Washington Roundup March 14, 2003
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This week, the House and Senate Budget Committees both passed budget resolutions that proposed large tax cuts and the House proposed dramatic spending cuts in key programs, including Medicaid and discretionary programs, such as alcohol and drug prevention, treatment, education and research programs. The House's budget proposal would require Congressional Committees to make decisions this summer about how to reduce spending in these programs as early as FY 04, which begins on October 1, 2003.

The House Budget Resolution would seek to bring the federal budget back into balance by cutting non-military spending across-the-board. Reports have indicated that the across-the-board cut for discretionary health programs would be 2.8 percent below FY 03 funding levels; however, when the cost of inflation and carrying programs forward into FY 04 are taken into consideration, the cut would be even deeper at 5 percent. Additionally, Medicaid, an entitlement program, would face a $93 billion cut, and the Food Stamp program would face a $12 billion cut, both over a 10 year period.

Despite the large cuts that are being considered in the House's budget resolution, the House is expected to pass its budget resolution more quickly than the Senate. Several Senators have expressed concern about the size of the tax cut in the Senate's budget resolution and the need to scale back the tax cut in order to reduce impending deficits.

Senate Committee on Finance Holds Hearing on TANF (Welfare) Reauthorization: Health and Human Services Secretary Tommy Thompson Defends Administration Proposal While State and Local Program Directors Discuss What Has Worked Locally

This week the Senate Committee on Finance held a hearing on reauthorization of the Temporary Assistance for Needy Families (TANF/Welfare) program. The Committee hearing was convened by Chairman Chuck Grassley (R-IA), and attended by several members of the Committee, including Ranking Member Max Baucus (D-MT), Senators Orrin Hatch (R-UT), John Breaux (D-LA), Olympia Snowe (R-ME), Jeff Bingaman (D-NM), Gordon Smith (R-OR), John D. Rockefeller IV (D-WV), and Blanche Lincoln (D-AR).

Secretary of the Department of Health and Human Services, Tommy Thompson, testified on behalf of the Administration, and defended both the Administration's proposal and the House of Representative's bill that the House passed last month. The Administration's proposal would:

$ Count drug and alcohol treatment as work for up to 3 months in any two year period.

$ Require 40 hours of work per week with a state option to exclude certain individuals from this requirement.

$ Require a minimum weekly average of 24 hours of direct work activities and a maximum weekly average of 16 hours of other activities. At a State's option, these other 16 hours of activities could include drug and alcohol treatment.

$ Increase State work participation rate requirements. States would be required to increase the percentage of welfare recipients participating in work activities from 50% during the first year to 70% during the fifth year.

$ Authorize a "super waiver" authority that would allow federal and state executive branch agencies to override various legal, eligibility and funding requirements for a range of federal low-income programs.

$ Maintain current block grant funding at $16.5 billion a year.

Members of the Committee expressed concern about the lack of flexibility offered by the Administration's proposal in terms of education and training with the increased amount of work hours that would be required. Secretary Thompson explained that the Administration's proposal only required 24 hours of direct work per week and that the state had the flexibility to provide a range of activities during the other 16 hours each week.

Other witnesses presenting testimony included: Howard Hendrick, Director, Oklahoma Human Services; Marilyn Ray Smith, Deputy Commissioner and IV-D Director of Child Support Enforcement Division, Massachusetts Department of Revenue; Larry Temple, Deputy Executive Director, Texas Workforce Commission; and Margy Waller, Fellow, Brookings Institute. These witnesses provided the Committee with insights about what has worked locally and how the Administration's proposal would affect programs in existence now.

Marilyn Ray Smith urged the Committee to continue to support programs for low-income fathers, including those who are currently or formerly incarcerated, because these programs help fathers to identify and address barriers to providing financial and family support for their children. Successful programs in Massachusetts have included providing work support programs for non-custodial, low-income fathers that have helped them to achieve employment and comply with child support requirements. Howard Hendrick also supported the idea of work preparation programs for non-custodial parents. Additionally, Mr. Hendrick testified that welfare reform generally has helped to increase Oklahoma's ability to address other barriers to work, including identifying and treating substance abuse. Margy Waller from the Brookings Institute urged the Committee to think carefully about changes to the current TANF program requirements, because many states are running programs that are working well and would not fit into the new requirements that the Administration and House are proposing.

The Committee is expected to propose a TANF reauthorization bill sometime this spring, with Committee review (mark up) of a bill not expected until after April recess, which ends April 25th. The TANF program currently is authorized through June 30, 2003.

House Education and Workforce Subcommittee on 21st Century Competitiveness Holds Hearing on Reauthorization of the Workforce Investment Act (WIA): Broad Goals of Reauthorization Addressed

This week the House Committee on Education and Workforce Subcommittee on 21st Century Competitiveness held a hearing at which stakeholders in the nations's workforce development system testified on reauthorization of the Workforce Investment Act (WIA). The hearing was conducted by the Chairman of the Subcommittee, Congressman P. "Buck" McKeon ( R-CA). The first panel included testimony from the Department of Labor's Assistant Secretary, Emily DeRocco, and the Department of Education's Assistant Secretary for Special Education and Rehabilitative Services, Robert Pasternack. The second panel included Thomas J. White, President and CEO of the Greater Durham Chamber of Commerce; John Twomey, President of the National Workforce Association; Steven Savner, Senior Staff Attorney at the Center for Law and Social Policy (CLASP); and Bettie Shaw-Henderson, District Manager for the Michigan Department of Vocational Rehabilitation.

The panelists testified on potential solutions to make the Workforce Investment Act more efficient, accountable, and responsive to job seekers, employees, employers and their communities. While the hearing did not address the needs or concerns of individuals with barriers to work due to alcohol and drug problems and criminal records, Democratic Subcommittee members did express the need for WIA to improve access to services for certain marginalized populations, such as low-income individuals, women, minorities and individuals with language barriers. Other key concerns raised by the Democratic Subcommittee members dealt with the impact of the significant changes proposed by the Administration on the WIA system.

These changes include:

$ the combination of the three now separate WIA Adult, WIA Dislocated Worker and Wagner-Peyser funding streams;
$ the proposal to eliminate youth councils and services for in school youth; and
$ the creation of Personal Reemployment Accounts.

Ms. DeRocco responded to the concern about the Administration's proposal to consolidate funding streams by stating that it will allow local workforce boards to better serve those needing services by ensuring that they are not constrained by burdensome federal requirements. She also stated that consolidation will lead to a flexibility in service, integration of services and additional money because of the removal of administrative funds. In response to the shift in state dollars from "in school youth" to "out of school youth," she articulated that those youth, who include drop-outs, court-involved youth and youth aging out of the foster care system, are the most in need of the services offered by the workforce investment system. Overall, the Administration's witnesses stated that their proposal would improve the system's emphasis on building the capacity of the entire workforce system and lead to increased flexibility and integration of services.

In addition to reemphasizing the concerns raised by Subcommittee members about the Administration's proposal, several other concerns addressed by the second panel included: the need for the House bill to encourage the integration of the economic system with the workforce development system; the need to address the dramatic decline in training under the Workforce Investment Act; and the need to invest more funding into job training as opposed to the Personal Reemployment Accounts or PRA's. PRA's will be administered through the One-Stop Career Center system and will be worker managed, contain up to $3,000, and will be used for the purchase of a variety of reemployment services or as a bonus for obtaining early employment.

Concerns were also raised by the Democratic Subcommittee members over the suggested time line for WIA reauthorization and the lack of hearings held by the House prior to the bill's introduction on Thursday, March 13th. The Subcommittee has suggested that it will mark up the bill the week of March17th, send it to full Committee the following week and vote on it before Congress's April recess, which is scheduled for April 14th through the 25th.