DOL Budget Cuts Could Mean Less Enforcement, Fewer Rules

Law360—Braden Campbell
03.16.2017

The $2.5 billion cut to the U.S. Department of Labor outlined in President Donald Trump’s budget blueprint Thursday means the DOL could be a very different agency in the near future. While exactly what will get eliminated as part of the 21 percent reduction is unclear, attorneys say the agency's rulemaking and enforcement efforts will likely take a hit.

The White House Office of Management and Budget proposal lists several grant programs targeted for cuts in the one-plus pages devoted to the DOL, but otherwise says little about how the president plans to trim the agency charged with administering many of the nation’s labor laws by a fifth. In the absence of concrete figures, the question becomes whether the agency's staff will shrink, and if so, by how much.

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Though the actual dollar reduction to the DOL’s budget is small relative to the blueprint levels for some agencies, it is among those hit hardest by percentage. The DOL’s 20.7 percent reduction puts it even with the Department of Agriculture, and it trails only the Environmental Protection Agency and State Department for the biggest drop in funding.

How the OMB intends to reach that $2.5 billion figure is not totally clear from the blueprint. The office has tabbed six grant programs for elimination or reduction in 2018 based on ineffectiveness or redundancy, but attaches concrete savings to only a few. At $434 million, a planned cut to the Senior Community Service Employment Program is far and away the biggest single hit to the DOL. Pulling a grant program from the Bureau of International Labor Affairs “will save at least $60 million,” the office writes, and killing the Occupational Safety and Health Administration’s training grants program will save another $11 million.

The budget does not say where the other $2 billion in cost savings will come from, but given the sheer volume of funds being stripped, attorneys say the remaining cuts may be borne largely by the DOL’s enforcement agencies.

“I know from working at the EEOC that if you’re going to cut your budget by twenty-something percent, that necessarily is going to have profound implications for your enforcement efforts,” said Outten & Golden LLP’s David Lopez, who was EEOC general counsel under President Barack Obama.

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The blueprint also proposes to nix funding for certain independent agencies, among them the Legal Services Corp., a nonprofit that helps those of low means with civil litigation. Coupled with the reduction of the DOL’s budget, the elimination of the LSC means less action will be taken to enforce wage laws, attorneys said.

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The budget does not propose any cuts to the National Labor Relations Board or EEOC, but attorneys say their omission is more a sign of their relatively low station on the totem pole than of their being spared cuts.

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OMB Director Mick Mulvaney said the office will release a complete budget in May, though even that proposal will likely be far different than the one that ultimately passes, attorneys say.

Thursday’s budget makes significant cuts to almost every major federal agency but the U.S. Departments of Defense, Homeland Security and Veterans Affairs, meaning it could face significant opposition on Capitol Hill. But even if the budget Congress adopts does not reduce funding for the DOL at quite the level proposed Thursday, the agency will take a hit.

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