IAWP LEGISLATIVE INFORMATION November 2007 Archives Home Page ***Weekly Update*** From Legislative Committee Chair: Todd Kolden, Aberdeen Central Office Week of November 5, 2007 PROPOSED CONFERENCE AGREEMENT WOULD RESCIND $245 MILLION FROM WIA • House and Senate conferees have reached a proposed agreement on the fiscal year 2008 Labor, Health and Human Services (HHS) and Education spending bill which appears to include a $245 million rescission to Workforce Investment Act funding. The House and Senate are expected to consider the proposed conference agreement and could send the bill to President Bush by the end of the week. President Bush has indicated already that he will veto the bill because its spending levels are too high. A table detailing the proposed conference agreement lists offsets including a "rescission of Training and Employment Services (TES) prior year balances" for a total of $245 million. Because bill language has not yet been released it is difficult to confirm if the rescission would be drawn mostly from WIA carryover funding from program years 2005 and 2006 as directed by the House bill approved on July 19, 2007. Nonetheless, it appears likely the proposed rescission will apply the rescission as proposed first by the House but at a lesser amount. It is not clear if the proposed conference agreement would cut TES funding by $49 million as the House-approved spending bill would. • A press statement released by the Senate Committee on Appropriations listing priorities in the proposed conference agreement indicates labor programs would receive $12 billion in fiscal year 2008, $1 billion more than the President's budget request. The press statement indicates as a priority of the conference agreement, job training programs including adult, youth and dislocated worker training and Job Corps. If the President veto's the conference agreement sent him by the Congress, it will be difficult to fend off additional reductions to workforce system appropriations as the Congress is likely to work to pare spending further. The federal government currently operates under a continuing resolution (CR) through November 16, 2007. An additional CR is likely necessary later this month to avoid a shutdown of federal government operations as Congress and the President are not expected to reach agreement on all spending bills before mid-November. Congressional leaders have said session days into December will be needed to complete work on appropriations bills. TAA REAUTHORIZATION BILL APPROVED BY HOUSE WITH UI AND WARN ACT PROVISIONS • The House approved (264-157) legislation (H.R. 3920) to reauthorize and expand the Trade Adjustment Assistance (TAA) program. In addition to the expanded benefits and a broadening of eligibility for workers impacted by trade, the legislation would incorporate an incentive via a $7 billion distribution of Reed Act funds for states to expand eligibility for Unemployment Insurance (UI) and amend the Worker Adjustment and Retraining Notification Act of 1988 to require additional advanced warning before a mass dislocation. The legislation now heads to the Senate where it is not yet clear when it will be considered. The bill likely to be considered by the Senate to reauthorize TAA is S. 1848, introduced by Chairman of the Senate Finance Committee Max Baucus (D-MT) in July. President Bush early in the week released a Statement of Administration Policy noting the President's senior advisors would recommend he veto the House approved-bill. • Under the House approved TAA reauthorization bill, entitled the Trade and Globalization Act of 2007, the TAA program would be reauthorized through September 30, 2012. The TAA operates currently under a short-term extension (P.L. 110-89) through the end of the year. The House approved bill would expand TAA benefits to service workers who lose their jobs because of increased imports. The expanded coverage would allow service workers, including local, state and federal employees, to be eligible for TAA benefits, including up to 104 weeks of income support for workers participating in job training. These benefits would be in addition to the 26 weeks of unemployment insurance. The House legislation would authorize industry-wide certifications requiring the Secretary of Labor to conduct industry-wide certification investigations: (1) when three petitions from firms in the same industry are certified within a 6-month period; or (2) at the request of the President, U.S. Trade Representative, or the House Committee on Ways and Means or Senate Finance Committee. The House legislation authorizes the Secretary of Labor to develop criteria for making industry-wide certifications to address concerns about overly broad certifications. • The legislation would double the current training funding cap from $220 million to $440 million and increase it to $600 million by 2010. The new funding covers training needed by some states and the potential increase in the number of eligible workers because of expansion to service workers and more manufacturing workers. Additional benefits included under the draft bill include up to 130 weeks of government-funded training, enhanced health care coverage, up to $1,500 in job search allowance for workers who must search for jobs outside their commuting area, and up to $1,500 in relocation allowances. For manufacturing workers, the bill would eliminate an eligibility requirement that certain coverage based on worker dislocation must be tied to trade with Canada or Mexico. • Under the UI benefit expansion language, states would be given five years (fiscal years 2008-2012) to enact laws to expand UI benefit eligibility and receive a portion of $7 billion from the Federal Unemployment Account set aside as a financial incentive. The UI benefit expansion language was first proposed in legislation (H.R. 2233) introduced by House Committee on Ways and Means Subcommittee on Income Security and Family Support Chairman James McDermott (D-WA). A state's potential maximum share of the distribution would be the amount of disbursement proportionate to FUTA taxes paid. One-third of a states distribution would be received when state law includes provisions for counting an applicant's most recent wages from the last completed quarter - referred to as an alternative base period. The remaining two-thirds of a state's share would be received when the alternative base period is enacted and the state meets at least two of an additional three requirements. These requirements include: (1) not denying UI benefit eligibility to someone seeking part-time work; (2) allowing separation from employment for compelling family reasons; and (3) requiring payment of UI benefits for an individual in training who has exhausted regular and extended UI benefits (if applicable). States would receive up to $100 million per year in fiscal years 2008-2012 in special Reed Act distributions for administration. The cost of the proposal would be financed by extending the 0.2 percent FUTA surtax through 2012. • Members of the House Minority lead by the Ranking Member of the House Committee on Education and Labor Howard "Buck" McKeon (R-CA) and Congressman Wally Herger (R-CA) attempted unsuccessfully to amend the House Majority party's TAA bill with their legislation (H.R. 3949/H.R. 3747) to reauthorize TAA and the Workforce Investment Act respectively. In his statement on the House floor, Ranking Member McKeon said his legislation would "strengthen WIA's infrastructure, eliminate duplication and waste, increase accountability, enhance the role of employers, and increase state and local flexibility." Mr. McKeon noted that WIA has not been reauthorized in nine years and the system "cannot keep pace with the rapidly changing needs of workers in a dynamic economy." He said he supports TAA and its renewal but that WIA and TAA must be better integrated to "more effectively equip workers affected by trade, globalization and other causes of job loss with skills they need to adapt to the changing global economy." • President Bush in his Statement of Administration Policy said he could not support the bill as approved by the House because it "converts TAA from a trade-related program to a universal income-support and training program." The Administration noted the duration of income support under H.R. 3920 would result in some workers remaining out of the workforce and on assistance for three years. Such a long detachment from the workforce the Administration said is detrimental to workers who need to reestablish themselves in new employment. The Administration said it does not support the continuation and expansion of the Alternative TAA Wage Insurance program (ATAA) because there is little to no evidence to show this model helps workers in the long-term. The Administration does not support expansion of eligibility for TAA to include service sector workers and public agency workers. The Administration does not support an expansion of the Health Coverage Tax Credit from 65 percent of the cost of qualifying coverage to 85 percent as proposed under H.R. 3920. SEPTEMBER UNEMPLOYMENT RATE AT 4.7 PERCENT WITH PAYROLLS INCREASING 166,000 • The Bureau of Labor Statistics of the U.S. Department of Labor reported nonfarm payroll employment continued to trend up in October, and the unemployment rate at 4.7 percent was unchanged. Nonfarm payroll employment increased by 166,000 following an increase of 96,000 in September. In October, service industries including banks, insurance companies, restaurants and retailers, added 190,000 workers last month after gaining 127,000 in September. Retailers cut 21,500 jobs after eliminating 12,300 in September. Manufacturing payrolls declined by 21,000 workers in October and 17,000 a month earlier. Week of November 21, 2007 CONGRESSIONAL SCHEDULE UNTIL DECEMBER 3, 2007 • The U.S. House of Representatives is in Thanksgiving Recess until December 3, 2007. • The U.S. Senate is in pro forma session. The Senate convened at 9:00 a.m. November 20 for a pro forma session. They will convene again on Friday, November 23, 2007. No votes are planned. Pro forma sessions are planned until December 3 when the Senate resumes its regular schedule. Week of December 3, 2007 CONGRESSIONAL SCHEDULE RESUMES ON DECEMBER 3, 2007 • The U.S. House of Representatives will reconvene on December 3, 2007. • The U.S. Senate resumes its schedule on December 3, 2007, after being in a pro forma session. CONGRESS PROVIDES CONTINUING RESOLUTION UNTIL DEC 14, 2007 • On November 13, 2007, the President signed Public Law 110-116, which included a continuing resolution (CR) provision to fund the federal government through mid-December. The continuing resolution was added to the Department of Defense Fiscal Year (FY) 2008 appropriation bill, H.R. 3222. Division B of the conference agreement amends the first FY 2008 continuing resolution (Public Law 110-92) to extend its general expiration date to December 14, 2007, and to add additional provisions. None of the additional provisions apply to Department of Labor programs. The first continuing resolution expired on November 16, 2007. • Congressional staff reports that the FY 2008 appropriations legislation will be a high priority when Congress reconvenes next week. In order to prevent the shutdown of nonessential federal services, by December 14, Congress will have to either approve appropriations bills or extend the continuing resolution date. Week of December 17, 2007 CONTINUING RESOLUTION PASSES LASTING THROUGH DECEMBER 21 • Congress passed a week-long continuing resolution to keep the federal government operating through December 21, 2007. Congressional leaders hope to finish an omnibus appropriations bill over the weekend on which Congress could vote on soon. It has been reported the Majority in Congress has agreed in principle to meet the President's proposed level of non-defense domestic discretionary spending. Speaker of the House Pelosi described the Congressional approach as "the president's number, our priorities." Details on these priorities have not been revealed, but could involve increased spending of up to $4 billion on veterans' health, but cuts in other non-defense programs to meet the President's budget constraint. SENATE PASSES ENERGY BILL WITH ONE-YEAR EXTENSION OF FUTA 0.2 PERCENT SURTAX • On December 13, the U.S. Senate passed another version of the energy bill (H.R. 6) and sent it to the U.S. House of Representatives. The House plans to take up the legislation this week. In response to the President's veto threat against an earlier version of the energy bill, the Senate deleted its $21.8 billion tax title, but retained three tax-related provisions, one of which was a one-year extension through 2008 of the Federal Unemployment Tax Act (FUTA) 0.2 percent surtax. The extension was estimated to raise $1.5 billion, which in the Congressional budget process helps to offset the $2.1 billion cost of the bill. Week of November 13, 2007 SENATE PASSES 2008 LABOR, HHS, EDUCATION CONFERENCE REPORT ON APPROPRIATIONS BILL • On Wednesday, November 7, the United States Senate passed the Conference Report on the 2008 Labor, Health and Human Services (HHS), Education Appropriations Bill (H.R. 3043) and sent it to the U.S. House of Representatives for final passage. The House was expected to consider the measure on Friday, November 9, at the earliest. • Initially, the bill was combined with funding for Military Construction and the Veterans Administration (VA), but the Senate rejected the combination when the Minority raised a point of order. The point of order asserted violation of a Senate rule against conference reports dealing with subjects not covered in the original bill as passed by the House or Senate. A waiver of the rule was rejected when it did not receive a required 60 votes. The vote on the waiver was 47-46. Although the original bill passed the Senate by a vote of 75-19, the Conference Report passed by a vote of only 56-37 as more Senators in the Minority supported the President's opposition to the bill. • The President has threatened to veto the Labor, HHS, Education Appropriations Bill because it would provide $150.7 billion in discretionary spending, $9.8 billion more than he proposed. In contrast, the President has said he will sign the Military Construction and VA bill despite its price tag, which exceeds the President's request by $4 billion. TRADE ADUSTMENT ASSISTANCE (TAA) REAUTHORIZATION UPDATE • On October 31, 2007, the House passed legislation (H.R. 3920) to reauthorize and expand the Trade Adjustment Assistance (TAA) program. In addition to the expanded benefits and a broadening of eligibility for workers impacted by trade, the legislation would incorporate an incentive via a $7 billion distribution of Reed Act funds for states to expand eligibility for Unemployment Insurance (UI) and amend the Worker Adjustment and Retraining Notification Act of 1988 to require additional advanced warning before a mass dislocation. The legislation now heads to the Senate where it is not yet clear when it will be considered. The bill likely to be considered by the Senate to reauthorize TAA is S. 1848, introduced by Chairman of the Senate Finance Committee Max Baucus (D-MT) in July. • On November 5, 2007, the TAA bill was read twice in the Senate and referred to the Senate Committee on Finance. Last week President Bush released a Statement of Administration Policy noting the President's senior advisors would recommend he veto the House approved-bill. • A short-term extension of TAA (P.L. 110-89) expires on December 31, 2007. It is expected Congress will either pass new legislation by that time or provide another extension of the program.