President is Calling for WIA Changes (2/8/2008)

President Bush released his fiscal year 2009 (FY09) budget proposal on Monday, February 4th. His $3.1 trillion budget calls for a number of program eliminations and cuts, though some specific programs would receive slight increases. Among his proposals, the President is calling for considerable changes to the funding mechanisms under the Workforce Investment Act (WIA). As a practical matter, the Administration understands many of its proposed changes will not be adopted on Capitol Hill, so President Bush is proposing an alternative plan to fund WIA programs under the current law.

The Administration’s primary proposal for WIA funding includes collapsing the funding from various programs into one large funding stream. Under this plan, funding for adult, dislocated worker and youth employment and training activities is eliminated. That funding is then funneled into Career Advancement Accounts (CAAs).

CAAs are “self directed” accounts of up to $6,000 over two years that would be available to adults and out-of-school youth entering or re-entering the workforce or transitioning between jobs, or incumbent workers in need of new skills to remain employed or to move up the career ladder. This would also replace the current system of separate training programs serving a single state grant for the provision of employment and training services.

Experience has taught the Administration that Congress does not always fall in line when it comes to the President’s budget request. Under the assumption that they lack support in Congress, the White House is also proposing alternative funding levels for the eliminated programs. If Congress decides to continue funding the separate programs, the Administration’s desired funding levels are:

• $712 million for Adult Employment and Training Activities;
• $1.2 billion for Dislocated Workers Employment and Training Activities; and
• $840.5 million for Youth Activities.

Most expect Congress to continue the separate funding streams, though the final funding numbers are still likely to reflect the President’s desired funding levels if they reject the CAA proposal.

Author: SAS