White House FY 2015 Budget Proposal At A Glance
Posted in: Legislative Updates
On March 4, President Obama publicly released his $3.9 trillion Fiscal Year 2015 Budget Proposal, representing the Administration’s funding “wish list” that, unlike past years, contains fewer compromises to court Republican appropriators’ support and emphasizes regulatory agencies’ enforcement activities. Additionally, the proposal includes new tax increases for wealthier Americans in order to lessen the financial burden on low-to-middle income families and reduce the overall deficit -- changes that could potentially affect IEC small business owners.
The following are a few selections from the budget regarding programs and initiatives that might impact IEC members.
Department of Education (ED)
The budget proposes to keep funding for the Perkins Basic State Grant at $1.118 billion in FY 2015, with no increase for Career and Technical Education (CTE) National Programs. It is a concern that state Perkins funding, which is proposed at $5 million below pre-sequester levels and over $140 million below FY 2010 levels, will negatively impact high schools, CTE centers, community and technical colleges, employers, and millions of CTE students nationwide. Consequently, this would have a negative impact on student enrollment in CTE and preparation for employment in the skilled trades. The Administration does propose to fund several new programs that could provide students with expanded education opportunities, including $150 million for high school redesign grants, $20 million for Skills Challenge Grants to benefit adult education, and $100 million for a First in the World Fund in postsecondary education. However, IEC believes that the resources provided to education would be better directed toward proven programs like Perkins that have already demonstrated success, rather than largely untested and unproven alternatives.
Department of Labor (Including the Office of Apprenticeship, Education and Training Administration, Veterans Employment and Training Services, and Job Corps)
While the specific details of the budget have not yet been released, the budget proposed for the Department of Labor (DOL) reflects the Administration’s emphasis on job training and employment programs.
The budget proposes to fund continued promotion of innovative, job-driven approaches to training and employment services and higher performance through the Workforce Innovation Fund and improved Incentive Grants. It is proposed that DOL move to create a single program to help all displaced workers as part of a larger effort to modernize the Federal job training system. In addition, it is proposed that DOL enhance efforts to provide technical assistance support to employers as they seek to comply with regulations and enforcement programs to ensure such compliance.
The budget proposes that $11.8 billion in discretionary funding be provided for the DOL to make targeted investments to improve job training and employment programs; strengthen enforcement activities related to workers’ wages and working conditions; ensure a strong safety net for workers who lose their jobs or are hurt on the job; and promote a secure retirement for workers at the end of their careers. Additional activities proposed include raising the minimum wage, providing funding for in-person reemployment services to reach unemployed workers at risk of losing their services, providing support for recently separated veterans seeking placement in the civilian sector, and assisting states as they seek to launch paid leave programs.
It is further proposed that $6 billion be designated over the next four years to fund the Administration’s Opportunity, Growth, and Security Initiative. Specifically included in the funding for the Opportunity, Growth and Security Initiative is a total of $2 billion ($500 million per year over four years) to be set aside for grants to states and regional consortia to increase new apprenticeships and increase participation in existing apprenticeships. This initiative is coupled with a positive administration response to the Advisory Committee on Apprenticeship's recommendations to actively educate employers, educators, and the public on the registered apprenticeship system, provide additional technical support for program sponsors, and encourage federal agencies to incorporate usage of apprenticeship. However, there are significant questions as to specifically how the designated $500 million per year will be used and by what agency or organization. IEC would encourage use of these funds towards supporting existing apprenticeship programs such as IEC's own program and further grants toward state-level efforts. Details will be available when funds are allocated during the budget appropriation negotiation.
Also proposed as part of this initiative would be the creation of the New Careers Pathways program, which would provide job assistance to a million Americans and combine the best features of the Trade Adjustment Assistance (TAA) for Workers program and the Workforce Investment Act Dislocated Workers program. The New Careers Pathways program, to be administered by the Employment and Training Administration, is the embodiment of the Obama Administration’s previously stated goal to offer one set of services to displaced workers through one unified system.
DOL Occupational Safety and Health Administration (OSHA)
The President has proposed an increase of $13 million to OSHA in his proposed 2015 Budget for a total of $565 million. This is a two percent increase or slightly larger than the cost of living increase for last year.
Specific allocations within OSHA’s budget include $4 million dollars to be earmarked in support of OSHA’s whistleblowers programs, $3 million toward federal enforcement of workplace safety regulations, and an additional almost $4 million dedicated for state plan state OSHA programs.
Compliance assistance programs such as on-site consultation, OSHA Alliances, and Partnerships will receive less than $1 million of the amount budgeted for the agency, demonstrating that OSHA would prefer enforcement over cooperative programs. Remaining budgetary funds would be used for creating new standards, statistics, and executive discursion.
National Labor Relations Board (NLRB)
The NLRB would receive an additional $3 million for FY 2015 in the President’s budget for a total of approximately $278 million. IEC is concerned that this funding could be used to implement controversial new rulemakings, including a proposed rule that would dramatically shorten the election window during union organizing campaigns to as little as 10 days.
Office of Labor-Management Standards (OLMS)
Under the President’s budget proposal, the OLMS would receive approximately $41 million in FY 2015, a $2 million increase from the prior year's request. Much like the NLRB, this funding could be used toward implementation of controversial rules, including the “Persuader Rule.” This rule, once finalized, would require employers to disclose to DOL any arrangements they have with consultants – and potentially trade associations like IEC that provide guidance to members on labor policy – to address employee unionization efforts or collective bargaining. Most recently, publication of that final rule was pushed back yet again with no new deadline publicly announced.
DOL Wage and Hour Division
DOL’s Wage and Hour Division (WHD) would receive a $41 million increase from the amount requested for FY 2014 for a total of $265 million. Much of this funding would be slated for enforcement actions and 300 WHD investigators to target the industries and employers likely to violate the regulations. Approximately $14 million would be used to enhance existing efforts to combat misclassification and $4 million for additional WHD personnel devoted to misclassification enforcement. Further, the budget would provide $5 million to a State Paid Leave Fund to provide technical assistance and support to states that are considering paid leave programs. In anticipation of this increased enforcement activity in 2015, WHD has scheduled six seminars in 2014 to provide employers with training on the Davis Bacon Act and related prevailing wage requirements.
DOL Office of Federal Contract Compliance Programs (OFCCP)
IEC members that do business with the federal government should take note that the President’s budget grants the OFCCP an additional $3 million in FY 2015 for a total of $109 million. As noted in the budget appendix, the money would be directed towards increasing the agency’s compliance evaluations “with a focus on both supply and service construction reviews.”
Equal Employment Opportunity Commission (EEOC)
The EEOC would receive approximately $366 million, which is comparable to the FY 2014 request. According to the budget report, the funding would be prioritized for “litigating systemic cases and maintaining a manageable inventory of cases.”
Key Tax Provisions in the President’s Budget
President Obama has included implementation of the so-called Buffett Rule in his budget, which would require individuals making over $1 million to pay at least 30 percent of their income in federal taxes (after charitable contributions), which the White House estimates could raise $53 billion over a decade. Further, the President proposes limiting the value of itemized deductions allowed for households to reduce their annual tax bill, as well certain tax exclusions, to 28 percent of the amount claimed. The proposal would also affect tax exclusions for employer-sponsored health insurance and tax-exempt interest. These changes would likely affect many small business owners – IEC members among them – as they would fall on individuals making more than $200,000 and married couples making more than $250,000 annually.
The budget further includes proposed caps on contributions to tax-preferred retirement accounts like IRAs and 401(k)s once an individual’s combined balance exceeds a certain level.
Lastly, the President proposes raising the estate tax (or “death tax”), which IEC has vehemently called on the Administration and Congress to repeal in its entirety.
If you have any questions or concerns, please contact Alexis Moch, IEC Vice President of Government Affairs, at (703) 650-0054 or email@example.com.