While the $3.7 trillion budget for fiscal year 2012 submitted Feb. 14 by the Obama Administration would freeze overall nonsecurity discretionary spending for five years by eliminating and reducing hundreds of programs, it calls for increased funding for the Department of Homeland Security's E-Verify Program, the Equal Employment Opportunity Commission, and several agencies within the Labor Department.

The freeze would provide a “down payment” toward ending federal deficit-spending, saving $400 billion over 10 years, and lowering domestic discretionary spending to its smallest share of the economy since the 1950s, President Obama said during an appearance in Baltimore, Md.

House Republicans criticized Obama for not making deeper and more immediate budget cuts.

E-Verify Funding Increase Proposed

The administration is requesting $102.4 million in funding for E-Verify, with 360 full-time employees, as part of the budget request for U.S. Citizenship and Immigration Services, the agency in DHS that administers the program. According to DHS, the fiscal 2012 budget request for E-Verify, the federal government's electronic employment verification program, includes funding for “new monitoring, compliance, and outreach positions necessitated by program expansion.”

Participation in E-Verify grew from 156,659 employers at the end of fiscal 2009 to 226,528 at the end of fiscal 2010, which represents an average of 1,300 new employers joining the program each week, DHS said. In addition, the number of queries processed through the program grew from 8.7 million in fiscal year 2009 to 16.4 million in fiscal year 2010, DHS said.

DHS's Immigration and Customs Enforcement budget would fund continued worksite enforcement efforts, including Form I-9 inspections, DHS said. ICE conducted 2,196 worksite inspections in fiscal year 2010, up from 1,444 in fiscal year 2009, the department said.

The budget also includes a new multiagency initiative that would coordinate federal and state efforts to combat the misclassification of employees as independent contractors. DOL's Wage and Hour Division budget includes $15 million for misclassification investigations.

Meanwhile, DOL's Office of Federal Contract Compliance Programs is requesting $109 million for fiscal 2012, up from $105.3 million in fiscal 2010 and 2011. In keeping with the administration's push to thwart misclassification, $3.57 million would fund OFCCP's analysis of potential worker misclassification when it conducts compliance evaluations.

EEOC Case Backlog

The administration's fiscal 2012 budget proposal requests $385.5 million in annual funding for EEOC, which is about $18 million above the current level. As part of the justification for the funding increase, EEOC Chair Jacqueline Berrien mentioned “the agency's expanding enforcement mission and the great demand for its services.”

In its budget projections for fiscal 2011, the administration estimates that EEOC will receive 105,917 new private sector discrimination charges, topping last year's record high of 99,922 charges received. The administration projects that EEOC will have a case backlog of 93,006 charges as of Sept. 30, 2011, the end of fiscal 2011. For fiscal 2012, the administration projects that EEOC will receive 108,036 private sector charges and will end fiscal 2012 with 100,834 pending charges in its backlog.

Unemployment Insurance

DOL's discretionary budget next fiscal year would decline by about 5 percent from its estimated fiscal 2011 level, but the administration proposed to “strengthen unemployment insurance” by providing states with short-term relief from making interest payments on borrowed federal funds, reducing fraud and other improper benefit payments, and doubling the taxable wage base for employers to $15,000 starting in 2014.

While the proposed $108.5 billion budget for DOL in fiscal 2012 would reduce the department's total budget by $40 million, several worker safety programs would be preserved. According to administration documents released with the proposal, the proposal “reflects the need to make sacrifices in many areas in order to invest in job creation and boost competitiveness for years to come.”

The administration proposed a substantial budget increase for DOL's Employee Benefits Security Administration to pay for increased regulatory activities and efficiencies, budget documents show. The president proposed a $197.5 million fiscal 2012 budget for EBSA, compared with the agency's $155 million appropriation for fiscal year 2010. The fiscal 2010 budget is still in effect this year under a continuing resolution.

The proposal shows a significant increase in the number of exemptions, determinations, interpretations, and regulations EBSA expects to issue in fiscal 2012, from 3,877 in fiscal 2010 and an estimated 3,987 in fiscal 2011 to an estimated 8,356 in fiscal 2012. EBSA also is working toward shaving 53 days off the average turnaround time for processing requests for exemptions, from 328 days in fiscal 2010 to 275 in fiscal 2012.

OSHA Funding Request

The fiscal 2012 budget would provide $583.4 million to the Occupational Safety and Health Administration, a $24.8 million increase from current funding levels.

The administration's proposal contrasts with a Feb. 11 Republican-sponsored continuing resolution (H.R. 1) that would slash OSHA funding by $99 million for the remainder of fiscal 2011—cuts that would set in March 4, when the current continuing resolution expires.

The biggest line-item increase in the president's budget proposal is for OSHA's standard-setting directorate, which would rise by 36.8 percent, from $19 million in fiscal 2010 to $26 million. The president's fiscal 2011 budget proposal sought $573 million for OSHA but was never adopted. Instead, a series of four continuing resolutions has maintained federal government funding at fiscal 2010 levels. Under the fiscal 2010 budget, OSHA is funded at $558.6 million.

PBGC Request

The budget requests $7.2 billion for the Pension Benefit Guaranty Corporation. The proposal would give PBGC's board of directors authority to adjust pension insurance premiums and would direct the agency to use a risk-based formula in setting premium prices.

The budget calls for a two-year study to be conducted before implementing the policy changes, and recommends a phased-in implementation of any premium increases. The proposal shows that PBGC premium changes, if implemented, would generate about $16 billion in a 10-year budget period.

Tax Exclusions

Tax exclusions, referred to as “tax expenditures” in the budget documents, would amount to $45.2 billion for employer-sponsored defined benefit plans in fiscal 2012, compared with $42.2 billion in fiscal 2011, and a total $245.9 billion for the five-year period from fiscal 2012 through fiscal 2016. The documents also show proposed fiscal 2012 tax expenditures of $67.5 billion as incentives for employers to sponsor 401(k) plans, compared with $62.8 billion in fiscal 2011, and a total of $356.2 billion for fiscal 2012 through fiscal 2016.

Proposed tax expenditures for employer-sponsored health care would be $184.4 billion in fiscal 2012. The budget shows expenditures for employer-sponsored health care at $173.7 billion in fiscal 2011 and $1.07 trillion for the 2012-2016 period. The budget proposed fiscal 2012 expenditures of $3.4 billion on small-business tax credits for employee health insurance expenses, compared with$2.4 billion in fiscal 2011, and a total of $20.6 billion for 2012 through 2016.