get into the program but
has been slow to relinquish enforcement authority and re-
deploy inspectors. Although the incentives allowed by the
OSH Act are not great, 26 States are operating OSH programs
under various stages of development and DOL approval.
Three important industrial States (New York, New Jersey,
Illinois) with DOL-approved plans but no basic enabling
legislation were recently given deadlines for that legis-
lation by DOL and are expected to withdrawy by June 30.
The absence of such States poses a threat to the Adminis-
tration's design for a Federal-State occupational safety
and health partnership and immediately raises issues of
the size and deployment of the OSHA enforcement staff.
Although DOL agreed to develop OSHA enforcement strategies
to increase State participation, no plans are yet available.
V-E
Occupational Safety and Health
Federal Enforcement Staffing
(Occupational Safety and Health Administration)
Because of emphasis in the Occupational Safety and Health
Act and strong private sector interest, the size and manage-
ment of the OSHA Federal inspector and State program monitor
force will continue to be important issues. OMB has long
sought from DOL a rational system for targeting inspections
to achieve maximum impact of use of a necessarily limited
inspection staff. (An annual inspection of each of the
2.5 million workplaces not covered by State or other Federal
agencies could require 15,000 to 20,000 OSHA inspectors.)
DOL resisted, and did not develop any plan until a Presidential
decision in December 1974 to defer funds for 180 inspectors
included in the FY 75 appropriation above the Budget request.
DOL submitted and OMB approved an initial plan that included
use of a computer model to allocate inspectors by State in
rough proporation to the existence of workplace hazards.
Inspections can also be roughly targeted according to accident
rates. While usable for allocating a given number of in-
spectors and State program monitors, it cannot determine a
needed inspector level or plan inspection targetting to
maximize reductions in injuries or diseases. DOL has been
asked to work on these deficiencies, other refinements and
serious information gaps and to report progress to OMB.
OSHA can be expected to move soon to add inspection impact
information in hopes of justifying some larger level of
Federal inspectors. We believe it is more important to use
that information to determine what should be inspected to
achieve the maximum impact, and to develop other strategies
when inspections have little impact.
VI-A
General
Departmental Mechanisms for Policy
Decisions and Follow-up
The Department of Labor has often not been able to produce
quality analyses and recommendations for consideration in
the development of Administration policy. There are also
failures in attempts to carry out policy once decided.
Much of this problem appears to be caused by the lack of
an effective Departmental staff organization that can
secure, distill, and integrate relevant inputs from all
parts of the Department. As a result, reliance is placed
upon the individual agencies, which necessarily have
narrower perspectives.
Attempts have been made to establish such a staff, but at
present three separate staffs claim to perform all or part
of the overall function. None of the three now have strong
leadership or top quality people. Policy and program de-
velopment is assigned to the Assistant Secretary for Policy,
Evaluation and Research (ASPER). Within his organization
the Office of Policy Development is charged with developing
and analyzing new programs or major program changes. The
Office of Program Analysis and Special Studies is respon-
sible for developing long term program strategy and annual
programs for the entire Department, pulling together and
analyzing available information on needs and program effec-
tiveness. Lack of leadership in the offices has resulted
in a dissipation of' staff, so that little talent remains.
Legislative development is handled primarily in the Solicitor's
office, which relies primarily on its own staff and that of
the agencies. The Assistant Secretary for Administration
and Management has an Office of Budget, with responsibilities
for annual program development, and an Office of Operations
Review, responsible for tracking accomplishments against plans.
Although these two Assistant Secretaries and the Solicitor
now sit with the Under Secretary on the Program and Budget
Review Committee, their separate staff support tends to
treat legislation, budget, and management issues affecting
the same programs as isolated transactions. What is needed
is the development of solid staff work to enable the Secretary
and Under Secretary to choose and implement a consistent
policy and emphasis, and to provide the quality advice needed
by the President.
VI-A-2
This problem is not unique to the Department of Labor, and
the existence of the Program and Budget Review Committee
is a positive step that could be a base on which to build
a Departmental staff capability.
Recommendation
It may be appropriate in your meeting to emphasize your need
for well researched, quality advice and alternatives from the
Department, as well as effective mechanisms to track policy
implementation, and to suggest that attention be given to the
need for a strong central staff organization.
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OMB TALKING POINTS
Possible Response to Secretary Dunlop
1
(and 5b) Responsibilities in Labor-Management Area
Rely on Secretary Dunlop for policy development and communications
with labor and management on major policy direction; rely on
Mr. Usery for mediation of particular disputes and work on
improving labor-management relations in specific situations, in
accordance with Secretary Dunlop's policy guidance.
2. Equal employment opportunity conflicts
a. Tell Secretary Dunlop that you have the regulations and are
expecting an options paper on them from OMB very shortly,
covering this and other issues in the regulations. Assure
him that DOL's views will be taken into account.
b. Say that over the long-term a regular forum for avoiding
conflicts in civil rights regulations of contractors and
aid recipients must be created. HEW has proposed that it
be added to the Equal Employment Opportunity Coordinating
Council for this purpose.
C. Point out that the increasing use of the procurement system
to accomplish social goals (setting wage levels; increasing
employment of minorities, women, handicapped, and veterans)
are burdening the procurement process, and that each new
addition dilutes the effectiveness of the method. Ask
Secretary Dunlop to work with the new Office of Procurement
Policy in its efforts to rationalize the system.
3. Follow-up on Education and Work
You are still waiting for a report from the Secretaries of HEW,
Labor, and Commerce that proposes a reasonable Federal role,
provides a unified strategy, specifies achievable objectives,
uses existing programs, and recognizes budgetary constraints.
Suggest a June deadline.
4. Legislation
a. Unemployment compensation.
2
Emphasize the need for careful analysis to assure that proposed
changes do not have unfortunate, unintended results. Suggest
limiting legislation now to the extension of coverage (assuming
the policy question of Federal imposition of costs on State and
local governments can be resolved) and to setting up a commission
to consider other changes.
b. Farm-labor relations
Ask for submission of a draft bill so that issues can be
resolved and an Administration position developed.
C. Federal labor relations
Point out that effective use of his authority under the
revised executive order is the Administration's way to
avoid legislation in this area.
d. Workers' compensation
Ask for a vigorous pursuit of the task force effort to
help States improve their programs and to find answers to
the issues presented in the interdepartmental White Paper.
Point out that unnecessary and premature Federalization
must be avoided.
e. Construction labor relations
Ask for a paper proposing specifics and alternatives, and
an analysis of how it might affect other sectors.
5. Priorities in Department
a. Quality of Administration - OSHA, pensions, OFCC
Agree that these are areas of priority concern, and that
capable top management should be secured.
b. Communications with labor and management. See topic 1.
C. Long-term structural reform in collective bargaining.
Suggest that it might be useful to have a major paper outlining
the major problem areas and proposing alternative strategies
and priorities for approaching them.