January 25, 2003 - National Journal: Former Peace Corps Drector Elaine Chao gets good marks for running Department of Labor

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Former Peace Corps Drector Elaine Chao gets good marks for running Department of Labor

Read and comment on this story from the National Journal on former Peace Corps Director Elaine Chao and how she is doing as the Secretary of Labor at:

Labor: Giving labor a raise*

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Labor: Giving labor a raise

Jan 25, 2003 - National Journal

by Barnes, James A; Baumann, David; Cannon, Carl M; Cohen, Richard E;, Et Al



She has elevated her department by keeping labor problems out of the Oval Office and by helping the GOP's political prospects.

Historically, it has never been easy for a Labor secretary in a Republican administration to have much influence on economic policy or even to pursue an affirmative agenda on Capitol Hill. The department typically plays defense and is consigned to the back burner. Labor Secretary Elaine Chao has quietly tried to elevate her department's standing, with some success.

Chao, the first Asian-American woman to serve as a Cabinet secretary, brought with her to Labor an impressive resume that included stints as head of the Peace Corps, the United Way of America, and the Federal Maritime Commission. She also brought a smooth, polished style that comes across in congressional testimony and in her many campaign appearances for GOP candidates. At bottom, she has fulfilled a main requirement of a Republican Labor secretary: keeping labor problems out of the Oval Office.

Chaos work on numerous issues has helped prevent them from becoming huge political headaches for the White House. She provided important counsel to President Bush during last fall's West Coast dispute between union dockworkers and port operators, a standoff that had threatened to wreak havoc on the economy during the Christmas holidays. Her department helped Bush develop a rapid response when corporate misdeeds at Enron exploded onto the front page. After 9/11, Labor led the charge for National Emergency Grants, an extension of unemployment benefits, given to areas hard hit by the attacks. And Chao has handled controversial federal ergonomics guidelines without creating a political firestorm.

Chao, 49, also wins high praise at the White House for working to cultivate better relations between the GOP and some unions while dissing the AFL-CIO, which she views as highly politicized. "By aggressively reaching out to the progressive unions, Chao has made herself part of the White House economic development team," said Scott Reed, who was Bob Dole's 1996 presidential campaign manager and who now lobbies for the Teamsters.

Peg Seminario, the AFL-CIO's director of safety and health, who has followed Labor Departments since the Reagan administration, complained that she has never seen "as political a Labor secretary." Seminario added: "Everything gets done based upon politics." Perhaps that's exactly the way the White House wants it.


Not only was Chao not Bush's first choice for Labor secretary- his first nominee, Linda Chavez, withdrew after acknowledging that she had sheltered an illegal immigrant-the president took steps early in his administration that made Chao appear to be out of the loop.

Shortly after his inauguration, Bush issued four executive orders that unions viewed with hostility. Only a few days earlier, Chao had specifically promised to give union leaders a heads-up before the administration undertook major labor initiatives. When Bush issued the orders, Chao had not provided the promised notice, and she seemed blindsided.

Since those early days, however, Chao has played a productive role in labor policy and politics and has raised her stature at the White House. The Labor Department was working on pension reform before the Enron scandal hit, and it drafted a proposal that the White House incorporated in its legislative package. Chao also advised Bush during last fall's volatile port lockout to issue a back-to-work order and to invoke the Taft-Hartley Act, a step that hadn't been taken in 30 years. The act allows for an 80-day cooling- off period in contract negotiations. Bush followed Chaos advice in October, and in December, longshoremen and port operators reached an agreement.

"The secretary has participated very actively in many of the big economic debates of this administration," said Deputy Labor Secretary D. Cameron Findlay. "When September 11 happened and the president had to come up with a stimulus package, we were right at the center of that.... On another big economic issue-retirement security-the secretary drafted the president's position."

Chao has also worked closely with the White House political shop, especially in wooing some unions away from their traditional Democratic roots. In addition, she won more points at the White House last year by proposing a budget that came in below what the Office of Management and Budget had allocated. Sources said that she was the only Cabinet secretary to do that. Critics contend that her budget proposal shows that her desire to be a team player in the Bush administration trumps her resolve to protect labor programs. Chao says that her proposal ensures that the department remains effective.

Chao herself insists that she has clout at the White House. She says she can see the president "whenever I want to," and contends that the Labor Department "is very much a part of the economic team."


Chao, like other Republican Labor secretaries, does not have much of an affirmative agenda on Capitol Hill. And sometimes she has been put on the defensive. But Chao has kept any Hill grumbles from requiring White House attention-and that may be about as much as any GOP-run Labor Department can hope for.

As the wife of Sen. Mitch McConnell, R-Ky., Chao knows many members of Congress and their spouses on a personal basis. She concedes that these friendships give her "an advantage," although she insists that she does not "exploit" the situation. Still, Chao has been especially effective at cultivating good relationships with powerful lawmakers, including Rep. John A. Boehner, R-Ohio, the chairman of the Education and the Workforce Committee, as well as Sen. Judd Gregg, R-N.H., the new chairman of the Health, Education, Labor, and Pensions Committee, and the panel's ranking member, Sen. Edward Kennedy, D-Mass.

That's not to say that Chao hasn't encountered any criticism from the Hill. Some suggest that while she is personable when testifying, she is not as "substantive" as some of her predecessors have been. And during her first year, the House Appropriations Committee issued a report taking potshots at Labor for failing to furnish data that had been requested, according to several department sources. Chao, one source said, had not done "all the base-touching that one needs to do." Since then, however, she has been more responsive to House members, and those difficulties have not been repeated.

Meanwhile, Chao has also faced some Hill criticism over her department's handling of ergonomics regulations. After Congress in March 2001 rolled back Clinton administration rules designed to reduce workers' repetitive-motion injuries, Sen. Arlen Specter, R- Pa., argued that Labor should have acted more swiftly to issue new regulations. Chao had set her own deadlines and missed them. But she has weathered that storm. First, the department issued some guidelines, then promised to issue more for various industries. Chao, as a result, appears to have moved the controversial issue along without further blowups on the Hill.


Republican political operatives have heaped praise on Chao for her close work with Ken Mehlman, the White House's director of political affairs, on "union outreach." By seeking to improve relations with the Teamsters and Carpenters unions, she has begun to split the organized-labor coalition that is crucial to Democrats' get-out-the-vote efforts. Chaos moves "take one of the legs of the stool away from the Democrats," said Reed, the former Dole campaign aide.

Richard Hurd, a Cornell University labor studies professor, agreed. He said that Chaos "velvet-glove" approach is very effectively weakening the AFL-CIO's political influence. Reed also said that Chao last year emerged as one of the "secret weapons of the White House political operation." She traveled extensively to boost Republican candidates in the Asian community and was very well received, he said.


Chao says she inherited a department that had a "chaotic" decision-making process. "It was a very-to be charitable- freewheeling environment," she said, adding that such a management style created a "silo effect," in which people worked on their own projects without effective coordination. She has imposed a far more structured operating style.

Kathleen Harrington, assistant Labor secretary for public affairs, said that Chaos approach has succeeded in involving career employees in decision-making. "There was a morale problem [in the Clinton administration], and the policy-making process had gone to seed," Harrington said. "How the budgets were developed was very much dictated by the front office. There is a real emphasis now on reaching out and reaching down."

Chao requires that a policy-planning board review major regulations and initiatives. Critics contend that the board actually slows down decision-making (as seen in the delay on the ergonomics guidelines) and that it imposes ideological litmus tests. "There's a real struggle, for anyone who wants to get anything done based on the merits, running into the ideology at the secretary's level [as well as having to satisfy] the White House," said the AFL-CIO's Seminario. Deputy Secretary Findlay denied that the board is "a political body" and insisted that it has lots o\f input from career employees.

Meanwhile, some members of a federal employees union at Labor are furious at what they see as Chaos efforts to force them to renegotiate their contract. She has declined to give them an increase in a Metro transit subsidy-from $65 to $100 per month-that other federal employees received last year. This nasty spat hasn't helped morale, although some folks said morale was poor in the last administration as well.

In addition, Labor Department Solicitor Eugene Scalia, who received a recess appointment from Bush last year and would have had to face a difficult Senate confirmation battle this year, decided to resign rather than face that fight, especially after Chao did not follow his legal counsel on a highprofile case recently, several sources said.

Established: 1913

2003 budget: $11.6 billion

Full-time employees: 17,300

Chao's salary: $171,900

Web site: www.labor.gov

Copyright National Journal Group, Inc. Jan 25, 2003

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