targeted enforcement of existing labor standards in the workplace. The immigration bill which is now working its way through Congress authorizes major increases in personnel in the Labor Department for this particular purpose. So we're carrying through on Congressional intent with regard to better and more targeted enforcement to reduce the incentives to employers to hire undocumented aliens.

DAVIS-BACON ACT

We're also seeking an increase of $3.8 million to improve the integrity and accuracy of prevailing wage and fringe benefit determinations under the Davis-Bacon Act. These additional resources are required to develop and implement improved methodologies to determine prevailing wages through econometric modeling based on available wage data and to develop improvements in verifying the accuracy of current surveys.

OSHA PARTNERSHIPS

For the Occupational Safety and Health Administration we're seeking an increase of $21.8 million and 283 additional full time equivalent personnel primarily for our partnership initiative. This is to design and redesign OSHA's field offices to foster new partnerships with employers and workers to improve worker protections. New multi-discipline teams will define and target and implement programs to address those workplaces and work processes with the most acute problems.

Another very important feature of the partnership initiative is a provision for small business specialists to address the specific needs of small businesses and to work with them. We have already begun on a pilot basis handling informal complaints using telephone and fax instead of letters. The reduced time is really staggering here. In Atlanta, we have reduced the time between a complaint and abatement from 32 days to 8 days; in Columbus, from 35 days to 11 days; in Wichita, Kansas, from 39 days to 9 days. Now that's the kind of customer service we want to expand upon. I want to also mention an increase of $10 million and 12 full time equivalent personnel to streamline and improve the regulatory process here as recommended by the Vice President's National Performance Review. Our objectives here are to accelerate the process which turns outdated technical standards into sensible and simple and realistic rules, and increase stakeholder involvement in the regulatory process, including negotiating rulemaking. Let me give you one example here. We have a current regulation that describes the minimum capacity for fire escape routes. It currently takes almost 300 words including a complicated graph. Now our proposed change boils this down to 36 words and we take out the table and the graph. We want to accelerate this process because simplifying is good for workers-it's also good for businesses. In 1990, OSHA issued over 5,000 citations for failing to put up a simple OSHA poster. This is the poster you have seen. In 1990, 5,000 citations, on average $400 each for failing to put up that poster. You know what we're doing now? When we find that a poster is not hung, we give the employer the poster. No fines. No citation. Again, this common sense approach to regulation is what

we're trying to invoke through the expansion of Maine 200 and also through sensible regulation and rulemaking.

CONSUMER PRICE INDEX (CPI)

The Department requests an increase of $4.6 million and 63 full time equivalent personnel for the revision of the Consumer Price Index. Revision of the CPI is a multi-year effort and this revision will be completed over a six year period. The CPI obviously is the principal source of information concerning trends and consumer prices. We do need those additional resources to get this job done.

STREAMLINING REDUCTIONS

Finally, Mr. Chairman, let me just mention we have already achieved in the Department the 12 percent streamlining reduction goal targeted for 1999. When I came to the Department we had 18,237 Full Time Equivalent (FTE) employees. That streamlining reduction goal gets us down to 16,100 FTE even though, when as you know, our responsibilities with regard to everything from the Family Medical Leave Act all the way through One-Stop Career Centers, all of this regulatory reform, those responsibilities have continued to grow and there are many more workers at work sites.

OPENING STATEMENT SUMMARY

In summary, we believe that the Department's budget supports the President's commitment to balance the budget in seven years. It adheres to the goals of the Vice President's National Performance Review by streamlining organizational structures, by implementing management improvements, and it focuses our resources on the development of economic security for the majority of working families in terms of skills, pensions, the concerns that people have with regard to ensuring that they do get a minimum wage and overtime, ensuring that the workplace is a place that they can trust.

I thank the subcommittee for the opportunity to talk with you today and to present our budget. Mr. Chairman, members of the subcommittee, this concludes my prepared statement. I would be happy to answer any questions that any of you may have. [The prepared statement follows:]

STATEMENT OF ROBERT B. REICH
SECRETARY OF LABOR
BEFORE THE

SUBCOMMITTEE ON LABOR, HHS, EDUCATION AND RELATED AGENCIES COMMITTEE ON APPROPRIATIONS

UNITED STATES HOUSE OF REPRESENTATIVES

MAY 7, 1996

Mr. Chairman and Distinguished Members of the Subcommittee:

I am pleased to appear before you today to discuss the Department's accomplishments and our FY 1997 request. I would first like to thank you Mr. Chairman and Ranking Minority Member Obey, and other members of the Subcommittee who worked long and hard to forge the FY 1996 budget agreement that was enacted on April 26, 1996. We can now get on with the people's business.

The Department's FY 1997 budget proposals support the President's goals by working in partnership with American business and by investing in our human capital-investments important to this nation that we believe will yield a tremendous return for American workers, businesses and their communities. Through a vast network of statutory responsibilities, the Department of Labor is involved in the work lives of most Americans.

This budget is built on the foundation of our accomplishments that have resulted from a careful strategy developed to create a better-prepared workforce through effective employment and training assistance; by promoting workplace safety and health and support to small businesses; by ensuring the pension security of America's working men and women; and by ensuring that employees have minimum wages and working conditions afforded them by law. Also, the Department's Bureau of Labor Statistics produces many of the principal economic indicators which form the backbone of economic intelligence for public and private strategic planning. I would like to begin by mentioning just a few of our major accomplishments during this past year:

Awarded implementation grants to 19 states which increased total School-to-Work states to 27. These grants make it possible to provide opportunities for hundreds of thousands of students to prepare for

careers.

Increased Job Corps placements in jobs paying over $6.00 per hour by 37 percent. The overall effectiveness of Job Corps continues to improve, and the high quality of training and education being received by Job Corps students translates into higher earnings and greater selfsufficiency for Jobs Corps graduates.

Provided summer employment to about one-half million youths with two out of three enrolled in education services.

Awarded One-Stop Career Center implementation grants to 10 states which increases the total to 16 states. The Career Centers will provide an opportunity for the 56 million civilian workers and the first-time labor force entrants in these states to access essential job and career information easily.

Awarded grants to all States to develop America's Labor Market Information System -- an easily accessible and comprehensive source of local information on which jobs are available, which skills are in demand, which occupations are growing and which are declining, and on the performance and job placement records of local training institutions.

Implemented America's Job Bank database on the Internet and provided access to 400,000 job openings daily.

Conducted nearly 300,000 employment eligibility verification compliance inspections and maintained a continuing program of employer education regarding their employment verification and antidiscrimination responsibilities.

Recovered nearly $1.7 million in wages that should have been paid to 400 workers admitted for temporary employment under the H-1B visa program.

Recovered more than $1.1 million for 2,800 workers by conducting 550 investigations to eradicate "sweatshops" in the garment centers.

Lowered pension underfunding through legal reforms and an "early warning" program by working with companies to structure corporate transactions to protect pensions.

Returned $8.4 million to 401(k) plans as of March 31, 1996, as a result of an Employee Contribution Project. These funds will be returned to plan participant's accounts along with lost earnings.

Increased special mine inspections aimed at discrete hazards by 30 percent.

Developed and published customer service standards in all major agencies.

Announced a solution to a subtle and pervasive bias in the CPI because of the introduction of new items into the index either through sample rotation or through item substitution.

Based on the exceptional success with OSHA Maine 200 program, similar programs in Wisconsin and New Hampshire are achieving positive results and the program will be implemented in six new states.

Assisted 566,000 veterans into jobs through the combined efforts of State Employment Security Agencies and their Veterans' Employment and Training Service funded-staff. Also, conducted over 3,500 transition assistance employability and job search workshops for 152,000 servicemembers and their spouses. The priority of services given to veterans and intense efforts to get them jobs is evidenced by their 3.4% unemployment rate by the end of the fiscal year.

Also, while the Department's FTE has steadily declined since 1992, consistent with a trend beginning in 1980, there has been a significant increase during this period in the number of working men and women in the American Labor force. For example, the Department's FTE has been reduced from 23,841 in 1980, to 16,655 in FY 1996, while U.S. employment increased from 99.3 million to 124.9 million. As the Department's staffing declined by 30 percent, the population served -America's workers - increased by 26 percent.

We accomplished these items, many of which were completed in FY 1996, under the most difficult of circumstances faced by the Department due to seven months of funding uncertainty.

The President's economic program emphasized one primary concern - to raise the standard of living for average Americans now and in the future. While the President's budget proposes to balance the budget by 2002, he has steadfastly supported education and training along with the basic protection of workers' health and safety, pensions, wages, hours and working conditions, and prevention of job discrimination. The FY 1997 request reflects these priorities.

So, the national conversation we are now having about wages, about jobs, and about the anxiety felt by many Americans in an era of vast, momentous economic change is key. How do we continue to make the American dream of opportunity available to all who are willing to work for it?

Unemployment and inflation rates are at their lowest combined level in nearly three decades. Unemployment has stayed under six percent 18 straight months. In three years our economy has created 8.5 million new jobs. And every year, more and more of them are good, higher-paying jobs. Companies are doing well. Last year, the Fortune 500 enjoyed an average profit rate of 13 percent.