IAWP LEGISLATIVE INFORMATION July 2006 Archives Home Page ***Weekly Update*** From Legislative Committee Chair: Todd Kolden, Aberdeen Central Office Week of July 5, 2006 SENATE APPROVES BILL TO REAUTHORIZE WIA BUT A QUICK CONFERENCE WITH THE HOUSE FAR FROM CERTAIN • The Senate yesterday unanimously approved by voice vote its legislation to reauthorize the Workforce Investment Act (WIA). Approval by the Senate will allow conference negotiations to begin with the House, which approved its bill in early March of last year. • Conference negotiations on WIA reauthorization between the House and the Senate might be slow to materialize according to a number of workforce system advocates. Members of the Senate Minority this week agreed to allow consideration of the WIA bill on the floor only after Senators in the Majority agreed to a "pre-conference" on the "faith-based" and "consolidation of WIA block grant" issues. This agreement requires the House and Senate not select conferees to convene formal conference negotiations until after the House and Senate reach a compromise on the faith-based and consolidation issues in the "pre-conference." The faith-based and consolidation issues have stalled consideration of the WIA reauthorization bill in the Senate for some time and the House and Senate bills differ significantly on both. • If the House and Senate reach a compromise on faith-based and consolidation issues in the pre-conference, the chambers would name conferees, move to a formal conference and attempt to negotiate a final bill before the end of the year. If they are unable to resolve their differences in the pre-conference, the bills would need to be reintroduced again next year to go it again in the 110th Congress. Week of July 24, 2006 SENATE'S WORKFORCE SYSTEM SPENDING BILL EXCLUDES HOUSE WIA RESCISSION, WOULD CUT ONE-STOP/LMI BY $18 MILLION • On July 20 the Senate Appropriations Committee unanimously approved its version of the FY 2007 workforce program spending bill refusing to include a rescission of Workforce Investment Act (WIA) funds as approved by the House Appropriations Committee on June 20. The Senate's spending bill would appropriate $63 million for the One-Stop/Labor Market Information program, $23 million more than proposed by the House but $18 million less than appropriated in FY 2006. House proposals to rescind WIA funds and halve the One-Stop/LMI program represent two of the largest cuts proposed to workforce system spending in many years. Thus far, the Senate appears unwilling to follow the House on the size of the cuts, but workforce programs are not spared altogether as the Senate's FY 2007 spending bill would reduce spending for the WIA Adult, ES and One-Stop/LMI programs. • Senator Arlen Specter (R-PA), Chairman of the Senate's Labor, Health and Human Services and Education Subcommittee opened the Committee's mark-up yesterday by reading a list of 20 cuts to job training, health and education programs included in the spending bill and said the bill "constitutes what I view as really the disintegration of the appropriate federal role in health, education and worker protections." He noted that it is not a fun time to be an appropriator because "we don't have money to appropriate anymore." Senator Specter's comments echoed those made by his House colleague Chairman Ralph Regula (R-OH) during a hearing on the same bill a number of months ago when he said his Subcommittee could easily and usefully spend twice the amount it was allocated. Overall the bill spends $606 billion, but only $142.8 billion is considered discretionary spending - amounts under the control of appropriators and split among Labor, HHS and Education programs. • Members of the Senate Appropriations Committee had a slightly easier time establishing program spending levels than their peers in the House because they had approximately $1 billion more in discretionary spending to work with. This difference on discretionary spending in the House and Senate bills will make future negotiations over a final FY 2007 spending bill difficult. But before conference negotiations can begin, both chambers must approve their bills. Although approval of the bill this week by the Senate Appropriations Committee is earlier than usual, many on Capitol Hill do not believe the Senate will schedule a floor vote on the bill until September at the earliest and likely not until after the November 7 elections. Consideration in the House over its spending bill is muddled in partisan and inter-party disputes as Members in the Minority want to approve it with a minimum wage increase and fiscal conservatives have said they will approve only after removing much of the 77 pages worth of line-item spending added to the bill. • Senate's Spending Levels - WIA and VETS' With the likelihood of many months of waiting until the FY 2007 workforce program spending bill is sorted out, it is important to look at the differences between House and Senate bills to reassess the need for communications with Congress and to identify how final FY 2007 spending might end up. Most notable is the difference over the rescission of $325 million in WIA funds included in the House bill but not the Senate's. The Senate's Committee Report (109-287) which accompanies its spending bill and provides additional information on the intent and direction of the Senate notes, "the Committee recommendation does not include the $325 million rescission of prior year funds proposed by the House, for which there was no budget request." The House and Senate bills would appropriate the same amounts for the WIA Dislocated Worker and WIA Youth programs or $1.476 billion and $936 million respectively. The Senate's bill would appropriate $800 million for the WIA Adult program, or $57 million less than was appropriated in FY 2006 and $47 million less than would be appropriated by the House. Appropriations for the Veterans' Employment and Training Service state grants for administration of the Disabled Veterans' Outreach Program (DVOP) and Local Veterans Employment Representative (LVER) program would be slightly greater under the Senate's bill for a total of $161 million. • Senate's Spending Levels - One-Stop/LMI, ES and UI The Senate's bill would appropriate $63 million for the One-Stop/LMI program, $18 million less than was appropriated in FY 2006, about $900 thousand less than was requested by the Administration and $23 million more than would be appropriated under the House bill. Both the House and Senate spending bills would appropriate $689 million for the Employment Service (ES) program for a cut of $27 million from the FY 2006 appropriated level. The Senate bill would appropriate $2.537 billion for UI State Operations or approximately $103 million less than would be appropriated by the House. It is unclear if this proposed reduction would impact states' base funding or funding for UI integrity initiatives requested by the Administration. • Career Advancement Accounts (CAAs) The Senate's report prohibits the U.S. Department of Labor from funding Career Advancement Accounts (CAAs). The report indicates, "the Committee expects that no funds be utilized for the proposed career advancement account initiative unless specifically authorized by law." Further on reauthorization of WIA, the report notes "while WIA is in the process of being altered and renewed, the Administration will refrain from unilateral changes to the administration, operation and financing of employment and training programs." It is unclear what impact the Senate's report will have on the Employment and Training Administration's (ETA) demonstration of CAAs for the automotive manufacturing industry. Under the demonstration, each of nine states would be granted up to $1.5 million for the first year and an additional $1.5 million for a second year conditioned upon performance and satisfaction of the grant agreement. PERKINS ISSUES RESOLVED DURING QUICK CONFERENCE MEETING • On Thursday, July 10 the conference committee appointed to negotiate the differences between the House and Senate Perkins reauthorization bills met and quickly approved the conference agreement for the "Carl D. Perkins Career and Technical Education Improvement Act." The Conference Report signaled language would be included in both the title and throughout the bill transitioning away from "vocational education" to the term "career and technical education." Most important, the new legislation maintains the Tech Prep program that helps link secondary and postsecondary education as a separate program within the bill, a priority of the career and technical education advocates. Finally, state administrative funding will be maintained at 5 percent of a state's allocation. • Both chambers had passed their bill more than a year ago over the objections of the Administration, which would rather use the grant money to extend the No Child Left Behind initiative into high schools. Due to strong support among lawmakers, President Bush is not expected to veto the legislation. The two bills differed in that the House version called for the merging of Tech-Prep (a separate $100 million program of math and science classes used to prepare high school students for technical colleges) with the larger Perkins program - which provides $1.2 billion for courses covering a variety of subjects in both high schools and community colleges. The conference report preserves both programs while allowing states to use Tech-Prep money for broader Perkins programs instead. Governors control Tech-Prep funds, while Perkins grants are divided among local schools according to funding formulas. WOTC AND WtWTC PROGRAMS MAY BE EXTENDED IN PENSION OVERHAUL BILL PENDING APPROVAL AS EARLY AS NEXT WEEK • Conference negotiations are reportedly nearing a conclusion over details of pension overhaul legislation (H.R. 2830), which might include an extension of the expired Work Opportunity Tax Credit (WOTC) and Welfare-to-Work Tax Credit (WtWTC) programs. The tax credit programs expired on December 31, 2005. House and Senate conferees negotiating the pension overhaul bill have stated they are close to reaching an agreement on the legislation and a vote could come as early as next week. Details on the bill have not been released but many expect the popular business tax credits to be included. Next week is the last scheduled session week before Congress takes a month long August recess. Consideration of the bill will have to wait until after Labor Day if conferees fail to reach an agreement and vote the bill week of July 24. Week of July 17, 2006 SENATE PANELS SCHEDULED TO CONSIDER WORKFORCE SYSTEM SPENDING BILL NEXT WEEK • House Senate appropriators have tightly choreographed a schedule next week to consider and approve the FY 2007 Labor, Health and Human Services and Education spending bill. The spending bill would appropriate funds beginning FY 2007 for the workforce system including Workforce Investment Act (WIA), Employment Service (ES), Unemployment Insurance (UI), Veterans' Employment and Training Service (VETS) and Labor Market Information (LMI) programs. On July 18, the spending bill will be considered by the Senate Labor, HHS and Education Appropriations Subcommittee followed by consideration on July 20 by the Senate Appropriations Committee. Once the bill is approved by both panels, as is expected, it will be ready for consideration on the Senate floor. Consideration on the Senate floor is not likely to occur until after Labor Day as Congress has only two more weeks of session scheduled before taking a month-long August recess. Many who follow events on Capitol Hill do not expect the spending bill to be considered until after the November 7 election. • Details on spending levels included in the Senate's FY 2007 Labor, HHS and Education appropriations bill have not been released and are not likely to be made public until the July 18 mark-up. Workforce system advocates are waiting to learn how the Senate's spending bill might differ from the bill (H.R. 5647) approved by the House Appropriations Committee on June 13. The House bill would cut workforce system appropriations by over a half billion dollars including a rescission of $325 million from WIA state grants and $42 million cut to the One-Stop/Labor Market Information program. A number of Senate staff expressed that the workforce system would be "pleased" with spending levels included in the bill, but would not provide specifics. Senate appropriators have a higher spending cap to work with than the House, allowing them to appropriate more. If the Senate Appropriations Committee approves levels of spending more favorable to the workforce system than those in the House bill, much work would remain to ensure a final positive outcome. HOUSE VETERANS AFFAIRS COMMITTEE APPROVES BILL TO EXPAND VETERANS' BENEFITS • The House Veterans Affairs Committee on Thursday approved an omnibus bill (H.R. 3082) that would expand veterans' education and employment benefits, burial rights, and incentives for veteran-owned businesses. The committee approved the bill by voice vote after rolling into it provisions from three other bills approved recently. The panel incorporated by substitute amendment language in three bills (H.R. 5038, H.R. 5220, and H.R. 601). The omnibus bill could be considered on the House floor the week of July 24. The bill aims to boost economic opportunities for veterans who are small-business owners. • The measure would require the secretary of Veterans Affairs (VA) to establish annual contracting goals for the VA to enter into with small businesses owned by veterans and service-disabled veterans. It would specify the goal for service-disabled veteran-owned small business would not be less than 3 percent of all VA contracts. • The bill calls for added initiatives through the Department of Labor's Veterans Employment and Training Service (VETS), as well as enhanced education benefits that would extend through 2011 the authorization for work-study positions at VA cemeteries, state veterans' homes and state approving agencies. It also would restore lost entitlement for certain beneficiaries of education assistance who are forced to discontinue their education to serve full-time in the National Guard. • The bill authorizes $1 million annually through FY 2009 for a pilot project to help soldiers make the transition to civilian life by making it easier for them to use their military experience to get credentialed in an equivalent civilian field. The legislation would authorize the Secretary of Labor to select at least 10 military occupational specialties that could lead to civilian credentialing in high-growth industries or industries with worker shortages. • Title II of H.R. 3082 would make the following changes to the Disabled Veterans' Outreach Program and Local Veterans' Employment Representative programs: Require VETS to establish guidelines for professional qualifications for DVOPs and LVERs; Clarify that part-time employment of DVOPs/LVERs is half-time employment; Require states to develop a licensing and certification program within two years after the date of enactment for veterans as a condition to receive a grant; Require all DVOPs/LVERs hired by a state be trained by the National Veterans Training Institute within three years of appointment; Modify requirements for VETS annual report to include additional and more specific data concerning veterans' employment; Authorize a five-year demonstration project to allow the Assistant Secretary of Labor for VETS to enter into contracts with non-governmental entities to carry out placement services in high-employment areas using unobligated funds and required GAO to study such demonstration projects; Modify the incentive award program to recognize high performing employment service offices in addition to high performing employees; and Require USDOL to prescribe regulations with regards to priority of service established under the Jobs for Veterans Act, P.L. 107-288, no later than one year after the date of enactment. Week of July 31, 2006 HOUSE VOTE TO RAISE MINIMUM WAGE • On July 27th House Majority Leader John Boehner (R-OH) yielded to a coalition of members in his party to postpone a vote to adjourn the House for its month-long summer recess to give Members an opportunity to negotiate details over a bill that would increase the minimum wage. According to reports on the prospective legislation, the bill would increase the minimum wage to $7.25 over three years but would leave the minimum wage for restaurant workers and other workers that receive tips at $2.13 per hour. Members of the House Majority want to add language to the minimum wage bill that would give small businesses the option to join together to purchase health insurance, an arrangement often referred to as association health plans. House Minority Leader Nancy Pelosi (D-CA) said adding language to authorize such health plans would constitute a "poison pill" and she urged Members in the Minority to oppose the bill if it included the language. • Bringing the bill to the floor for a vote even if it were to fail would placate moderates in the Majority who fear a backlash from voters over the summer recess. Moderates have reportedly convinced sufficient Members in the Majority that a vote regardless of its outcome will provide them sufficient political cover in advance of the November election. It is unclear if a vote on a minimum wage bill today would enable consideration on the House floor of the FY 2007 Labor, Health and Human Services and Education spending bill (H.R. 5647). House Majority leaders have stalled consideration of the House FY 2007 workforce program spending bill on the House floor because it includes language that would increase the minimum wage. The bill was approved by the House Appropriations Committee on June 20. CONFERENCE AGREEMENT ON PERKINS LIKELY TO BE SENT TO PRESIDENT BUSH FOR HIS SIGNATURE BY END OF TODAY • The Senate last week approved by unanimous vote the conference agreement (S. 250) reached to reauthorize the Perkins Act (P.L. 105-332). The House is expected to approve the conference agreement today. Upon approval by both the House and Senate this week, the bill is expected to be signed into law by President Bush. The conference agreement would maintain the Tech Prep program that helps link secondary and postsecondary education as a separate program and would maintain state administrative funding at 5 percent of a state's allocation. Governors control Tech-Prep funds, while Perkins grants are divided by formula among local schools. PROSPECTS FOR EXTENSION OF WOTC AND WtWTC PROGRAMS REMAIN UNCLEAR • Efforts to conclude conference negotiations over a pension reform bill (H.R. 2830) continued as House and Senate Conferees are struggling to decide whether to include a number of tax breaks for business, including the Work Opportunity Tax Credit (WOTC) and Welfare-to-Work Tax Credit (WtWTC) programs. Details on the bill have not been released. House Conferees are said to oppose including the business tax break extensions in the pension overhaul bill while Senate Conferees reportedly support them. Leaders in the House and Senate have said they want to approve the bill before departing for their month-long August recess. Consideration of the bill will have to wait until after Labor Day if conferees fail to reach an agreement and vote the bill. CONSIDERATION OF FY 2007 WORKFORCE SYSTEM SPENDING BILLS ON HOLD UNTIL AT LEAST SEPTEMBER • Congress adjourned last week for its August recess without approving the spending bill to fund the workforce system in FY 2007. Both the House and Senate Appropriations Committees approved their respective FY 2007 labor program spending bills over the past few weeks leaving approval on the House and Senate floor as the last step before conference committee negotiations may begin. Prospective action in the House to vote on legislation to increase the minimum wage (see article above) might improve the prospects for approval of the spending bill (H.R. 5647) as the issue is stalling its consideration. Members in both chambers have not given a clear indication of when they might approve their bills, but most observers believe it will not come until after the November 7 election. Many believe neither chamber will approve the bills individually and will instead lump programs funded under the bills into a final end-of-year omnibus package. Approval after the beginning of the FY 2007 federal fiscal year on October 1 makes it likely workforce programs will operate on at least one continuing resolution (CR). • The most notable difference between House and Senate spending bills is the rescission of $325 million in WIA funds included in the House bill but not the Senate's. The House and Senate bills would appropriate the same amounts for the WIA Dislocated Worker and WIA Youth programs or $1.476 billion and $936 million respectively. The Senate's bill would appropriate $800 million for the WIA Adult program, or $64 million less than was appropriated in FY 2006 and $54 million less than would be appropriated by the House. Appropriations for the Veterans' Employment and Training Service state grants for administration of the Disabled Veterans' Outreach Program (DVOP) and Local Veterans Employment Representative (LVER) program would be slightly greater under the Senate's bill for a total of $161 million. • The Senate's bill would appropriate $63 million for the One-Stop/LMI program, $18 million less than was appropriated in FY 2006, about $900 thousand less than was requested by the Administration and $23 million more than would be appropriated under the House bill. Both the House and Senate spending bills would appropriate $689 million for the Employment Service (ES) program for a cut of $27 million from the FY 2006 appropriated level. The Senate bill would appropriate $2.537 billion for UI State Operations or approximately $103 million less than would be appropriated by the House. • The Senate's report to its FY 2007 labor program spending bill includes language intended to prohibit the U.S. Department of Labor from funding Career Advancement Accounts (CAAs). The report indicates, "the Committee expects that no funds be utilized for the proposed career advancement account initiative unless specifically authorized by law." However, report language is considered "non-binding" and would not prohibit the Employment and Training Administration from moving forward on its CAA demonstration. However, moving forward on an initiative when a Congressional Committee expresses explicit opposition to it could have a detrimental impact on the intergovernmental relationship. It is not clear in this instance if the ETA will alter its plans on the CAA demonstration.