Can the Nation’s Workforce Development System Survive the Budget Wars?

May 6, 2013

By Neil Bomberg

This is the second in a series of articles on the impact of the fiscal year 2013 budget on programs and activities that are important to America's cities and towns.

If there are any programs that are pawns in the budget wars between the House and the Administration, and the House and Senate, they are the Workforce Investment Act (WIA) and other workforce development programs that provide employment, training and job search assistance to unemployed and underemployed youth and adults.

The nation's workforce development system has been the subject of significant criticism by the majority in the House, which has called the program wasteful, duplicative, and costly, and has argued that many of the programs which operate under the larger workforce development umbrella are unnecessary, and should be eliminated.

While much of the evidence-from placement rates and net gains in income, to the importance of the local business connection - reported by the U.S. Department of Labor, the General Accountability Office (GAO), the Aspen Institute and others contradicts this view, the opponents of WIA continue to describe the program in very unflattering terms.

Within this environment have come three very different fiscal year 2013 budget proposals. The House proposal would nearly eliminate the nation's workforce development system; the Senate proposal would maintain things as they are pending reauthorization of WIA; and the Administration proposal would maintain funding levels but would consolidate numerous programs into a single workforce development system.
The fiscal year 2013 House budget proposal would so reduce funding for the Workforce Investment Act as to make it nearly nonexistent. Though we will not know exact funding levels until the House Appropriations Committee releases its recommended funding levels for WIA and related programs, it appears certain that these programs will either lose all of their funding, or would reduce funding so much as to make it unworkable.
The Senate budget proposal would maintain current funding levels, and would defer any programmatic changes until passage of a WIA reauthorization bill.

The Administration proposal is a bit more complicated. Specifically, it would fund programs at the same level as last year: adult employment and training activities at $769.5 million, youth activities at $824.4 million, and dislocated worker programs at $1.230 billion for fiscal year 2013.

But the Administration also proposes an entirely new employment and training system. If the Administration has its way, they would "modernize, streamline and strengthen the delivery of training and employment services," by revisiting how the federal government funds the broad array of job training programs (40 programs at 11 federal agencies). This would be done by combining all of the WIA programs and the many other job training programs into a "universal displaced worker" program that will reach up to a million workers a year with a set of core services, combining the best elements of more narrowly targeted programs with one that includes universal access. Unlike the House version, which would dramatically reduce the amount of funds available for employment and training, this consolidation proposal would maintain funding at current levels.

The most likely resolution to these very different proposals will be the Senate's proposal, which would maintain funding levels at current levels and make no changes to the program itself until WIA reauthorization occurs.