• Training more workers by giving Governors and individuals more flexibility and setting higher performance standards for job training and employment programs.

Improving workers' access to health benefits by allowing small businesses to band together to offer health insurance for their workers and their families.

Giving working families more flexibility by offering them the options of compensatory time off and flex-time.

• Safeguarding workers' pensions by restoring the solvency of the Pension Benefit Guaranty Corporation.

• Protecting workers' safety, health, pay, and benefits through strong enforcement of our Nation's labor laws and compliance assistance for employers.

Helping veterans to return to civilian life by enforcing their re-employment rights.

Matching employers to willing workers through an electronic search engine and more efficient foreign labor certification process that protects American jobs.

Supporting a Compassionate Society

• Helping troubled communities by giving ex-offenders a second chance.

MEETING PRESIDENTIAL GOALS—Continued

Making Government More Effective

Preventing and recovering overpayments of Unemployment Insurance benefits.

• Refocusing the International Labor Affairs Bureau on its original mission of research, analysis, and advocacy.

Improving Federal workers' compensation programs by strengthening return-to-work incentives, adopting effective State practices, and restoring the solvency of the Black Lung Disability Trust Fund.

Eliminating the duplicative and ineffective Migrant and Seasonal Farmworkers program.

PROMOTING ECONOMIC OPPORTUNITY AND OWNERSHIP

Expanding Access to Job Training

In April 2004 the President proposed significant reforms to the Department of Labor's (DOL's) job training programs to double the number of workers trained and to give workers more choice about their training and career paths. The 2006 Budget builds on that proposal by:

• Giving Governors more flexibility. The President's proposal would merge the four major DOL Federal job training and employment grant programs into a single $4 billion grant program. In addition, Governors would be able to supplement this consolidated grant with their State's resources from a "menu" of several other Federal job training and employment programs.

• Eliminating unnecessary overhead. In exchange for more flexibility, the proposal would place strict limits on overhead costs. This would free resources to allow more workers to be trained. • Giving workers more choice. The President's proposal would give workers greater control over their training through the use of personal Innovation Training Accounts.

• Demanding greater accountability. The proposal would establish increasingly rigorous performance standards each year, leading to a goal in the tenth year that States place in employment 100 percent of the workers trained with grant resources. To ensure that individuals are placed in high-quality jobs, States would also be required to show improvements in earnings and job retention. States' performance would be ranked and published each year.

These reforms, together with the President's $250 million Community College job training initiative, will train 400,000 workers annually—twice as many as are trained under the current system.

Improving Workers' Access to Health Benefits

The Nation's eight million small business employers are only half as likely as large employers to offer health benefits. More than half of the Nation's uninsured are small business employees and their families. To help these small businesses and give more working families access to health coverage, the President wants to allow small businesses to join together through industry and professional associations to purchase affordable health benefits for their workers. These Association Health Plans (AHPs), which would also be available to a broad range of civic, faith-based, and community organizations, would give small businesses and groups the same kind of purchasing power and options that large firms and unions provide, expanding health coverage and saving participants as much as 25 percent on their health insurance premiums. DOL would be charged with oversight and regulation of AHPs, and would ensure that they meet strict solvency and other requirements.

PROMOTING ECONOMIC OPPORTUNITY AND OWNERSHIP-Continued

Giving Working Families More Flexibility

Many labor laws are outdated, designed generations ago when few women worked outside the home. In 2003, almost 61 percent of two-parent families had both parents working, versus 49 percent in 1976. The President has called on the Congress to give private-sector workers the same flexible scheduling options that Federal employees now enjoy. Offering choices like whether to receive overtime pay as cash or as paid time off will help workers successfully juggle the demands of

It seems that Americans are getting stretched in every direction these days. It's hard to work 40 hours or more a week, find time to make dinners, take your father to a doctor's appointment, attend a school play and go to a parent-teacher conference. .. There is no doubt that Americans need more time. The President wants to work with Congress to make flex time and comp time more widely available, so that people can work a flexible schedule and have more control over how they spend the hours of their day.

the workplace with the needs of their families.

Safeguarding Workers' Pensions

The Pension Benefit Guaranty Corporation (PBGC) insures the defined-benefit pensions of 44 million Americans against employer bankruptcy or other plan failures. Nearly 1 million individuals now receive, or are owed, benefits under plans that have been taken over by the PBGC. At the end of 2004, PBGC's liabilities exceeded its assets by more than $23 billion-more than double the $11.2 billion deficit recorded a year earlier-due to the termination and anticipated termination by U.S. businesses of a number of large pension plans.

2000

2001

2002

2003

2004

Source: PBGC.

The Administration is committed to addressing this problem as part of its comprehensive strategy to strengthen the retirement security of America's workers. Although no payments for workers who currently receive PBGC benefits are threatened, the defined-benefit pension system must be reformed or future worker benefits will be at risk. The 2006 Budget proposes comprehensive reforms designed to protect workers' pensions and stabilize the defined-benefit pension system by updating the 30-year-old legislation that created the PBGC. The proposals contained in the 2006 Budget would: • Require employers to fund their plans responsibly. PBGC estimates that private-sector single-employer defined-benefit plans are underfunded by more than $450 billion. The Administration's proposals would require companies to make up their funding shortfall within a reasonable period of time. In addition, the Administration would give companies greater flexibility to

contribute funding above their current liabilities and would reduce volatility in plans' required contributions.

• Estimate plan liability more accurately and simply. Under current law a variety of statutory provisions determine a company's pension plan liability. This makes it difficult to know whether a company is funding its plan adequately, thereby allowing companies to minimize their pension contributions and understating PBGC's exposure. The Administration's proposals would provide a better measure of liabilities and establish appropriate funding targets based on a plan's risk of termination.

• Set insurance premiums based on cost and risk. Defined-benefit plans pay premiums to PBGC in return for coverage. Current premiums do not properly reflect the plan's risk of insolvency and are inadequate to cover losses to PBGC. The President's proposals would reform the current premium structure to restore PBGC to a sound financial state by increasing the share of premium income tied to the plan's risk of termination. The risk-based premium would reflect the new funding targets and be re-examined on a periodic basis to ensure PBGC's solvency. Flat-rate premiums would be adjusted to reflect wage growth. These reforms would provide PBGC with the assets needed to pay future benefits and would strengthen companies' incentives to ensure adequate funding.

• Prevent companies from making empty promises to workers. Currently companies may promise future benefits to their workers (in lieu of immediate compensation) that they fail to provide for and in many cases can neither keep nor pay insurance premiums to cover. This places the burden of these increased benefits on PBGC and the financially healthy companies that fund it. The Administration's proposals would require companies to pay for additional benefits immediately if they are financially weak or have a significantly underfunded pension plan.

Make pension plans more transparent. Current law does not require adequate disclosure to workers, retirees, investors, and policymakers about a plan's funding status. As a result, workers are surprised when promised benefits are lost, and investors and policymakers are unable to make informed decisions. The Administration's proposals would require plans to provide workers with timely information on the true financial health of pension plans and make such information publicly available.

For further information on these proposals, please see www.dol.gov/ebsa.

Protecting Workers

The 2006 Budget includes the resources DOL needs to fulfill its responsibilities under more than 180 worker protection laws, providing $1.4 billion for labor law enforcement. DOL will continue to meet its responsibilities to workers through a combination of enforcement and compliance assistance and will continue to update its regulations so they make sense, protect workers, and minimize unnecessary burdens on employers. The 2006 Budget will:

Ensure safe and healthy workplaces. The Occupational Safety and Health Administration (OSHA) and Mine Safety and Health Administration (MSHA) are responsible for assuring the safety and health of the Nation's workers. From 2002 to 2003, the occupational injury and illness rate declined from 5.3 to 5 cases per 100 full-time workers and the number of injuries and illnesses fell by 7.1 percent. The 2003 workplace fatality rate of 4 per 100,000 workers was also a record-low level. The 2006 Budget provides $747 million for OSHA and MSHA to allow these agencies to maintain a strong enforcement presence and work with employers to ensure the physical well-being of their workers. Included in this amount is $1 million to improve OSHA's ability to get timely data on worker injuries and illnesses, based on a recommendation in OSHA's Performance Assessment Rating Tool (PART) review.