Vol
IV • No. 5 • January 2006
Secretary
Chao Violates New Transit Subsidy Law
Defies Congress, Refuses to Raise Subsidy
to $105
In
a breathtaking display of arrogance, Secretary of Labor
Elaine Chao is brazenly violating a new law concerning
employee transit subsidies. Despite a strongly worded
letter to her from four Senators and eight Representatives,
she is refusing to raise the maximum transit subsidy
for all Department of Labor (DOL) employees in the Washington,
DC metropolitan area to $105 a month.
Background
On August 10, 2005, President Bush signed a $286 billion,
6-year transportation bill entitled The Safe, Affordable,
Flexible and Efficient Transportation Equity Act –
A Legacy for Users (SAFETEA-LU). One of its provisions,
Section 3049, makes law key parts of Executive Order
13150, which was issued by President Clinton in April
of 2000. That Executive Order required all Federal agencies
in the National Capital Region to implement a transit
subsidy program and to provide the maximum tax-free
transit subsidy to their employees. With SAFETEA-LU,
those requirements are now law.
Currently,
the maximum tax-free transit subsidy for all DOL employees
in the Washington, DC metropolitan area, both supervisory
and non-supervisory, is $100 a month. On January 1,
2005, as a cost of living adjustment, the government-wide
maximum was raised from $100 to $105.
Following the signing of SAFETEA-LU, AFGE 12 President
Larry Drake inquired as to management’s plans
for implementing the new law. Sandra Keppley, Director
of the Office of Employee and Labor-Management Relations,
responded that the new law did not require DOL to raise
the maximum monthly transit subsidy from $100 to $105.
According to her, the Department plans to keep the maximum
transit subsidy at $100, and the Union must wait until
a new contract is negotiated to seek the $105 subsidy
(the earliest that could happen is 2008.
President Drake then sought assistance from the offices
of the two original sponsors of the transit subsidy
legislation, Senator Paul Sarbanes (D-MD) and Representative
Jim Moran (D-VA). As a result, in late September a letter
was sent to Secretary Chao explaining very clearly the
meaning of the new law and urging her to comply with
it. The letter – which is reprinted on the back
– was signed by all four local Senators, including
Virginia Republicans George Allen and John Warner, as
well as the entire local House delegation, including
Virginia Republicans Tom Davis and Frank Wolf.
Congress to Chao:
Raise Subsidy to $105
The letter from Congress could not be clearer. “As
the sponsors of the transit benefit provision of SAFETEA-LU,
we believe it is critically important for the Department
to comply with the requirements of this new law…
Since Section 3049 of SAFETEA-LU requires the Department
of Labor to offer its employees transit benefits up
to the maximum level, we expect the Department to provide
the full $105 per month benefit beginning on October
1.”
Secretary Chao’s response? She had Assistant Secretary
for Administration and Management Patrick Pizzella reply.
Mr. Pizzella’s letter (copies of which are available
in the Union office) is a masterpiece of obfuscation.
Following the usual formalities and a review of Section
3049 of SAFETEA-LU, he states: “This increase
in the amount of fringe benefits that may be excluded
from gross income does not, however, create an affirmative
requirement for the Department to increase its subsidy
to DOL employees. Consistent with Executive Order 13150,
all eligible DOL employees have been and are currently
receiving transit subsidies approximately equal to their
commuting costs – but not exceeding the exclusion
limitation set by the IRS, now $105.” From this,
you would think that some DOL employees are getting
$105 in transit subsidy, which is definitely not the
case.
The
Crux of the Issue
The
crux of the issue is that the law, as explained in the
Congressional letter, requires that Federal agencies
provide the maximum transit subsidy. DOL disagrees and
says that the law does not require it to take any action,
that it can continue to provide a subsidy less than
the maximum.
Some readers may ask: It’s only $5 more, why is
the Union making such a big deal? The answer is that
it’s not just the $5 now; the law means that whenever
the government-wide maximum goes up, it automatically
goes up at DOL too. There’s also the principle
that the Department must obey the law, even if the political
appointees don’t like it.
It is important to note that this law applies to non-bargaining
unit employees as well as those represented by the Union.
So not only are DOL employees represented by AFGE 12
being denied the increase to $105, so are all the managers
and supervisors who use the transit subsidy.
The Union has filed a grievance on management’s
refusal to obey the new law and raise the transit subsidy.
The grievance ultimately will be decided by an arbitrator.
Contempt
for Congress
On
another level, DOL’s response to the Congressional
letter reveals the utter contempt that the Bush Administration
has for Congress. In essence, Assistant Secretary Pizzella,
on behalf of Secretary Chao, is telling the Senators
and Representatives, the very people who actually wrote
the law, that they don’t know what they are talking
about. Unbelievable.
“Secretary Chao is not above the law,” declared
President Drake. “The Union will persevere as
long as necessary to see that DOL employees get the
transit subsidy that they deserve,” he vowed.
3.44% Pay Raise in 2006
Thanks
in large part to the lobbying of AFGE, Federal civilian
employees in the Washington-Baltimore area are receiving
a pay raise of 3.44% this month. President Bush’s
budget had called for only a 2.3% raise but Congress
– led by the D.C. area delegation – voted
for “pay parity” with the raise proposed
for the military. President Bush went along with Congress’s
action and signed the pay increase into law.
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