Under current federal budget rules, which impose stringent budget caps on spending, programs under Labor, Health and Human Service and Education (Labor-- H) are expected to be cut by 20 percent under the President's request for FY 2000 spending.  In addition, much of the Labor-H discretionary allocation has been used to pass other spending bills.  The cuts that would be required to pass a Labor-H bill that would remain within the spending caps are politically infeasible.  In the House the cuts could be up to 32 percent.   Though there have been no mark-ups in the House or the Senate, there is talk of an increase in funding for The National Institute of Health (NIH) and special education.  This means that even if the budget caps are lifted employment and training could at the very least face a 10 percent across the board cut from FY 99 allocations without even looking at the President's FY 2000 requests.

Without specific information on mark-ups, under a 20 percent cut from the President's FY 2000 budget request, 114,000 youth would be eliminated from the summer/youth training for next year.  In FY 1999, Congress provided funding for approximately 570,000 youth.

It is quite likely that Labor-H will end up in an omnibus bill.  It is reported that Appropriations Committee Chair, Senator Ted Stevens (AK) has given up on a stand-alone passage of the Labor-H bill.  Initially the Chairman had a plan to bust the caps.  It is also quite likely that Congress will need at least one continuing resolution (CR) to keep the government running until negotiations are completed and possibly a long-term CR that would keep the government running into next year.  The delay allows more time for an updated report on budget surplus estimates, which may give negotiators more money to work with.  A CR would mean level FY99 funding until which point the budget is passed.

Welfare-to-Work

Unless Congress acts this year, continued funding for the Welfare-to-Work program will end September 30, 1999.  Congress must first reauthorize the program and then appropriate funds. Representative Ben Cardin (MD) introduced a Bill in Congress (H.R.1482) and Senator Daniel Akaka (HI) introduced a mirror version in the Senate (S.1317) to reauthorize the Welfare-to-Work program. This Bill reflects the President's FY 2000 Budget to provide $1 billion to continue the WtW program for an additional year.   The Bill includes a simplification of the eligibility provisions and a stronger focus on services to noncustodial parents, increased resources to Indians and Native Americans, and a greater integration with the Workforce Investment system.

Congressional leaders oppose the continuation of the program due to concerns over unspent WTW dollars, surplus TANF funds in many states and objections to the program in general.  There seems to be bipartisan agreement of the need to change the eligibility requirements but no political will to authorize continued funding. There is also talk in Congress of reclaiming unspent WTW dollars. There are no specifics on how Congress would do this or how they would define unspent WTW dollars.  As of the reporting period ending June 30, over 13 percent of WTW funds allocated have been spent to date -- approximately $1 billion of FY98 funds.  The majority of WTW funds have only been available to States for two full quarters out of the three full years in which dollars can be spent.