Vol. 8 No. 14

                        SECOND STIMULUS PLANNING UNDERWAY  

While Members of Congress are currently out on the campaign trail, discussions in Washington regarding a second economic stimulus package are intensifying.

NWA met last week with Speaker Pelosi’s leadership staff to discuss the Speaker’s plans for a second economic stimulus package.  Speaker Pelosi attempted to pass an economic stimulus package before members left town earlier this month.  It was rebuffed due to opposition in the White House and among Senate Republicans.

However, there is renewed momentum behind moving a second economic stimulus package, in large part as a result of the financial meltdown over the past few weeks. For the first time, both the White House and House Republicans have shown interest in moving a second stimulus package.  Earlier this week, Federal Reserve Chairman Ben Bernanke also offered his support for a second-half economic stimulus package. Congressional leaders told us that Bernanke’s support for another stimulus was carefully cultivated over weeks of negotiations.

A successful enactment of a bipartisan stimulus bill will not be easy.  Democratic ideas regarding his second stimulus are far different than their Republican counterparts who are interested in another round of tax cuts to stimulate the economy. Democrats are focused on ways to immediately infuse money into the economy and are particularly interested in job creation strategies.

Speaker Pelosi’s staff told us that the Speaker has not decided on a specific overall funding level for the second stimulus. Nor has a timetable for passage of any second stimulus been established at this point.

Instead, Speaker Pelosi has asked her committee chairs to provide recommendations in crafting a new stimulus package. These recommendations will be reviewed by the leadership and assist in the development of their bill.  To begin this process, the authorizing committees will hold hearings over the next few weeks to examine ways to turn around the economy.

The Speaker has instructed her committee chairs to provide her with recommendations for the stimulus within their Committee’s jurisdiction.  As part of this effort, we have been working with the Education and Labor Committee on their hearing on Friday focused on rising unemployment and strategies for spurring job growth.

It's expected that the stimulus package will be far larger package than the one proposed by the Speaker in September, with enough funding to address the major economic needs of our nation. It could be even larger than $300 billion mentioned by some in the press.  Congressional leaders tell us that increasing the size of the deficit is not a concern at this time; rather the priority is to get the country back on track economically.

Privately, House leadership sources believe the White House will show some flexibility in its negotiations over an economic stimulus package this time and ultimately sign their bill before leaving office. Some in the Democratic leadership told us that they have recommended that the Speaker bring members back for a lame-duck session beginning the week of November 17 and immediately move an economic stimulus package as some economists have suggested to jumpstart the economy. 

However, other members of the Democratic leadership are skeptical of working with the White House and are urging the Speaker to wait until early January to enact a new bill, presumably when a President Obama takes office. Politically, these members believe the passage of an economic stimulus package would be an early victory for a new Obama administration. 

Senate plans are a bit further behind the House at this point, with Majority Leader Harry Reid, indicating publicly last week that he is interested in taking up a $150 billion stimulus package sometime after the Senate returns week at November 17.  However, some Democratic senators are grumbling that there have been no discussions on the second stimulus to date in the Senate and Speaker Pelosi is taking the lead.

WIA is still in the mix in the second stimulus package. The previous version of the House bill had $500 million for workforce funding and the Senate bill included $600 million for the WIA formula programs. The Speaker’s staff indicated to NWA that funding for job training will continue to be an essential component in their upcoming stimulus proposal and authorizing committee members also indicated to us continued support for ensuring that WIA funding is included in a new stimulus bill.

As a result, the workforce system has an opportunity not only to increase funding for WIA, but we need your help to raise our visibility with the House leadership to ensure WIA will continue to be part of the second stimulus package. 

NWA will be writing Speaker Pelosi, Majority Leader Hoyer and House Education and Labor Chairman George Miller to thank them for the inclusion of WIA in the previous stimulus bill and to encourage them to provide additional funding for workforce programs in the next edition of the stimulus package. 

We need you to write your Member of Congress to highlight the inclusion of WIA funding in the previous stimulus bill and request expanded funding for workforce programs in the upcoming stimulus package.  If your member is a Democrat, please ask him or her to speak with Speaker Pelosi on behalf of funding for workforce programs.  See our draft Letter.

Vol. 8 No. 13

TUMULTOUS WEEK IN WASHINGTON

GOOD NEWS/BAD NEWS FOR WIA!

Washington remains in the grips of a bitter partisan divide over how to handle the bailout of Wall Street, with no easy solution in sight as a result of the House’s rejection of the compromise bill on Monday. However, there was also a great deal of activity over the weekend on both the Continuing Resolution (CR) and economic stimulus packages.

The Continuing Resolution moved through the House late last week and passed overwhelmingly on the Senate floor on Saturday.  The CR has been sent to the President for signature and will keep the government funded through March 6. It also contained a minibus of three appropriation bills solely related to defense and homeland security activities and a very limited number of additional items. At this point, the Congressional leadership intends to work on revising the bank bailout bill before adjourning and does not intend to hold a post election lame duck session this year.

As a result, all other FY 09 appropriation bills, including Labor-HHS, will need to be completed early in the next Congress as part of an Omnibus Appropriations bill.  Appropriators have told us they would prefer to work with whoever wins the Presidential race in either December or January to iron out the details of the Omnibus Appropriations bill. However, if this timetable proves unrealistic, Appropriators will be forced to try to complete the FY 09 appropriation bills next February, in the midst of a new Administration introducing its budget for fiscal year 2010. The FY 2010 budget is expected to have the largest potential deficit in history, as much as $1 trillion, making the late resolution of the FY 09 bills particularly unappealing.

With the world’s economy so uncertain, some key Members of Congress continue to hold out hope for enacting a second stimulus package to whatever emerges as the second financial bailout package (Wall Street bailout bill).  At a minimum we are optimistic that Congress will eventually have to adopt another round of stimulus legislation. The current bill should serve as the starting point for future negotiations.

The House and Senate also voted this past week on an economic stimulus package.  The House passed the economic stimulus bill by a vote of 264 to 158; the Senate approved the measure by a 52-42 margin.  Both chambers failed to garner the 2/3 vote needed to overcome the certain Presidential veto.  The leadership chose to keep the key jobs components; such as the UI benefits extension, infrastructure spending, and WIA funding in the economic stimulus package. 

WIA funding was a significant component of the stimulus package and its inclusion was a result of an effort over the course of many months led alone by our colleagues at USA Works!  The House provided $500 million for workforce funding including $400 million for WIA Dislocated Workers and Youth formula programs and the Senate provided $600 million evenly divided between the formulas and directed to local areas. The good news is that our advocacy efforts are paying off and we are developing a constituency in Congress supporting WIA.  The bad news is that we were part of a larger package that ended up failing due to the opposition of the Administration, which threatened to veto the stimulus package.

However, in the longer-term, a stimulus package may not be dead. We have been reaching out to the Presidential campaigns and our discussions with the Obama campaign indicate that a President Obama would introduce a stimulus package early in his Administration, if elected.  However, there is no certainty at this point that WIA funding would be part of this package.  We will once again need to make a concerted effort to ensure WIA funding would be part of this package, whether introduced by the Administration or our supporters in Congress.

Vol. 8 No. 12

Vol. 8 No. 11

WIA A WINNER IN LABOR-HHS APPROPRIATIONS MARKUP !

The Labor-HHS appropriations process was in full swing in both the House and the Senate this past week.  Both bills quickly moved through their respective subcommittees and received the consideration of the full Appropriations committees this past Thursday.

There is very good news for the workforce system.  Both the House and the Senate chose to fully restore the Administration's drastic proposed cuts to the workforce system in their subcommittee markups. Both bills even include an increase over the previous year's overall funding levels.

We have been focused on working with Committee members to prevent a recurrence of last year's WIA rescission during full committee markup, the most vulnerable point of the appropriations process.  We are pleased to tell you that there was not an amendment in either the House or Senate full committee mark that included a proposed cut to WIA funding.  The protection of WIA came in large part due to the work with our sister organization, USA Works, to educate members by providing them specific information about the impact WIA programs are making in their individual districts as well as around the country.

While the Senate full committee markup was approved on a nearly unanimous basis, significant problems arose during House markup unrelated to the Labor-HHS bill that ultimately forced the postponement of full committee markup and likely has brought the end of the appropriations process in the House this year.

Republican members of the committee have been trying to force consideration of the Interior bill, to provide them with an opportunity to argue that more areas should be opened for offshore oil and gas drilling. NWA learned from senior Republicans that their strategy was to offer their version of the Interior appropriations bill as a substitute for which ever bill the Appropriations Committee was marking up.

The first test of this strategy was the Labor-HHS markup last Thursday.  The ranking Republican on the committee, Jerry Lewis (R-CA), offered the Interior bill as a substitute at the outset of the Labor-HHS markup. It is an unusual strategy to have another bill used as an amendment during markup and Democrats responded by choosing to adjourn, rather than moving forward with the Labor-HHS bill.

Senior appropriations committee officials indicated to us after the proceeding that Chairman Obey made it very clear that he will not markup any more appropriations bills this year; instead he will pass a Continuing Resolution in the fall and resolve the FY 09 bills with a new Congress and new President, which they presume will both be led by Democrats. While we were disappointed that the full committee was unable to complete the House Labor-HHS markup, we are pleased that both the House and Senate bills provide an increase
over last year's overall funding levels and that there was no attempt to use WIA as an offset. If there had been an amendment to cut WIA, USA Works had commitments from several members on the Labor-HHS subcommittee to strongly oppose the proposed cut.

The bills also contain language that we have advocated protecting the local workforce system from attempts by the Administration to make changes to WIA without the permission of Congress including:

• Prohibiting the Department from amending, through regulations or any other administrative
action, the definition of functions and activities under title I of WIA until the
legislation is reauthorized.

• Prohibiting the Secretary from taking any action to alter the procedure for re-designating
local workforce areas.

• Requiring the Secretary to competitively award grants under WIRED, the Community-based Job
Training Grants, and the High Growth grants.

At this point, it appears unlikely that House Appropriators will move forward with the
appropriations process.  On the Senate side, Chairman Harkin would very much like to bring
his bill to the floor, but Senate leadership has indicated that only one bill, the Defense
appropriations bill, will move forward before a month-long August recess.

Vol. 8 No. 7

Supplemental appropriations bill on the House floor and in Senate markup action!

The House may take the FY 08 supplemental appropriations bill directly to the House today, while the Senate will mark up their version of the bill in the full Appropriations Committee. Senators Patty Murray and Tom Harkin have been trying to include funding for WIA in the supplemental bill for the last few weeks arguing that in this economic downturn there should be additional workforce funding targeted to summer jobs and dislocated workers. They have been joined in this effort on the House side by House Appropriations Chairman David Obey, who has been supportive of additional summer jobs and dislocated worker funding.

The bill is targeted to providing funding for the wars in Iraq and Afghanistan, with nearly $180 billion dedicated to the military. President Bush is threatening to veto the bill if any items unrelated to the war, particularly domestic spending items, are included in the bill.  The House and Senate leadership have decided that they will push all but a few domestic items to the second economic stimulus package, the timing of which is unclear at this juncture.

The bill will include extended UI benefits, but even this provision is causing significant concern in the Democratic leadership, as conservative “Blue Dog” Democrats want offsets for additional UI funding and Republicans are opposed to providing extended UI when there is only 5% unemployment. Senior Administration officials are also signaling that the bill will be vetoed with UI included, stating that the supplemental should only be used to pay for emergency military spending.

As a result, Chairman Harkin and Senator Murray, who has continued to argue on behalf of including WIA in the stimulus in talks with the leadership, indicated to NWA that any additional WIA funding will have to wait until the second stimulus package. There has been support from other Members of the Committee for additional WIA funding. In other developments, you should be aware that Senators Harkin and Murray have offered to have Senator Kohl join their effort to increase funding for workforce in the stimulus bill.

Secretary Chao offers testimony to the Senate Appropriations Labor-HHS Subcommittee

Secretary Chao appeared before the Senate Appropriations Labor-HHS Subcommittee yesterday in support of her FY 2009 budget request.  Secretary Chao argued vociferously against the newly released IG and GAO reports criticizing over $250 million in sole source grants overseen by the Secretary under the President’s High Growth Job Training Initiative. The reports focused on the lack of evaluation and poor follow up by DOL in the administration of these grants.

Senator Harkin led the extensive questioning regarding these sole source grants and also disputed Chao’s assertions of continued WIA formula carryover, citing Iowa as an example of a place with very little carryover. He highlighted that in a recent survey, 19 out of 20 states are using PY 07 funding to pay for the rescission because PY 05 and 06 funds are already exhausted.

Senator Patty Murray questioned Chao about the GAO’s findings that the $900 million in workforce funds used for three key presidential initiatives had little benchmarking or measures to judge performance or evaluate the outcomes of the sole-source grants.  She asked Secretary Chao whether she was concerned about declining funding for the workforce system.   Chao responded she was concerned about declining resources, but what the system needed fundamental reform, due to the duplicative services being offered, continued carryover, and need for demand driventraining for jobseekers. Murray responded they have a difference in philosophy regarding the needs of the workforce system that will not be resolved during Chao’s remaining months in office.

McKeon continues to press WIA reauthorization

House Education and Labor Ranking Member Buck McKeon told NWA that he continues to press WIA reauthorization with his Democratic counterparts on the Education and Labor Committee in just the past couple of weeks. He also released a press release Friday when the April unemployment numbers were released, encouraging Democrats to move on reauthorization to help improve the employment situation.

Mr. McKeon also indicated he and Senate Ranking Member Mike Enzi were encouraging Senate HELP Chairman Ted Kennedy once again to move WIA. However, it does not appear that reauthorization is on the House agenda at the moment, as Committee staff have been meeting with interest groups to discuss key items for a more comprehensive reauthorization in 2009.