What the Debt Ceiling Agreement Means for Workplace Safety

So, assuming radical Republicans don’t sabotage the agreement that their fearless leader, Speaker Kevin McCarthy, reached with President Biden, we seem to have once again dodged the completely unnecessary debt ceiling bullet. The world economy is likely to survive for a bit longer.

While a final agreement could have been much worse if House Republicans had gotten their way, this agreement will still have a major impact on OSHA — and consequently workplace safety.

To put it bluntly, this agreement will cause more workers to get hurt, sick and die.

For those of you you have not been following this issue obsessively, the debt ceiling is an authorization by Congress to pay for the obligations  that Congress had previously agreed to.  When Democrats are in the White House and Republicans control at least one house of Congress, Republicans routinely attempt to hold the U.S. and world economy hostage by threatening not to increase the debt limit. Not authorizing funding to pay our bills would mean that the U.S. could no longer honor its debts or finance our government. Worldwide economic calamity would ensue.

It’s kind of the equivalent of taking all your friends out for an expensive steak and seafood dinner, then — suddenly realizing you can’t afford to pay for what you ordered —  refuse to pay the bill until the restaurant renegotiates the check. Oh, and you’ll burn down the restaurant if they don’t agree.

It Could Have Been Worse

OSHA’s Budget

The budget freeze in the bill will be the main hit that OSHA will take (as will MSHA, NIOSH, EPA and most other non-military “discretionary” government programs). Due to some budgetary gymnastics, which I won’t go into here, what is portrayed as a small cut will actually end up resulting in a flat OSHA budget for FY 2024 and 2025. This is not a good thing, but considerably better than major cuts — up to 22% — that Republicans were originally proposing.

To put it bluntly, this agreement will cause more workers to get hurt, sick and die.

But a flat budget in FY 2024 budget will continue — and worsen — OSHA’s chronic underfunding.  OSHA is a small agency with a tiny budget — and an enormous mandate:  the safety and health of 158 million workers at more than 10.9 million workplaces.

OSHA’s Fiscal Year (FY) 2023 budget was only $612,015 million. (Just for comparison, EPA’s budget is in the neighborhood of $10 billion.

And, of course, with inflation, a flat budget is really a cut.  OSHA agency has not had a major budget increase since FY 2010 when its budget was $558,620 million. Since that time, the dollar had an average inflation rate of 2.57% per year, producing a cumulative price increase of 39.12%.  What this means is that $558,620 in 2010 dollars is equivalent in purchasing power to about $777,161 today, an increase of $218,541.09 over 13 years.

But OSHA’s budget has only increased by $73.6 million over that time.

In other words, OSHA has seen a $144,641 budget cut since FY 2010.  Another couple more years of flat budget will only make things worse, especially with the current high level of inflation.

According to David Dayen, writing in the American Prospect:

You’ll hear a lot about a spending “freeze,” but if you don’t increase spending at the rate of inflation, in real terms you’re cutting. Given that inflation will run around 4-5 percent this year and maybe 3 percent the next, if you do the math you’re talking about approximately a 5 percent cut to domestic discretionary programs over the next two years, maybe more depending on inflation’s persistence.

Budget cuts at OSHA are not just an academic paper-work exercise.  Reducing the agency’s ability to do its job means that more workers will get hurt and die. As the AFL-CIO reports in its 2023 Death on the Job report, there are currently only 2069 total federal OSHA staff. As of last December, federal OSHA had only 900 inspectors (and state OSHA’s have an additional 971 inspectors.) At the peak of federal  OSHA staffing in 1980, there were 2,951 total staff and 1,469 federal inspectors (including supervisors) responsible for 67.8 million workers. So OSHA is now responsible for over twice as many workers as in 1980 with about 30% less staff.

More workers will get hurt and die — as a result of budget cuts and OSHA’s increased inability to inspect workplaces or issue standards to protect workers.

Consequently, in FY 2022, it would take OSHA 190 years to inspect each workplace in the United States just once.

In other words, unless a worker dies or is hospitalized, or unless an employee files a complaint with OSHA, it is very unlikely that most employers will ever see an OSHA inspector.  And as the threat of an OSHA inspection recedes, we can expect OSHA’s deterrent value to deteriorate. This problem will only continue to become worse — and more workers will get hurt and die — as a result of budget cuts and OSHA’s increased inability to inspect workplaces or issue standards to protect workers.

Regulatory Issues

OSHA protects workers by enforcing its standards. But the agency’s standard-setting process is severely handicapped. It can take between ten and twenty years for OSHA to issue a major standard. Due to budget cuts, COVID-19 and a flawed strategic approach, OSHA will likely issue no major standards during the entire first term of the Biden administration.

The original Republican debt limit proposal would have made this situation catastrophically worse — not just for OSHA standards, but for any environmental or consumer protection regulations.   As I wrote before, a section of the Republican bill (the REINS Act) would have required Congress to approve every major regulation issued by OSHA, MSHA, EPA or any other agency. Republicans and their business backers hate nothing more than new regulations, so passage of the REINS Act would essentially have meant the end of government rulemaking.

Happily, the REINS Act disappeared from the Biden-McCarthy agreement to be replaced by a section called “Statutory Administrative Pay-As-You-Go,” commonly known as Administrative PayGo.

PayGo essentially sets up a regulatory budget for “mandatory spending.” Mandatory spending is spending that is permanent — like Social Security and Medicaid — that doesn’t have to be re-authorized every year.  This section says that if mandatory spending is increased by more than $1 billion, then an equivalent amount of savings need to be identified elsewhere. It does not include the costs of normal regulations, nor the cost passed on to business owners or others who may have to spend more to comply with a new standard.

In addition, this provision sunsets after two years and the Director of the White House Office of Management and Budget has the power to waive the PayGo requirement and its decisions cannot be reviewed by the courts. Consequently, the PayGo language is unlikely to have any impact on OSHA rulemaking

So, that’s certainly a good thing.

Use It Or Lose It

As part of the American Rescue Plan (ARPA), OSHA received $100 million for COVID-related activities. These activities included enforcement and development of related standards, like OSHA’s long-lost  COVID standard for health care workers, and OSHA’s long-delayed comprehensive infectious disease standard. Any money not used will be rescinded in the debt ceiling deal.  As of the end of 2022, OSHA had only spent  $68 million of the $100 million in ARPA funding. It’s unclear five months later how much of that funding remains — and will be lost.

Meanwhile, OSHA’s healthcare worker COVID standard is about to enter the sixth month of its 3-month White House review and OSHA is predicting that it will issue a proposal for the infectious disease standard in September.

Many observers (like me) remain skeptical about that date.