Policy Watch: Trump budget weakens protections for working people
This week, the Trump administration published its full budget request for fiscal year 2018. The proposal makes it clear that President Trump has no intention of honoring his State of the Union pledge to work to create “jobs where Americans prosper and grow.” The Trump budget would impose a major drag on economic growth and lead to job-losses totaling 1.4 million in 2020. Beyond the stark job-loss numbers, the budget proposal includes severe cuts to anti-poverty programs including food stamps and children’s health insurance. Below is information on the Trump budget cuts to worker protection programs.
The Trump budget reduces funding for the Department of Labor (DOL) by nearly 20 percent. Most of the cuts come from job training programs. However, the Trump budget also severely reduces funding for unemployment insurance program administration. On top of this cut, Trump’s budget would require this already stretched program to administer a new program— six weeks of paid family leave—with no new funding. Currently, only one in four jobless workers collect unemployment benefits and only 21 states have adequate reserves in the event of another recess.
One agency within the DOL would receive a substantial increase in funding under the Trump budget. The Office of Labor-Management Standards (OLMS) would see its funding increase by 20 percent. OLMS is responsible for enforcement of the Landrum-Griffin Act, which requires unions to report on their finances and gives the Secretary of Labor the authority to investigate unions and audit union finances. This budget increase stands in stark contrast to the National Labor Relations Board (NLRB) which would see its funding cut by six percent.. The NLRB is responsible for enforcing workers’ rights under the National Labor Relations Act which gives workers the rights to organize and join unions and bargain collectively with their employers for better pay, benefits, and working conditions. Unlike OLMS, which has jurisdiction only over union activities, the NLRB’s jurisdiction covers the right of all workers—whether union members or not—to seek better wages or working conditions. In spite of this, OLMS gets the additional funding in Trump’s budget while the agency tasked with protecting workers’ rights sees its funding reduced.
In addition to the release of the budget proposal, the Trump administration issued an important announcement on the fiduciary rule. Secretary of Labor Alexander Acosta originally said that he was hoping to further “freeze the rule,” but in an op-ed in the Wall Street Journal on Monday he said that he couldn’t find a legal way to do so, stating that while the department “should seek public comment on how to revise this rule,” department officials “have found no principled legal basis to change the June 9 date while we seek public input.” The fact that there will be no added delay in the near term is very good news. Further delay of the rule would have been a huge win for the financial industry and a huge loss for retirement savers all across the country, with every additional week of delay costing retirement savers $431 million over the next 30 years.
However, while the rule’s fiduciary standard will take effect on June 9, key compliance provisions built into the rule’s exemptions have been further delayed to January 1, 2018. Moreover, the department has stated that it will not enforce the rule between June 9 and January 1. This means the loopholes that allow financial advisers to take advantage of savers are not fully closed, and retirement savers will continue to be harmed.
Further, it is far from certain that the rule will in fact become fully applicable on January 1. The department has made it clear that—as requested by the financial industry—it is considering proposing additional changes to the rule and delaying it beyond January 1. Thus, we can expect further attempts to weaken and delay the rule in coming months.
Next week, Congress is in recess. When they return on June 5, they will continue to consider President Trump’s budget proposal. The Perkins Project Policy Watch will continue to track the Trump administration and Congress and provide information on how their actions impact on our nation’s workers.