By Shannon Holmes
July 3, 2006

The House Appropriations Committee June 13 passed the Labor-HHS-Education spending bill, H.R. 5647, by voice vote. Representative Steny Hoyer (MD), Minority Whip, was successful in adding an amendment to the bill to gradually increase the minimum wage to $7.25. The committee voted 32-27 for the amendment, with seven Republicans voting in favor. The amendment is unlikely to survive once the bill reaches the floor for a vote; however, the Subcommittee on Labor-HHS-Education passed the measure along partisan lines 9-7 June 7.

Neither the subcommittee nor the full committee followed the recommendations of the President’s budget request to cut $680 million for key Workforce Investment Act (WIA) programs and the Employment Service. The bill does reflect slight reductions in WIA formula funding from fiscal year 2006 for Adult and Youth, with a modest $15 million increase in Dislocated Worker funding.

The report language for H.R. 5647 does, however, include a $325 million rescission for WIA carryover of unexpended program funds. The language states that the money to cover the rescission could come from the three formula funding streams under WIA – Adult, Youth and Dislocated Worker — but gives the Department of Labor (DOL) the ability to use funding from any other stream of funding under WIA or the Employment Service.

Over the past few years, DOL has used the argument of substantial program carry over as justification for cuts to the funding streams under WIA. Carryover was an intentional spending measure built into WIA as a planned management strategy to assure proper and consistent operation of the workforce system. The WIA system must respond to economic events such as unanticipated plant closings, mass layoffs, or disaster relief for which some funds must be held in reserve to enable immediate response. The system also provides training for jobseekers that spans more than a single program year — at the point in time when carryover is determined (June 30 of each program year), many workers are midway through training, which appears as “carryover” even though those funds are already legally obligated.

The Senate Appropriations Committee has divided up the funding levels for the subcommittees to move forward with the appropriations process. Like the House, the Senate is operating under a $873 billion spending cap for total discretionary spending and would shift about $9 billion from the Department of Defense funding to domestic programs. The Labor-HHS-Education spending bill will be the primary beneficiary receiving an additional $5 million in funding to the President’s request of $137.8 billion.

The Senate Labor-HHS-Education Subcommittee is scheduled to hold mark up of the Labor-HHS spending bill July 20, but it is expected that the Senate will not go along with the rescission. Therefore the $325 million rescission for WIA programs will be an issue for conference.

For further information, contact Assistant Executive Director for Education and the Workforce Kathy Amoroso at 202-293-7330.