Jan. 18, 2008

 
 

 
 
 
 

 
 

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Dear Colleague:
 
At this time last year the workforce community was looking forward to a year in which funding for workforce programs would stabilize and might even increase and a year in which the Workforce Investment Act would be extended with incremental improvements but no major modifications. With Democrats taking control of the Senate and the House, the predictions went, domestic programs would be protected from the funding reductions proposed by the Bush Administration. On the matter of WIA reauthorization, House Republicans would drop calls to turn the program into a block grant and to insert language regarding faith-based service providers. Senator Kennedy would then forge a compromise with Republicans and the House would go along with the deal; or so the speculation went.
 
The happy days are here again scenario seemed reasonable, at least at first. In February Congress passed and the president signed a massive continuing resolution (CR) that essentially held Fiscal Year 2007 funding at the 2006 level, defeating Administration proposals to cut WIA and many other domestic programs. Congress planned to take up WIA reauthorization in March or April. But as winter gave way to spring, it became apparent that the wheels were coming off the WIA wagon.
 
WIA fell victim to priorities: it was often in the top ten bills but seemed always stuck near the bottom of the “plan to do” list. WIA fell victim to partisanship: Republicans had provided strong leadership for WIA but for many Democrats it was seen as a “Republican program.” Tensions between Congress and the Department of Labor only made matters worse. Finally, WIA fell victim to politics: organized labor in particular preferred to hold off reauthorization until 2009 when new leadership would be installed at the Labor Department. The House Subcommittee on Higher Education, Lifelong Learning, and Competitiveness held two lethargic hearings on WIA during the summer that mostly rehashed old issues.
 
After Labor Day WIA was dead, as Congress had one key priority—to approve funding for the federal fiscal year beginning October 1. Following a series of CR’s, the president signed an omnibus bill funding domestic programs on December 26. The bill was a major disappointment for the workforce community. WIA shared with many other programs an across the board cut of 1.747 percent. More devastating, an administration proposed rescission of supposedly unspent WIA funds, an initiative that had been resisted by Congress for several years, was approved as part of the budget deal. That deal cost the WIA system $250 million and its impact will be felt over the next few months.
 
If not everything went as the workforce community had planned, there were a few places where the Bush Administration and Congress reached agreement: 

 
• The minimum wage was increased for the first time in a decade, going from $5.15 to $7.25 per hour over the next two years. A top priority of the Democrats as they assumed majority status in the Congress, the bill took both more time and political capital than the leadership had anticipated.
 
• The College Cost Reduction and Access Act of 2007 increased Pell Grant scholarships for low-income students from $4,050 to $5,400 over the next five years and increased the amount available for need-based federal student loans while lowering the interest rate on these loans.
 
• The Improving Head Start for School Readiness Act will expand and strengthen the nation’s major early education program.
 
• The 21st Century Competitiveness Act will assist students who want to enter into science, technology, engineering and math (STEM) career paths and will fund programs to enhance teacher education in the STEM fields. It may not be much money given the scope of the challenge but it is a step in the right direction.
 
Other workforce related measures met with less success but some may emerge as economic stimulus proposals or as fodder for the fall campaign, or both.
 
• Proposals to expand the number of workers eligible for unemployment insurance (UI), increase the weekly benefits, extend the length of benefits and/or provide wage insurance to some workers who take lower paying jobs following layoffs had the support of Democrats but failed to pass.
 
• House Democrats also sought to expand those eligible for Trade Adjustment Assistance to include service workers and to extend the length of income support for workers in training and education programs as part of a move to reauthorize TAA. These ideas ran into a veto threat from the White House and mixed reviews in the Senate. For now, the program has been extended through the appropriations process as is done for WIA.
 
• Reauthorization of the President’s premier domestic achievement, the No Child Left Behind Act, was left behind, caught in wrangling over the role of testing and a host of other issues. The Higher Education Act also failed it bids at reauthorization.
 
So what is in store for 2008? With the possibility of a recession, and the very real fear of one in any case, the agenda for the year may be changing. An economic stimulus package of $100 to $150 billion is almost a certainty and should be on the president’s desk by mid-February. Three aspects of the pump priming bill seem in agreement: (1) tax rebates of $500 or more for most taxpayers; (2) extended UI payments (from 26 to 39 weeks) for laid-off workers; and (3) some form of tax break for small businesses. Everyone agrees for now that the package should be targeted so that the money is spent quickly and of limited duration. Nonetheless, look for the list of elements to grow as the bill moves through Congress.
 
National unemployment last month rose from 4.7 to 5.0 percent. While not high by modern standards, the jump has many economists predicting a rate of 7 or above by the end of the year. It certainly is shortsighted, to say the least, to take almost $325 million out of the workforce system—forcing layoffs, one-stop closures and reduced support for the unemployed—at the very time that more jobseekers will be turning to the one-stop career system for assistance. Surely, if Congress can increase the federal deficit by $100 billion or more, they can find a few hundred million dollars to keep the local one-stop network open and adequately staffed in a time of growing need. This is an issue that should unite us all—business, labor and workforce professionals. Would thousands of letters to the congressional leadership make a difference? Only be trying will we know. 

 
Sincerely,

Robert Knight
Managing Director
Arbor Workforce Institute