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January 24, 2001, Wednesday
TYPE: COMMITTEE HEARING

LENGTH: 27405 words

COMMITTEE: SENATE HEALTH, EDUCATION, LABOR AND PENSIONS COMMITTEE1

HEADLINE: U.S. SENATOR JAMES JEFFORDS (R-VT) HOLDS CONFIRMATION HEARING FOR LABOR SECRETARY-DESIGNATE ELAINE CHAO

SPEAKER:
U.S. SENATOR JAMES JEFFORDS (R-VT)

LOCATION: WASHINGTON, D.C.

WITNESSES:

ELAINE CHAO, U.S. LABOR SECRETARY-DESIGNATE
U.S. SENATOR JIM BUNNING (R-KY)
U.S. SENATOR MITCH MCCONNELL (R-KY)
U.S. SENATOR PATRICK LEAHY (D-VT)

BODY:
U.S. SENATE COMMITTEE ON HEALTH, EDUCATION, LABOR AND PENSIONS

HOLDS CONFIRMATION HEARING FOR LABOR SECRETARY-DESIGNATE

ELAINE CHAO


JANUARY 24, 2001


*** Elapsed Time 00:00, Eastern Time 10:31 ***


SPEAKERS:

U.S. SENATOR JAMES M. JEFFORDS (R-VT), CHAIRMAN

U.S. SENATOR JUDD GREGG (R-NH)

U.S. SENATOR WILLIAM FRIST (R-TN)

U.S. SENATOR MIKE DEWINE (R-OH)

U.S. SENATOR MIKE ENZI (R-WY)

U.S. SENATOR TIM HUTCHINSON (R-AR)

U.S. SENATOR SUSAN COLLINS (R-ME)

U.S. SENATOR SAM BROWNBACK (R-KS)

U.S. SENATOR CHUCK HAGEL (R-NE)

U.S. SENATOR JEFF SESSIONS (R-AL)

U.S. SENATOR JOHN W. WARNER (R-VA)


U.S. SENATOR EDWARD M. KENNEDY (D-MA), RANKING

U.S. SENATOR CHRISTOPHER J. DODD (D-CT)

U.S. SENATOR TOM HARKIN (D-IA)

U.S. SENATOR BARBARA A. MIKULSKI (D-MD)

U.S. SENATOR JEFF BINGAMAN (D-NM)

U.S. SENATOR PAUL DAVID WELLSTONE (D-MN)

U.S. SENATOR PATTY MURRAY (D-WA)

U.S. SENATOR JACK REED (D-RI)

U.S. SENATOR JOHN EDWARDS D-NC)

U.S. SENATOR HILLARY RODHAM CLINTON (D-NY)

*

JEFFORDS: The committee will come to order.


This morning, the committee is meeting to considerate the nomination of Elaine Chao to be secretary of labor.


I want to congratulate you on your nomination.


CHAO: Thank you.


JEFFORDS: And I also want to applaud President Bush for making such an excellent choice.


Your life epitomizes the American dream, a concrete example of the consequences of opportunity and hard work and talent. And as such, you are a positive role model for America. I look forward to working with you on the issues within the jurisdiction of this committee and the Labor Department, issues that have such a great impact on millions of workers in this country and their families.


The Department of Labor has a primary responsibility for administration of our nation's job training programs and protection of worker safety and health.


The department also is concerned with the worker's retirement and health benefits. In fact, the Pension and Welfare Benefits Administration, PWBA, within the Department of Labor, oversees compliance with ERISA, COBRA and HIPAA -- those might not mean much to you know, but after a while you'll get used to these...


CHAO: They mean a lot.

JEFFORDS: For employer-based retirement and health benefits, more than 150 million people rely upon PWBA for the integrity of their employee benefits. In addition, the department manages the compensation programs for injured federal employees, deals with veterans' employment and training, and is a principle federal fact- finding body regarding labor, economics and statistics. Of course, this is not a complete list.


As secretary of labor you will be charged with the administration and/or enforcement of over 180 federal labor laws. Although, as chairman of the committee, I am concerned with the entire agenda of the Labor Department, and I have been and continue to be particularly interested in working training and education.


From all indications our economy is growing and we are experienced lowest unemployment in 20 years. Yet, our economy could be even more productive if we were able to fill the thousands of skilled positions that are open and available.


The Business and Labor Committee and the federal, state and local governments must support education and training systems which enable all individuals to enter the training system and receive the educational training that they need at any point in their lifetime.


Last fall, Congress passed the American Competitive -- the 21st Century Act. This initiative raises a cap on a number of H1B visas to 195,000 for the next three years. The H1B bill, which passed the Senate by a vote of 96 to 1 was needed, because this nation is lacking a skilled work force in the areas of high tech and health care. I feel strongly that we should not become reliant on foreign workers, but rather must train our own citizens.


It is clear that the success of the mission of the Department of Labor is of utmost importance to American workers, and that we all have this responsibility to ensure that the department's resources are utilized in the most effective manner possible.


Again, congratulations. I look forward to your testimony.


CHAO: Thank you.


JEFFORDS: Senator Kennedy?


KENNEDY: Thank you very much, Mr. Chairman, for holding this important hearing. And it's an honor to join in welcoming our distinguished nominee for the secretary of labor, Elaine Chao. And I commend our senators from Kentucky in advance for their introduction. And our friend, Senator Leahy for the presentation and gracious introduction of her. And I know that this is a particular proud day for our colleague, Senator McConnell.


Elaine Chao is a person of impressive talents, who has achieved a great deal in her career, both in and out of government. She is an accomplished manager, a graceful leader. And she has distinguished herself and her family by her strong commitment to public service.

She knows firsthand the experience of minorities growing up in America, the 1950s and '60s. And her career is a vivid example of a triumph of the American dream. And I might add that she wisely chose to attend both college and graduate school in Massachusetts, so our state can be proud of her, too.


The secretary of labor has profound responsibility in enforcing the basic laws of programs that protect workers fundamental rights to fair wages, fair benefits, reasonable work hours, safe and health work places and nondiscrimination and equal opportunity in employment. The department's statutory mission is specifically, and I quote, "to foster, promote and develop the welfare of the wage-earners of the United States, to improve their working conditions and to advance their opportunities for profitable employment."


So I look forward to hearing from Secretary-designate Chao about her priorities for the years ahead and her perspective on a number of initiatives of great importance to working families.


This Congress once again will have an opportunity to increase the minimum wage. I have long fought for raising the minimum wage, and I plan to introduce a bill this year to do so again. Eleven million workers have already waited over three years for Congress to act.


The real value of the minimum wage has fallen dramatically over the years. To have the purchasing power it had in 1968, it would have to be at least $8.05 an hour today, not the current level of $5.15.


Minimum wage families today fail to earn enough to rise above the poverty level, and no one who works for a living should have to live in poverty in the United States.


So I hope that a fair increase in the minimum wage will be a top priority early this year.


Another top priority is training the nation's work force to meet the demands of the new economy. The bipartisan Work Force Investment Act was passed in 1998, reforming federal job training to create much more streamlined, one-stop approach to give all workers, adults, dislocated workers and youth, access to training that they need to qualify for good jobs.


But we need to do more to address the needs of those in the work force who are not adequately prepared. As more and more workers face mid-life career changes, and as even traditional occupations grow in complexity, further training is necessary. So I hope very much that we can work together on this pressing issue. I know that Ms. Chao had referenced that in her statement earlier today that she'll present to us this morning.


I was also heartened that Ms. Chao had said that we must see that parents have an easier time balancing the responsibilities of home and work. Today employees are working longer and longer hours to make ends meet. The average worker's working 460 hours a year more in 1999 than they were in 1979, and this has put enormous pressure on the families, as well as on the workers. The result is significant problems for businesses, families, and we can do more to deal with these problems.


We must also guarantee strong, effective enforcement of federal laws against job discrimination. Current laws require nondiscrimination and affirmative action. The landmark executive order issued by President Johnson in 1965 has been in effect for more than 35 years, under both Republican and Democratic administrations, and strong enforcement is still needed.


Ms. Chao has spoken about the persistence of discrimination, and I hope this is an area where the department will continue to make progress rather than roll back long-standing policies and practices.


I have long been committed to vigorous enforcement of laws and programs to protect workers' health. Of particular concern is the prevalence of ergonomic injuries in the workplace. It's the most significant workplace safety and health issue we face today. About a 1.8 million workers report they suffer ergonomic injuries every year and another 1.8 million workers experience injuries that they do not report. These injuries are painful, often crippling, disrupt and sometimes end workers' careers, but in the vast majority of cases these injuries are preventable.


The OSHA ergonomics rule which went into effect last week at long last offers vital protection to America's workers and it benefits employers, too. Recent studies should lay to rest the preposterous suggestions made by special interest groups that we should wait for additional scientific evidence to deal with this serious problem.


Finally, as we know, from equal pay for women and people of color to pension plans, health plans, to the Family and Medical Leave Act, employees depend on the department to ensure that are labor laws are fully and fairly enforced.


We, in Congress, have a responsibility to see that the department has adequate resources to carry out the mission successfully.


So I look forward to Ms. Chao's testimony today, to working with her on these issues of vital importance to workers and their families. I hope that under her able leadership, the department will be at the forefront of improving the lives of the nation's families by ensuring that they have good jobs, good wages and safe and healthy places to work.


Thank you, Mr. Chairman.


CHAO: Thank you.


JEFFORDS: Thank you, Senator Kennedy. I now turn to my colleagues and urge please to keep your statements to within two minutes. Thank you.


Senator Enzi?


ENZI: Thank you, Mr. Chairman.


I want to welcome the distinguished panel that will be introducing the secretary-designate as well as welcome the rightfully proud family of the secretary-designate.


You've been selected by the president of the United States for your management capability, and I want to commend you for the outstanding list of achievements that you have in that area.


I'm the subcommittee chairman for the Employment Safety and Training Subcommittee, and a number of these issues that have been mentioned come under the jurisdiction of that subcommittee.


I will concentrate my very brief remarks on the area that I'm most concerned about which is the area of small business. I'm also on the Small Business Committee, and we have a lot of discussions in there about what small business is. And we've determined that it's those businesses less than 500.


And I've got to tell you, I think it's much smaller than that. That's the federal definition, but the real definition is the business where the person that owns it sweeps the sidewalks, cleans the toilets, does the accounting and waits on the customer.


And if we can do the regulations of this country so that the person in that size business can understand that all businesses will do well. We've designed a lot of the rules, regulations and laws so that those people who have additional expertise, particularly the big businesses who can specialize in different areas, can handle it. So, we have our job cut out for us if we're going to actually have fairness in the workplace and job safety.


If we can't include where most of the people work, which is in the small businesses of this country -- and I briefly mention one other area, and that's in the worker training. In the rural areas of this country and in some of the most rural, which are the Indian reservations of the country, there are tribal members that need additional help there, too. And I'll be placing some emphasis on that.


But I welcome you. I thank you for the expertise that you bring to this job and look forward to confirming you.


JEFFORDS: Thank you, Senator.


Senator Wellstone?


WELLSTONE: Thank you, Mr. Chairman.


Welcome, Ms. Chao. And you've got a lot of distinguished people hear speaking on your behalf.


Mr. Chairman, let me be very brief. I'd be less than honest if I didn't say -- and I think I said it when you came by the office -- that I do have some deep concerns about what the record of this administration will be on issues that I think are critically important to working people in our country. But I approach this nomination and this hearing with an open mind, and I know we have a very good person that's testifying here today.

A safe workplace; it's not a partisan issue. The right of workers to form a union; that's not a partisan issue. Senator Kennedy talked about the importance of people being able to earn a decent standard of living so they can take care of their children; that's not a partisan issue.


And when I think about single mothers, welfare mothers with children trying to make the transition to living wage jobs or people in farm country that are losing their farms or people in rural America or people in the iron range right now where some of the tacinite (ph) industry is closing down, and they've lost their job, and people looking for the opportunity for training, for education and for a job that they can support themselves on; that's not a partisan issue.


So I look for common ground, but -- and I know everyone was waiting for the but -- there are some fundamental principles that I do not believe we should compromise away. And I want to say to you -- and I'll ask questions about this, and I guess this is also to the administration -- that I believe that the ergonomics regulation that was passed and what position you take and this administration takes on that, and the new coal dust regulation which was passed by MSHA and is waiting for approval over at OMB, and for that matter, the responsible contractor rule which restricts the abilities of companies that have flouted federal law from getting government contracts -- I think the decisions you make and your positions on these issues and the decisions this administration makes over the next couple of months are going to echo throughout the country, especially when it comes to the position of working people and labor people and union people for the next four years.


So I think the question is whether or not the administration is going to be an administration that labor, that working people, that unions feel they can work with or not, and I hope that we will have some real cooperation from the very beginning.


I thank you for being here.


JEFFORDS: Senator Hutchinson?


HUTCHINSON: Thank you, Mr. Chairman. Thank you for calling the hearing, and congratulations to our Secretary-nominee Chao and her family.


It is a happy day for all of us, and I know -- I'm confident that you are the kind of person that all parties and all interests in labor issues and health issues will be able to work together and to work with. I think your approach to administering the Department of Labor will be one by which America benefits in your tenure in the president's Cabinet.


As a member of this committee, I have consistently spoken in favor of and supported legislation that would modernize our nation's labor laws. We must ensure fairness, as Senator Enzi said, to small business owners and their employees. And I'll continue to support efforts to make our regulatory agencies respect good faith employers and seek to help them to comply with what are too often very complex labor laws, rather than to view the small employer with suspicion and contempt.


I believe that the majority of employers care dearly about their employees, and this is perhaps one of the most profound differences between our modern society and the era of economic unrest back in the 1930s when many of our labor laws were written.


So while we must not roll back protections, we do need to reform our laws. And I look forward to working with you in this changing economy. You bring to this post an uncommon ability to work with people. And everyone who has come into my office, which we've had a discussion about how you will serve in this key position has mentioned that quality of being able to bring people together and work with people of various backgrounds.


So thank you for coming by and for the opportunity to visit last week, and we look forward to supporting your confirmation.


JEFFORDS: Senator Murray?


MURRAY: Thank you, Mr. Chairman.


And Ms. Chao, I want to join my colleagues in welcoming you here today. We had an opportunity to talk a few days ago, and I was very impressed by your comments.


In our discussion, when we met we talked about the important role that you will play as secretary of labor, being one of the main advocates for America's workers and being there to help improve working conditions and fighting for good family-wage jobs and helping get workers the skills they need. These are very serious responsibilities you're taking on, but I think you're up to the task. And I really look forward to working with you in fighting for those goals for American workers.


I know we're not going to agree on everything, but I do want you to know I want to have an open dialogue and a good working relationship with you because I think you head an agency that's extremely important for our country.


I'm very impressed with your background, especially your leadership of the Peace Corps and the United Way. In our meeting, you said you were a quick study and I think listening to you and in looking at your record, I think that's very true.


Ms. Chao, I just want to mention a few of my priorities briefly and I'll raise them later with you in questions. I am concerned about how the new administration will address the Family and Medical Leave Act, which has played a very important role in helping families balance work and home responsibilities. And I'm interested in how the administration plans on addressing President Clinton's paid leave initiative.


Ms. Chao, I hope that you and the new administration will address the wage gap that separates men and women in this country today. And I hope that the Bush administration will protect workers from ergonomic injuries by supporting the recently enacted ergonomic standard.


Finally, I want you to know that job training is a priority in my state. We have a highly educated work force that makes everything from computers to airplanes and we are greatly impacted by the flow of international trade. So given our rapidly changing economy, many workers in my state rely on retraining programs to find new jobs as our economy changes. So I hope that in your agency you will continue to work and invest in workers by supporting these job training programs.


Mr. Chairman, those are some of my concerns.


I look forward to working with you, Ms. Chao. And I look forward for the question and answer period.


JEFFORDS: Thank you, Senator.


Senator Collins?


COLLINS: Thank you, Mr. Chairman.


I want to welcome Ms. Chao to the committee and congratulate her on her nomination. I am just delighted with her appointment and I think she will be an absolutely terrific secretary of labor. I look forward to working with her on the many issues facing this committee.


In particular, as we stand at the dawn of the 21st century, we are facing an increasingly global economy that tests the skills of many of our workers in the United States and which will require innovative and creative leadership by the secretary of labor.


While the economy remains strong and unemployment low, we have seen how an ever-changing world can leave some workers behind. For example, the shortage of high-tech and other specialized workers in the United States caused Congress recently to increase the cap on H1B visas. That was an appropriate move which I supported, but the underlying lesson is that it demonstrates that we need to do a better job in this country of ensuring that our workers have the skills for those important and often well-paid high-tech jobs.


We also must continue to expand training and employment opportunities to ensure that no worker in more traditional industries is left behind, including the thousands of Maine shoeworkers who have lost their jobs due to increased imports in the past decade. In fact, the shoe industry in Maine has lost thousands of jobs -- almost 5,000 jobs in the last decade. This is a responsibility that I know that Secretary-designate Chao takes very seriously and I will be discussing with her the importance of the trade adjustment assistance program and other programs designed to help displaced workers.



COLLINS: I believe that Ms. Chao's extensive experience in the Peace Corps as the director, as deputy transportation secretary, as well as her management in the nonprofit realm as the CEO of the United Way, gives her the experience to excel as secretary of labor.


Moreover, her personal story of coming to this country at such a young age and being able to excel and reach the very highest levels of public service in this country is an inspiration to all of us. Clearly, she is the embodiment of the American dream and I can't think of a better choice to head this important department.


Thank you, Mr. Chairman.


JEFFORDS: Senator Clinton?


CLINTON: Thank you, Mr. Chairman.


I join in welcoming Ms. Chao and also her family, who are constituents of mine in New York. And I'm delighted that they could be here for this very important event.


I thank you for your service in the past and look forward to working with you in the future. I echo the comments of all who have spoken before me and will not repeat the issues that they raised, and will look forward to the questions.


But I do think that it's important to emphasize something Senator Collins has said, and that is, of course, the globalization of the economy and the challenges that it still poses to our work force here in the United States.


There's a tremendous opportunity for us to put into place 21st- century labor and economic policies that will enable us to put a human face on globalization and to make us as productive as we need to be in the future, as we have been over the last several years.


In particular, I'm concerned about pension plans that remove the reliability that workers should be able to count on as they go through their work life. I'm concerned about the need for better training that is really matched with work force capacity that we have to fill; the Family and Medical Leave Act and other issues that try to help workers balance family and work responsibilities, which become increasingly important. And along that line, the whole issue about compensatory leave, as opposed to paying workers for overtime work, is one that I'm concerned about.

But I just wanted to focus in my brief comments on pensions, because pension reform is, for me, an issue that is just looming out there. There are a lot of unfunded and underfunded pension responsibilities, a lot of corporate decisions that are using pension funds for purposes other than what they were intended to. So we need to have a plan about how to improve asset portability and strengthen legal protections for pension plan participants. Because certainly in our global economy, we have to increase savings and retirement security for all of our workers.


I look very much forward to working with you on behalf of American workers. And am very pleased by this nomination and the commitment and experience that you will bring to the task.


JEFFORDS: Senator Sessions?


SESSIONS: Thank you, Mr. Chairman.


I first would like to express my congratulations and appreciation for the service of former Secretary Alexis Herman from my town of Mobile, Alabama. She worked extremely hard in this position, was extraordinarily responsive to the requests of this Congress, and I think made quite a number of changes. But some more need to be made.


This is a $40 billion agency with 17,000 employees, and it's going to be a great challenge. I believe that in Elaine Chao we have a nominee that can more than meet those challenges, who, from my conversations with her, is just so anxious to get started and so committed to doing the right thing effectively, that I just know she's going to be successful.


And with a background as deputy secretary of the Department of Transportation in which she had to deal with quite a number of challenges, including the Hurricane Hugo, the earthquake, Pan Am, and Exxon Valdez, none of which you caused, but had to respond to. I guess perhaps living with Mitch, you're used to cleaning up messes; I'm not sure.


(LAUGHTER)


But that is a great record.


And then you took over the Peace Corps and served as leader of the Peace Corps and then as president and CEO of United Way of America after it had suffered great credibility losses and was really in a state of disarray. You brought that together and left there after having reinvigorated that great institution.


You have a tremendous record of achievement. And I believe we probably need more bipartisanship in the labor force; we need more teamwork between workers; we need more flexibility. We need to convert our labor laws from the '30s mentalities to a new century, a new millennium of partnership between workers and labor. And I believe you'll do a great job.


We're delighted you're here. And it's a delight also to have your family with you.


Thank you.


JEFFORDS: Senator Dodd?


DODD: Welcome. Very nice to see you. I'm very impressed that you have Senator Bunning and Senator Leahy with you here. I don't know who the other fellow is to your right there that's along with you, the other side of Kentucky, but we welcome him as well. And we're honored that you're before the committee and congratulate you and President Bush for submitting your name to the committee.


I had the wonderful pleasure on inauguration morning of meeting your parents. And I'm delighted they're here with us as well. And we welcome you both.


And let me second the comments made by Jeff Sessions about Alexis Herman as well. She did a wonderful job as secretary of labor. We're all deeply proud of her record, and know that you're going to pursue similar goals and values that she brought to the job.


We had the pleasure of working together when you were director of the Peace Corps. And as a former volunteer and on the committee that has jurisdiction over the Peace Corps in the Foreign Relations Committee, you did a very fine job there. And I know that many of the former volunteers and staff at the Peace Corps speak highly of your service as the director of the Peace Corps.


I'll wait for the question period to raise issues. We had a wonderful conversation in the office the other day about a number of things that I'm interested in pursuing. Family and medical leave is an issue that I have a deep interest in, having authored the bill along with my good friends Kit Bond from Missouri, who is here with us on this committee today, and a number of others, Arlen Specter. There was a very bipartisan effort. Senator Kennedy played a very important role.


I always took great pride in the fact that the very first piece of legislation signed by President Clinton was the Family and Medical Leave Act on a February morning back eight years ago. And I know he was very proud of the legislation.


Some 35 million people have taken advantage of that Family and Medical Leave Act. So we'd like to pursue that. We had good reports a few weeks ago on how well it's working, on surveys done by employers who had felt that the law was working very, very well. And so we want to pursue that and discuss that with you and see what efforts we can make to enhance and strengthen even that law.


So I look forward to your service. Pleased you have decided to come back into public life. You've distinguished yourself over the years with your service. And I'm confident you will again. I look forward to supporting your nomination. And I do welcome my chairman from the Rules Committee here, Mitch McConnell. He's been a good friend. And I look forward to your working with the committee.


CHAO: Thank you.


JEFFORDS: Senator DeWine?


DEWINE: Thank you very much, Mr. Chairman.


And I join my colleagues in welcoming Elaine Chao as the nominee. I can't exceed the laudatory comments and smart cracks of my colleague from Alabama. I will not try. But I would second all of the nice things that have been said.


Certainly, based on our discussions and your background, I am confident, Elaine, that you are the right person to pursue the noble and lofty goals of improving the welfare, the job opportunities and the well-being of the working men and women of America. And I know that you take that very seriously in your commitment came through in our discussions.


I would, however, point out that one of the things that we have to be concerned about when we are trying to accomplish all these great purposes in the laws of unintended consequences, and federal laws often have those unintended consequences.


As Senator Dodd, lead cosponsor of Family and Medical Leave, I was concerned about making sure that we didn't force small businesses out of operation and cost jobs. And that's why we put the job -- the 50-employee limit on Family and Medical Leave. And as my colleague from Wyoming has pointed out, by trying to do good things in too heavy-handed a way, we may not only force small businesses out of business, but cost the people we try to help, jobs.


The minimum wage, several years ago the New York Times said the proper minimum wage is now 0.00. They recognized that too high a minimum wage could, in some circumstances, force out of the workplace the teenagers trying to get the first step on the ladder, particularly minority teenagers. That's why it's worthwhile that we consider flexibility. That has been discussed in the minimum wage.


Also, as one who chairs the Small Business Committee, I would urge you to take a look at the ergonomics regulations. Small businesses understand just as large businesses do that ergonomics injuries are not only harmful and painful, they are very costly. That's why they have worked together to bring down the level of ergonomics injuries in recent years.


Unfortunately, what OSHA has done is not to provide working guidelines or help for injuries, but to impose penalties. And this may have a negative impact.


Finally, you have in the Department of Labor a newly established office for Small Business Programs. As we've discussed, I believe we can work together on job training programs to make sure that, for example, the hub zone opportunities where small businesses will get jobs in inner cities from selling to the government, gives not only the Labor Department an opportunity to purchase there, but to bring job training programs in. And we, small business, look forward to working with you to see small business creating the jobs with that the men and women of America need.


I thank you and I wish you well and I look forward to working with you.


JEFFORDS: Senator Reed?


REED: Thank you very much, Mr. Chairman.


And welcome, Ms. Chao and your family, and Senator McConnell and Senator Bunning and Senator Leahy. It was a pleasure to meet with you last week.


As my colleagues have so well-explained, you bring extraordinary range of talents to this job, in addition to your intellect and your reputation for fairness and integrity. So we're all confident that you're going to do a very, very good job.


You will assume these responsibilities at a very interesting time in our history. We've enjoyed unprecedented prosperity over the last several years, and yet, in the midst of that prosperity, there are still families struggling to make ends meet.


Now, you'll find that we have some different views here on the committee. And one view that I have is that the minimum wage should be increased. If you look at the statistics, if there is a worker at a minimum wage job working 40 hours a week, all through the year there will earn about $10,700. And that's $3,400 below the poverty line. I think it's something that we have to address, because we want to make work rewarding. We certainly want to make it a way out of poverty. And that, I think, can be done by increasing the minimum wage. I hope you will address that issue.


And there's another that you are, I'm sure, concerned about, and that is the disparity in the types of income and wages that women earn in our society. I think we have to work creatively and hopefully with business to ensure that an individual is rewarded based upon their talents and not based upon stereotypes. And your efforts in that regard will be deeply appreciated.


There is also a major challenge in making sure that our work force, particularly young workers have all the skills they need. And one program at the Department of Labor has sponsored for generations, at least several decades, has been the Job Corps. That is a very important program. We're very pleased, as I explained in the office, to have a Job Corps center being developed in Rhode Island, our first center. We will join the ranks of most the others states with a Job Corps center. But I would hope that you would continue to invigorate the Job Corps, support it and make it an accessed opportunity for countless Americans who need that chance to succeed in the workplace.


I look forward to working with you and wish you well. And thank you very much for being here today. And I'm eager to here your responses.


Thank you.

JEFFORDS: Senator Warner, congratulations on your fight to get back on this committee. Some might question your sanity, but I praise you for your courage.


WARNER: Mr. Chairman, I thank you for the opportunity to rejoin this committee and be among members for whom I have the greatest respect. I've known the ranking member, I guess, some 40 years. And we'll have a tussle or two, as we've had in the past.


But this is a great committee. It's a strong committee. And the leadership through the years, certainly the current leadership, have propelled it right to the forefront of the Senate responsibilities.


And I thank our distinguished nominee for rejoining the public sector. It's not an easy decision, given the diversity of background that you've had in many jobs and the challenges and the opportunities in the private sector today, to return. But on behalf of the nation, we commend the president. We thank you very much.


Because this nation can be no stronger than the men and women who get up every day, accept the challenges to go out into the workplace, return home to care for their families, and their selves, and indeed their neighborhoods.


So you'll be a great leader. You'll be a role model for generations of younger Americans that are coming along who aspire likewise to achieve the goals that you have.


I wish you luck. And if I may say on a personal note, having known you fairly well through the years, whether it's in the private sector or the public sector, you've accepted the challenges, pursued your responsibilities, with firmness, fairness, always with a quiet dignity. Good luck.


JEFFORDS: Senator Mikulski?


MIKULSKI: Thank you very much, Senator Jeffords. But I note that I was late coming. I'm happy to yield to Senator Clinton because she was here first...


(CROSSTALK)


CLINTON: Thank you for that kindness, Senator.


MIKULSKI: Ms. Chao, hi. When you called me about right after President Bush designated you, I said I felt very comfortable with your nomination. And I felt comfortable because I have three criteria: competence, integrity and a commitment to the mission of the Department of Labor.


I believe you're very competent to do this job, and I think you bring great personal integrity. Your resume speaks for itself. In the way you served the United Way, brought it through a difficult time, restored integrity, public confidence, built coalitions, worked with the labor unions, who are major contributors. Your leadership at the Peace Corps, moving it during a very difficult post-Cold War period. Transportation. All your awards. You have an extraordinary resume.


What I believe is that because of your background you also have a deep commitment to an opportunity ladder in this society. I take President Bush at his word where on Saturday he said he wants to have a single nation, with justice and opportunity and an atmosphere of civility. And I feel you will be -- I have confidence, even looking -- both knowing you and your testimony, to talk about an opportunity ladder.


I'm going to be looking forward, after you give your testimony, to hear about what we talked about on the telephone, which is that we don't have a worker shortage in this country, we have a skill shortage in this country, and that what we need to do is to make sure that everybody who wants to work has the tools to participate in the new economy. And even the old economy, our smokestack economy, is now a cyber-stack.


So I look forward to hearing to make sure that we do not have a digital divide, either through our K through 12, but also in our skill shortage, as well as being very sensitive to the new occupational safety challenges that are affecting us in the new workplaces and the others.


I know we really want to hear from you and the wonderful team out there waiting to introduce you. I look forward to conversations on how we get the job done so people have jobs when all is said and done.


CHAO: Thank you.


JEFFORDS: Senator Gregg?


GREGG: Thank you, Mr. Chairman.


And it's great to have you here, Ms. Chao. And, you know, you so epitomize the American story and the American dream that your choice as secretary of labor by President Bush, I think, is a reinforcement of that dream. And I just congratulate you on all that you've done that's been so extraordinary.


CHAO: Thank you.


GREGG: I listened to your press conference when you were announced and it was just such an overwhelming story of success and hard work and perseverance, coming to this nation when you were 8 years old and jumping in with both feet, and now becoming secretary of labor. And along the way having contributed so much to the betterment of our country in your various activities at the Peace Corps and with the United Way.


So I'm very excited that you decided to take this opportunity on, and the nation is better because of it, and I look forward to voting for you.


CHAO: Thank you very much.


JEFFORDS: Senator Harkin?

HARKIN: Thank you very much, Mr. Chairman. And I apologize for being late.


I want to extend a warm welcome to Ms. Chao. Appreciate the opportunity to discuss the challenges that lie before us.


Ms. Chao, as we discussed when we met earlier, I wear a couple of hats. I'm on the authorizing committee here, but I also serve as the ranking member on the Labor, Health and Human Services Appropriations Committee, and so we'll be working with also on budgetary items. In that regard, again, I just want to mention a couple of things that I hope that we can work together on that you will focus on.


Last year -- let me just phrase it this way: We look out across America and we see most people employed. We have low rates of unemployment. That's good for America. But among people with disabilities, and especially people with severe disabilities, you're looking at as high as 80 percent unemployment rates among people with disabilities and severe disabilities.


And so last year I worked with Senator Specter and my colleagues on the Appropriations Committee to fund an Office of Disability Policy at the Department of Labor with an assistant secretary position. So this is something new, it's never been created before. And so you'll be in the position of hiring the first assistant secretary for disability policy.


The office is intended to improve job opportunities for people with disabilities. And so I think the Department of Labor now has a real opportunity to reach out that that sector of America that is severely unemployed and to begin to create the kind of work opportunities and enhancements that people with disabilities need in order to become employed.


And so I am hopeful that you will look for an individual to fill that assistant secretary position who really understands and knows what it means to have to overcome disabilities to get to work every day, and what they face in terms of high unemployment rates.


Lastly, or secondly, Ms. Chao, I've been working for several years, as I mentioned to you earlier, to provide increases in funding to developing countries for the purposes of eliminating child labor. Again, I commend to you to look at the five volumes that have been done in the Department of Labor on child labor around the world. It's really the seminal work on the issue of child labor globally. And I hope, again, that you will continue what your predecessors have done to get the Department of Labor involved in working with IPEC and with ILO to eliminate child labor globally and to improve access to basic education in those areas, and working with the Department of Education.


Two last things, fair pay, you hear a lot about equal pay for equal work, to a great extent, that has been taken care of. But we need to enforce it more and you need some more enforcement. But the big issue is equal pay for comparable work. We have too many women in this country who are working in jobs that are designated as female- oriented jobs. And right now, they're making probably less than 70 cents on the dollar for what a man makes for a comparable job. And I think we need to look at the problem of underpaying workers in what has been traditionally female-dominated jobs, such as nursing homes, hospitals, day care, child care, that type of thing.


And so those are the issues I hope to be working together with you on.


Let me just conclude by saying that organized labor has done a lot for this country. I believe that many of the freedoms and many of the quality of life aspects that we enjoy in America have been brought to us because of the efforts of organized labor over many years. I come out of organized labor, that's where my father came from, and I just again hope that you'll have a close working relationship with organized labor. I know you have in the past with United Way, and I have every assurance that you will continue that.


So, again, I welcome and look forward to working with you.


JEFFORDS: Senator Frist?


FRIST: Thank you, Mr. Chairman.


I join in applauding President Bush for your nomination as secretary of labor. Your list of accomplishments are already outlined in so many different fields, whether it's business or whether it's government or the non-profit sector, really is truly remarkable. You distinguished yourself as a leader, as a decision-maker, as one who really does touch something and that something grows, becomes better, of higher quality, more compassionate. It's consistent as one follows throughout your, as I said, remarkable career.


The path that lays ahead of you as we've gone down and addressed some of those and introduced some of those, indeed will be difficult, but as you look back over your past, whether it is in the Peace Corps or at the Department of Transportation or as CEO of United Way, each and every time, you've brought to the table the maturity, the judgment, the careful thought processes, the common sense to address these complicated, these numerous problems. And I expect -- and I guess we all expect -- that you'll be taking that same set of skills, same set of leadership and management skills to your new position as secretary of labor.


I hope to have the opportunity to address really two issues. And one has been mentioned in part, and that is the new economy, the globalization aspects of the new economy that we see, and in addition to that, the information technology aspects as it affects both the domestic economy, the job creation as well as the globalization which has been mentioned. How will we best prepare this current work force to address the new economy?


The other issue is one that Senator Harkin mentioned, that is, addressing the whole concept of individuals with disabilities, of maximizing the opportunity, the potential of individuals with disabilities. He pointed to Secretary Herman's announcement of the Office of Disability Policy, and I think that is a tremendous first step that we can concentrate, that we can focus and address the whole issue of how to increase the employment rate of individuals with disabilities.


President Bush -- and I look forward to hearing more about that, hopefully over the course of the morning -- had made helping people with disabilities a high priority in terms of quality employment. And he's proposed a comprehensive New Freedom Initiative that will help integrate Americans with disabilities into the workplace.


Again, congratulations. I am delighted. I'm very excited about working with you on a number of these issues as we come forward.


JEFFORDS: Senator Bingaman?


BINGAMAN: Thank you, Mr. Chairman.


Congratulations to you. I certainly intend to support your nomination. I think you're well-qualified for the position. I will be in touch with you on a couple of issues also. Let me just mention them briefly.


One is, we passed a bill this last year to provide compensation to workers who have worked in our nuclear weapons production complex and who have been injured either from exposure to beryllium or radiation or whatever. The responsibility for administering that law has been put at the Department of Labor. And I want to follow up with you to be sure that that's given priority.


I think the law becomes effective in July. So I will certainly be in touch with you on that.



BINGAMAN: The other is trade adjustment assistance. I'm persuaded that it's time for us to modernize our trade adjustment assistance laws. And I hope very much to work with you on that as well.


Congratulations to you. And I wish you well in this new position.


Thank you, Mr. Chairman.


JEFFORDS: I thank my colleagues for excellent statements. It's now our time to turn to the introduction.


Now, to those who will introduce the nominee and I turn first to the senator from Kentucky, the junior senator, for his remarks.


MCCONNELL: Mr. Chairman, if you don't mind, I think we'll have Senator Leahy lead off and then Senator Bunning and then myself. Would that be all right?


JEFFORDS: Well, that's all right. I had it the other way around, but that's quite all right.


LEAHY: Whatever you say, Mr. Chairman. I understand that there's been some concern, and I thank my friends...


JEFFORDS: Certainly, Senator, please proceed.


LEAHY: ... from Kentucky. I really am honored to be here with Elaine Chao. And I think the president made an excellent choice.


Everything has been said about her, I believe, and everybody has said it, but I will put most of this statement in the record. But I wanted to emphasize the high regard there is for Elaine Chao on both sides of the aisle, and also to say how wonderful it is her mother and father and family could be here with her.


Elaine, I can only begin to imagine the sense of pride they're feeling for you, but the sense of pride you must have in having them here.


I first got to know Elaine when she was the director of the Peace Corps, and that, with all the other positions she's held, all of which she's done very, very well, this was an extraordinary one. She expanded the Peace Corps mission beyond its traditional areas of agricultural and health and education. She tried to bring it into the former Soviet republics. What she did was to recruit volunteers with graduate degrees in business. That took the Peace Corps way beyond where it had been, but it focused resources on strengthening the private sector that could be the economic growth in so many of these developing countries.


During the time when I worked with her, I never saw an instance where she did not put our nation's ideas first. I never saw her take political positions or whether those positions that would strengthen the ideas of our country.


Senator Dodd has served and served with distinction, as did some others, in the Peace Corps. And this is the one area where we can really make the ideas of the country shine and she did that.


Same way she did when she went to United Way and restored the tarnished reputation of that organization. That organization has done so much good and would have had to stop doing that good has she not come in there and restored it.


And she also happens to be married to Senator Mitch McConnell. Now Senator McConnell and I are very good friends, but I would say that their marriage is more about his good judgment than anything else. And while we may be different in some political things, we share the common bond that both of us have married way above ourselves.


And this is a case where I saw, I remember when Elaine and Senator McConnell and my wife, Marcelle, and I took a trip to the former Soviet Union together. And, again, how beneficial it was having her there.


Mr. Chairman, I'll just close with this: I consider a great honor to even be asked to be one of the introducers. I think the president has made a very wise choice. I know that you and Senator Kennedy and the committee will hear all the testimony, but I would hope we would have a very early vote on Ms. Chao on the Senate floor and I intend to vote for her.


JEFFORDS: Thank you, Senator Leahy.


Senator Bunning?


BUNNING: Thank you very much, Mr. Chairman.


I don't know if I can add too much to what my senior senator will have to say. He obviously has a pretty good reference. But I'm proud and excited to be here today to help introduce the woman who is going to be the first Cabinet secretary from Kentucky in over 50 years.


I'm extremely happy that the president nominated Elaine to be our labor secretary. She is exceptionally smart and qualified, and someone whose managerial background and temperament will suit here well in that position.


Elaine's biography and experience are impeccable and impressive. The president has made a great choice. She has run government agencies, she has help steer the United Way out of deep trouble. She has worked in the private sector and the academic community. Elaine Chao has done it all, and we're lucky that she wants to serve her country again.


Mr. Chairman, Elaine is living proof that the American dream is alive and well and continues to be alive and well. For all those who think that opportunity is not here in America, she is living proof that it is.


When her family arrived in America, she couldn't speak a single word of English. She is now about to become a Cabinet secretary. Her life story is an inspiration for American workers who struggle to succeed and every day try to do better for themselves and their families.


In Kentucky we take great pride in our people, in our commonwealth. I have always been very, very proud to say that I am a Kentuckian by birth. But in Kentucky we are especially proud of those like Elaine who are Kentuckians by choice. It's just another example of her good judgment.


Mr. Chairman, Elaine Chao will make a great secretary of labor and I hope you confirm her quickly.


Thank you very much.


JEFFORDS: Thank you very much.


I'll turn to the senior senator from Kentucky, who, I believe, has an unusual perspective on the nominee and I would accept, perhaps, that this is the first time that this has occurred in the Senate.


KENNEDY: I want him sworn, Mr...


(LAUGHTER)


(CROSSTALK)


JEFFORDS: Senator McConnell?


MCCONNELL: I thank you very much, Mr. Chairman. And as you can imagine, the last couple of weeks have been overwhelming for our family. The encouragement and positive support Elaine has received since President Bush nominated her for this position has really been stunning. Particularly among the Asian-American community for whom she's been a role model for a long time, extraordinary excitement.


I want to saw how incredibly honored I am to be here today, not as the senior senator from Kentucky, but as the proud spouse of a woman I believe will be one of the best secretaries of labor our country has ever had. You all have all addressed her extraordinary accomplishments, and Jim has mentioned the attitude at home; 55 years is a long time since the last Cabinet secretary from Kentucky and our people are just thrilled that this has occurred.


And on a personal note, all of us who have been in politics, I think -- and won elections probably think the great thrills are the nights that we win. But I must tell you, Elaine's selection by President Bush was more exciting than anything I have ever experienced in my entire life. He made a fantastic choice. I hope the committee will do the same.


And now I'm going to do what I do best, and that is to shut up and let Elaine do the talking.


(LAUGHTER)


JEFFORDS: Thank you all for...


(UNKNOWN): Mr. Chairman, in the spirit of honesty, I don't know whether that's what he does best, but I want to thank all of the nominations, the speeches and all and now we will turn -- but first before we turn to your word, I wish you would introduce your family, if you might do that for us, so we can know who's here with you.


CHAO: Now that Mitch has adopted the sense of the adoring spouse, I would love to introduce my family: my father, James Chao -- stand up, Dad -- and my mother, Ruth Chao; my sister, Mae Chao; my younger sister, Angela Chao; and my brother-in-law, Jeff Wong (ph).


Thank you.


(APPLAUSE)


JEFFORDS: Now, please proceed. We look forward to your statement.


CHAO: Thank you. Good morning, Chairman Jeffords, Ranking Member Kennedy, and also members of the committee. Thank you very much for allowing me the opportunity to be with you here today.


I'm honored to be accompanied today by the two senators from my home state of Kentucky, Senator Mitch McConnell, with whom I'm moderately acquainted, and Senator Jim Bunning. Much can be said about both of these men, their integrity, their stature, their achievements. But the most important thing about them is that they have two of the most wonderful wives you've ever seen.


(LAUGHTER)


I also want to thank Senator Leahy of Vermont for coming to introduce me today as well. Senator Leahy and I have worked together in the past, and I truly appreciate his support as I prepare for this position today.


As you have seen, I'm also very blessed to have with me a group of people who are the reason I'm able to come before you in this capacity. And that's my family -- my mother and father, Ruth and James Chao; my sister, Mae Chao, and her husband, Jeff Wong (ph) -- and they're all from New York; and my younger sister, Angela Chao, who flew in from Boston.


Also present in the audience here and other places are many members of the Asian-American community who share pride in my nomination, as I am only the second Asian-American and the first Asian-American female to be nominated to the U.S. Cabinet. I appreciate deeply their support and their encouragement.


Today is also Chinese New Year, a traditionally auspicious day, and I hope that it will be auspicious for me as well. And there are many, many other friends, co-workers and former associates who are here, and I thank them for their support.


You know, surrounded by so many special people like this, who have played such significant roles in my life, I'm reminded that even though I'm personally honored to have been nominated for this position by President Bush, I know that this is not just for me. This is also for all of those immigrant families who come to this country with nothing but their essentials and an unswerving faith in themselves, in the promise of America, and in God. This is also for those struggling families where one or more parents hold down several jobs just to make ends meet, and they have little bargaining power with an employer over issues of pay, benefits and safety.


This is for those who have encountered barriers to getting good jobs, whether that barrier is a physical disability or some form of prejudice or, as in the case of many immigrant families like my own, barriers of language and culture.


This is for the many thousands of Americans I encountered as president and CEO of United Way of America, those who are served by the charities that it supports, who want to leave behind a destructive lifestyle and need a helping hand to lift them up into productive, healthy, dignified lives. These are the people who have been helped by Welfare to Work and who are counting on it to being reauthorized.


And this is also for all of those women in the work force who were once told not many years ago that the highest position to which they could aspire was to become a secretary, and with your guidance and support, that's exactly what I hope to become.


(LAUGHTER)


Through the diverse experiences that I've had, from struggling to learn English as a young child to serving as deputy secretary of transportation, director of the Peace Corps, president and CEO of United Way of America, I have seen that all work is worthy of respect and virtually all workers need appropriate protection.


And the way I see it, the Department of Labor represents all workers, both those who choose to join unions and those who do not. It represents those who have been denied equal access to good jobs or advancement because of residual prejudice against their race, gender, ethnicity, national origin or religion.


It represents veterans and those returning from temporary military service who want to start or renew careers in the private sector.


And it represents those who have not been allowed to reach their full potential because of physical disability. In the last decade, we have made tremendous progress in opening the workplace to disabled Americans, starting with the Americans with Disabilities Act that was signed by former President Bush nearly a decade ago.


Today, through the work of Senator Harkin and others on this committee, we have a new Office of Disability Policy as well as a new assistant secretary to oversee that mission.


Now, President Bush does want to go further, and he has proposed a new freedom initiative that will harness the latest technology to give disabled Americans even greater access to work opportunity.


These changes are a reflection of what work truly means to most of us, and that is that it's not just a way of paying the bills but also a pathway to gaining respect and human dignity.


In that same light, I commend the Department of Labor for taking steps to recognize and value the kind of work that most of our mothers did, running a household and raising a family. And if we think that that's not work, then we don't really know what work really is.


So, thanks, Mom.


As I've been preparing for the awesome responsibility of serving as secretary of labor, should you extend me that honor, I have been struck by the rich heritage of this department. I am very much aware that so much of the work force protection that we now take for granted in this country were born out of the Labor Department, that labor movement.


The labor struggles of the early part of the last century and the laws that grew out of them are a critical part of this nation's historic commitment to justice for all. The balances that these laws strike between labor and management are a critical source of stability in economy as well as a guarantee of fairness in the workplace. And in recent years, we have seen how these two forces must come together and work cooperatively in order to compete successfully in the world economy.


For all of these reasons, I believe that a critical part of my responsibility, should I be confirmed as secretary of labor, is to fully, fairly and evenly enforce the labor laws of this country. And I believe further that any change in our labor laws or in their interpretation must be carefully and solemnly considered, giving respectful and full attention to the views of every participant in the labor-management equation.


At the same time, it will be my goal as secretary of labor to make sure that the department, its programs and its mission are in step with a dramatically new economy that continues to evolve right before our eyes.


If the ongoing activities of the Department of Labor do not reflect the emerging realities of a new economy, then sooner or later, the department will be unable to fulfill its responsibilities to the workplace that it is supposed to serve.

To me, perhaps the greatest challenge faced by the Department of Labor and one that demands immediate attention is represented by what I am holding in my hand today. This is a recently published listing of unfilled high-tech positions all across America. This publication and others like it advertise thousands upon thousands of well-paying jobs, most of them with unlimited future opportunities, and earning potential unmet, and employers so hungry for applicants that they offer to pay all travel expenses for perspective employees, and a demand for a qualified labor that is so great that all historical barriers of race and gender and disability are almost irrelevant.


So you might ask: What's the problem? It sounds like a utopia. And yet, unfortunately, as of this moment, it is only a promise that we must work to fulfill, because in America today there are thousands, tens of thousands, perhaps hundreds of thousands, of high-tech jobs that cannot be filled, while at the same time there are millions of Americans who cannot currently fill them. That, I believe, is a supreme challenge that this Labor Department faces at the threshold of a new millennium.


And that's why President Bush has expressed a strong commitment to build upon and improve our national job training efforts. We need to ensure that job training funds are targeted to bridge this gap between these high-paying, but high-skilled positions that need qualified workers and the millions of Americans who need additional training to be able to fill them.


We also need to recognize how broadly this new economy is revolutionizing the workplace. We now live in a world where workers are being empowered to be managers as well as shareholders and even owners of the companies in which they work. Younger workers are increasingly taking their retirement into their hands, rather than relying on the government or an employer or union to provide it for them.


In one sense, the new economy is deconstructing work with jobs that cannot be pigeonholed into traditional workday or work week, and corporate structures that, in some cases, are eliminating the need for workplace altogether.


Workers themselves are demanding more autonomy, more freedom, more customization of the terms and conditions of their employment. And as we invest in critical job training, we're giving workers the bargaining power they need to custom design their jobs around their lives, instead of the other way around.


So in order to remain relevant and responsive to workers' needs, even the Department of Labor will need to adapt to the reality of the changing economy. It's not that there's a new administration in town; there's a whole new world that we need to respond to.



CHAO: What changes need to take place, how and when they need to be implemented, should be the subject of a continuing and robust dialogue between the department, the Congress and all those who play a role in labor-management relations.


It's been said many times in the last few years that we need to build a bridge to the 21st century. Well, I believe the best way to build a bridge, figuratively speaking, is for people on both sides, on all sides, to get working and find an appropriate meeting place somewhere in the middle. I look forward to that process, which I started even today as you share with me your concerns and your ideas in this hearing.


I may not be able to fully answer all your questions today, but I pledge to maintain an open line of communication so that together we can best serve the working men and women of this country.


Thank you very much, and I'd be delighted to answer any questions.


JEFFORDS: Thank you very much. I want to say that's one of the most articulate, incisive and moving statements I've ever heard from someone coming before this committee.


CHAO: Thank you.


JEFFORDS: And I praise you for that.


We will now have the opportunity for each member to ask questions for five minutes. That includes the answers, so you can probably control that to a certain extent.


(LAUGHTER)


CHAO: Thank you.


JEFFORDS: I would hope you would allow us to listen to you, to the answers to these questions.


I'll start. It's one that I expect you know we are going to get.


Here in Congress, one issue we seem to continue to grapple with is our federal minimum wage. But I do not believe that the minimum wage is the only way or even the best way to give folks in need a helping hand to get out of poverty. I do believe that the time has come to raise the minimum wage again. An increase will go a long way toward helping those workers obtain the basic needs for themselves and their families. Now, I recognize that raising the minimum wage is our job. However, I'm wondering if you could tell us what your view is on this subject? Or the administration's?


CHAO: Sure. The president's position on the minimum wage is that is should be increased. And his proposal would also include that the community should have some flexibility to ensure that any minimum wage increase would not hurt employment in rural and economically depressed areas. And I support that.


We need to remember that the real minimum wage is always zero and people who truly need work are effectively shut out of the labor pool by a nationally mandated minimum wage that restricts employment in economically stricken areas. However, under the president's plan, even in these rural communities with a lower cost of living, employers should still be required to abide by the current federal minimum wage, and this flexible plan is a fair proposal, designed to save jobs as well.


As secretary of labor, you should have no doubt that I will vigorously enforce our nation's wage laws and strive to guarantee that an honest day's work results in an honest day's pay.


Thank you.


JEFFORDS: As I indicated in my statement, I look forward to working with you on job training also and the continued implementation of the Workforce Investment Act. One of the key provisions of the act was the importance of coordinating job training with vocational and technical education. What are your thoughts as to how the relationship between job training, run through DOL, and vocational education, being run by the Department of Education, can be improved or coordinated or what are your views on this?


CHAO: Let me say at the outset that training, developing and modernizing America's work force is one of my highest priorities. I want to ensure that the department job training programs are designed to make our work force as prepared as possible for the challenges of the 21st century. I will also ensure that President Bush's efforts to reauthorize Welfare to Work are complemented by new, one-step job training centers administered at the local level, as provided by the new Workforce Investment Act.


Secondly, quality job training must be available so that aspiring workers can get the job that they need in our new economy. This would require the full commitment of and coordination among federal, state and local governments, as well as organized labor and businesses. There is broad consensus on the need for such an effort, and I look forward to coordinating and being a part of helping and facilitating that effort.


Thirdly, to lead the global economy, we've got to continue to have the most skilled, trained and versatile work force in the world, and no worker should be left behind. The Department of Labor must provide our work force with the skills necessary to compete in America and around the world as we continue to move into a new and more global economy.


And with Secretary Paige having been confirmed, I look forward to working with the Department of Education in a very coordinated and a close fashion to ensure that both our departments are working in a coordinated fashion to ensure that all workers are prepared to face a new economy, a global marketplace, from K-12 and from thereafter.


JEFFORDS: The last question, I'm going to turn to the questions of health care. Health care premiums are increasing again, and for the third year in a row, U.S. employers can count on the average increases for the next year, 10 to 13 percent. Historically, premium increases have caused more people to become uninsured. Today, there are 43 million Americans with no health insurance. An important part of any managed care reform debate is impact on cost. Do you have any thoughts on how we can draft a patients' bill of rights so it does not increase the cost of health care?


CHAO: Senator, I wish I could draft a ideal patients' bill of rights. I suspect if I were, I would be the hero of this country. But as you know, the president will support a strong patients' bill of rights. And he wants a bill, obviously, that will not increase the number of uninsured Americans. And I support that as well.


Employers are not required to offer health plans to their employees at this point. They do so because it is an attractive benefit for employees and their families. Such arrangements should be encouraged, not hindered, by higher insurance costs and increased exposure to liability. What we need to do is carefully assess the impact of competing proposals on employer-sponsored health insurance plans. And the last thing that any one of us want to do is to pass a bill that causes hundreds of thousands of employees to lose their health benefits.


But as secretary, I will enforce any provision of a patients' bill of rights that is assigned to my department.


JEFFORDS: Thank you.


Senator Dodd?


DODD: Thank you very much, Mr. Chairman.


And I too want to commend you, Ms. Chao, for your statement. I thought it was an excellent statement you made.


And while I know this is new territory for you, having had a background in the transportation area, I'm a great believer, bright people with good sense, common sense, coming in, that you'll quickly learn the issues here at the Department of Labor.


I want to thank Senator Harkin as well -- I wish I had said it in my opening remarks -- talking organized labor. And we need to get beyond this issue of sort of seeing organized labor as the enemy. And the numbers are dropping of people who are part of organized labor in the country, at least the numbers are today. And I just take it from your background and experience at United Way and elsewhere, how closely you've worked with leaders who have made a huge difference, not only in the lives of their members, but for working people generally.


I've always said, I know very few other organizations who battle as hard on behalf of people who are not their members. There's not a single member of organized labor in this country who earns the minimum wage.



DODD: There's not a single member or very few members who are actually getting the benefits of family and medical leave, in a sense. I mean, these are issues that went beyond their own constituency. So I have great respect for the work they've done and the difference they've made in contributing to the strength and well-being of America, and I know you share those views.


I just want to touch on three subject matters. I'm may only get to one or two of them in five minutes, and I suspect others may pick up on them, so I'll follow through. And that is what I've mentioned, the family and medical leave and also the Employment and Training Act. This is an extremely important issue for us here. And you addressed it -- the administration, excuse me -- by raising that newspaper column and talking about what Senator Mikulski addressed on numerous occasions. And that is -- she said again this morning -- it's not a worker shortage; it's a skill shortage.


And I'm just going over -- looking at the budget for the employment and training administration from the previous few years. And, obviously, there are a lot of pressures on these areas. But if you look down that whole budget area on training and employment services, Work Force Investment Act, youth opportunity grants, it's been pretty much a flat line over the last number of years.


And you made the point eloquently about how we've got to do a better job. A lot of us are hounded to death by constituents and businesses for the H1B visas, but we've dealt with it up here. And in the absence of anything else, we've been supportive of providing those visas for people because our businesses need them in order to fill the skilled job levels they have.


But I know in Fairfield County, alone, in Connecticut, there were some 50,000 jobs a few years ago that were going unmet by people in my own state because the skill levels were not being met. And so we spent a lot of time trying to bring people in from India, Pakistan, Bangladesh other places where the skill levels were high. And it seems to me, while that has been helpful, that the real issue is finding or providing the skill level and training for our own citizens here to be able to apply and meet those job requirements.


I always say -- and certainly something you'd agree with, too -- the influx of people contribute greatly to the strength of our country. But, obviously, being able to provide some training -- I'm not going to ask you to get into the numbers discussion with me here except to take note of it.

If you'd take a look at it as the budget battles come up, are there tax incentives which can be helpful? Sometimes these direct appropriations, which can get and improve the job training programs, can most directly meet the needs we discussed.


And secondly -- and then I'll just finish this on the family and leave, and I'll leave the occupational safety issues to others who may raise them. And that is, just if might express here some thoughts on the family and medical leave issue. Again, I mention these reports that have come out in the last few weeks that indicate that while there are some problems for business, that overall the bottom line has been a strong one here.


And there's some discussion -- Senator Bond mentioned, that we settled on the number of 50 for employees. We did that as a political compromise at the time. Actually, I could have lowered it to 25. In 1993, I had the votes to change that, and I had a president who would have signed it. Since that number is historically used to define small business: 25 and less.


And we've served now some 35 million people, but we're missing about 15 million people who fall into that category -- most of them women -- for birth and adoption, which it will be so critical, those early days of a child's life, to have a parent around who can be with them. Again, I'm preaching to the choir here. I know you understand this.


And I'm not asking you to take a position on that particular point, but if you might just share some general thoughts on the Family and Medical Leave Act and how good a law you may think it is or problems that you may have thought about that need to be addressed.


CHAO: Well, first of all, I want to thank you very much for sharing with me your concerns and the issues that you want to pay particular attention to.


And to every other member of the committee, I want to thank you also. I do need guidance, and I do need want to seek counsel from all of you as I begin this new position should I be confirmed. And I will look again very much forward to your counsel. So, it's helpful to me to know what you're interested in.


On the whole issue of budget, I'm glad you're not going to ask me any questions on that, because even though I pride myself with being pretty good with numbers, the department's budget is one that I've not studied in depth. And as everyone knows, the budget is pretty much set for this year. And there will be areas which we can adjust and tweak, but pretty much the budget will be submitted Congress as is from the previous administration.


I will take note, of course, of the straight-line trend that you have pointed out, and I will study and take a look at it and see what was behind it and study it a bit.


As for the Family and Medical Leave Act, I think that has brought about a great deal of benefits for working families that need flexibility. I am also cognizant and sensitive, however, to small businesses. And you are right: The 25-employee threshold is one that's traditionally been used. In this case, in this particular act, it's at 50.


I know that this is going to be an issue of robust debate. There are those who will be on both sides of the issue. And I think at this point, I want to keep an open mind. I want to listen to what people have to say on both sides. And hopefully, I will be a fast student and that I will be a receptive student as well.


DODD: Thank you for that.


Thank you very much, Mr. Chairman.


JEFFORDS: Senator Gregg?


GREGG: Thank you. I don't want to get into too many specifics, but the Family and Medical Leave Act is an issue. Not because it isn't a great idea. It's an excellent idea. It's just that the way it's been administered by the department has created some chaos in the marketplace. For example, at one point, they were saying that colds and the common flu were not subject to family medical leave, and the next year, they said it was.


And then they have notification requirements which are very complicated and very hard to administer for many small businesses, especially, where you have to have written notification within two days that the event is a family medical leave event.


And then there is the fact that the way it's structured now, companies which reward people for attendance end up having to abandon those reward programs, which often works against the employee in many instances, because employees who have high attendance end up losing those reward programs, which in many cases they use for their vacation time when they take their family on trips or things, depend on what the reward program is.


So, the Family and Medical Leave Act does have some technical issues that need, I think, to be worked on. And I know you'll hear a lot about them. And I know you're going to take a hard and long look at them.



GREGG: One of them is the proposal -- as a former governor, that I found very difficult to accept that a person should receive unemployment compensation for a family and medical leave event. Unemployment compensation is an insurance program which states, like mine that went through the recession of the early '90s, found their unemployment insurance programs drained and they ended up with huge financial problems. And traditionally, unemployment insurance has been used for a termination event, not for a voluntary event. And so I do hope you'll take a look at that issue as well.


The thing I wanted to talk to you about specifically, though, was your question here on technology. I find this very appropriate that you're going to focus on the issue of how we get more people trained to do our technology jobs, which are the cutting edge of our economy and the cutting edge of employment. At least in my state and in the Northeast and many other regions, obviously, but certainly in our state, more people are employed in technology than any other state on a per capital basis in the country.


So I'd be interested in if you could just give us a few minutes of -- maybe you haven't gotten it formulated yet -- but what you're thinking about; how we make these training programs, which we've all worked very hard on over the years to make relevant, how we make them more relevant to the communication economy and the technology economy?


CHAO: Well, the high-tech industry in America is really the envy the world over. And clearly it's been an engine of growth for this great, robust economy that we're experiencing.


If we expect to continue this robust growth, clearly they need more experienced, more skilled workers. And this gap that we have just talked about here, where there is a tremendous need for skilled workers and the lack of skills on the part of so many Americans, who are unable to fulfill them, I think is an initiative that needs to receive increased priority. Because if we talk about the modern workplace, if we talk about empowerment, we really want to be able to empower workers to take advantage of all these opportunities.


So I would hope that one of the first steps in addressing this issue is to acknowledge how important it is, and to be able to prioritize it as one of your department's priorities, and devote it the requisite to management, as well as the financial resources to the extent possible. But more important, the management attention.


And I would hope that I would bring into this discussion the best and the brightest minds on how do we bridge this gap. And what are the requirements on one side? What are the assets of the other? And how can we mesh the two together?


GREGG: I think that's the right priority. I would hope that you would include in that exercise the fact that there's a lot of creative activity occurring out in the states. Especially at the technical college level, I know in my state. And that unfortunately there tends to be a one-brush-fits-all approach when we get to regulations coming from Washington in how we manage the technical training aspects.


And so I would hope you would create atmospheres where experimentation of approaches and ideas that aren't necessarily appropriate to all communities that can be tried by others will be more readily received by the federal agencies.


CHAO: I think there are lots of opportunities for public-private partners. And I understand your advice and I look forward to following up on that.


GREGG: Thank you.


JEFFORDS: Senator Kennedy?


KENNEDY: Thank you. And let me apologize: We had a brief meeting of the Judiciary Committee, which I needed to attend for a few moments.


I want to come back to an issue I know that was raised previously by our chair, and that is the minimum wage. And I feel strongly about that issue. I understand the president's position about letting states affectively opt out. We have states now that are down to $1.50 an hour for minimum wage and some at $2.80 and another at $3.50.



KENNEDY: I mean, they really don't provide any, kind of, adequate resources for these workers.


And the workers we're talking about, as you understand, Ms. Chao, we're talking about assistant teachers, we're talking about men and women that work in our nursing homes. We're talking primarily about women, because the great majority of minimum wage workers are women. We're talking about children, because a great percent of the women have children. We're talking about as a civil rights issue, because great numbers of those that earn the minimum wage are men and women of color.


And, most of all, we're talking about a fairness issue. I mean, it's been supported by Republican presidents as well as Democrats and all.


And, what bothers me, quite frankly, is we were very, very quite in the last Congress to increase the pay for members of Congress. We didn't hesitate. We didn't need a study. We didn't know what the economic impact was going to be. But, nonetheless, we went right out and increased all of the members of the Congress on that, but we were still unwilling to deal with an issue which is of such basic fundamental importance for people trying to survive on this.


So this is an issue of enormous importance. I know you've thought about it and I know you'll be carrying through the president's position about it, but I wanted to just mention it again to you so that you had a sense about, again, the importance of it in terms of what I think is fairness.


The greatest economy in the history of the country and we've already lost the increases that we had two years ago on the increase. We provided $11 billion in tax incentives in the last time that we had increase. The first time we ever had to do it (inaudible) from 11 to 18, and we were told last -- in the last Congress, we had to provide $73 billion in tax reductions in order to have an increase in the minimum wage, which is basically holding these 11 million people hostage to tax breaks for the wealthy individuals and that's an untenable position, I think, and we are going to press this along and we're going to try -- we want to work with you on it.


And I know we have some understanding of your position, but I hope you also have a pretty good sense about the, sort of, intensity of those that feel that fairness demands that working people, and we're talking about people that are working, more often than not have two jobs, have rare times -- the average minimum wage worker now has 25 hours a week less with their children than they did 10 years ago, just to spend time with their children. And I just hope that, you know, as we move on through this process, we can continue to raise this with you and talk about it and hear your points. But I hope that you have a sense about where we're coming from.


CHAO: Senator, I appreciate very much your sharing with me your viewpoint. Obviously, you're very passionate about this issue and I understand that.


Let me just clarify. My previous comments were not meant to be interpreted as any attempt to dismantle the federal minimum wage. And obviously, the president's proposal will maintain the current $5.15 even in high-employment rural counties. So, I will...


KENNEDY: We won't get in the most -- really, the studies show that it really hasn't had -- we've got the highest employment in minority teenagers. Their parents are all for it. They're not trying to -- minority groups are all for it. They're not throwing over the interest of teenagers and the rest of it. We'll have a chance to come back.


I want to, in the time that's left, focus on the ergonomics. Now, this is what we had on the ergonomics as early as 1989. Ann McLaughlin, President Reagan's secretary, praised the settlement agreement in ergonomic cases -- "an industry-wide blueprint for dealing with ergonomic problems and to provide other industries with valuable information for handling their own cumulative trauma disorders."


In 1990, President Bush's secretary of labor, Elizabeth Dole, said that, "eliminating the hazards of cumulative trauma disorders back injury, tendon disorders will be one of the most important work issues of the '90s." In '92, Secretary of Labor, Lynn Martin, continued to work on ergonomic rule-making.


We've got, as I mentioned, 1,800,000 people that have these problems. More than 600,000 workers lose time.



KENNEDY: Most of the studies show that actually it saves the employers funds.


And the interesting point about it is the implementation doesn't go into effect until there's an injury. I mean, I think that's a weakness of the provisions myself.


You've indicated in your testimony that before you altered or changed any of the policies dealing with labor that, "And further, I believe that any change" -- this is on page 4 -- "I believe that any change in labor laws or their interpretation must be carefully and soundly considered, giving respectful attention to the views of every participant in the labor-management equation." Will you give us those assurances on this issue, on the ergonomic issue?


CHAO: Absolutely. If there is one thing that I have already learned since the week and a half that I've been informed that I will be the labor secretary nominee, is that this is the most, probably, visible issue in the department. This is a final rule that became effective on January 16 of this year. It clearly is very, very visible. There's a great deal of opinions on both sides about it. The National Academy of Sciences has issued a study on this.


The overall conclusion that I draw is that it's an extremely complicated issue, a very complex issue. And I can assure you that, should I be confirmed, I will give this issue the greatest thought and effort and study.


And, of course, as you well know, this is in litigation right now, so it's probably inappropriate for me to say very much beyond that.


KENNEDY: Well, the promulgation have already been -- are out at the present time.


CHAO: Yes. But the final rule is January 16.


KENNEDY: My time is up, Mr. Chairman.


JEFFORDS: Senator Frist?


FRIST: Thank you, Mr. Chairman.


And I'd like to come back to a couple of the issues that I mentioned in our brief opening statement. Before doing that, on the Patient Bill of Rights -- and I agree with your comments in response to the chairman's question -- I think the principles do need to be to return -- medical decision-making be made by physicians, people in the medical arena, in consultation with the patients, and not having HMO bureaucrats do that.


Number two, we do have to avoid a litigation lottery, which many of the proposals have put forward.


Number three, we have to have an internal and external appeals process that is rapid, that is responsive, with ultimately final decisions being made by physicians, as long as they have to do with medical decisions.


And fourth, respect of state efforts, and the many state efforts that have been put forward that have respected the great strides that many employers have made in terms of making sure that the best benefits are offered in a way that respects individuals, respects consumers and patients.


Going back one other time to the disabilities issue, and it's been mentioned several times, and the February 9 announcement by Secretary Herman in creating the Office of Disability Policy has been stated, and their purpose and their direction has been spelled out with responsibilities of the office, including ensuring that people with disabilities get full consideration in all programs funded or managed by the department, evaluating all laws enforced by the department to remove any barriers that may exist for people with disabilities, ensuing that all services of one-stop centers created by the Work Force Investment Act are accessible for people with disabilities.


Again, many of us are very excited about that, think it gives true focus.


Could you comment on President Bush's initiative? President Bush has put forward an initiative which I think complements these overall efforts very well. It's been called the New Freedom Initiative. He's proposed what is a comprehensive initiative to help integrate Americans with disabilities into the workplace.


I'm not sure, again, because of the brevity of time, how much thought you've been able to give about the role of a new agency that might play a part, and maybe a major part of this New Freedom Initiative. Could you comment on how you might integrate these two in a way that would respect the initiatives both of Secretary Herman, Senator Harkin, as mentioned, as well as President Bush?


CHAO: I'd be delighted to. The president and I strongly support implementation of his, if you have heard, New Freedom Initiative.



CHAO: This is a 10-year, $1 billion, multi-departmental effort to enhance independence, employment opportunities and the community involvement for millions of Americans with disabilities. As the range in efficacy of assisted technology grows, an increasing number of disabled Americans want to acquire this revolutionary, but often very expensive, equipment. And so the president and I will support loan programs and guarantees that will enable people with disabilities to purchase the technology that they need to be independent and productive. We'll also promote stronger investments in research and development to make assistive technology more widely available.


As I've talked about before, the changing nature of the American work force and the increased potential for telework also holds great promise for many Americans, especially those with disabilities.


Employers faced with employee and workspace shortages are coming to realize the value of telework. And we need to make sure that disabled Americans are permitted to take advantage of these new working arrangements.


I am pleased that the Department of Labor has been given a new office for disability policy and that there will be a new assistant secretary to oversee the mission.


I look forward to utilizing this new office of the department to help disabled Americans realize their full potential in America's work force and this new office would compliment the important work that the Office of Veterans' Training already does now to help veterans, disabled veterans with job training.


FRIST: Thank you. The other issue that I mentioned -- I have just a few seconds -- is the new economy. We've mentioned the globalization, information technology. Senator Gregg also mentioned the importance of appropriate training.


Because we don't have time, probably for you answer the question or comment for very long, but yesterday the president introduced his education proposal, a blueprint as looking to the future. As part of that, he focused on enhancing education through technology: sending more dollars to schools, the public schools K through 12 for technology; allowing funds to be used in a certain way to promote job training; offer matching grants for community technology centers.


I just want to encourage you, as we look for continuity from those early years to the later years, to have the department in job training, in maximizing the resources that hopefully we will increasingly place in the K through 12 to integrate those in a way that is seamless that makes sense as we prepare for this new economy.


I guess my time is up, Mr. Chairman.


CHAO: I totally agree with that. One of the things that I have been finding is the need for the Department of Labor to work with the Department of Education. Education always takes care of K through 12 and Department of Labor works with people who have been through a good education or not so good education. So the two departments do need to work closely together.


FRIST: Thank you.


JEFFORDS: Thank you.


Senator Hutchinson?


HUTCHINSON: Thank you very much, Mr. Chairman.


And, Ms. Chao, thank you very much for a very outstanding statement. And all of the things you were saying about using the department to enhance the ability of people with disabilities to find meaningful employment is, indeed, music to my ears and I'm sure to a lot of us. We look forward to working with you in those efforts.


To further integrate Americans with disabilities in the work force requires a multifaceted approach. For example, same things I know you're already aware of, but when a perspective employee goes in for an interview, if they're qualified, they'd be offered the job. The perspective employer never asks, "Can you get to work? You got a car? Can you get on the subway?" I mean, that's left to you, the employee to get to work. However, for millions of Americans with disabilities transportation may be one of the keys for them to get meaningful employment.


The other one is job training. Many people with disabilities are qualified, but they need some additional training, especially in the new technologies.


Many people with disabilities also need community support services; some type of an attendant service, for example. For example, my nephew, who's quadriplegic, has to have a nurse to make sure he gets out of bed in the morning. Gets him ready to go. Gets him his exercises. Does all this stuff. But after that he's fine. He can go to work. And when he comes home he has to have the same thing at night. If that were not there, he could not be gainfully employed.



HUTCHINSON: And so, I guess what I'm asking you is, again -- I talked to Governor Thompson about this last week at HHS, is we really need inter-agency, kind of, cooperation on this.


Now, the Office of Disability Policy that you mentioned in your statement, that you will have jurisdiction over in the Department of Labor, I believe could be the coordinating agency within the federal government for transportation, for Health and Human Services, for community support services, your area of DOL and job training; that type of thing.


And so I'm hopeful that you will look upon this office as, sort of, the central office to coordinate and to reach out to coordinate all of these various activities. I just want to ask you for any views you might have on it.


CHAO: I think that will be very exciting.


HUTCHINSON: And I think you'll find Governor Thompson very willing to move ahead on that.


The other two areas that I had that I just wanted to question briefly on was -- we just had a long -- I think it lasted -- well, it's been on the docket now for almost 10 years, and that's the ergonomics rule. In fact, Secretary Elizabeth Dole is the one, in 1990, who called for action in which she recognized, as I quote, "One of the nation's most debilitating across the board workers' safety and health illnesses of the 1990s." Secretary Dole committed the department to develop an ergonomic standard. And she stated, and I quote again: "These painful and sometimes crippling illnesses now make up 48 percent of all recordable industrial work place illnesses. We must do our utmost to protect workers from these hazards, not only in the red meat industry but all U.S. industries."


The ergonomic standard, we had that, and we debated it ad nauseum for three or four years here. And it finally got through, and it's been reworked and reworked a number of times and was finally put into the record, I believe, in November, if I'm not mistaken. I think it was November -- it was published in the record, I believe, in November.


CHAO: Final rule came out January 16.


HUTCHINSON: Yes, it's implemented. It's been implemented now. Again, I just want to ask your opinion of the ergonomic standard, and do you agree with Secretary Dole that a standard is needed to protect workers? And are you fully committed to implementing and carrying out the standard as it is now implemented as of this month?


CHAO: I don't think there's anybody in this room who's not committed to ensuring worker safety. I think employers have a vested interest in safety as well. I mean, it's to their benefit in this very, very tight labor market where each employee represents a major investment in training and development.


I'm obviously very concerned, as the new secretary of labor, on the physical safety of every worker. From what I understand based on my brief introduction to this issue, it is apparently a very complicated issue. There is a department's 1,800-page ergonomics regulatory proposal. There is also a 300-page report by the National Academy of Sciences. So, I understand the concern that people have on this.


The final rule just went out January 16. It's been litigated already. I can assure you that my commitment to you is that I will want to have an open and full dialogue with all of you to the extent possible, and I will take every point of view into consideration.


Again, it's a very -- I know enough to know that it is a very complicated issue.


HUTCHINSON: But one that's important to a lot of, again, women and minorities in this country. I hope that you would work with the National Safety Council in terms of the regulations in OSHA and what OSHA's doing. They have really been great in their efforts in terms of providing worker safety protections, especially in agriculture.


One last thing, on child labor, the Child Labor Coalition which is a group of NGOs here in this country have come up with what they call the National Program of Action to make sure that we are in compliance with the ILO Convention 182.


Well, the United States ratified -- or Senate ratified last year ILO Convention 182 concerning the prohibition and immediate action for the elimination of the worst forms of child labor. We were the third nation to ratify it. But this has a lot to do, sometimes, with domestic child labor in this country.


And so, the Child Labor Coalition is a group of NGOs who have come up with a National Program of Action. And again, if you are not familiar with this now, I'd hope that you would be and to take the lead on the development of a National Program of Action to ensure that the United States will be in compliance with ILO Convention 182, which we just ratified last year.


And under your leadership, will the Labor Department continue its active support of international efforts and programs to end abusive child labor?


CHAO: Well, Senator, you and I have discussed this during our meeting together, and as you well know, during my tenure as director of the Peace Corps, I personally have seen the horrific condition that children have to labor in in some of these countries.



CHAO: And so you can be assured that I will support vigorous enforcement of U.S. laws prohibiting the use of child labor. The president and I are also committed to using our influence to encourage other nations to restrict the use of child labor. And as you mentioned, the Senate recently ratified the ILO convention prohibiting the worst child labor abuses.


I understand that your concern now is the child labor abuses here in our country, and I can assure you that it will receive my full attention and my concern.


HUTCHINSON: Thank you very much.


JEFFORDS: Thank you, Senator.


We're going to have a vote at 11:30. I would suggest that -- I'm going down the group here, and so I would suggest that maybe those that are a ways away from their time could go and vote now and so we won't have to interrupt the proceedings. And the same over here.


Senator Enzi?


ENZI: Thank you, Mr. Chairman.


And I want to thank Secretary-designate Chao for the time that she spent meeting with me and talking about a number of these issues.


What you may not realize is that the Subcommittee on Employment Safety and Training, that I chair and that Senator Wellstone is the ranking member on, is one of the most bipartisan committees here. I'm sure that comes as a surprise to a lot of people. But actually, during my tenure here, we have passed the first legislative changes in OSHA in the nearly 30 years that it's been in existence. And we've done that by unanimous consent, which doesn't get any publicity, which is why you may not have heard about that.


But we have frequent meetings with, particularly, the assistant secretary for the department which deals with OSHA. And one of the things that he has lamented, and that I certainly have to agree with, is that the rule-making process for OSHA does not allow for us to update the process to comply with changes that have happened in the nearly 30 years that it's been in existence. Not one rule that OSHA has promulgated has ever had a change to it in nearly 30 years. Business has changed dramatically.


I hope that you will work with me to change that process for OSHA so that it can have more flexibility, more responsiveness to the businesses. Would you be willing to do that?


CHAO: Absolutely, you have my commitment on that.


ENZI: Thank you.


Earlier, Senator Dodd mentioned that we've got to quit looking at the unions as being the enemy. I want to emphasize that we've got to quit looking at business as being the enemy as well. One of the things we have to do with all of the people involved in employment safety and training is try to encourage the good and try to punish the bad. And I think that's kind of what OSHA and MSHA and a number of the agencies that come under your jurisdiction are charged with.


One of the difficulties is that small businesses have these tremendous volumes of law that they have to go through. You mentioned the 800 pages of the ergonomics law. That's a lot for a small business to go through.


We've held some hearings in Wyoming on it. I do remember that one of the news media folks came up to me afterwards and said, "Well, you only had about 100 people here. That's not very good."


I said, "Well, take into consideration the size of the town first, and secondly that the people that we heard from are the small business people. If they had enough people to send them to a day's hearing, they'd fire them because it would be too much of an overload for what they're trying to do."


So I want to mention that our subcommittee has also gotten approval from the Senate as a whole in the last two appropriations processes that half of the increase in money that goes to OSHA would be spent on consultation, so that we can help these small businesses to understand that.


What can you do to include small business in the regulatory and compliance process?


CHAO: I think that there should be great comfort in the fact that I have worked with organized labor and I have also worked with small business.



CHAO: I think you're right, I think sometimes both sides tend to view the worst in each other, and I pride myself on being someone who can work with diverse groups, who can find the mutual ground of commonality, and who has the trust on both sides.


In terms of organized labor, I have worked with organized labor in the very lofty ideals of America's number one charity, and organized labor is a full partner with corporate America in raising the financial resources available to help those in need.


I have also worked with small businesses and understand the tremendous pressures that they face on a daily basis -- in trying to meet a payroll, in trying to find enough resources to be able to handle the myriad of crisis and management issues that erupt on a daily basis -- and how we can help small businesses deal with this plethora of regulations that is coming out of Washington.


And I believe that if we work together, if we maintain open dialogue, and if we use smartly the resources of the federal government in a better matched, coordinated fashion, I think we can accomplish a great deal.


So to that extent, for example, in terms of small business, the Department of Labor can work with the SBA, with the Commerce Department, which of course is larger businesses, with the Small Business Administration.


The Small Business Administration very often holds these annual or semiannual workshops or summits, and clearly the Department of Labor can partner with SBA to reach out to small businesses to help them understand the regulations that are involved; and also in the process of looking at future legislation as well, to be cognizant of the regulatory burdens that are placed on small businesses.


I think everyone recognizes that the largest number of new jobs are created by small businesses, and so the issue is how do we foster that continued increase in new jobs, yet provide protection for our workers which they deserve and thus is the responsibility of the Department of Labor and the secretary of labor, that is to ensure the physical safety and security and opportunities for working men and women of America and to ensure that those opportunities are still there.


So it's going to require balance, and it's going to require someone who's willing to listen and understand both sides and who's had a track record in working with people from all different spectrums. And I hope I'm that person and I look forward to tackling those issues.


Thank you.


ENZI: Thank you very much. I look working to with you.


JEFFORDS: Senator Mikulski?


MIKULSKI: Thank you very much, Mr. Chairman.


And Ms. Chao, first of all, it's just wonderful to see your family.


CHAO: Thank you.


MIKULSKI: And it was wonderful to hear your story. I've read about this very compelling story and poignant story, but to see your dad and mom and your sisters and brother-in-law, really I know how proud they are of you today. But we're proud of them for what they've done and so on. So anyway, our respect to you and our joy for you on this happy occasion.


I'd like to come back to the skill shortage issue. And I don't know if your microphone is as bad as I am, I hear the conversations up here better.


CHAO: That's better. Thank you.


MIKULSKI: Thank you.


But you have a predecessor in Senator -- Bill Brock...


CHAO: Yes.


MIKULSKI: ... was an excellent secretary of labor. And one of the things that he did was kind of do a report on America's work force shortage. And a lot of us came out of the Humphrey-Hawkins bill background, you know, big government, big (inaudible). And what Bill Brock said was, at the time he did his analysis, that because of demography, population, we would have enough work for everybody in this nation if they had the training.



MIKULSKI: I really strongly recommend that you go back to the Brock report and perhaps do a Brock-Chao II, because I think we need an inventory of kind of where we are in terms of work force needs in this country and then really have strategic goals and plans for achieving them. It was an excellent report. It was a nonpartisan report. And I think it's a document we could all work from. So I commend this to you.


I'm concerned about shortages, not only in computer technology and systems analysis, but in the trades. You know, I truly believe that I could get President Bush on the phone today, if I needed to, but I don't know if I could get a plumber or an electrician. And it might be harder to get an appointment to see them.


(LAUGHTER)


And it's really not a laughing -- but because we so emphasize college, we've also got a...


CHAO: You're absolutely right.


MIKULSKI: ... shortage in machinists. I've go to my high-tech places and there's fabrication; shortages in nurses, lab technicians; in the field of gerontology. But I get bits and pieces. And I think if we had from the Department of Labor kind of this inventory document, later in the year and so on, that we could all be working from, I think it would help us focus on it. So I commend that to your attention.


Second, I'd like to come back to the skill shortage area, just as we've talked about trades, et cetera. Have you thought about the kinds of partnerships, because the Department of Labor cannot do this alone.


CHAO: Right.


MIKULSKI: And it would be a flawed effort. Do you have thoughts on how you would pursue this -- job training, tech training?


CHAO: I think there are so many opportunities for the Department of Labor to partner with other groups, to partner with other departments, to partner with other agencies in the executive branch, and also to partner with nonprofit organizations, for example, and also the private sector. And I think the key is to be innovative and to reach out to hitherto unincluded groups.

And I hope that during my tenure, because of my experience in all three sectors -- the public, the private and the nonprofit -- and with my contacts and connections, that I'll be able to reach out and draw upon those groups, as well.


MIKULSKI: Well, if I could, I'd like to offer some suggestions. And I'm so glad to just hear your framework.


First of all, I think it requires creativity, working on lessons learned. Picking up even what Mr. Enzi said about, Let's not make anybody the enemy, poverty is the enemy.


CHAO: Right.


MIKULSKI: Poverty's the enemy.


And I would commend a couple of things to your attention. Number one, take a look at the community colleges, echoing what Senator Gregg said. They are the gateway. And often for people who are intimidated about higher ed, through certificate programs that lead to degrees.


I know steel workers that in order to keep their job had to take certificate at the Baltimore County Community College, but it was a certificate here, a certificate there. Many of these men and some women are eligible for community college degrees now. These are the gateways.


The other, the community centers. You come from a very strong Asian-American community. As you know, ethnic heritage groups often live in same communities. Community centers, where adults could learn by day, kids could have structured after-school activities.


And last, veterans.



MIKULSKI: That's (inaudible). Yes, veteran's health care is such burgeoning, we forget job training.


One last story, because I want to make sure -- Senator Collins has a question, has an opportunity before we go to vote.


SBA, fantastic opportunity. One last cameo story. I got a special purpose grant -- that's called a line item in HUD -- to go to Wheaton, Maryland, because we have over 1,000 small businesses, primarily from immigrant communities, many learning language for the first time. But I created a small business tech center. They were being ripped off in web site design. They were being ripped off by people saying -- they were really being gouged, because they didn't have access to technology and didn't learn how to use it. We are focusing on this. And this is empowering.


First of all, it stops fraud against them. But because they can't afford to buy a computer, take the time to learn how to use the computer, and so, by having the community center right where they are, they're coming in almost 24-hours-7 to have access to technology and learn how to use it. This is kind of the partnerships I'm talking about. And I'm so enthusiastic about working with you on this.


CHAO: Thank you very much.


MIKULSKI: I didn't mean to give a speech.


CHAO: No, I appreciate that actually.


MIKULSKI: Your framework is kind of along the lines we're talking about. Is this in alignment with your...


CHAO: Absolutely. I think there has to be innovative ways to approach education. Educational institutions themselves are under pressure to respond to the changing workplace in a very different way. Distance learning, for example. All these certificate programs that you mentioned. There are now lots and lots of different ways to train people. And schools and the nonprofit organizations, for-profit organizations within the private sector are all going to have to work together. And I think it's a real exciting time.


MIKULSKI: And I do hope you take a look at the Brock report and see how we could do...


CHAO: In fact, the secretary and I missed each other, in fact, right before the meeting here. So it has been my intent to give him a call and we are going to discuss this.


JEFFORDS: We have a sort of a messy situation, because there's two votes. First, I'd like to ask you, would you like a break?


CHAO: I will do whatever the committee would like.


(LAUGHTER)


JEFFORDS: Well, let's put it this way, I'll give you a break.


CHAO: OK.


JEFFORDS: So we'll take a 10-minute break. And then Senator Enzi will take over until I get back. And I'm going over there and get back as fast as I can.


CHAO: Great. Thank you.



(RECESS)


ENZI: We'll call the committee back to order. Senator Jeffords will be casting the second vote and then he'll be returning to chair this, as will other members of the committee.


WARNER: Are there two votes or one?


ENZI: There are two votes.


WARNER: Is it to two now?


ENZI: Yes.


And this is still the first vote.


WARNER: Well, when did they shift? They didn't.


ENZI: I'm not sure when they did. It came as a surprise to just about all of us here so...


WARNER: Thank you for that.


ENZI: So we'll go ahead with your questions and then you and I can do a second vote.


WARNER: Thank you very much. I welcome this opportunity.


I've been privileged to represent the Commonwealth of Virginia for 23 years now in the United States Senate. And with a little luck, I'll be hanging in for awhile. But throughout that period, I have had, I think, very even-handed and fair treatment from the unions. I think my bottom line is unions are essential -- absolutely essential to achieve a balance between certain segments of workers and the private sector and other interests that are important to those workers, whether it's health care or many other interests.


But from time to time, any organization, I think, fall onto programs which concern me. And you have undoubtedly followed the vigorous debate for several years in the campaign finance arena primarily about the automatic or mandatory or however it's properly addressed check-off of the dues, whereby union workers are required to have their paychecks deducted before they even get the check for dues that go in for purposes for the union leaders to make decisions as to which candidate to support and not support.

This troubles me just fundamentally that an individual, who otherwise might wish to give their sum of money to politics, are lacking the ability to exercise discretion over the manner in which those funds are spent. They could be desirous of doing their political contribution to say, the school boards or the local city council as opposed to congressional races and so forth.


What is the history of this to the best of your knowledge? And what actions have been taken by any of your predecessors to examine this policy simply from the standpoint of fairness and equity to an individual's right to decide for themselves how to spend their own funds which they've earned and to which they're entitled?


CHAO: Senator, I think that's an excellent question in which you obviously are concerned. I probably would not be the best person to give you a historical perspective, seeing that I haven't even set foot on the Department of Labor building yet.


However, I will say this: All of my jobs in the for-profit, non- profit and the public sector, an overriding philosophy is that disclosure is always a good thing. And insofar as we can disclose whatever activities an organization is doing or any entity is doing, I think each member will become that much more empowered and that much more knowledgeable. And so it's a worthwhile goal to ensure that there's full and adequate disclosure.


And on issue that you've just raised, that clearly would be the position that certain people would want to take. And I know they could be very controversial, but again, I just can't...



WARNER: We will be addressing the important subject of campaign finance reform. This will come up. Whether or not Congress will try to strike some balance in this area, such that a worker has a measure of discretion, I know not. You have this one law case, whereby they can opt out, but that puts them in a very tenuous position with regard to the other workers and a lot of peer pressure and so forth. So we'll look at it.


But I wondered if you would at least commit to say that you will examine what is the authority within the framework of laws that you are enforcing, or indeed maybe an initiative to Congress from your department to help this situation in the event Congress does not come to some resolution of this issue in the course of the campaign finance reform measure. I just think it's only fair to the workers to do that.


CHAO: Again, as secretary of labor, should I be confirmed, I will always be concerned about equipping workers in an empowered and modern workplace that they can make their own decisions.


WARNER: Good. Well, that's...


CHAO: And to that extent, disclosure, I think, would be a...


WARNER: ... very reassuring and I think as much as you can state at this point in time.


Second question relates to the high-tech industry. We're fortunate, in the Commonwealth of Virginia, to have, depending on what evaluation you make, one of the largest, maybe the fastest growing in Northern Virginia and other parts of our state. We welcome it.


And I wasn't able to read the banner on your newspaper there, but the Washington Post and other people here and published it every weekend, I've used it many times in speeches.


CHAO: That's exactly what it is. Yes, just a high-tech listing of jobs.


WARNER: I've used it many times in speeches.


But as hard as I and others have worked on this issue, we've not come into any program that is significantly benefiting workers so that they can begin to prepare for this.


It comes down to the fact that in America, regrettably, very few young people want to take on the arduous educational course involving science and technology. And I happen to come up through the engineering side of life, not a professional engineer, but majored in mathematics and physics and things like that, because I had a natural bent and was quite interested in it. But look at any statistic worldwide, we're at the lower level in terms of our educational structure to help provide to meet this requirement in the job market.


Now, you could work with the secretary of education. Let me give you an example, and I'm going to touch on hallowed ground, where I get in trouble every time, but I'm going to go ahead and do it.


The Pell grant program, billions, billions of taxpayers dollars. Fine program, but should we not, maybe build in some incentives in this enormous sum of money that goes out every year to try and encourage those receiving Pell grants to begin to prepare themselves for this job market? Because it gets down to the taxpayers' dollar, which we, the Congress, then take from them and taxation, turn it right around and put it out in a Pell grant. And it's to the interest of this country to maintain our position in this one world global economy, a stronger position in the high-tech world. So I would hope that you would look at that and talk to the secretary of education and see what you can do.


CHAO: Again, I have emphasized on many occasions, and especially my visits with members, that it's really important to reinforce and strengthen this critical link between Department of Education and the Department of Labor. Clearly, when you talk about the inadequate preparation of our young people today in the sciences and in math in particular, which are the foundations of any career in high-tech world, it is of concern.


And there are a whole host of other issues. You know, why is this developing. There are issues of young people where it's not cool to learn, I mean, there's a whole host of other issues involved which the Education Department needs to address, as well.


But, clearly, the Labor Department and the labor force is impacted by the quality of workers that are, quote-unquote, "delivered" to the workplace at age 21, 22, 18, 19. So the two departments do need to work very closely together. And, again, I'm all for that.


WARNER: Let me go to a third subject. You once served as chairman of the Federal Maritime Administration. And I've had a modest association with the sea in my lifetime, working in the Navy Department as secretary and now on the Armed Service Committee these 23 years.


I've watched our Merchant Marine go from the largest in the world. I mean, it's the end of World War II, tens of thousands of ships proudly flying the American flag all over the world. And, again, I'm not pointing fingers at the unions, but slowly this thing has gotten down to where it's just a few hundred ships, at most.


CHAO: How I view...

WARNER: The Jones Act, you've got a whole framework of laws, which you're very familiar with. And I think and I represent a state which proudly has a number of facilities which serve today's Merchant Marine.


I'd like to see more American flags afloat. I'd like to see America strengthen it's Merchant Marines. I guarantee our entire concept of defense, except now for a growing need of homeland defense, is predicated on forward deployment, projecting beyond the shores of this nation our military to deter war or if necessary to join with our allies in bringing peace and freedom to other countries.


This surface transportation is absolutely essential -- absolutely essential to our national defense. And I would hope that I could work with you and seeing what we could do, and indeed the unions and the industry, to be reinvigorating the magnificence of our once proud heritage in the Merchant Marines.


Is this an area in which I can hopefully work with you and stimulate a little?


CHAO: Absolutely, Senator. We have worked in the past on Maritime issues. And you know that I am a very, very strong proponent of the Merchant Marine. And, clearly, in the Gulf War of 1991, we saw how important and viable and robust American Merchant Marine meant to national security, because they were the ships that brought the logistical supplies and troops to the Middle East. So I'm very, very cognizant of the need for a strong Merchant Marine and one that clearly supports our national security.


I think the problem is very difficult, because of the cost disparities that now exist between construction of these ships, as well as manning levels.



CHAO: The "marketplace," quote/unquote, if not very hospitable, and the issue is how do we work with labor people in this sector to ensure that there are adequate seagoing jobs, because there are a lot of shoreside jobs, but seagoing jobs; and also are we encouraging young people to go into a field that has adequate opportunities for them? There are five tremendous academies, King's Point and the state maritime academies, that are doing a wonderful job in turning out seafarers.


WARNER: And once they're turned out, there are no jobs.


CHAO: And so we need to work with...


WARNER: What a concept. Here's a starving need in the high-tech industry, too few. Here we have the taxpayers educating men and women to assume the wonderful, historical career at sea, and no ships on which to go.


CHAO: This is a larger issue about national security, but certainly I look forward to working with the Department of Transportation, the maritime academies, King's Point, addressing these issues.


WARNER: Well, I'm going to some initiatives.


CHAO: I look forward to working with you.


WARNER: It's just so important that labor be a part of it. Labor take the lead, if necessary.


I thank you and wish you luck. And you have my support.


CHAO: Thank you.


JEFFORDS: Senator Wellstone?


WELLSTONE: Thank you, Mr. Chairman.


And I'll say to Senator Warner, another marriage that's ready to take place, and you mentioned this earlier, is you've got the communication technology industry looking for skilled workers and you've got people in rural communities that have a great work ethic -- and this ought to be put together -- who can telework; who can do it from their homes; who can do it from a satellite office if we have the infrastructure. And I appreciate your commitment to that.


Let me ask some direct questions, if I could, Ms. Chao.


One is, on the ergonomic standard, I think the National Academy of Science report was very important, because we kept hearing if the science is there, and this report says, "Look, there's a direct connection between workplace practices and ergonomic injuries and as a matter of fact, there is also conclusive evidence that the interventions in the workplace can play a large role in reducing these debilitating injuries or illnesses."


As secretary of labor, would you attempt or support any attempt to stay or rescind -- I mean, the regulations are on the books -- or otherwise modify this ergonomics regulation?


CHAO: I can't answer that question right now, because I'm not there yet. And I think that, again, this is a very, very complicated issue. The final rule was issued on January 16. It took years to get the final rule out. And now it's in litigation already.


So I think one of my first responsibilities is to make sure that I understand this issue, and that I understand the viewpoints of all sides, the pros and the cons. And I will commit to you that I will study this issue very carefully and I will make a very informed choice.


WELLSTONE: Well, listen, I don't have any doubt about your good faith in answering that part of the question. My question is, this regulation has been promulgated. Can you make the commitment to enforce this regulation right now, until there's evidence otherwise? I mean, it's the law of the land.


CHAO: I don't know. I don't know what the prerogatives of the secretary of labor is, so I can't answer that.


WELLSTONE: I mentioned when you dropped by my interest in coal dust regulation and what MSHA has done. I couldn't believe it. I know that Eastern Kentucky is near and dear to your heart and to Senator McConnell's heart. I just couldn't believe it when I drove my wife drove my wife, Sally, that way, and I met with people, and all of the reports of not being able to see six inches in front of them -- and MSHA's worked long and hard, and now we have a regulation which is at OMB which basically says, there's too much evidence of, basically, cheating -- I don't know any other way to say it -- by the companies. It shouldn't be the companies that do this regulation, but rather MSHA would come in and independently do it.


And I guess my question for you is whether or not you would be committed to making sure that this regulation goes through. It's so important to the health and safety of the miners. I just feel so strongly about this when you want to prevent black lung disease. And a lot of work's gone into this.


CHAO: I think the two rules that you mentioned were just issued in the last few weeks or so. So again, as part of my responsibilities, going in as the new secretary of labor, I would expect that I would review them carefully and try to understand them as to the full ramifications before coming to any further.

I will say this, though. I do understand that the black lung trust fund is $7 billion in debt, and I'm very concerned about that. Because if this fund is supposed to help people who are in need of these resources, then potentially its insolvency will, obviously, fall short of its obligations.



CHAO: And so I'm going to be very concerned about that. And that I will also look very carefully at.


WELLSTONE: Well, I appreciate the second part of your answer, but what I'm trying to get at is, how is it that we make sure that people in the first place aren't having to struggle with black lung disease and don't need the help in the first place?


And you're absolutely right, I mean, a lot of work went into this. A lot of sweat and tears went into the regulation. And at the very end, OMB couldn't go through.


But my question is, whether or not you, as secretary of labor, would do everything you can to see that the regulation is enacted. I mean, it's coal dust levels. We know what the problem is. We know something needs to be done. You've got this regulation, it's key to health and safety of workers, in this particular case, miners. And I'm trying to ask you, as a future secretary of labor, whether or not you would do everything you could to see that this regulation would be enacted. That's really my question.


CHAO: I think in concept I care deeply about this regulation, and I'm concerned about the plight of coal miners.


I have to say also to you, I don't know exactly what this regulation does. And so before I enact it, I would have to understand what it does. And I will commit to you that I will study it very carefully.


JEFFORDS: OK.


Senator Hutchinson?


HUTCHINSON: Thank you, Mr. Chairman.


Ms. Chao, there will be a number of legislative issues that I will look forward to discussing with you and corresponding with you about, and this is probably not the day to get into a long discussion. We don't have time to get into a long discussion on them.


But the ergonomics issue, which has come up repeatedly, I think the NAS study was helpful. The question is not now and hasn't really been whether we do something, it's how we do it. And as you pointed out, it's in the courts already. So this issue may well need to be addressed again.

Senator Enzi had lengthy hearings pointing out problems in the approach that has been taken on the ergonomics issue. And so I look forward on that issue.


Salting is an issue -- salting abuse is an issue that I have been concerned about. The blacklisting rule which was finalized January 19, which, in my opinion, really, under that rule, mandates that the federal government discriminate in the awarding of contracts, discriminating against non-union contractors. That also I suspect will be in legislation.


And the area of OSHA reform -- and Senator Enzi has led the fight in the Senate to improve OSHA and to modernize OSHA. And that's going to be a recurring issue.


But this afternoon, I would just like to focus for a moment upon the department itself. Millions of Americans at least, and certainly all of us on this committee were shocked last year when the word came out that OSHA was looking at regulating the home workplace. And, of course, there was a quick retreat on that. And Senator Enzi and myself had some meetings on how that came about.


And I think the General Accounting Office, in their annual report on major management challenges and program risks at the Department of Labor, kind of hit the nail on the head. They talked about decentralization and how that has intensified the department's coordination challenge, the lack of policy management by the department and the multitude of individualized policy shops located in each agency.


So it would appear that the department's Office of Policy doesn't have the level of control over the agencies that it used to, and that I think it should. Would you address that management issue?


CHAO: Senator, you're not the first one that has brought that to my attention. Apparently in past administrations, the assistant secretary for policy was a centralized place and it was a clearance for all policy issues. And since that time, I think in the last seven or eight years, there's apparently been a decentralization of the office. There has been enough concerns expressed on this issue that I realize that it's an issue that I've got to address, at least examine and look at when I get in, and I will do so.



HUTCHINSON: I appreciate that. I think in that initial review, this is something that certainly deserves scrutiny, and I appreciate your assurance that you'll be doing that.


The other issue that I just wanted to mention briefly is that we talked earlier about the Patients' Bill of Rights and the difficulty we've had in arriving at one. One of the issues that was on the conference committee -- one of the issues that we addressed was the Association Health Plan issue, the AHPs, which I strongly support. I've introduced legislation in the past, will be introducing legislation, to allow small businesses, which do not have the buying power of our great retailer in Arkansas, Wal-Mart, and many of the other retailers that have large health plans, but small businesses that could work together and operate under ERISA, assuming that we then will have patient protections under the ERISA, will really, I think, attack the problem of the increasing numbers of uninsured.


And I appreciated, during the campaign, President Bush's support of that concept. And I hope that, as we move forward with legislation on that, we can work together to insure that a lot of these small businesses will be able to bring down the premiums and provide better health care for their employees.


CHAO: I know that this is an issue that you've been very concerned about and you've championed, so I will certainly be very mindful of it.


HUTCHINSON: I thank you, and I think that's all I need to bring up. I appreciate the very candid answers you've given today. And we look forward to having an ally for American workers again in the Department of Labor.


CHAO: Thank you.


JEFFORDS: Thank you, Senator.


Senator Clinton?


CLINTON: Thank you, Mr. Chairman, and I apologize for having to leave to cast the votes. And I'm sorry to have missed any of the conversation.


I just wanted to touch on a few issues that are of concern to me. One is that our emphasis on the need for skilled workers is very timely, and I look forward to working with you on that.

But I'm also concerned about the shortage of workers in certain professions that there's an increasing demand for, such as nursing homes, home health aids, other kinds of service professions where we're having a very difficult time recruiting and keeping such people. I think there's both a skills issue and a wage issue that the market will respond to, but I think there has to be some attention paid to that in terms of incentives for moving that along, especially with the increased aging of the population.


Secondly, I think it's also very important that we make decisions based on good information. And I look forward to talking with Senator Gregg about his comments about the Family and Medical Leave Act, which in my experience are really not borne out based on the evidence of the analyses that have been done about the Family and Medical Leave Act.


So I think there has to be some meeting of the minds about what evidentiary basis we used to make any kind of policy decisions on. And the Family and Medical Leave Act is of particular concern to many millions of Americans, and you've had that addressed to you from several different vantage points.


But I do want to emphasize the larger issue that's raised about making policy based on good information. And I'll look forward to talking with you and Senator Gregg about that further.


I want to turn now to pensions, which falls under your responsibility. And I know certainly in New York there has been a great deal of concern about companies changing to cash balance plans or attempting to change to cash balance plans, which is a move away from rewarding workers for longevity, which is really what the contract that these original workers thought they were buying into at the time they started employment with a lot of these companies.


And I think that it's important that, although the new economy is here and globalization is changing the way we work, it hasn't really penetrated into many of the work sectors in our economy, and there are many people who have planned their retirement and have really made a very strong commitment to a company based on the pension plan.


And I know that pension law is governed by federal statute. And I would be interested in your views about how you ensure that employees who start off under one system and work for decades, often, are given a fair chance to have some voice in any corporate decision that might undermine or eliminate their pension rights.



CHAO: Well, the secretary of labor, obviously, has responsibility for ensuring the financial stability of the American working man and woman as well.


The issue that you raise is an enormously complicated one. I am sure you are much, much versed in it than many, many others in this room, because of your past experience and work in this area.


I'm very sympathetic, obviously, to ensuring that workers who have put in a tremendous amount of dedication and commitment to their employers not be forsaken and that their past labors not be forgotten.


On the other hand, there is also the very difficult issue of companies who are faced with increasingly hefty and burdensome pension benefits that over time they're unable to bear, to the point where many of these companies are suffering financial consequences.


So there must be some way in which we, as a creative nation, can work on this issue and take care of the financial security of our increasing seniors and also make sure the companies are not bankrupted either.


I don't have the solution to this, but clearly it's a concern of yours. I will certainly be mindful of that. And I hope that we can work together on it, because it's a very important issue, especially with the aging of our population as well.


CLINTON: And I think your point about being creative is a good one. We need to look for ways that balance the needs that you outlined. And I would very much like to work with you on that.


There's been a lot of questions to you about work force development. I'm particularly interested in finding ways that we can really target programs and encourage communities to make the assessment of their own educational and training capacity, working with business and labor and the educational communities, using the regional skills alliances model, which I think has proven successful in a number of areas that I have reviewed.


And then continuing what has been started, which are a lot of the school-to-work programs, because a lot of our young people need the kind of support and direction that these programs provide. We have a grant, for example, up in Rochester that is giving externships to many of the high school students there. And I think it's important to take a good look at what has been working, because the school-to-work partnerships sunset this year.

So I would like, again, to work with you and to have you pay particular attention to what we've learned from this experience, what has worked well. I'm a strong believer in continuing what works and discontinuing what doesn't work, and being flexible and creative and creating the kind of opportunities that will provide the, sort of, skills development that the work force needs. And so I would very much like to have your feedback on that once you get into the department and figure out what's going on.


I wanted to finally just raise some issues concerning the federal contract compliance program, which, as you know, really is founded on the proposition that our government should not send funds to anyone, anywhere, that support illegal discrimination against women and minorities. And this program requires contractors to pledge not to discriminate, and requires them also to adopt affirmative action plans with goals and timetables for ensuring equal opportunity. It does not require quotas, which I'm opposed to, it does not in any way permit or promote the hiring of unqualified personnel.


But ever since it's been in place, since the Nixon administration added the goals and timetables requirement, there has been steady progress in a lot of the areas of the economy that traditionally were closed to women and minorities, the so-called nontraditional areas that are now much more integrated.


And I would hope that we could continue to, you know, use the clout of the federal government in its contracting capacity to urge people to think more broadly about who is hirable and promotable. And I wanted to ask if you would support the vigorous enforcement of the contract compliance program.


JEFFORDS: Senator, I hate to interrupt, but we have one member who hasn't voted yet, and your time has expired.


Senator Collins?


COLLINS: Thank you, Mr. Chairman.


Ms. Chao, I am only going to be able to touch on a few issues very quickly, in order to go vote.



COLLINS: I do want to follow up on the point made by Senator Enzi about the burden of well-intentioned but very complex and complicated and lengthy regulations on our small businesses. And I want to do so by giving you an example of a true case in the state of Maine that I think really defied common sense.


Last summer, a small restaurant in Damariscotta, Maine, was fined $8,400 by the Department of Labor for allowing a teenaged-worker to use a standard Kitchen Aid mixer to whip up a soft cheese mix. Now, here's where it gets complicated. The small businessman contacted my office and asked us to look into this. Well, as we started going through the regulations and talking with the Department of Labor, we discovered that teenagers were allowed to use this exact mixer if they were whipping up cream, egg whites or icing. It was silent on the issue of soft cheeses.


(LAUGHTER)


It also said you weren't allowed to use this mixer to do heavy bread doughs. Now, how in the world was this small business, this small restaurant, this mom and pop operation in Damariscotta, Maine, supposed to figure out that whipping out egg whites and cream was fine, but mixing up this soft cheese mix was not?


Now, I want to give credit to the Department of Labor, because upon further discussions with the officials, they agreed to rescind the fine and to close the case. But I wanted you to be aware of this case, because I can't think of a better example of an unfair burden on a small business owner who is doing everything possible to try to comply with the law, but was really faced with a regulation that was just impossible to understand what was allowed and what was covered.


So I would hope that you consider reviewing regulations like that and working, as you have pledged to do, not only with SBA, but with the small business community so we can avoid these kinds of really absurd situations in the future.


CHAO: I think all of us care about physical security and safety of workers. And I don't think any one of us would say that we're not in support of that.


Obviously, the Department of Labor has a humongous responsibility in enforcing the many regulations that it is responsible. The Department of Labor supposedly is one of the largest regulators in the federal government. And I would hope that every single employee in the Department of Labor understands the gravity of that responsibility and will work to ensure the safety and security of workers, but also work to ensure that there's common sense in regulations involved, as well.


COLLINS: Well, again, I do want to salute the department's employees for ultimately exercising that common sense. But the fact that this regulation existed in the way that it did, again, well- intentioned, but clearly defied common sense in its execution; it's a real problem.


The second issues I just want to touch on quickly is my concern about the trade adjustment assistance programs, which will need to be reauthorized at the end of this fiscal year. One of the most difficult experiences that I have had as a United States senator, was meeting with displaced shoe workers in my state, who had spent their entire lives working in factories doing a great job with excellent craftsmanship, turning out shoes only to find that they were going to lose their jobs because of a flood of cheap imports.


Trade adjustment assistance has been absolutely essential in assisting these individuals, not only with extended unemployment assistance, but more important with new training and new skills. I have to tell you, it's still very difficult, if you've worked in a small town in Maine at the shoe factory your whole life and you're in your early 50s and your health isn't very good, to be told all of a sudden you've got to learn a whole new career or move to a new town, it's very difficult.


But these programs are essential and I hope you will pledge to work with us to support them, to strengthen them and improve them to make sure that we are attentive to the needs of those displaced workers in this new economy.


CHAO: I certainly will be.


COLLINS: And finally, I do want to just let you know of my interest and support for the Job Corps program. We are fortunate to have two Job Corps sites in Maine that do an excellent job in Bangor and in Northern Maine. And I would invite you to visit those sites, once you get settled into your new job.


CHAO: I look forward to that.


COLLINS: Thank you very much.


Thank you, Mr. Chairman.


JEFFORDS: Senator Sessions?


SESSIONS: Thank you, Mr. Chairman.


Maybe Senator Clinton didn't get to finish. I'm sure you can't see that little light, it's awfully subdued there. If you need to finish your question, I'd yield to you.


CLINTON: That's so kind of you, Senator.

I just wanted to ask Ms. Chao to respond to a question about enforcing the contract compliance program, including its affirmative action component, with goals and timetables. If you had an opinion on that, at this point.


CHAO: I think, clearly, we are against discrimination of any sort, and I will enforce the law as it is enacted.


But it is interesting, from what little I understand about this topic, apparently, a lot of the federal acquisition controlling office -- and I can't remember what the proper name is -- they've been very concerned about how to apply this law, because the amount of regulations that impinge upon federal contracting is so lengthy and voluminous that the contracting officer's concern about whose role is it to try to see whether one contractor has abided by all the regulations. So I think there is a concern there as to how that can be done.


But if you want to know the standards, it's applied applicable to the federal acquisition process are not set by the Department of Labor. And they're the sole responsibility of the FAR council. And Secretary Herman herself has said that it's up to the agencies that comprise this council to set those standards. But there are set, obviously, we will enforce them.


CLINTON: Thank you, Senator Sessions.


SESSIONS: Ms. Chao, on the size of this agency, 17,000 employees and $40 billion in expenditures, I would urge that you really apply some tough management decisions, the total quality management vision, identifying what the goal is, in trying to do so with the least possible expense. And I believe if that's done, there could be some savings in Labor that could be used for other programs that are worthwhile and even allowing some of the American people to keep a little more of their money. I would urge you to make that a priority.


I think, also, one of your goals will need to be how you can further flexibility in the work force. A lot of businesses feel hampered by wage and hour laws that haven't really changed since the Depression and it complicates their lives.


For example, federal employees could volunteer to work Saturday if they had a child that needed to be in school Monday and they could get credit for working Saturday and they could take off Monday. And that's not available for most businesses under present wage and hour laws. You think we could make some progress in that regard?


CHAO: You're talking about compensatory time off, which I think is a very important issue.


SESSIONS: I was just saying no federal worker that I know would want to give that right up. They see that as a worker benefit, not a burden of the federal government on them.


CHAO: I know how strongly organized labor feel about this, as well. And right now we have a bifurcated work force. If you work in the government, you can have compensatory time off. But if you have a household with one person working for the federal government and the other one working for the private sector, there is a dichotomy; the one in the federal sector can have comp time and flexible hours and the one in the private sector cannot.


This, obviously, was the subject of a great deal of discussion in the last Congress.



CHAO: It's going to come up again and even in terms of the Family and Medical Leave Act, in terms of allowing parents to take time off for adoptions. I mean, all of these are all issues that will be discussed.


And I can assure everyone on both sides that I'm going to be a real good listener in all of this, and I want to work with both sides and hopefully find a field of commonality that we can all agree upon.


SESSIONS: And to follow up on Senator Enzi's leadership on OSHA, I would suggest, first of all, that he really has studied this to an extraordinary degree, and you would find Senator Enzi a valuable resource on OSHA questions.


I would note that we've had a hearing involving a Mr. Ron Hayes (ph) near Mobile, Alabama, my home town, who lost a son in an industrial accident. He has become a national expert and spokesman for safety in the workplace. And I think I can sum up his passionate concern, and it is this, that Labor Department officials have lost sight of their ultimate goal and are more, maybe, focused on moving the paper work from place A to place B and not actually going out into the workplace in a cooperative way to work with businesses and industry to identify what might be dangerous practices and improve them.


I would urge you to think about how you can make OSHA an aider, a facilitator for improved workplace safety rather than somebody who comes in after an accident and starts assessing blame. It will have to do that, I'm sure. But if you can avoid the accident, that's preferable.


CHAO: I think that's a very good suggestion. OSHA needs to take more care with helping companies in the preventive side. And I would hope that we would do that under my tenure.


SESSIONS: And finally, on job training, it has great potential, but the constant demand -- and this is just constant -- is to make sure that training that's being given to a young person or a person who is seeking a second employment, that that training is relevant to what's available in the community for them to work.


And in some instances, I believe, training might be better in partnership with the very industry itself because perhaps they only have a certain type of equipment. And the job training center cannot train them on that equipment. Some sort of subsidy that would encourage them to take unemployed and to train them for precisely the job they will be doing and give them a job would be a good direction for us to move.


CHAO: I appreciate that advice.


SESSIONS: Thank you, Mr. Chairman.


JEFFORDS: Thank you, Senator.


Senator Kennedy?


KENNEDY: Thank you, Mr. Chairman.


I want to just mention something about the OSHA. I'm a very strong believer in it, and no one excuses the kinds of examples that we are given today. But listen to these figures: During the Reagan administration, there was a systematic weakening of OSHA under the banner of regulatory reform, and OSHA regulations were rolled back, enforcement weakened to the point of being meaningless, programs to train and educate workers were cut, and workers and union rights guaranteed by law were virtually ignored.


Rather than focus on protecting workers, the agency instead focused on accommodating businesses through weakening regulation and easing up on enforcement. Budget and personnel were also cut. Dedicated staff were pressured into leaving. The cumulative result was a significant increase in workplace injuries and illnesses: The injury rate increasing from 7.6 per 100 in 1983 to 8.9 per 100 in 1992.


Now, during the Clinton administration, where Charles Jeffress, who, I think, is just an extraordinary leader and has done really an outstanding job on OSHA. The foundation of OSHA programs was enforced, standard-setting, supplemented and balanced by compliance assistance, consultation, outreach, training and education. During this period, there was significant reduction in injury rates, with injury rates falling from 8.3 in '93 to 6.3 per 100 in '99, the lowest OSHA in 30 years of history.



KENNEDY: So, this doesn't lend itself to simple, easy answers. H.L. Mencken said that. "For complicated issues, there's a simple, easy answer, and it's wrong."


And we don't want to have a lot of simple, easy answers here today. This is a complex issue, but when there is vigorous enforcement and Charles Jeffress has done an outstanding job. If you had a few extra moments, I would suggest spending some time. Enormously --- he had an incredible record in North Carolina. He had strong bipartisan support when he came up here initially. I think he's done an outstanding job, but it is incredibly important, as you understand.


Now, going along quickly, on the Office of Contract Compliance, let me just mention this if I could, Ms. Chao. Between '94 and '98, the Office of Contract Compliance -- it's a general question, so you don't, I'm not trying to flyspeck you on this -- the Office of Contract Compliance recovered more than $175 million in total financial settlements for victims of discrimination. In '93 and '94, conducted 53 glass ceiling reviews, covering 29 different industries and 1.4 million workers.


Eighty percent of those reviews incurred serious problems on glass ceiling issues. From just eight of those reviews, obtained $1.4 million in remedy to pay discrimination, and discriminations in promotions for women in our society. Fiscal year '99, conducted 3,800 compliance reviews.


So the enforcement actions really must continue and I think must be strengthened. And I just want to ask -- repeat the question of Senator Clinton whether we have assurances from you whether this is going to -- it's been in effect now for 35 years, and whether we're going to have, will you commit to continued enforcement and strengthening this.


CHAO: I think from what I understand of the Office of Federal Contract Compliance Program, once the employer's awarded a contract, enforcing will occur. There's no question about that.


KENNEDY: But in terms of the program itself that's in effect, your response is that you support that program.


CHAO: I do. I am concerned, however, that there are contracting officers who are in the job of trying to make sure that all the compliance is in place and they are expressing some concern. And I want to listen to them as well.

KENNEDY: If there are individuals, but I would think if there's going to be changes, in light of what you mentioned earlier about willing to deal with all the stakeholders, we're a stakeholders in this. This committee is, as well. We would definitely wanted to be alerted on that.


CHAO: I would certainly be willing. Yes, absolutely.


KENNEDY: Let me mention another area quickly, again. On overtime and family hours, as I mentioned quickly before, particularly in lower income workers, are working considerably more -- 416 hours in the last 20 years more today. And, in many instances they don't have -- we have these examples where the -- I'd just finish with this if I could, Mr. Chairman -- we've had examples particularly in hospitals. But there are many examples; we had in our own state of Massachusetts, St. Vincent's Nursing Hospital, where nurses where working 20 straight hours often with a few moments' notice, disrupting their family lives and threatening their ability to provide the care on forced overtime.


We had that example that we received a lot of national attention. Brent Churchill, a 30-year old powerline man in Maine died on the job accident where he went two and a half days on five hours of sleep. Workers should have some control over these overtime issues.


We had the most recent study was a Department of Labor study of the poultry processing survey which uncovered overtime violations in 100 percent of the companies surveyed. And I hope you will give this issue of mandatory overtime, required overtime, abuses in these overtime, give this some attention in the department, because it's having this impact on people's lives that is enormously health threatening in instances, and in particularly in the health area, it's adverse in terms of the patients themselves. And people in our own economy ought to have a greater control over their lives.


My time is up.


CHAO: Thank you.


JEFFORDS: Well, thank you very much.


And that concludes our hearing. Under the rules, however, members may put questions in writing within a reasonable time and they will be looked at and answered to.


KENNEDY: If I could I would ask the disposition of the chair in considering when we might vote on the nomination, however?


JEFFORDS: As soon as possible. And I'll have to let you know. We haven't made a specific determination of exactly when that will happen.


KENNEDY: I think you have to gather that it's going to be a very positive, favorable and we'll certainly try to expedite it.


JEFFORDS: There are no further questions, but I also would like to thank you for your testimony, Ms. Chao.

CHAO: Thank you very much, Senator.


If I could just end with this, these are very, very tough issues. And I think we all care passionately about these issues, and if I can pledge this committee that I will work very hard, again, to find common ground and I will listen very carefully. Thank you.


JEFFORDS: Well, thank you again. You've been a fantastic witness and we deeply appreciate your willingness to serve and I'm sure that we will be expediting your confirmation as soon as possible.


CHAO: Thank you very much.


KENNEDY: Thanks, Chairman, thank you.


END


NOTES:
???? - Indicates Speaker Unkown
      - Could not make out what was being said. 
off mike - Indicates Could not make out what was being said.

PERSON:  ELAINE CHAO (88%); JAMES JEFFORDS (85%); JAMES M JEFFORDS (73%); JUDD ALAN GREGG (57%); TIM HUTCHINSON (55%); SUSAN M COLLINS (55%); JOHN W WARNER (54%); CHUCK HAGEL (54%); JEFF SESSIONS (54%); TOM HARKIN (53%); EDWARD M KENNEDY (53%); JEFF BINGAMAN (52%); PAUL DAVID (51%); JACK REED (51%); PATTY MURRAY (51%); JOHN EDWARDS (50%); HILLARY RODHAM CLINTON (50%); 

LOAD-DATE: January 25, 2001