***Weekly Update***
From Legislative Committee Chair: Todd Kolden, Aberdeen Central Office
Week of March 10, 2008
SECRETARY OF LABOR PRESENTS BUDGET TO CONGRESS
• Secretary of Labor Elaine F. Chao testified before the Appropriations Subcommittee on Labor, Health and Human Services and Education on the department's fiscal year 2009 budget. The subcommittee members and the Labor Secretary discussed her recommendations for consolidating employment services with the Workforce Investment Act (WIA) programs as well as an Inspector General's report that criticized the department for awarding grants noncompetitively.
• The Secretary stressed her desire to roll many employment services currently provided through federal funding to state programs into programs provided under the Workforce Investment Act. She noted, services from both programs are provided side-by-side in DOL one-stop centers, causes duplication of resources.
• "The existence of separate funding streams for these programs makes it very difficult for them to work together at the grassroots level, the Secretary said, explaining, under her proposal, governors would gain "greater flexibility" to shift funds as necessary.
• The Secretary also noted "our country has seen a succession" of workforce training programs but each new program has been added without an adjustment to the overall scheme and through consolidation of the programs, people currently receiving employment services, will be served by WIA programs.
• Rep. Tim Ryan (OH) expressed skepticism, asking how the WIA program, which serves 900,000 people annually, can accommodate the 13 million people served annually under the employment services program.
• In addition, the Subcommittee's Ranking Member, James T. Walsh (NY), said the funding request for FY 2009 represents a 14 percent decrease in workforce training funds and DOL "would need additional resources" to serve these extra people.
• The Secretary disagreed, observing there has been an "overhang" of $1.2 to $1.7 billion in unspent workforce training funds by the states each year for the past several years.
• During the hearing, Chairman David Obey (WI), asked the Secretary about a report from USDOL's Inspector General's Office that criticized the department's Employment and Training Administration for awarding many High Growth Job Training Initiative grants without competitive bidding. Secretary Chao responded that sole-source grants were made at the beginning of the program to speed its inception.
ECONOMY CONTUNUES TO LOSE JOBS
• The U.S. Department of Labor (USDOL) reported the worst job losses in five years of 63,000 jobs in February.
• The USDOL said job losses were widespread, coming from construction, manufacturing, retailing and a variety of professional and business services.
• Those losses swamped gains elsewhere including education and health care, leisure and hospitality and the government.
• While the national unemployment rate eased a statistically insignificant 0.1 percentage point to 4.8 percent from 4.9 percent in January. Economists expected to add 30,000 jobs and an increase in the unemployment rate to 5.0%.
• Indicating disappointment with the numbers, White House spokesman Tony Fratto said "This quarter's going to be a difficult quarter for the U.S. economy. We are in a low-growth period in the economy."
• Morgan Stanley economist David Greenlaw wrote, "Today's unemployment report is consistent with a slowdown in economic activity that we expect to intensify over the course of coming months." According to Greenlaw, the latest readings on jobless claims point to a further deterioration in the labor market in March and a continued slowdown in income growth.
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