IAJVS 2012 Annual Conference April 23, 2012 Houston, TX

IAJVS 2012 Annual Conference

April 23, 2012

Houston, TX

www.nationalskillscoalition.org

Our Vision

We seek an America that grows its economy by investing in its people, so that every worker and every industry has the skills to compete and prosper.


Our Mission

• We organize broad-based coalitions seeking to raise the skills of America’s workers across a range of industries.

• We advocate for public policies that invest in what works, as informed by our members’ real-world expertise.

• And we communicate these goals to an American public seeking a vision for a strong U.S. economy that allows everyone to be part of its success.


Federal Funding


FY 2013 Budget and Appropriations Process• President’s budget

(early Feb.) starts year-long process on the Hill– Budget resolution

(April 15)– Appropriations

(June-September)– Sequestration

(December-January)


New Year, Same Old, uh, Stuff

• Overarching political focus still on deficit reduction

• Any policy discussion driven by this debate

• Budget / Appropriations process being used for policy change


Reminder: What’s Happened So Far (Appropriations)• FY 2011 House

passed HR 1, $4B in cuts (including elimination of WIA)—eventually cut $1B

• FY 2012 similar dynamic. House proposed about $2.5B in cuts to DOL + $44B in Pell cuts


FY 2013: More of the Same


House Budget Resolution: Job Training• $28B below BCA

caps for non-defense discretionary programs

• More than $16B in cuts for “Function 500” programs

• Clearly targeting job training (again) for very deep cuts


House Budget Resolution: Pell

• Huge cuts—potentially more than $100B

• Would further reduce income protection allowance and “automatic zero” EFC

• Would eliminate eligibility for less-than-half-time students


Key Takeaways

• Focused on much smaller government

• Includes huge new tax cuts for the very wealthy

• 62% of cuts come from low-income programs

• Includes job training in safety net programs


Next Steps

• Senate Budget Committee will pass its own budget resolution

• Appropriations cycle will start (mid-May)

• Will almost certainly wind up with a CR/omnibus negotiated between WH and House


Reminder: What’s Happened So Far (Budget Control Act)• Debt ceiling deal• $1T in cuts through

new spending caps• Created “super

committee” to develop another $1.2T in cuts

• Included sequestration trigger if super committee failed


Let’s Talk about Sequestration!

• Sequestration is simply the process by which automatic cuts are made

• Written into law as part of the BCA

• Goes into effect January 2013


But What Does Sequestration Actually Do? • Automatic cuts

each year, 2013 through 2021

• $109B, equally divided between “national defense” and all other (non-defense) programs


How Do the Cuts Work?

• Non-defense cuts include both mandatory and discretionary programs

• But many mandatory programs exempt– Social Security, SNAP, child

nutrition, SSIA, EITC and child tax credit, etc.

• Exempt mandatory programs means discretionary program must absorb more of the cuts


What Does That Mean?

• Sequestration is across-the-board in that the overall caps are lowered (so there is less money equally for all programs)

• However, specific cuts will be achieved through regular appropriations process


An Exception to the Rule

• Sequestration functions differently in 2013 than in other years

• About $16B in non-defense cuts from mandatory programs, another $38.7B from across-the-board discretionary programs (estimated 9.1%)


Process on Auto-Pilot

• All the “easy” cuts have been made at this point—no more low-hanging fruit

• But additional cuts *must* be made (by law) and debate is not around undoing previous cuts or even preventing additional cuts—just where those cuts will fall


Questions?


Federal Policy


All Policy Discussion Derives From Budget Debate• Policy conversation

is entirely within the context of fiscal austerity and smaller government

• Policy change primarily implemented now through budget and appropriations


Success at the Message Level...

The message about a skills gap resonates—lots of policymakers are adopting this language


…But not Translating to Policy

“I am no fan of the federal government being involved in education. And I use the word education, because I don’t like the word training when it comes to human beings. You train animals….you educate people. If I had my way, there wouldn’t be any federal job training programs.”

–Rep. Virginia Foxx (R-NC)


Workforce 2012 – New Reality• 2003-2010—No WIA

reauthorization, but general agreement that an appropriate (if shrinking) federal investment

• 2011—New reality:– Fiscal challenges –

FY 2011, 2012 efforts in House to gut workforce funding

– Political challenges – GAO report (“47 programs…”) puts consolidation on the front burner.


New Focus on WIA Reauthorization

• To protect the workforce system, reauthorization critical vehicle for reform (linked to preserving funding)

• To eliminate system, reauthorization a vehicle for cuts (via consolidation)


Foxx-McKeon-Heck WIA Bill (HR 4297)• Consolidates 27

programs, creates single “Workforce Investment Fund”

• Not clear that low-skill, low-income, other vulnerable populations well served under the bill


Tierney-Miller-Hinojosa WIA Bill (HR 4227)• Maintains existing

structure• Much greater focus

on career pathways and sector partnerships

• Expands use of OJT, transitional jobs, and subsidized jobs

• New investments in community colleges


WIA’s Future…

• Republican bill will pass out of committee on party-line vote; will pass full House

• Senate will not take up House bill (not clear if House activity will trigger Senate)

• House bill will become de facto starting point for any on-going conversations


Questions?


December 2012 (The Mayans Were Right)Everything leads to December:•Presidential/ Congressional elections•Bush-era tax cuts expire•Debt ceiling likely to be reached•Sequestration begins January 2013


Building the Strongest Argument

All of the debate around investing in skills—including WIA reauthorization—are stepping stones on a path toward the decisions that must be made in December


What This Means for Workforce…

• There will be cuts – the only question is how much

• Will depend on how lawmakers—even allies—weigh workforce against other key priorities

• We cannot be the least bad option—must reinforce importance of skills to economic prosperity, growth


Questions?


Stay Connected

• Visit us our website.

• Sign up for our member email list.

• Follow us on:


Contact

Rachel GraggFederal Policy [email protected], ext. 102

Documents

IAJVS 2012 Annual Conference April 23, 2012 Houston, TX