The American Spectator

It wasn’t good enough for the AFL-CIO, the 55-union, 10-million worker labor federation that has fought the Labor Department in Congress and in the courts. President John Sweeney accused Chao of telling “half-truths about whether workers are at risk of losing overtime pay.” Before the regulations were finalized, national legislative director Bill Samuel told Reuters, “We still think that millions of workers would lose overtime protections, including many earning barely above $22,000.” Ted Kennedy agreed that it was an “anti-worker rule” that would force employees to “work longer hours for lower pay.”

Kennedy isn’t the only politician to take aim at Chao’s department. Democratic presidential candidate Barack Obama, in a campaign speech where he promised he would walk a picket line as president, told union activists, “We are watching a Washington that has thrown open its doors to the most anti-union, anti-worker forces we’ve seen in generations.”

Some of Chao’s reforms are aimed at the culture of the Labor Department itself. Grant processes have been opened up to competition. The Senior Community Service Employment Program, for example, had been handing out $300 million in national grants to the same handful of organizations every year since 1967. The Labor Department now forces groups to compete for the money, with six new grantees in 2006 alone. For the last two fiscal years, the department has ranked first out of the 18 largest federal agencies in the percentage of dollars awarded competitively.

Instead of having Labor Department bureaucrats pick one-size-fits-all job training opportunities for workers seeking to upgrade their skills, the Bush administration has been experimenting with career advancement accounts. These $3,000 vouchers — part of a larger American Competitiveness Initiative — are an effort to introduce flexibility and choice into the process. The AFL-CIO opposes the vouchers.

NOT EVERYTHING HAS BEEN an ideological battle. The Bush Labor Department has set up a record number of health and safety partnerships with labor unions. In 2006, Chao joined many labor leaders in support of the bipartisan Pension Protect Act. Top Labor aides believe they have even won over some skeptics among the department’s career personnel. “We’re winning hearts and minds in these buildings,” says Chao.

Chao is also willing to win hearts and minds in the unions. “I think I’m one of the very few people on this side of the aisle who really understand organized labor,” she says. “You learn for one that organized labor is not monolithic and they run the gamut in terms of philosophy. There are some that are willing to work with us and there are others who are so partisan they will not.”

Granted, none of this rises to the level of the “revolution” conservatives are promised whenever Republicans get to wield power in Washington for a few years. Making an agency run better is not the same thing as shrinking the federal government. And the Labor Department doesn’t command the status of State or the budget of Defense or Health and Human Services. But the right needs to highlight examples of successful conservative governance wherever it can find them.

Conservatives look at Bridges to Nowhere, discretionary spending binges, and Brownie doing a heck of a job and see a Republican Party that is insufficiently ideological. Many independents, however, look at these missteps and think they see conservatism. To them, the GOP is too ideological — and incompetent at governing.

The Bush Labor Department, by contrast, has kept its budget tight. It was the first — and so far still the only — Cabinet agency to earn a “green” rating from the White House for sound management practices in every required area. It meets its Office of Management and Budget spending targets. Chao’s fiscal 2008 discretionary budget request represents a 9 percent cut from what Congress authorized last year.

When conservatives run traditionally liberal agencies and cut spending, they are often accused of trying to gut the agency from within. Yet Labor has practiced spending restraint without eviscerating the department’s core functions. Since 2001, the Wage and Hour division has recovered record back wages for workers. The Occupational Safety and Health Administration reports that injury and illness rates are down 13 percent. Money recovered for victims of illegal employment discrimination is up 80 percent while the department’s efforts to protect health and safety plans has yielded $9.2 billion in money results and 691 criminal indictments.

“[B]y every key measure — workplace safety and health, back wages recovered, and retirement assets protected — the Department has achieved record results,” Chao beams. “So it is possible to do more with less.” That isn’t exactly Thomas Jefferson’s observation that the government which governs best governs least, but it is a vast improvement over a stagnant big government conservatism that ends up doing less with more.

SO HOW DID THEY DO IT and what could future conservative policymakers learn from this record? Observers argue a lot of the credit should go to Chao herself. “She’s a really good thinker and smart woman,” says economist Lawrence Kudlow. “The unsung hero of the Bush administration,” agrees Heritage Foundation President Edwin Feulner. The Weekly Standard dubbed Chao the “last woman standing” after Donald Rumsfeld’s resignation made her the only member of Bush’s original Cabinet still serving.

It’s true that Chao came to the office with a unique skill set. She arrived in the United States as an immigrant from Taiwan unable to speak a word of English-you can still detect a faint accent in some of her verbal inflections — and rose to become a Harvard MBA. She has worked at high levels of the private, public, and nonprofit sectors, a path that has taken her from the Reagan White House to the Heritage Foundation (“She’s one of my superstars,” Feulner says) to the Peace Corps and United Way. Her husband, Mitch McConnell, is the Senate minority leader. But Chao and others close to her put the emphasis on what her former deputy Steven Law calls “the three Ps: principle, people, and persistence.” “She was careful to pick people with enthusiasm for their subject matter,” Law says. “Senior political appointees had passion, shared the philosophy of the president and the secretary, and were committed to staying around long enough to carry out the mission.”

“She has a great team of about 30 people who support the president and believe in what they’re trying to accomplish,” says Feulner. “Personnel make a difference in policy.” So does longevity: Not only is Chao the longest-serving Cabinet officer but most of her senior appointees have stayed at Labor long enough to see their initiatives through. “I know conservatives don’t like to stay in the government for very long,” Chao says. “I think that longevity’s important.”

Yet no administration can hold power forever. Conservatives had substantial influence over the Department of Education when William Bennett was Ronald Reagan’s man at the helm. This was to a lesser extent true at Jack Kemp’s Department of Housing and Urban Development under George H. W. Bush. Both departments went back to business as usual as soon as the Democrats regained power — and in some cases, sooner. How durable will the reforms at Labor prove?