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$500 MILLION INCLUDED FOR WIA

IN SENATE ECONOMIC STIMULUS BILL !

Congress is wrapping up its legislative agenda before leaving today for its five week August recess. Upon its return in September, a number of issues will be on the agenda including a second economic stimulus package.

On that front, we have very good news to report.  The Senate Appropriations Committee released its draft of its $24 billion economic stimulus bill.  We have been working closely with key appropriators to ensure WIA would become a key component of this package and the Senate bill now includes $500 million for WIA!

Senators Murray and Harkin have championed this effort, which will provide $250 million for the dislocated workers formula as well as $250 million for the youth formula. We are pleased to report that 100% of this proposed WIA funding would be sent to local level, there will be no 15% set aside for the state with these funds.

We greatly appreciate Senators Murray and Harkin’s efforts to include these funds for WIA. You should be aware that these Senators did not design this funding to restore the rescission; rather it is a much larger package to assist those most impacted by the recession. The local system will benefit far more from this package than if Appropriators had merely restored the rescission, as it is twice as large and specifically targeted for the local system.

However, the introduction of the Senate bill is only the first step in the process and its ultimate passage is unclear at this time.  Senior Senate Democratic leaders told NWA on Wednesday that they expect Senate Republicans to block consideration of the bill on the Senate floor.

The House has not crafted its version of its economic stimulus package and Appropriations Chairman David Obey is examining over 110 requests from Members for inclusion in the House stimulus bill.  It is expected that the House leadership is looking at several big picture political items and is unlikely to include as many individual program increases as in the Senate package.

The House bill will be introduced in September. Speaker Pelosi indicated this week that she wants any stimulus package to be bipartisan and with the support of the Administration, which has responded coolly to this point regarding another stimulus package. House Republicans are adamantly opposed to doing another stimulus package at this point.

APPROPRIATIONS OUTLOOK

The FY 09 appropriations process has been put on hold and will result in a Continuing Resolution (CR) passed at the end of September through early next year.   It is unlikely that we will see a Labor-HHS bill completed before the new president takes office in January.  The new Administration will face even greater challenges than most. It will have to craft a FY 2010 budget for introduction in early February, as the Bush Administration has told agencies not to begin any preparation for the 2010 budget until a new Administration takes office. As a result, the next Administration will be simultaneously faced with completing the FY 09 appropriations bills, crafting a 2010 budget request, and developing its first 100 day agenda, a daunting set of challenges.

However, if Senator McCain is elected, it is expected that Congressional leaders may try to wrap up their appropriations bill in December before McCain takes office, in significant part because Members in both parties will want to preserve their earmarks, a practice McCain has vowed to end.

Appropriations takes center stage

Budget completed

Last week, the FY 09 budget resolution was passed in both the House and Senate, almost exclusively along party lines. The budget resolution provides $24.5 billion more for domestic discretionary programs above what is requested by the Administration. The good news for workforce system is that Senator Murray succeeded in her effort to include $390 million in additional WIA funding above current levels in the budget resolution. We greatly appreciate her continued leadership on behalf of the workforce system. However, we must also be mindful that the budget resolution provides a blueprint for overall funding, but its individual recommendations are not necessarily reflected in the final appropriations bills.

Appropriations up 

We are actively engaged with our sister organization USA Works in the upcoming appropriations process, in support of a rejection of Administration’s proposed FY 09 cuts to the workforce system post and a restoration of the FY 08 of WIA rescission. USA Works has taken the lead in meeting with a majority of members in the House and Senate Labor-HHS subcommittee outlining the impact of the Administration's proposed cuts and the rescission in individual Members districts.

The House Labor-HHS subcommittee has scheduled its markup for June 19, with full committee consideration scheduled for June 25.  The Senate is not far behind in its Labor-HHS schedule, with subcommittee expected to markup on June 24 and in full committee on June 26. 

In partnership with USA Works, we are engaged in an exclusive strategy with senior members of the Democratic leadership with jurisdiction over workforce programs to directly approach Labor- HHS Chairman Harkin, strongly encouraging him not only to restore the proposed funding cuts, but also to restore the rescission. This is a member level strategy and is ongoing.

While we are encouraged that a rejection of the FY 09 proposed funding cuts is likely to occur both the House and Senate, we are aware that Labor-HHS subcommittee’s overall funding allocation is less than they consider necessary to fully restore proposed overall cuts and priorities, placing tremendous pressure on the chair of the House and Senate to fill the gaps created by the Administration's low funding request for these programs.  As a result, we have faced resistance to this point to a restoration of the rescission and believe our strongest chance for additional funding lies in the Senate.

Rescission devastating states across the country

NWA has obtained a copy of DOL’s internal state by state assessment of the impact of the rescission -- and the results are devastating.  44 of the 50 states are using current year funds to pay for at least part of the rescission, directly undercutting Secretary Chao’s argument before the appropriations committee that a rescission of WIA prior-year carryover funds can made within and without impacting current services. In fact, nearly half of the rescission is coming out of current year PY 07 funding. We are using this information with Members as a key piece of evidence to demonstrate the need for the restoration of the rescission.

Outreach to key House Republican appropriators

NWA also have met recently with senior House Labor-HHS Republicans to precisely explain the impact the rescission is having on the workforce system at the national, state, and in their districts and provide more detailed information on the strong WIA performance we've compiled nationally.

We believe we have made progress in protecting WIA from being used as an offset. However, we are aware that some Labor-HHS subcommittee members are actively searching for offsets this week and we are fighting against WIA from being included as a potential offset by using both the DOL documents and the largest rise in the unemployment rate in twenty-two years this past week to argue against any future rescission.

We followed these discussions with meetings with senior Republican authorizers about the appropriations environment for workforce and these authorizers have agreed to directly weigh in with their counterparts on the Labor-HHS subcommittee to strongly discourage them from using WIA has a potential offset. These efforts are ongoing and at the Member level.

Labor-HHS timetable

While both the House and Senate expect to markup their bills and move them through the appropriations committee before the end of the month, it is unlikely, according to the leadership, that these bills will actually see floor time this year.

However, House Labor-HHS committee staff  still believe that they will receive floor time for their bill and Senate Labor-HHS Chairman Tom Harkin has not given up on receiving floor time. Harkin is pressing the leadership to allow the Senate bill to come to the floor to help define the differences between the Democrats and the Republicans for the upcoming election.

Second stimulus package strategy being discussed

The Democratic leadership in the House and Senate is actively discussing introduction of a second economic stimulus package, which would most likely be introduced in July. The package will still need to be developed. While it is not expected to have much of a chance for enactment, it will be used as a marker by the Democratic leadership to contrast Democratic and Republican philosophies on economic issues.

As part of a strategy to increase the visibility of WIA, Senators Cantwell, Kohl, and Collins circulated a new dear colleague letter last week and have personally requested that we assist them in their efforts to circulate this letter as broadly as possible in the workforce system and gain as many signatures in the Senate as possible.  Their dear colleague letter would encourage a restoration of rescission in a second stimulus package. We gladly agreed to assist them in their effort to engage as many senators to support this letter as possible.

Cantwell/Collins Letter

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