IAWP LEGISLATIVE INFORMATION November/December 2005 Archives Home Page ***Weekly Update*** From Legislative Committee Chair: Todd Kolden, Aberdeen Central Office November 14, 2005 CONGRESS EXPECTED TO APPROVE LABOR SPENDING BILL NEXT WEEK House and Senate conferees reportedly met today to begin sorting out differences on the FY 2006 Labor, HHS and Education appropriations bill (H.R. 3010) and could be ready to make final the bill early next week. The Senate's bill approved on October 27 added a number of new concerns to an already problematic House spending bill including a $125 million reduction to state Unemployment Insurance (UI) and Employment Services (ES) administrative grants and an amendment restricting states from pursuing waivers for re-designation of local areas. The Senate's bill includes language that could complicate for some states the administration of UI eligibility assessments by requiring they be conducted "by state unemployment insurance employees." The additions by the Senate add to an already lengthy list of spending reductions to ES, WIA programs and the one-stop/Labor Market Information (LMI) grants approved by the House. Although the Senate named its conferees a week ago, the House appointed its conferees the middle of this week. Senate conferees are Senators: Specter (R-PA); Cochran (R-MS); Gregg (R-NH); Craig (R-ID); Hutchison (R-TX); Stevens (R-AK); DeWine (R-OH); Shelby (R-AL); Domenici (R-NM); Harkin (D-IA); Inouye (D-HI); Reid (D-NV); Kohl (D-WI); Murray (D-WA); Landrieu (D-LA); Durbin (D-IL); and Byrd (D-WV). House conferees are Representatives: Regula (R-OH); Istook (R-OK); Wicker (R-MS); Northup (R-KY); Cunningham (R-CA); Granger (R-TX); Peterson (R-PA); Sherwood (R-PA); Weldon (R-FL); Walsh (R-NY); Obey (D-WI); Hoyer (D-MD); Lowey (D-NY); DeLauro (D-CT); Jackson (D-IL); Kennedy (D-RI); and Roybal-Allard (D-CA). If a member of your state delegation is not included in this list, we encourage you to send letters to members of your delegation on the House and Senate Appropriations Committee and the Chair and Ranking Members of these committees. In related news, staff on the House and Senate Appropriations Committees said this week a second short-term continuing resolution (CR) likely will be necessary to extend funding for federal government operations beyond the current November 18 period. Congress has approved three of the total thirteen spending bills and appears intent on finishing each remaining bill independently rather than by consolidating unfinished bills into a single omnibus measure. If the FY 2006 Labor, HHS and Education appropriations bill is finished early next week and signed by the President, the programs it funds would operate at appropriation levels approved in the bill rather than a second short-term CR. Once all thirteen spending bills are completed, Congress is likely to approve an across-the-board cut to most spending to bring total FY 2006 appropriations inline with budget caps established early in the year. This could further exacerbate spending reductions if approved. USDOL ANNOUNCES CAMPAIGN TO INFORM VETERANS OF WORKFORCE SYSTEM SERVICES U.S. Department of Labor (USDOL) Secretary Elaine L. Chao today announced the launch of a new public relations campaign titled "Key to Career Success" to help inform veterans' of nationwide workforce programs available through one-stop centers. The campaign will supply 300,000 veterans with wallet-sized cards and key fobs with critical employment and job training information over the next six months. The information directs veterans to local one-stop offices for assistance in their transition to civilian life and employment. Workforce Investment Boards (WIBs) and local one-stop offices will be provided with a toolkit including a desk guide for staff. The campaign is jointly sponsored by USDOL's Employment and Training Administration (ETA) and Veterans Employment and Training Service (VETS), with support from the Department of Defense. December 19, 2005 CONGRESS SET TO PASS CUTS IN WORKFORCE SYSTEM SPENDING Congress is poised to approve cuts in workforce program spending in its FY 2006 Labor, Health and Human Services (HHS) and Education spending bill (H.R. 3010), which could be approved as early as today by the Senate. The bill was approved (215-213) on Wednesday by the House. Consideration in the Senate was delayed yesterday because some members whose votes are needed to approve the bill were absent. Once the bill is approved by the Senate it will be transmitted to the desk of President Bush where it is expected to be quickly signed into law. Approval of the spending bill will end speculation over how Congress will fund labor programs through FY 2006. Some on Capitol Hill had thought a year-long continuing resolution (CR) funding labor programs at their FY 2005 levels would be a likely option. But conferees were able to reach agreement on sufficient amendments to avoid rejection by the House as had occurred before on November 17. The result is a spending bill with significant reductions to workforce programs. The spending bill will cut FY 2006 spending for the WIA Adult program by $31 million from its FY 2005 appropriated level of $897 million. The WIA Youth program will be cut by $36 million from its FY 2005 appropriated level of $986 million. The WIA Dislocated Worker program will be level-funded at the FY 2005 appropriated level of $1,476 million. The Prisoner Re-entry program will be level-funded at the FY 2006 appropriated level of $20 million and the Community College Initiative will be cut entirely. The Community College Initiative was appropriated $124 million in FY 2005. The spending bill will cut the Employment Service (ES) state grants by $57 million. This year was the first that the Senate joined the House in eliminating the $35 million Re-Employment Services (RES) grants to states. The UI state operations budget will be $99 million less than the Administration's requested level. According to the US Department of Labor, this reduction is not a concern because a corresponding reduction by 100,000 was imposed on the Average Weekly Insured Unemployed (AWIU) to provide a more rapid triggering on of additional appropriations if claims loads jump. The conference bill will reduce the One-Stop/America's Labor Market Information System (ALMIS) grant to states by $15 million from the FY 2005 appropriated level of $98 million. The grant appropriated states for administration of Veterans' Employment and Training Service (VETS) would increase by just over $1 million from the FY 2005 appropriated level of $161 million. Most of the FY 2006 spending levels agreed to by Congress were requested by the Administration in its FY 2006 Budget request released back in February. The Administration had requested a higher reduction to ES state grants totaling $85 million and a reduction of $126 million to the WIA Dislocated Worker program, which Congress did not approve. But the Congress did approve the Administration's Budget request on the WIA Adult and WIA Youth programs reducing their appropriations by a combined $67 million. The Administration's FY 2006 Budget request for these programs and their corresponding spending reductions is rooted in its WIA-Plus proposal and the "administrative efficiencies" it says will result from a federal-level pooling of program resources. While Congress is as yet undecided on the direction it will take on the WIA-Plus proposal, it has agreed in its latest spending bill with the Administration on its request to reduce appropriations for the workforce system. On a related matter, Congress is considering an across-the-board cut applied to all FY 2006 discretionary spending before it adjourns for the year. If approved, this cut would further reduce workforce system appropriations. Application of an across-the-board cut has arisen as lawmakers from the Gulf Coast push for additional spending to assist Louisiana and its neighbors recover from recent hurricanes. Providing additional funding for hurricane recovery would push spending over the budget caps established earlier in the year, forcing cost offsets on other programs. Congress has found the easiest way to deal with offsets is through an equal distribution of pain in the form of across-the-board cuts. Although the level applied is not established, some members of Congress have called for a one percent reduction to all discretionary spending if additional funds are appropriated for hurricane recovery. Congress may work throughout the weekend and into early next week before adjourning for the year. SENATE VOTE ON WIA STILL POSSIBLE BEFORE YEAR END Although as of press time the Senate has yet to vote on its legislation (S. 1021) to reauthorize the Workforce Investment Act (WIA), many on Capitol Hill still believe the bill will be approved by the Senate before the New Year. The Senate had scheduled consideration of the bill on November 18, but was unable to do so as an unknown member purportedly placed a "hold" on the bill. NASWA reported earlier this week that concerns with the bill had been resolved and the bill could be approved by unanimous consent vote as early as Tuesday. It now appears concerns held in the Senate may not have been resolved. It is difficult to know the precise status of WIA in the Senate because the shadowy nature of holds, their application and the lack of public disclosure over why a Senator (or Senators) has placed a hold on the bill. If the hold (there may be more than one) is released before the Senate adjourns for the year, the Senate is expected to approve a manager's amendment offered by Senator Michael Enzi (R-WY) that would replace existing language. Senator Enzi's amendment does not include language advanced in National Governors Association (NGA) policy that would allow governors the flexibility to coordinate WIA program funding at the state level. The amendment would authorize 100 percent transferability of funds between the WIA Adult and WIA Dislocated Worker programs. The amendment includes language to restrict states ability to re-designate local workforce areas. According to a Senate staff person who has worked on the local workforce area designation issue, Senator Enzi's amendment would not change the reasons why service areas can be re-designated. The Senate has indicated it wishes to negotiate "better language to clarify this issue" once the conference begins. It is not clear what this means or how this might occur given the House likely favors the amendment restricting state discretion. WoTC and WtWTC PROGRAMS SET TO EXPIRE With the Work Opportunity (WoTC) and Welfare to Work (WtWTC) Tax Credits set to expire in little more than two weeks on December 31 it is unclear if Congress will act to prevent the popular tax programs from lapsing. Congress has in previous years let the programs expire, forcing states to retroactively process and authorize credits for businesses. The Employment and Training Administration (ETA) released a Training and Employment Guidance Letter early this year to provide states administrative guidance on how to administer the tax credits after Congress retroactively extended the program. But as the new deadline approaches, ETA has not issued revised guidance; possibly holding out hope the Congress will attach an extension of the tax credit programs to a Hurricane Katrina-specific tax bill, which might be approved before adjournment this year. SECRETARY CHAO ANNOUNCES NEW RULES FOR USERRA U.S. Secretary of Labor (USDOL) Elaine L. Chao today announced new regulations to be published December 19 Federal Register, interpreting the Uniformed Services Employment and Reemployment Act (USERRA). NASWA staff attended the press conference. This is the first time since enactment of USERRA the USDOL has developed regulations to explain and clarify the law. USERRA protects employment rights and benefits of service members upon their return to civilian life and prohibits discrimination against past and present members of the uniformed services and establishes reemployment rights for service members who want to return to the jobs they held prior to service. Secretary Chao and Assistant Secretary for the USDOL Veterans Employment and Training Service (VETS) Chick Ciccolella said the regulations will ensure employment rights will be implemented without delay and will clarify requirements for both employers and service members. Secretary Chao and Assistant Secretary Ciccolella said the final regulations address questions presented by employers, union representatives and other interested parties following the release of the proposed regulations. December 27, 2005 CONGRESS APPROVES WORKFORCE PROGRAM CUTS FOR FY 2006 Congress this week approved the FY 2006 Labor, Health and Human Service (HHS) and Education spending bill (H.R. 3010), including significant reductions to many workforce system programs. Congress also approved as part of the FY 2006 Defense appropriations bill (H.R. 2863) a one-percent across-the-board cut to all non-veterans' programs, further reducing appropriations for workforce programs. President Bush is expected to sign both the Labor and Defense spending bills into law before the end of the year. Programs funded under the Labor, HHS and Education spending bill currently operate on a continuing resolution (CR) through December 31. It is unclear whether appropriations for Veterans' Employment and Training Services (VETS) would be insulated from the one-percent across-the-board cut. The one-percent across-the-board cut would be applied to levels appropriated for FY 2006 in H.R. 3010. The appropriation levels outlined below do not include the additional one-percent across-the-board cut. The spending bill will cut FY 2006 spending for the WIA Adult program by $31 million from its FY 2005 appropriated level of $897 million. The WIA Youth program will be cut by $36 million from its FY 2005 appropriated level of $986 million. The WIA Dislocated Worker program will be level-funded at the FY 2005 appropriated level of $1,476 million. The Prisoner Re-entry program will be level-funded at the FY 2006 appropriated level of $20 million and the Community College Initiative will be cut entirely. The Community College Initiative was appropriated $124 million in FY 2005. The spending bill will cut the Employment Service (ES) state grants by $57 million. This year was the first that the Senate joined the House in eliminating the $35 million Re-Employment Services (RES) grants to states. The UI state operations budget will be $99 million less than the Administration's requested level. According to the US Department of Labor, this reduction is not a concern because a corresponding reduction by 100,000 was imposed on the Average Weekly Insured Unemployed (AWIU) to provide a more rapid activation of additional appropriations if claims loads jump. The conference bill will reduce the One-Stop/America's Labor Market Information System (ALMIS) grant to states by $15 million from the FY 2005 appropriated level of $98 million. The grant appropriated states for administration of Veterans' Employment and Training Service (VETS) would increase by just over $1 million from the FY 2005 appropriated level of $161 million. SENATE ADJOURNS WITHOUT CONSIDERING WIA BILL The Senate adjourned yesterday without considering its bill (S. 1021) to reauthorize the Workforce Investment Act (WIA). Some on Capitol Hill had believed the Senate was poised to quickly move the legislation as early as November 18 and then again last week, but competing priorities, a lack of available floor time and possible objections from unknown members of the Senate served to push its consideration sometime into next year. The Senate is scheduled to reconvene on January 18 after which time it could schedule consideration of the bill. WELFARE PROGRAMS EXTENDED THREE MONTHS Congress this week approved its twelfth short-term extension (H.R. 4635) of the welfare law (P.L. 104-193) extending programs authorized under the law through March 31, 2006. President Bush is expected to sign the legislation into law before the beginning of the New Year. In addition to the Temporary Assistance for Needy Families (TANF) program, the legislation extends supplemental grants to states, the Child Care and Development Block Grant, and child welfare waiver authority through March 31, 2006. Congress also acted this week on a Budget Reconciliation bill including provisions that would impact administration of the TANF program. NASWA is researching these provisions and will report further information as soon as possible. STATES REPORT BETTER THAN EXPECTED REVENUES AND CAUTION OVER THE ABILITY TO MEET FUTURE DEMANDS The National Governors Association (NGA) and National Association of State Budget Officers (NASBO) this week released a report titled The Fiscal Survey of the States showing state fiscal conditions have rebounded in FY 2005. Most states reported marked improvements to revenue with only six states forced to cut budgets over the year. States are restoring normal levels of total balances following the recent fiscal downturn with revenues from the collection of sales, personal income corporate income taxes surpassing budgeted estimates. But the report also highlighted state's concern over the budgetary strain of Medicaid, and looming issues such as pensions, growing school-age population and infrastructure needs. The report is a compilation of data self-reported by states on their general fund budgets. The full report is available on the NGA website at http://www.nga.org