IAWP LEGISLATIVE INFORMATION September/October 2007 Archives Home Page ***Weekly Update*** From Legislative Committee Chair: Todd Kolden, Aberdeen Central Office Week of October 1, 2007 SENATE PASSES CONTINUING RESOLUTION (CR) • Today, the Senate signed off on a continuing resolution (CR), a stopgap bill to fund the federal government through mid-November. The non-controversial measure, which easily passed in the House yesterday, funds the government through November 16, 2007, the target date for adjournment. Senate majority leaders have indicated they will resume work on the appropriations bills, focusing on them the first week of October. Priority appears to be given to the Defense and Commerce-Justice-Science measures. However, Senator Harry Reid (D-NV) also indicated he might attempt bringing up the bill for Labor-HHS-Education before the Senate departs of Columbus Day recess, but this is unlikely. • Senator Reid also told reporters that he is not expecting the Senate to pass all twelve of the regular appropriations bill, indicating an omnibus bill containing multiple appropriations bills is likely. But even if these bills pass Congress, they face an uncertain future with the President, who has threatened to use his veto power. Majority leaders believe the President is intent on blocking domestic spending bills because they provide more money for programs than he included in the Administration's 2008 budget. • There is also speculation that the Majority party will delay consideration of the President's next request for supplemental war funding, expected to reach $200 billion. Reports indicate although the request for funding the Afghanistan and Iraq war are imminent, Congress will not begin consideration until January. Minority Leader John Boehner (R-OH) indicated if the supplemental does not move soon, Congress will have to provide a "bridge" funds in the DOD appropriations bill in order to ensure the Pentagon does not run out of war funds. This discussion will prove highly contentious, as Senate Appropriations Committee Chairman Robert Byrd (D-WV) indicated there will be no "rubber stamp" of the President's request. Concerns are fanned further by a recent Congressional Budget Office assessment that put the cost of maintaining an Iraq presence over the next 50 years at more than $2 trillion. Week of October 15th, 2007 SENATE COULD BEGIN CONSIDERATION OF FY 2008 LABOR PROGRAM SPENDING BILL NEXT WEEK • The Senate could begin consideration this week of its fiscal year 2008 Labor, Health and Human Services (HHS) and Education spending bill (S. 1710). Programs funded under the bill, including those of the workforce system, currently operate under a continuing resolution (CR) through November 16, 2007 approved by the Congress two weeks ago. The House approved its Labor, HHS and Education fiscal year 2008 spending bill in July including a rescission of $335 million and a cut of $49 million both likely to be taken from the workforce system. House and Senate leaders will have a few weeks to craft a compromise bill to send President Bush if the Senate approves its bill next week. But reaching a compromise on spending will not be easy, as the bills total spending differs significantly and President Bush has promised to veto any spending bill that exceeds his Budget request. • The Senate's fiscal year 2008 labor program spending bill would fund the workforce system at the same levels appropriated in fiscal year 2007 with a couple of exceptions. The Workforce Investment Act (WIA) Adult, WIA Dislocated Worker and WIA Youth programs would be funded at $864 million, $1.5 billion and $941 million respectively - the same as fiscal year 2007. The Senate's bill would cut the One-Stop/Labor Market Information (LMI) program by $8 million, fund the Employment Service (ES) program at the fiscal year 2007 level of $716 million and fund U.S. Department of Labor Veterans' Employment and Training Service (VETS) programs at their fiscal year 2007 levels. Both the House and Senate bills would appropriate $40 million more than was appropriated in fiscal year 2007 for Unemployment Insurance fact-to-face beneficiary eligibility reviews - also known as Re-employment and Eligibility Assessments. • On a related matter, Congressmen John Tierney (D-MA) and Ric Keller (R-FL) distributed a dear colleague letter this week to encourage fellow House Members co-sign a letter to the leaders of the House Committee on Appropriations urging them to remove the $335 million rescission. The letter encourages House Members interested in signing the letter to contact Kevin McDermott of Mr. Tierney's office or Kim Southard of Mr. Keller's office. States are encouraged to contact their House delegation and request they co-sign the Tierney/Keller letter. House Members that have co-signed the letter thus far include Representatives: Neil Abercrombie (D-HI), Joseph Courtney (D-CT), Danny Davis (D-IL), John Dingell (D-MI), Vernon Ehlers (R-MI), Phil Hare (D-IL), Brian Higgins (D-NY), Rush Holt (D-NJ), Sam Farr (D-CA), Barney Frank (D-MA), Ric Keller (R-FL), Steven LaTourette (R-OH), Sander Levin (D-MI), Timothy Mahoney (D-FL), James McGovern (D-MA), John McHugh (R-NY), Howard McKeon (R-CA), Gwen Moore (D-WI), James Oberstar (D-MN), Tim Ryan (D-OH), Bobby Scott (D-VA), Zack Space (D-OH), Bart Stupak (D-MI), John Tierney (D-MA), Christopher VanHollen (D-MD), Tim Walz (D-MN) and John Yarmuth (D-KY). HOUSE PANEL POSTPONES HEARING ON PERFORMANCE OF VETS PROGRAMS • The House Veterans Affairs Subcommittee on Economic Opportunity has postponed until further notice its hearing on the performance of the DVOP and LVER programs originally scheduled on October 11, 2007. NASWA is developing a statement that will highlight VETS program performance and will present the statement to the Subcommittee upon a rescheduling of the hearing. NASWA's statement focuses on: the performance of the DVOP and LVER programs overall; the partnership it continues to foster with USDOL-VETS; the need for part-time DVOPs and LVERs to serve more veterans in geographically disparate regions as federal funding remains less than adequate; and our request for an increase to state grants needed to serve veterans. Week of October 8, 2007 HOUSE MINORITY INTRODUCES BILL TO REAUTHORIZE WIA • Congressman Howard "Buck" McKeon (R-CA) introduced legislation (H.R. 3747) entitled the Workforce Investment Improvement Act this week to reauthorize the Workforce Investment Act (WIA). This is the first bill introduced to reauthorize WIA this Congress, but its purpose is to serve largely as a marker of the Minority's policy objectives rather than a bill the House Majority would advance. The bill is likely to cause concern among Members of the Majority as it is taken largely from H.R. 27, the House Republican's bill approved by the chamber largely along party lines last Congress. It includes the lightning rod provision to allow faith-based groups which receive federal funds to selectively hire based on faith and would combine at the federal level Wagner-Peyser, WIA Adult and WIA Dislocated Worker programs. Congressman McKeon currently serves as Ranking Member of the House Committee on Education and Labor, was sponsor to the original WIA law (P.L. 105-220) approved on August 7, 1998 and is a leader on workforce development and education matters. • The National Governors' Association (NGA) first learned of the bill's imminent introduction during a briefing this week sponsored by Minority staff. The bill would: strengthen the role of the state boards by giving them greater oversight responsibility over the local boards; remove the requirement that one-stop partner programs sit on local boards; give governors the discretion to determine contributions from one-stop partners for one-stop operational costs; address the WIA carryover issue by defining "accrued expenditures" (will need to clarify further based on language in the bill); establish a new in-state allocation of 60 percent to localities 40 percent to states - with 60 percent of the state share going to localities for providing core services; combine core and intensive services into "work ready services;" establish WIA Youth funds be divided among in-school and out-of-school youth equally; and would codify the WIRED program in federal law. • Though it is unlikely the Majority will introduce their bill to reauthorize WIA before the end of this year, the Minority staff said Ranking Member McKeon wishes to introduce his bill to establish its programs as a priority this Congress and to establish their positions if conference negotiations begin. They are not optimistic WIA will be reauthorized this Congress as the House Education and Labor Committee has established other priorities and the direction of WIA is now, in their view, controlled largely by organized labor groups. Organized labor has expressed concern with the requirement of business majorities on the state and local boards, wishes to shift the focus of WIA services away from businesses toward workers and wants stronger language to ensure Wagner-Peyser services are delivered exclusively by merit-based staff. • The desire by most workforce system advocates to move a bill to reauthorize WIA this Congress mixed with the legislative objectives of organized labor has created a dispute within the Majority in the Senate delaying the introduction of the WIA reauthorization bill in that chamber. Organized labor is concerned if additional language is not included in the bill to strengthen the role of merit-based staff in service delivery, the Administration may attempt to dilute merit-based staffing requirements in the regulatory process. These same concerns may delay the introduction of a bill to reauthorize WIA by the majority in the House placing the prospect of WIA reauthorization this Congress in doubt. HOUSE PANEL SCHEDULES HEARING ON PERFORMANCE OF VETS PROGRAMS • The House Committee on Veterans' Affairs Subcommittee on Economic Opportunity is scheduled on October 11, 2007, to conduct an oversight hearing on the performance of the Disabled Veterans Outreach (DVOP) and Local Veterans Employment Representative (LVER) programs. The Subcommittee is investigating implementation of DVOP and LVER programs in the states, the circumstances under which state funding should be cut for poor performance, the need for part time DVOP and LVER staff and feedback on the U.S. Department of Labor's tracking of performance for the DVOP and LVER programs. It is unclear if the Subcommittee is conducting the hearing in preparation of the development of new legislation or simply wishes to assess progress in administration of the Jobs for Veterans' Act (P.L. 107.288) and more recently the Veterans Benefits, Health Care, and Information Technology Act of 2006 (P.L. 109-461), which among other provisions clarified the definition of part-time DVOP and LVER staff and require the Secretary of Labor to develop regulations to clarify the laws provisions. • The National Governors' Association (NGA) was offered the opportunity to provide a witness to appear during the hearing and forwarded the invitation to NASWA as the Association has testified numerous times over the past few years and worked closely with the Subcommittee on USDOL Veterans Employment and Training Service (VETS) programs. NASWA is developing a statement for the record that will highlight: the performance of the DVOP and LVER programs overall; the collaborative partnership it continues to foster with USDOL-VETS; the need for part-time DVOPs and LVERs to serve more veterans in geographically disparate regions as federal funding remains less than adequate; and our opposition to cutting state grants as performance overall is good and the law provides the tools already to improve where it may be required. USDOL ANNOUNCES RELEASE OF ADDITIONAL TAA FUNDS • The U.S. Department of Labor has announced the release of more than $44 million to assist states in providing career training as well as job search and relocation assistance to U.S. workers who lose their jobs for reasons related to trade. The announcement of this additional funding follows the September 27 release of Training and Employment Guidance Letter (TEGL) 8-07 entitled Fiscal Year 2008 State Base Allocations and the Process for Requesting Additional Trade Adjustment Assistance (TAA) Program Reserve Funds. GAO REPORTS ON ONE-STOP INFRASTRUCTURE ISSUES AND RECOMMENDS ES OFFICES BE AFFILIATED WITH THE SYSTEM • On October 4, 2007, the Government Accountability Office (GAO) released GAO-07-1096, a study it conducted entitled, "One-Stop System Infrastructure Continues to Evolve, but Labor Should Take Action to Require That All Employment Service Offices Are Part of the System." The study discusses how the Workforce Investment Act (WIA) of 1998 requires states and localities to bring together employment and training programs into a single workforce system, the one-stop system, but no funds were appropriated to fulfill this objective. • The study was conducted primarily by a survey of state workforce officials, updating information received in 2000 and 2001. The GAO study assessed: 1. The current composition of states' one-stop systems and how this has changed, 2. What funds are primarily used to support states' one-stop system infrastructure and how this has changed, and 3. The extent to which states are monitoring customer satisfaction. • The study reports that 13 of the 16 mandatory programs were available at the majority of one-stop centers. States reported they were providing Wagner-Peyser-funded Employment Services on-site at one-stop centers, but at least nine states also provided services through stand-alone Employment Service offices. The report says WIA and Employment Service were the largest funding sources for states to support the infrastructure - the non-personnel costs - of their one-stop centers. States reported a greater percentage of Employment Service funds than WIA funds were used for infrastructure costs than in the past. • Nearly all states reported they submitted customer satisfaction data to the U.S. Department of Labor (USDOL) for program year 2005. In addition, 12 states reported they have established additional customer satisfaction measures beyond those required by labor. • The GAO study recommends the USDOL step up action to ensure all stand-alone offices be affiliated with the one-stop system. In its comments, the USDOL stated the report would be useful, but disagreed with the findings and recommendation regarding stand-alone offices, asserting all Employment Service offices are in compliance. SEPTEMBER UNEMPLOYMENT RATE AT 4.7 PERCENT WITH PAYROLLS INCREASING 110,000 • The Bureau of Labor Statistics of the U.S. Department of Labor reported today nonfarm payroll employment continued to trend up in September, and the unemployment rate at 4.7 percent was essentially unchanged. Nonfarm payroll employment rose by 110,000 following increases of 93,000 in July and 89,000 in August (as revised). In September, health care, food services, and professional and technical services continued to add jobs, while employment was down in manufacturing and construction. Week of October 22, 2007 SIX STATE COALITION ASKS CONGRESS TO REJECT PROPOSED RESCISSION OF WIA FUNDS • In a letter sent to the leaders of the House and Senate Committees on Appropriations, the Governors of California, Florida, Illinois, New York, Ohio and Texas urge the restoration of $335 million in Workforce Investment Act program funding that would be rescinded under the House approved fiscal year 2008 spending bill (H.R. 3043). The letter indicates the rescission would have a dramatic and devastating effect on states' ability to administer critical education, training and workforce programs. The letter estimates as many as 134,000 workers across the country would not have access to job training services if the rescission were enacted and affirms earlier findings by the Government Accountability Office (GAO) that the U.S. Department of Labor (USDOL) overestimates annual WIA carryover funds. • The House on July 19, 2007, approved the Labor, Health and Human Services (HHS) and Education spending bill with an amendment to rescind $335 million and cut $49 million from the Training and Employment Services (TES) budget function. Workforce Investment Act grants comprise the largest share of the TES function making it likely any rescission would impact WIA most. The rescission would take $335 million in unobligated WIA balances (an estimate of balances as of October 1, 2007), including "recaptures and carryover" remaining from funds appropriated to the U.S. Department of Labor for fiscal years 2005 and 2006. The Congressional interpretation of the rescission is it would be drawn mostly from WIA carryover funding from program years 2005 and 2006 carried into program year 2007. The Senate began consideration of the fiscal year 2008 Labor, HHS and Education spending bill this week (see next article). • The National Governors' Association (NGA) in August weighed in on the House approved fiscal year 2008 spending bill expressing concern with the rescission. Concern with the House rescission was transmitted via memorandum from the NGA Education, Early Childhood and Workforce Committee (ECW) to House and Senate staff with both the authorizing and appropriating committees to ensure those responsible for reauthorization of WIA understand the apparent disparity between what the law authorizes and what appropriators view as acceptable spend down. The NGA may work to reaffirm their position again to House and Senate staff before conference negotiations between the House and Senate begin. The NGA memorandum reaffirms jointly developed NGA/NASWA WIA reauthorization policy advocating a sorting out of WIA spend down by clarifying terminology used to characterize spent and obligated funds. The NGA memorandum requests Congress clarify WIA funding issues through the WIA reauthorization process, not by rescinding funds through the appropriations process effectively penalizing states for adhering to the law. SENATE EXPECTED TO APPROVE FY 2008 LABOR PROGRAM SPENDING BILL ON OCTOBER 23 • The Senate spent much of this week debating its fiscal year 2008 Labor, Health and Human Services (HHS) and Education spending bill (H.R. 3043) and is expected to approve the legislation on October 23. The Senate took the House approved spending bill, replaced it with the language included in S. 1710 and is amending it. The Senate's fiscal year 2008 labor program spending bill would fund the workforce system at the same levels appropriated in fiscal year 2007 with exceptions. The Workforce Investment Act (WIA) Adult, WIA Dislocated Worker and WIA Youth programs would be funded at $864 million, $1.5 billion and $941 million respectively - the same as fiscal year 2007. The Senate's bill would cut the One-Stop/Labor Market Information (LMI) program by $8 million, fund the Employment Service (ES) program at the fiscal year 2007 level of $716 million and fund U.S. Department of Labor Veterans' Employment and Training Service (VETS) programs at their fiscal year 2007 levels. • Many Senators have said they do not support the $335 million rescission but the cut could be difficult to fend off once the House and Senate begin conference negotiations as differences between House and Senate versions of the spending bill are significant requiring cuts to be found somewhere. If the Senate approves its bill on October 23, conference negotiation would begin shortly thereafter. Leaders of the Senate Majority have been meeting with their House counterparts determining which bill to first send President Bush. They say a decision will be made by November 1. A top candidate is the fiscal year 2008 Labor, HHS and Education spending bill, which President Bush has vowed to veto given both the House and Senate versions would budget more than he requested in his fiscal year 2008 Budget. The federal government currently operates under a continuing resolution (CR) through November 16, 2007. A Presidential veto would require further negotiations and likely further reductions to spending in the bill. An additional CR may be necessary next month to avoid a shutdown of federal government operations. • States interested in communicating their concern over the rescission should first contact Senators to ensure the rescission is not included in the Senate's fiscal year 2008 Labor, HHS and Education spending bill. Once it is confirmed the Senate has not included the rescission in its bill, states should focus on House and Senate conferees likely to be the members of the House and Senate Labor, HHS and Education Appropriations Subcommittee. WARN ACT AND ANTI-DISCRIMINATION REFORMS APPROVED BY HOUSE COMMITTEE ON EDUCATION AND LABOR • The House Committee on Education and Labor this week approved legislation to reform the notification system for worker mass-layoffs and to prohibit discrimination on the basis of sexual orientation. The legislation (H.R. 3796) to reform the Worker Adjustment and Retraining Notification Act of 1988 would require notification 90 days before a mass dislocation and would extend the time period workers can continue their health coverage at their own expense under COBRA. A press statement from the Committee indicates this bill will be considered by the House within the next month. The second bill (H.R. 3685) approved by the Committee this week would prohibit employment discrimination on the basis of sexual orientation by employers with 15 or more employees. Thirty states currently permit employers to fire employees based on their sexual orientation. TAA REAUTHORIZATION DRAFT RELEASED BY HOUSE COMMITTEE ON WAYS AND MEANS • House Committee on Ways and Means Chairman Charles Rangel (D-NY) introduced draft legislation to reauthorize and expand the Trade Adjustment Assistance (TAA) program. The draft legislation would incorporate an incentive via a $7 billion distribution of Reed Act funds for states to expand eligibility for Unemployment Insurance (UI). The UI modernization 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). • Under the draft TAA bill, entitled the Trade Adjustment Assistance Improvement Act, the TAA program would be reauthorized through September 30, 2012. The draft bill would expand TAA benefits to service workers who lose their jobs because of increased exports. 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. • 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. • A press release by Chairman Rangel's office indicates Members of the Committee on Ways and Means will work over the coming weeks to improve the legislation and to then begin consideration. FIFTEEN STATE COALITION ENDORSES LEGISLATION TO EXPAND UI BENEFIT ELIGIBILITY • A letter co-signed by fifteen governors was sent to request the support of the Chairmen and Ranking Members of the House Committee on Ways and Means and Senate Finance Committee for legislation (S. 1871/H.R. 2233) to provide a financial reward to states for expanding eligibility of Unemployment Insurance (UI) benefits. With the language to expand UI benefit eligibility now part of the House draft TAA reauthorization bill (see article above), the prospect for its enactment has improved. The letter was co-signed by the Governors of Connecticut, Iowa, Maine, Massachusetts, Michigan, New Hampshire, New Jersey, New Mexico, New York, North Carolina, Ohio, Oregon, Virginia, Washington and Wisconsin. The letter cites a finding of the Advisory Council on Unemployment Compensation released in the early 1990's which recommended reforming the UI program to respond to the workforce of low-wage and women workers and an economy that has produced longer-term unemployed workers across income and education levels. • Under the House and Senate legislation, 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. 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. 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 (if applicable) UI benefits. 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. • The National Governors' Association and NASWA do not support an extension of the 0.2 percent FUTA surtax because it contributes to the growth of a fund estimated to exceed $51 billion dollars by the end of 2011 unjustifiable in its size to meet the nearly nonexistent demand for federal loans to states with trust fund balances insufficient to meet benefits. NASWA testified last year before the House Committee on Ways and Means that it supports a repeal of the surtax, which was approved by the Congress in 1976 as a temporary provision to re-establish the fiscal health of accounts comprising the federal Unemployment Trust Fund. The letter from the 15 state coalition notes that the FUTA surtax has been in effect for upwards of 30 years and an extension is supported by the Bush Administration. The Bush Administration included the extension in its fiscal year 2008 Budget request and U.S. Treasury Secretary Henry Paulson, Jr. affirmed before Congress that the revenue it brings in is necessary for federal budgeting purposes. • The UWC, a business community interest group specializing in UI and Workers Compensation issues has expressed concerns with the House and Senate proposals including that they would extend the 0.2 percent FUTA surtax, tie the distribution of funding from the Federal UI Trust Fund to requirements for changes to state law and provide limited funding for administration for a five-year period, after which the added funding would be provided no longer. A recent summary by UWC of the House draft TAA reauthorization bill points to a study by the Congressional Budget Office (CBO) which assumes not all states will enact provisions to expand UI eligibility to acquire the financial reward. Funds not distributed to states ineligible to collect the financial reward along with the extension of the FUTA surtax will enable an estimated reduction of $5 billion to the federal budget deficit. Week of October 29, 2007 SENATE APPROVES FY 2008 LABOR PROGRAM SPENDING BILL The Senate approved its fiscal year 2008 Labor, Health and Human Services (HHS) and Education spending bill (H.R. 3043) opening the way for conference negotiations to begin with the House. The Senate took the House approved spending bill, replaced it with its language (S. 1710) and amended it. The House approved its fiscal year 2008 labor program spending bill on July 19, 2007. The Senate's spending bill would fund the workforce system at the same levels appropriated in fiscal year 2007, with exceptions. The Workforce Investment Act (WIA) Adult, WIA Dislocated Worker and WIA Youth programs would be funded at $864 million, $1.5 billion and $941 million respectively - the same as fiscal year 2007. The Senate's bill would cut the One-Stop/Labor Market Information (LMI) program by $8 million, fund the Employment Service (ES) program at the fiscal year 2007 level of $716 million and fund U.S. Department of Labor Veterans' Employment and Training Service (VETS) programs at their fiscal year 2007 levels. The Senate's bill would not rescind $335 million from WIA programs as the House bill would. The Senate Committee on Appropriations report (110-107) on the bill states, "the committee rejected the administration's proposal to cancel $335 million in job training funds currently available for training purposes." Although rejection of the rescission by the Senate is promising, the cut will be difficult to fend off once the House and Senate begin conference negotiations as differences between House and Senate versions of the spending bill are significant, requiring cuts to be found somewhere. President Bush has said he will veto the bill if it exceeds his fiscal year 2008 Budget request. A Presidential veto would require further negotiations and likely further reductions to spending in the bill. The federal government currently operates under a continuing resolution (CR) through November 16, 2007. An additional CR may be necessary next month to avoid a shutdown of federal government operations. Congressional leaders have said session days into December are likely needed to complete work on appropriations bills. The Governors of California, Florida, Illinois, New York, Ohio and Texas sent a letter last week to the leaders of the House and Senate Committees on Appropriations to urge the restoration of $335 million in Workforce Investment Act program funding that would be rescinded under the House approved fiscal year 2008 spending bill (H.R. 3043). The letter estimates as many as 134,000 workers across the country would not have access to job training services if the rescission were enacted and affirms earlier findings by the Government Accountability Office (GAO) that the U.S. Department of Labor (USDOL) overestimates annual WIA carryover funds. The National Governors' Association (NGA) in August weighed in on the House approved fiscal year 2008 spending bill expressing concern with the rescission. The NGA may work to reaffirm their position again to House and Senate staff before conference negotiations between the House and Senate begin. TAA REAUTHORIZATION BILL APPROVED BY HOUSE COMMITTEE ON WAYS AND MEANS The House Committee on Ways and Means approved (26-14) legislation (H.R. 3920) that would reauthorize and expand the Trade Adjustment Assistance (TAA) program. Offered as a draft just last week, Committee Chair Charles Rangel (D-NY) decided to move the bill without delay. The bill is expected to be considered by the House next week (see article below). 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). 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). Under the draft TAA bill, entitled the Trade and Globalization Act of 2007, the TAA program would be reauthorized through September 30, 2012. The draft bill would expand TAA benefits to service workers who lose their jobs because of increased exports. 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 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 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. 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. 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 (if applicable) UI benefits. 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. HOUSE TO CONSIDER TAA AND WARN ACT REFORM BILLS NEXT WEEK The House is scheduled to combine and then consider legislation to reauthorize and reform the Trade Adjustment Assistance (TAA) and Worker Adjustment and Retraining Notification Act of 1988 (H.R. 3920 and H.R. 3976 respectively). The bills are expected to be approved. The legislation to reauthorize TAA was approved this week by the House Committee on Ways and Means while legislation to reform the WARN Act was approved two weeks ago by the House Committee on Education and Labor. The legislation to reform the WARN Act would require notification 90 days before a mass dislocation and would extend the time period workers can continue their health coverage at their own expense under COBRA among other changes to this program. Members of the Majority leadership believe the two bills should be combined and approved at the same time as they are targeted toward assisting the same population of workers.