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WebMemo #3396 on Budget and Spending

October 13, 2011

Two Cheers for Proposed Labor, Health, Education Appropriations

By and

House appropriators deserve two cheers for their recently released bill funding the Departments of Labor (DOL), Health and Human Services, Education, and related agencies for fiscal year (FY) 2012.[1] Disappointingly, the legislation only slightly reduces federal spending. Nevertheless, its policy riders take important steps in the right direction.

The legislation blocks funding for many harmful regulatory proposals that discourage business expansion. It de-funds the National Labor Relations Board’s (NLRB) attempts to push workers into unions, large portions of Obamacare, and the sea of red tape rising from the DOL. Cutting funds for these harmful initiatives will encourage employers to expand and hire.

Spending Levels

Overall the bill reduces spending by 2.5 percent from FY 2011 of $157.4 billion to $153.4 billion for FY 2012. Taken alone, these numbers reflect a largely status-quo measure, maintaining a number of programs and activities that have little justification.

In addition, many of the spending cuts are technical rather than policy-based. For example, the bill reduces spending in the Employment and Training Administration by $2.2 billion. The committee summary explains that these cuts come mostly from “the transition of employment and training programs to a federal fiscal year and the elimination of $2.4 billion in advance appropriations.”[2]

The bill merely trims some programs that—especially in light of trillion-dollar annual budget deficits—the federal government has no business financing. These include the ineffective Job Corps; the Corporation for Public Broadcasting, which should move toward self-financing; and the Corporation for National and Community Service, an early 1990s creation that fostered the oxymoron of “paid volunteers.”

Nevertheless, the bill does make much-needed reforms in Pell grants, such as holding the maximum award at $5,500 and tightening eligibility requirements in a manner consistent with the House-passed budget resolution. More broadly, the bill, combined with other House appropriations, does keep a lid on spending by keeping total FY 2012 base discretionary spending (excluding war funding) within the $1.043 trillion budget authority cap required by the Budget Control Act. But the cap level is still excessive, as it is well above the comparable FY 2008 pre-stimulus level of $933 billion.

Policy Riders

While the bill can be criticized for being too timid on spending reductions, the same cannot be said about its policy riders. The bill would eliminate funding for many harmful policies that the Obama Administration is seeking to implement.  This would sharply limit the damage the federal government is doing to the economy.

Obamacare. The bill includes language de-funding the new health care law. Under the legislation, the Administration could not spend money to implement Obamacare. The economically damaging effects of the health care law are well documented, and public opposition remains strong.

De-funding is an important tool Congress should use to stop the implementation of the health care law until it can be fully repealed. Equally, it is critical that the language used to de-fund the law is properly structured to avoid any potential conflicts with pending court cases.

Department of Labor. The bill takes direct aim at the most harmful Obama DOL initiatives, which already discourage businesses from expanding and hiring and would needlessly raise business costs even further. It bars the DOL from spending money to:

  • Deter employers from classifying workers as independent contractors;
  • Refer allegations of wage and hour violations to plaintiffs’ lawyers to pursue private lawsuits;
  • Implement new ergonomic injury reporting proposals, seen as a prelude to expensive new ergonomics regulations;
  • Make it more costly for employers to educate their workers about the downsides of unionizing during organizing drives;
  • Revise the H-2A (temporary foreign agricultural workers) program to make it much more costly for employers to use while substantially raising required wage payments;
  • Change the methodology for calculating prevailing wages under the H-2B (temporary foreign nonagricultural workers) program to artificially inflate the required minimum wage rates; or
  • Alter the definition of a fiduciary under the Employee Retirement Income Security Act.

Union Subsidies. The legislation further targets expensive taxpayer subsidies to organized labor. It prohibits any agency it funds from paying:

  • Officers in federal unions to perform union business while on the clock as federal employees (i.e., Official Time), or
  • For construction contracts that force contractors to sign collective bargaining agreements with unions before starting work.

National Labor Relations Board. Many employers fear that the NLRB has moved from being a neutral enforcer of the law to an agency actively promoting unionization no matter the cost to the economy. The spending bill would prevent the NLRB from engaging in union favoritism. It would prevent the agency from:

  • Conducting snap organizing elections that would force workers to vote as little as 10 days after a union files for an election;
  • Allowing unions to cherry-pick bargaining units to exclude the votes of workers who oppose unionizing;
  • Refusing to process petitions for a secret ballot decertification election if an employer recognizes a union formed with publicly signed cards;
  • Requiring employers to display posters encouraging workers to unionize;
  • Regulating small businesses; or
  • Conducting organizing elections over e-mail.

The National Labor Relations Act protects employees’ right to decide whether or not to join a union, and it protects employers’ rights to communicate with their employees. The provisions in the appropriations bill would force the NLRB to protect these rights impartially instead of attempting to push workers into unions. The bill also cuts the NLRB’s budget by 17 percent—a long overdue reduction given the agency’s declining caseload.

Protecting Life and Conscience. Despite the Hyde amendment, federal law allows some taxpayer funding for abortion. Taxpayers also heavily subsidize Planned Parenthood, an organization that performs more than one-fourth of the abortions in the United States. The appropriations bill takes steps to protect conscience for taxpayers and health care providers, including:

  • Statutorily prohibiting any federal agency—or state or local government that receives federal funding—from discriminating against health care providers who do not provide abortions;
  • Prohibiting the federal government from paying to perform abortions under Obamacare;
  • Cutting off federal taxpayer funding for Planned Parenthood until it certifies that it has stopped providing abortions; and
  • Denying tax funding for the creation of human embryos that are destroyed in research.

Good but Not Perfect

The House appropriators’ draft bill is not perfect. It should go much further to reduce spending, aiming for pre-stimulus, pre-bailout levels. On the other hand, the bill would prevent the Administration from implementing many harmful policies. It would cut off funding for the DOL’s proposals to burden employers and the NLRB’s plans to foist unions on workers. It denies funding to implement Obamacare and prevents taxpayer funds from subsidizing abortions. House appropriators deserve two cheers for this proposal.

James Sherk is Senior Policy Analyst in Labor Economics in the Center for Data Analysis and Patrick Louis Knudsen is the Grover M. Hermann Fellow in Federal Budgetary Affairs in the Thomas A. Roe Institute for Economic Policy Studies at The Heritage Foundation.

Show references in this report



[1]Fiscal Year 2012 Labor, Health and Human Services funding bill, September 28, 2011, at http://appropriations.house.gov/UploadedFiles/FY_2012_Final_LHHSE.pdf (October 12, 2011).

[2]Press release, “Appropriations Committee Releases the Draft Fiscal Year 2012 Labor, Health and Human Services Funding Bill,” Committee on Appropriations, U.S. House of Representatives, September 29, 2011, at http://appropriations.house.gov/News/DocumentSingle.aspx?DocumentID=262231 (October 12, 2011).

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