***Weekly Update***
From Legislative Committee Chair: Todd Kolden, Aberdeen Central Office
Week of June 5, 2006
HOUSE AIMING TO FINISH SPENDING BILLS BY JULY 4 - EMERGENCY SUPPLEMENTAL SPENDING BILL DISCUSSIONS STRUGGLE
• Although conflict over earmarks and budget rules continues, the House remains on track to complete work on the 2007 spending bills. House Appropriations Chairman Jerry Lewis (CA-R) has vowed to move the bills through and avoid an omnibus package. Four of the eleven spending bills have currently passed the House including: Interior-Environment, Military Quality of Life-VA, Agriculture, and Energy-Water. When Congress returns on Monday, June 5, the House will tackle Homeland Security along with Legislative Branch and Foreign Operations bills.
• Appropriators also continue to struggle reaching a conference agreement on the 2006 emergency supplemental spending bill for the conflicts in Iraq and Afghanistan and for hurricane recovery. There is a $17 billion gap between the Senate and the House bills that was not bridged before the Memorial Day recess. The President has indicated he would veto anything that exceeds $94.5 billion. The matter has been complicated further by a last minute request by the President to spend an additional $1.9 billion for the boarder security initiative - an increase to be offset by a cut to his earlier request for defense funds.
• Failure to complete work on the supplemental appropriations bill has consequences for moving other appropriations bills, especially in the Senate. The Senate plans to use the supplemental to increase the discretionary budget cap to $873 billion for FY 2007. If the supplemental measure does not pass, the Senate would then be operating under the FY 2006 budget resolution, which included an $866 billion cap for FY 2007. This cap is $7 billion less than the President's request and $23 billion below the amount outlined in the Senate's FY 2007 resolution. The Senate has delayed setting final subcommittee allocations while the issue of the cap is being resolved.
• Other factors that could affect the appropriations process are new earmark disclosure and enforcement rules that could emerge from a conference deal on a lobbying overhaul package and proposals to grant the President expedited line-item rescission authority.
Week of June 12, 2006
HOUSE SUBCOMMITTEE APPROVED SPENDING BILL WOULD CUT MOST WORKFORCE PROGRAM FUNDING IN FY 2007
• The House Labor, Health and Human Services (HHS) and Education Appropriations Subcommittee this week approved on a party-line vote (9-7) the spending bill that would fund the workforce system in federal fiscal year (FY) 2007. Cuts to workforce programs by the House Subcommittee in most cases would be smaller than those proposed in the Administration's FY 2007 budget request, but there are a couple of exceptions. The bill is scheduled for consideration by the House Appropriations Committee on June 13 and is likely to be approved. Upon approval by the House Appropriations Committee the bill would be ready for consideration on the House floor. The Senate has not yet begun consideration of the FY 2007 Labor, HHS and Education spending bill for workforce programs and traditionally waits until the House approves its bill.
• Overall, the House Subcommittee approved FY 2007 spending bill would cut the Employment and Training Administration's (ETA) budget by $409 million compared to its FY 2006 level. Chairman of the House Labor, HHS and Education Appropriations Subcommittee, Ralph Regula (R-OH) said during the mark-up, "we obviously do not have all the money we would like to have." Ranking Minority party member David Obey (D-WI) said Members of his party would not offer amendments to the spending bill during the Subcommittee's consideration because shifting funds from one program to another was an unacceptable solution to budget shortfalls. A number of Members of the Minority party recognized that there was little Chairman Regula could do to increase appropriations given the cap on spending approved by the House last month.
• The bill would cut the Workforce Investment Act (WIA) Adult program by $10 million, the WIA Youth program by $5 million and the WIA Dislocated Worker program by $121 million. The Unemployment Insurance (UI) state operations appropriation would increase by $142 million. Approximately $102 million of this amount was requested by the ETA to manage additional UI operational activity projected from the increase in the number of employers and workers. The remaining $40 million was requested by the Administration to continue face-to-face beneficiary eligibility reviews and proposals to improve integrity. The Employment Service (ES) program would be cut by $27 million under the House spending bill. This reduction was requested by the Administration.
• The One-Stop Career Centers/Labor Market Information program would be cut by $42 million for the largest cut as a percentage of the overall program budget of any workforce program. This program would effectively be cut by half if the numbers approved by the House Subcommittee are approved by the Congress for a FY 2007 appropriation totaling $40 million. The Administration's FY 2007 budget requested a cut of $17 million for this program. The One-Stop/LMI program was appropriated $150 million as recent as FY 2001. Appropriations for state administration of Veterans' Employment and Training Service (VETS) programs would be flat-funded at $162 million.
• Included in the House Subcommittee's bill is a $69.8 million cut to Job Corp funding in FY 2007 for an appropriation totaling $1.5 billion. The House Subcommittee's FY 2007 spending bill would eliminate the youthful offenders' reintegration program for a total cut of $49.1 million and the newly minted ETA, Housing and Urban Development (HUD) and Department of Justice (DOJ) prisoner-reentry program totaling $19.6 million.
• Finally, buried in the House Subcommittee's spending bill is language that would rescind $325 million from "training and employment services." It is unclear from what source this funding would be taken if approved by the Congress. NASWA learned a number of weeks ago that the Administration's FY 2007 Budget includes a request to withhold one quarter of funding for WIA programs. Secretary of Labor Elaine Chao has advocated the reduction of funding for WIA programs before the House citing large amounts of unexpended WIA state grants.
NEW LEGISLATION ADDS NASWA AS MEMBER OF ADVISORY COMMITTEE FOR VETERANS SERVICES
• On June 7, 2006, Congress sent newly approved legislation, the Veterans' Housing Opportunity and Benefits Improvement Act of 2006 (S. 1235) to the President for his signature. The President is expected to sign the bill. S. 1235 amends Title 38, United States Code, to improve and extend housing, insurance, outreach, and benefits programs provided under the laws administered by the Secretary of Veterans Affairs, to improve and extend employment programs for veterans under laws administered by the Secretary of Labor, and for other purposes.
• Section 202 of S. 1235 replaces the existing Advisory Committee on Veterans Employment and Training with the "Advisory Committee on Veterans Employment and Training, and Employer Outreach" and expands the duties of the committee. A primary focus of the committee will be the integration of veterans into the workforce. The committee is to assist the Assistant Secretary of Labor for Veterans' Employment and Training (ASVET) in carrying out outreach activities to employers with respect to the training and skills of veterans and the advantages afforded employers by hiring veterans. The committee is to make recommendations to the Secretary, through the ASVET, with respect to outreach activities and the employment and training of veterans.
• The Secretary of Labor is to appoint at least 12, but no more than 15, individuals to serve as members of the advisory committee as follows:
The National Society of Human Resource Managers;
The Business Roundtable;
The National Association of State Workforce Agencies;
The United States Chamber of Commerce;
The National Federation of Independent Business;
A nationally recognized labor union or organization;
Not more than five individuals from among representatives nominated by veterans service organizations that have a national employment program; and
Not more than five individuals who are recognized authorities in the fields of business, employment, training, rehabilitation, or labor and who are not employees of the Department of Labor.
• By December 31 of each year, the advisory committee is to submit to the Secretary of Labor and the Committees on Veterans' Affairs of the Senate and House of Representatives a report on the employment and training needs of veterans, with special emphasis on disabled veterans.
• Section 203 of S. 1235 reauthorizes the Homeless Veterans Reintegration Programs (HVRP) in the amount of $50,000,000 for each of fiscal years 2007 through 2009. Of course, this legislation only authorizes the program at this level of funding, it does not appropriate funds. Other sections of S. 1235 pertain to insurance and health care matters, housing issues, outreach services, and other benefits for veterans.
AGRICULTURE DEPARTMENT PUBLISHES FINAL RULE ON FOOD STAMP PROVISIONS
• The U.S. Department of Agriculture has published a rule which finalizes the proposed provisions of a March 19, 2004 rule to amend food stamp program regulations to codify food stamp employment and training program provisions of section 4121 of the Farm Security and Rural Investment Act of 2002. This final rule establishes a reasonable formula for allocating the 100 percent federal grant authorized under the law to carry out the employment and training program each fiscal year. This final rule also codifies the provision that makes available up to $20 million annually in additional unmatched federal employment and training funds for state agencies that commit to offer an education, training or workfare opportunity to every applicant and recipient who is an able-bodied adult without dependents (ABAWD), limited to 3 months of food stamp eligibility in a 36-month period, who would otherwise be terminated.
• This final rule eliminates the current federal cost-sharing cap of $25 per month on the amount state agencies may reimburse employment and training participants for work expenses other than dependent care. This final rule codifies provisions that expand state flexibility in employment and training program spending by repealing the requirements that state agencies earmark 80 percent of their annual 100 percent federal employment and training grants to serve ABAWDs; they meet or exceed their fiscal year 1996 state administrative spending levels to access funds made available by the Balanced Budget Act of 1997; and the Secretary of Agriculture be given the authority to establish maximum reimbursement costs of employment and training components. Finally, this final rule rescinds the balance of unobligated funds carried over from fiscal year 2001. This final rule is effective August 8, 2006.
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Week of June 18, 2006
DIVIDE OVER MINIMUM WAGE COULD DELAY CONSIDERATION OF WORKFORCE PROGRAM SPENDING BILL IN HOUSE
• The House Appropriations Committee this week approved by voice vote the spending bill that would fund the workforce system in federal fiscal year (FY) 2007. Workforce system appropriation levels approved in the bill by the House Appropriations Committee are identical to those approved by the House Labor, Health and Human Services (HHS) and Education Appropriations Subcommittee last week.
• According to House staff, the bill was scheduled to be considered on the House floor next week but was pulled from the schedule after it became clear the Majority lacked sufficient votes to remove language that would increase the minimum wage. Members of the Minority successfully added language to the spending bill that would increase the minimum wage to $7.25 by January 1, 2009. The Majority would prefer removing language to increase the minimum wage in the House Rules Committee, the last stop before legislation is moved to the House floor for consideration, to avoid the politically sensitive vote on the floor. Until the language to increase the minimum wage is removed from the bill, it is not likely to be considered by the House.
• The bill would cut the Workforce Investment Act (WIA) Adult program by $10 million, the WIA Youth program by $5 million and the WIA Dislocated Worker program by $121 million. NASWA is investigating how the $121 million reduction to the WIA Dislocated Worker program would be applied to state grants. The Unemployment Insurance (UI) state operations appropriation would increase by $142 million. Approximately $102 million of this amount was requested by the ETA to manage additional UI operational activity projected from the increase in the number of employers and workers. The remaining $40 million was requested by the Administration to continue face-to-face beneficiary eligibility reviews and proposals to improve integrity. The Employment Service (ES) program would be cut by $27 million under the House spending bill. This reduction was requested by the Administration.
• The One-Stop Career Centers/Labor Market Information program would be cut by $42 million for the largest cut as a percentage of the overall program budget of any workforce program. This program would effectively be cut by half if the numbers approved by the House Committee are approved by the Congress for a FY 2007 appropriation totaling $40 million. The Administration's FY 2007 budget requested a cut of $17 million for this program. The One-Stop/LMI program was appropriated $150 million as recently as FY 2001. Appropriations for state administration of Veterans' Employment and Training Service (VETS) programs would be flat-funded at $162 million. Included in the House Committee's bill is a $69.8 million cut to Job Corp funding in FY 2007 for an appropriation totaling $1.5 billion. The House Committee's FY 2007 spending bill would eliminate the youthful offenders' reintegration program for a total cut of $49.1 million and the newly minted ETA, Housing and Urban Development (HUD) and Department of Justice (DOJ) prisoner-reentry program totaling $19.6 million.
HOUSE SPENDING BILL WOULD RESCIND MASSIVE AMOUNT OF WORKFORCE INVESTMENT FUNDING
• The FY 2007 Labor, Health and Human Services and Education Appropriations spending bill approved by the House Appropriations Committee this week would rescind $325 million in "unexpended" Workforce Investment Act (WIA) funding. An excerpt of the spending bill obtained by NASWA (the bill and the Committee's report are not expected to be released publicly until June 19) would require the rescission of $325 million be taken from unexpended balances for fiscal years 2006 and prior years. The rescission of funds is required to occur no later than September 30, 2007. If insufficient unexpended funds exist from fiscal years 2006 and prior years, the House bill would require any balance be taken from current and prior year funds. A chart produced by the Congressional Research Service (CRS) breaks down the $325 million rescission to show its impact on each state.
• Language in the House Appropriation Committee's report on the FY 2007 Labor, HHS and Education spending bill notes that "based on an analysis of funding cycles, the Committee established that there remain unexpended balances in many of the local entities which implement workforce training and employment activities." A chart that accompanies the House report shows unexpended balances beginning in PY 2000 totaling $1.7 billion. The estimated unexpended amount in PY 2006 is $1.1 billion. The House report says "recent reports of significant abuses of administrative costs by local Worker Investment Board has prompted Congress to take immediate action, but also highlights the importance of enacting permanent legislation." This sentence in the House report appears to reference the disclosure in April that the director of a local workforce board in Iowa received an annual salary of $360,000.
PRESIDENT SIGNS EMERGENCY SUPPLEMENTAL SPENDING BILL LARGELY FOR HURRICANE RELIEF AND WAR
• Congress reached agreement this week and President Bush signed into law an emergency supplemental spending bill (H.R. 4939) totaling $94.5 billion that will largely go to supplement hurricane recovery efforts and the wars in Iraq and Afghanistan. Also included in the emergency spending bill is language that establishes the budget cap for the Senate at $873 billion, the same amount requested by the Administration and approved by the House. Language to expand the budget cap by $7 billion for the Labor, Health and Human Services and Education spending bill was eliminated. This increase was endorsed by Senators Arlen Specter (R-PA) and Tom Harkin (D-IA) who successfully added the amount earlier in the year to the Senate's budget resolution. Senator Specter was the lone Member of the Senate who voted against the bill. With a budget cap in hand, Senate Appropriations Committee Chairman Thad Cochran (R-MS) is expected next week to release spending levels for each of the thirteen spending bills so the Senate can begin consideration of appropriation bills.
Week of June 26, 2006
FY 2007 APPROPRIATIONS: CONGRESSIONAL OUTLOOK
• House
Inclusion of language in the House Appropriations Committee approved FY 2007 Labor, Health and Human Services and Education spending bill (H.R. 5647) to increase the minimum wage by $7.25 is preventing its consideration on the floor. The bill, approved by the House Appropriations Committee last week would appropriate funding for the workforce system in FY 2007. House Majority Leader John Boehner (R-OH) said he would not allow a vote on a minimum wage increase this year.
• However, a number of media sources reported this week that H.R. 5647 could reach the floor sooner than expected if reports of closed door meetings with Members of the Majority on a minimum wage compromise are true. The Majority in the Senate last year allowed a vote on a minimum wage increase after adding tax breaks largely for small businesses. A similar course may be taken by the House before the November election that would allow H.R. 5647 to be considered on the floor after removal of the wage hike language. The Majority would bring H.R. 5647 to the floor, remove the provision to increase the minimum wage, pass H.R. 5647 and then consider a minimum wage increase including language for targeted tax breaks. Although this scenario would seem to contradict Majority Leader Boehner's remarks to not allow a vote on the minimum wage, the legislative maneuver of adding provisions unpalatable to members of the Minority could force them to vote against the bill and defeat the proposed minimum wage increase.
• Notwithstanding this political gamesmanship, if the FY 2007 Labor, HHS and Education appropriations bill does not make it to the floor before the month-long August recess, it is not expected to be considered until after the November 7 election. Consideration of the spending bill by the House after the November 7 election will require approval of a continuing resolution to fund program operations as the FY 2007 federal fiscal year begins on October 1. Many on Capitol Hill believe the FY 2007 Labor, HHS and Education spending bill will not be agreed to by both the House and Senate and spending levels will likely need to be decided in an end of year omnibus appropriations bill as occurred during the FY 2006 appropriations cycle.
• Senate
The Senate Appropriations Committee this week approved the spending caps for the thirteen spending bills allowing each of the Senate Appropriations Subcommittees to begin work on their spending bills. The overall spending cap approved by the Senate for the FY 2007 Labor, HHS and Education spending bill is the same as the one approved earlier in the month by the House. This gives the Senate the same level of funds from which to determine individual program spending. Consideration of the FY 2007 Labor program spending bill by the Senate Labor, HHS and Education Appropriations Subcommittee is scheduled on July 18. The Senate Appropriations Committee is scheduled to consider and move the spending bill on July 20. Consideration of the bill on the Senate floor is not likely to occur until after Labor Day.
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