IAWP LEGISLATIVE INFORMATION August 2006 Archives Home Page ***Weekly Update*** From Legislative Committee Chair: Todd Kolden, Aberdeen Central Office Week of August 7, 2006 SENATE ADJOURNS AFTER VOTING DOWN BILL TO INCREASE MINIMUM WAGE AND EXTEND WOTC AND WtWTC PROGRAMS • Yesterday the Senate failed to invoke cloture (56-42) and end debate on legislation (H.R. 5970) that would have increased the minimum wage to $7.25 over three years. Included in the bill is language that would have reauthorized the Work Opportunity Tax Credit (WOTC) and Welfare-to-Work Tax Credit (WtWTC) programs. Majority Leadership fell short by four votes of the 60 needed to invoke cloture that would have ended debate and permitted a simple majority to approve the bill. Inclusion of language in the legislation that would have expanded the exemption from the estate tax tipped the balance against the bill for most Members in the Minority. • Some Members also expressed concern with the language to increase the minimum wage because they noted it might actually reduce wages for workers who rely on tips. Dueling analysis produced by the Congressional Research Service (CRS) and Congressional Budget Offices (CBO) showing the bill likely would override some states' minimum wage laws and the U.S. Department of Labor's (USDOL) analysis showing it would not impact wages negatively added to the uncertainty and convinced some to vote against the bill. The Washington Department of Labor and Industries sent its own analysis to Senators Cantwell (D-WA) and Murray (D-WA) that concluded workers receiving tips would see a decline in income. Both Washington state Senators voted against the bill. • The July 28 update reported the House and Senate Conferees were negotiating final details over a pension reform bill (H.R. 2830) that could include language to extend the WOTC and WtWTC programs. Negotiations over H.R. 2830 broke down and the House decided instead to approve H.R. 5970 that included the minimum wage increase, estate tax expansion and tax credits and a separate stand alone pension reform bill (H.R. 4) before it adjourned last week. The Senate approved the stand alone pension reform bill yesterday as approved by the House, sending it to President Bush who is expected to sign it into law. The prospect for another package of tax cuts for businesses including the WOTC and WtWTC programs is unclear. Senate Majority Leadership expressed an interest in revisiting extension of the tax credits when the Senate returns to Capitol Hill in early September. HOUSE PASSES VETERANS LEGISLATION TO ESTABLISH DVOP/LVER MINIMUM QUALIFICATIONS • On Tuesday, July 25, 2006, the House of Representatives passed H.R. 3082, the Veterans Small Business and Memorial Act of 2006. The bill increases benefits for veterans by establishing the annual contracting goals for the Department of Veterans Affairs (VA) to include a greater number of veteran-owned small businesses, clarifying the rules regarding contracts, prohibiting bonus payments to senior executives who do not meet veteran and disabled contracting goals, and provisions to extend veteran business status to the spouses when the veteran dies. The intent of the legislation is to provide increased opportunities for veteran business owners. The bill also would make permanent the VA Secretary's authority to furnish a government headstone for veterans who are interred in a marked grave at a private cemetery. The current authorization expires December 1, 2006. • Title III of H.R. 3082 would amend Title 38 of the United States Code (USC). The amendments would affect the Disabled Veteran Outreach Program (DVOP) and the Local Veterans Employment Representatives (LVER) program. It would require the U.S. Department of Labor Veterans Employment and Training Service (VETS) to establish professional qualification guidelines for the DVOP and LVER staff. States would need to report annually professional qualifications it uses for these positions and the training provided by the state. • Other changes for the DVOP and LVER grants are: o Clarifies that part-time employment of DVOPs and LVERs is half-time employment; o Requires states to develop a licensing and certification program within two years after enactment for veterans as a condition to receive a grant from VETS. o Requires all DVOPs and LVERs hired after date of enactment to successfully complete training by the National Veterans Institute (NVTI) within three years of appointment. All DVOPs and LVERs, who were designated as such within a five year period prior to enactment of this bill, will be required to attend NVTI training within five years after enactment. o Requires states to report on a number of additional performance requirements beyond those currently established in state DVOP and LVER grants. o Authorizes a 5-year demonstration project to allow VETS to enter into contracts with non-governmental entities to carry out placement services in high-unemployment areas using unobligated funds and require the Government Accountability Office (GAO) to report on the demonstration project. o Allows Incentive Awards to be provided to "employment service offices" for any purpose." Current law requires incentive awards to be provided to individual staff only, preventing a number of states to utilize their awards funds due to state or agency policies. o Requires the Secretary of Labor to prescribe regulations to implement the priority of service for veterans' requirement established in section 4215 of Title 38, USC. o Establishes a demonstration project that would: authorize the Secretary of Labor to identify not less than ten military occupational specialists that would lead to civilian credentialing within an industry that has a critical shortage of employees or that is a high growth industry; require the Secretary to work with states and industries to identify civilian credentialing requirements within each state and industry to reduce the barriers for service members; require an annual report to Congress describing the efforts and results of the previous year towards credentialing services; terminate the authorization of the demonstration project on September 30, 2009; and authorize appropriations of $1 million for each of the fiscal years 2007 through 2009. • H.R. 3082 as approved by the House has been sent to the Senate. It is anticipated the Senate Veterans Affairs Committee and full Senate will move this bill through the Senate prior to the end of this Congressional session. Some of the provisions in H.R. 3082 are a concern of USDOL/VETS, especially the additional reporting requirements. JULY UNEMPLOYMENT RATE UP TO 4.8 PERCENT • The Bureau of Labor Statistics reported today the number of unemployed persons edged up to 7.2 million in July, and the unemployment rate increased to 4.8 percent from 4.6 percent in June. • Total nonfarm payroll employment increased by 113,000 in July. Job gains occurred in several service-providing industries, including professional and business services, health care and food services. This increase followed job gains of 92,000 in May and 124,000 in June. The average monthly gain of 112,000 over the May, June, July period compares with an average monthly gain of 169,000 over the preceding 12-month period ending in March. • Following a decline in June, the number of long-term unemployed persons - those unemployed 27 weeks or longer - returned to its May level of 1.3 million. These long-term unemployed accounted for 18.6 percent of the total unemployment, about the same as May. Week of August 21, 2006 LITTLE PROGRESS REPORTED ON WIA PRE-CONFERENCE Before the Senate on June 29 approved its bill (S. 1021) to reauthorize the Workforce Investment Act (WIA), Members of the Senate Majority and Minority reached agreement that conference negotiations with the House would not begin until the faith-based and WIA grant consolidation issues are resolved during a "pre-conference." Now, nearly two-months later and with a limited number of scheduled session days remaining, Congressional staff report little to no progress in moving a WIA reauthorization bill forward. The Senate's action on June 29 to approve its WIA bill was characterized by some on Capitol Hill as "incremental" and "symbolic" because even though approval was progress, the core disagreements over faith-based and consolidation issues had not changed. The agreement on a pre-conference 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. Members of the House and Senate are in summer recess until September 7 when they are scheduled to return for a work period lasting three weeks. Both chambers are expected to adjourn at least one-month before the November 7 mid-term elections. Many on Capitol Hill believe the Congress will convene a post-election, lame-duck session of an unknown duration. The legislation covered during the lame-duck session and its duration would depend on the outcome of the election and any emergent business the Congress might be compelled to address. This schedule leaves little opportunity to approve a WIA reauthorization bill with significant hurdles remaining including agreements on not only pre-conference issues but all remaining differences between the House and Senate bills. Opinions on Capitol Hill on the likelihood for approval of a WIA reauthorization bill this year vary, but most believe it will not happen without significant concessions made during the pre-conference. The most difficult issue to compromise during pre-conference could be on the language included in the House approved bill (H.R. 27) that would allow faith-based groups to receive federal funds while maintaining their religious identity, including hiring based on religious preferences. Many Members of the House Minority have raised concerns the bill approved by the House would be the first time an existing law would be amended to allow "discriminatory" hiring with federal funds. The White House has issued a statement of administration policy asserting that the Administration "strongly supports" passage of the House bill and the provision granting "hiring autonomy" to religious groups. The White House statement included a list of laws approved during the previous Administration that it says permits faith based groups to hire workers with federal funds according to their beliefs. The issue of WIA grant consolidation could be easier to resolve although there are significant differences between the House and Senate bills. The House bill would consolidate at the federal level the WIA Adult, WIA Dislocated Worker and Wagner-Peyser programs. The Senate bill would allow one-hundred percent transferability between the WIA Adult and WIA Dislocated Worker programs but would not consolidate programs at the federal level. The National Governors' Association (NGA) recently sent a letter to Members of the House and Senate to encourage giving governors the option to "coordinate" funding a la carte among the WIA Adult, WIA Dislocated Worker Program, WIA Youth, Wagner-Peyser and Adult Education programs. The proposal according to the NGA letter would retain the current allocation formulas used to allocate grants from the federal government to the states for the listed programs and prevent erosion of funding associated with federal-level block granting. Although the proposal presented by the NGA is presented as a compromise between the House and Senate bills, it is not supported by locally based interest groups including the National Association of Workforce Boards (NAWB) and the National Association of Counties (NACO). These groups believe it would give too much authority to the states over funding. If the Congress fails to reach a compromise on a bill to reauthorize WIA by the end of this year, it is required to pursue the process anew next year once the 110th Congress convenes through 2007-2008. Week of August 14, 2006 PERKINS BILL WOULD ENCOURAGE USE OF EMPLOYMENT STATISTICS THAT CONGRESS APPEARS UNWILLING TO FUND • Included in legislation (S. 250) approved by Congress and awaiting the signature of President Bush to reauthorize the Carl Perkins program, is language that would authorize funding for and encourage the use of employment statistics provided under Section 15 of the Wagner-Peyser Act. Information on emerging professions available from states under Section 15 would help administrators of Perkins programs to advise individuals on the careers in high-demand. Section 118 of the Perkins reauthorization bill includes as state level activity: providing readily available occupational information such as information relative to employment sectors; information on occupational supply and demand; and other relevant information provided pursuant to Section 15 of the Wagner-Peyser Act. • However, the authorization of funding does not ensure it will be appropriated. The FY 2007 Labor, Health and Human Services and Education spending bills approved by the House and Senate Appropriations Committees do not include funding for Section 118. With the bills at their caps on spending, the only way Congress could fund Section 118 would be to cut spending for another program. If both the House and Senate approve their bills without funding for Section 118 it will be very difficult to add it in during conference negotiations. Congress is currently adjourned for its summer recess through the Labor Day holiday and is not expected to renew consideration of FY 2007 spending bills until at least mid-September. President Bush is expected to sign into law soon the legislation to reauthorize Perkins. WIA ALLOTMENTS FOR PY 2006 RELEASED BY ETA • The Employment and Training Administration (ETA) has announced final allotments for PY 2006 (July 1, 2006 - June 30, 2007) for the Workforce Investment Act (WIA) youth and adult programs and additional PY 2006 funding from WIA section 173(e) for eligible states. The August 10, 2006 Federal Register provides the update to the planning estimate levels for the WIA youth and adult programs announced in the April 11, 2006 Federal Register. The WIA allotments for states are based on provisions defined in statute. WIA allotments announced in the April 11, 2006 Federal Register remain unchanged for outlying areas in the adult and youth programs and Native Americans in the youth program. • The allotments are based on the funds appropriated in the Departments of Labor, Health and Human Services, and Education, and Related Agencies Appropriations Act, 2006 (P.L. 109-149) including the Department of Defense, Emergency Supplemental Appropriations (P.L. 109-148), which required a government-wide reduction of 1.0 percent to all FY 2006 discretionary programs.