```

[Senate Hearing 108-38]
[From the U.S. Government Publishing Office]

                                                         S. Hrg. 108-38

       WORKFORCE INVESTMENT ACT: THE ADMINISTRATIONS APPROACH TO 
                            REAUTHORIZATION

=======================================================================

                                HEARING

                               BEFORE THE

            SUBCOMMITTEE ON EMPLOYMENT, SAFETY, AND TRAINING

                                 OF THE

                    COMMITTEE ON HEALTH, EDUCATION,
                          LABOR, AND PENSIONS
                          UNITED STATES SENATE

                      ONE HUNDRED EIGHTH CONGRESS

                             FIRST SESSION

                                   ON

 TO EXAMINE THE ADMINISTRATIONS APPROACH TO REAUTHORIZE THE WORKFORCE 
    INVESTMENT ACT (WIA), FOCUSING ON STRENGTHENING THE DELIVERY OF 
              EMPLOYMENT AND TRAINING SERVICES NATIONWIDE

                               __________

                             MARCH 6, 2003

                               __________

 Printed for the use of the Committee on Health, Education, Labor, and 
                                Pensions

85-658              U.S. GOVERNMENT PRINTING OFFICE
                            WASHINGTON : 2003
____________________________________________________________________________
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          COMMITTEE ON HEALTH, EDUCATION, LABOR, AND PENSIONS

                  JUDD GREGG, New Hampshire, Chairman

BILL FRIST, Tennessee                EDWARD M. KENNEDY, Massachusetts
MICHAEL B. ENZI, Wyoming             CHRISTOPHER J. DODD, Connecticut
LAMAR ALEXANDER, Tennessee           TOM HARKIN, Iowa
CHRISTOPHER S. BOND, Missouri        BARBARA A. MIKULSKI, Maryland
MIKE DeWINE, Ohio                    JAMES M. JEFFORDS (I), Vermont
PAT ROBERTS, Kansas                  JEFF BINGAMAN, New Mexico
JEFF SESSIONS, Alabama               PATTY MURRAY, Washington
JOHN ENSIGN, Nevada                  JACK REED, Rhode Island
LINDSEY O. GRAHAM, South Carolina    JOHN EDWARDS, North Carolina
JOHN W. WARNER, Virginia             HILLARY RODHAM CLINTON, New York

                  Sharon R. Soderstrom, Staff Director

      J. Michael Myers, Minority Staff Director and Chief Counsel

                                 ______

            Subcommittee on Employment, Safety, and Training

                   MICHAEL B. ENZI, Wyoming, Chairman

LAMAR ALEXANDER, Tennessee           PATTY MURRAY, Washington
CHRISTOPHER S. BOND, Missouri        CHRISTOPHER J. DODD, Connecticut
PAT ROBERTS, Kansas                  TOM HARKIN, Iowa
JEFF SESSIONS, Alabama               JAMES M. JEFFORDS (I), Vermont

                    Ilyse W. Schuman, Staff Director

                William Kamela, Minority Staff Director

                                  (ii)

  

                            C O N T E N T S

                               __________

                               STATEMENTS

                        Thursday, March 6, 2003

                                                                   Page
Enzi, Hon. Michael B, a U.S. Senator from the State of Wyoming...     1
Murray, Hon. Patty, a U.S. Senator from the State of Washington..     6
Findlay, D. Cameron, Deputy Secretary of Labor, Department of 
  Labor..........................................................    10

                          ADDITIONAL MATERIAL

Statements, articles, publications, letters, etc.:
    D. Cameron Findlay...........................................    12
    American Network of Community Options and Resources..........    25
    Tony Young...................................................    34

                                 (iii)

  

 
       WORKFORCE INVESTMENT ACT: THE ADMINISTRATIONS APPROACH TO 
                            REAUTHORIZATION

                              ----------                              

                        THURSDAY, MARCH 6, 2003

                               U.S. Senate,
  Subcommittee on Employment, Safety, and Training,
of the Committee on Health, Education, Labor, and Pensions,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 10:03 a.m., in 
room SD-430, Dirksen Senate Office Building, Senator Michael B. 
Enzi (chairman of the subcommittee) presiding.
    Present: Senators Enzi, Murray, and Jeffords.

                   Opening Statement of Senator Enzi

    Senator Enzi. Good morning. We will begin this hearing and 
I will begin by welcoming the new ranking member to the 
subcommittee, Senator Murray.
    We were both just commenting that for a long time Senator 
Wellstone has either been the chairman of this subcommittee or 
the ranking member of this subcommittee and did just an 
outstanding job. It is really different to hold the hearing 
without him. His sincerity, his effort, his focus, his comments 
will be greatly missed.
    Senator Murray, I do look forward to working with you as we 
reauthorize the Workforce Investment Act and all of the other 
things that this subcommittee does.
    I would also like to welcome our distinguished guest today, 
Deputy Secretary of Labor Findlay, who will testify on the 
administration's approach to the reauthorization of this 
legislation.
    When the Workforce Investment Act was enacted in 1998, 
Congress envisioned a coherent workforce development system 
that could effectively and efficiently respond to the needs of 
workers and employers. The only thing that we saw more 
important than this workforce training was creating the jobs in 
the first place.
    This publicly funded workforce system has improved the 
lives of many Americans seeking new or better jobs. However, 
the full promise of the Workforce Investment Act is yet to be 
realized. Reauthorization of the Workforce Investment Act gives 
us an opportunity to complete the transformation of fragmented 
employment and training programs into a seamless workforce 
investment system.
    Why is our task of reauthorizing WIA so important? It is 
because it plays a key role in preparing at-risk youth for the 
workforce and helping people to get back to work or find a 
better job in these challenging economic times. In turn, our 
businesses need an appropriately trained workforce to compete 
in the global marketplace.
    Prior to being in Washington, my wife and I owned shoe 
stores. We were not shoe salesmen, we were shoe fitters. There 
is a big difference. Shoe fitters have to listen to the 
customer and then fit their desire into something comfortable. 
Some people may be born salesmen but they have to be trained 
shoe fitters.
    We had a series of courses that we put our employees 
through. Few people are aware that some stores can make slight 
changes in a shoe to make it especially comfortable, as well as 
useful and attractive, all thrown in for free.
    We taught listening, needs questioning, and technical 
fitting. Any staff person could even advance through training 
to filling foot doctor's prescriptions. The value of the 
training was that it made our store special. But along the way 
we got to see some very special people achieve.
    One young man, a returning Vietnam veteran, became a store 
manager. Then he bought that store. Later he bought a second 
store from us. Now he owns his own buildings and is also in the 
motel business. That is Bill Sheppler of Miles City, Montana. 
He has been playing an important role in building three 
communities. I also consider him to be one of my good friends.
    He went through a workforce training program that we had 
approved in conjunction with the Federal Government.
    My wife has also served on several boards that dealt with 
training and jobs and is currently on the Advisory Committee on 
Apprenticeship of the Department of Labor. She and I know that 
real opportunity in America comes from the small business 
sector, where the American dream can still happen.
    One-stop career centers are the focal point of Workforce 
Investment Act employment and training services. I do not see 
one-stop centers as different buildings. I see them as a single 
system, a system through which the resources of different 
programs can be used to deliver services in a complementary 
manner.
    As we seek to improve this system through reauthorization, 
we should keep the following principles in mind. One, it should 
be demand driven and responsive to the needs of employers, both 
large and small.
    It should provide a workforce development system that works 
in rural as well as urban areas.
    It should provide flexibility to meet State, local, and 
individual workforce development needs.
    And fourth, it should call for accurate data collection, 
reporting, and performance measures that are not unduly 
burdensome. I will go into those just a little bit more.
    Demand driven and responsive to the needs of employers both 
large and small. To be effective, the Workforce Investment Act 
must provide employment and training services that meet 
employers' workforce needs. We do not want to train workers for 
skills that are not needed. Nor should we view human resource 
activities in isolation from economic development activities. 
Doing so will discourage linkage with the private sector.
    Workforce development should be in coordination with, not 
in competition with economic development. Also, we should 
ensure that our workforce development system is responsive to 
the unique challenges and opportunities of small businesses.
    Second, the Act should provide a workforce development 
system that works in rural as well as urban areas. What works 
in Washington, DC or Washington State does not necessarily work 
in Wyoming. Rural and frontier areas like Wyoming face unique 
workforce development challenges. I want to focus on removing 
the barriers to successful implementation of the Act in rural 
and frontier areas.
    Third, the Act should allow flexibility to meet State, 
local, and individual workforce development needs. The Federal 
Government is not and should not be best suited to determine 
State, local and individual workforce development needs. We 
should empower individuals to make choices that are best suited 
for them. We should also empower States and localities to make 
choices that are appropriate to their workforce needs.
    Fourth and finally, the Act should call for accurate data 
collection, reporting, and performance measures that are not 
unduly burdensome. The system must have accountability.
    However, the Act's performance measures need to be fixed. 
The 17 current performance measures should be simplified to 
more accurately and easily depict the impact the Act is having. 
By reducing administrative complexity, more Workforce 
Investment Act resources can be devoted to delivering services 
rather than doing paperwork.
    The Act made dramatic changes to the publicly funded 
workforce investment system. The Department of Labor's guidance 
and technical assistance is critical to the successful 
implementation of the law at the State and local level. As we 
reauthorize the Act this year, the role of the Department in 
successful implementation becomes even more critical.
    Today we will hear from Deputy Secretary Findlay about the 
administration's approach to the reauthorization. While it is 
focused on reauthorization, I want to address the President's 
plan to create personal reemployment accounts to help 
unemployed workers get back to work quickly.
    These worker managed accounts would give unemployed workers 
the flexibility to receive the services they need most, the 
customer more in control of the product.
    I am looking forward to working with the administration, 
with Senator Murray, with the rest of my colleagues, and with 
the stakeholders to reauthorize this act, a demand-driven, 
flexible and accountable system that will work in all areas of 
the country and all economic times. That is what we can achieve 
through reauthorization of this landmark legislation.
    [The prepared statement of Senator Enzi follows:]

                   Prepared Statement of Senator Enzi

    When the Workforce Investment Act (WIA) was enacted in 
1998, Congress envisioned a coherent workforce development 
system that could effectively and efficiently respond to the 
needs of workers and employers. This publicly-funded workforce 
system has improved the lives of many Americans seeking new or 
better jobs. However, the full promise of WIA has yet to be 
realized.
    Reauthorization of WIA gives us an opportunity to complete 
the transformation of fragmented employment and training 
programs into a seamless workforce investment system. 
Reauthorization gives us an opportunity to build on the 
successes and remove the barriers to implementation of this 
system.
    Why is our task of reauthorizing WIA so important? It is 
because WIA plays a key role in preparing at-risk youth for the 
workforce and helping people get back to work or find a better 
job in these challenging economic times. In turn, our 
businesses need an appropriately trained workforce to compete 
in the global marketplace.
    Prior to being in Washington, my wife and I owned shoe 
stores. We were not shoe salesmen, we were shoe fitters. There 
is a high difference. Shoe fitters have to listen to the 
customer and then fit their desire into something comfortable. 
Some people may be born salesmen, but they have to be trained 
shoe fitters. We had a series of courses we put our employees 
through. Few people are aware that some stores can make slight 
changes in a shoe to make it especially comfortable as well as 
useful and attractive--all thrown in for free. We taught 
listening, needs questioning, and technical fitting. Any staff 
person could even advance through training to filling foot 
doctor's prescriptions. The value of the training was that it 
made our stores special. But along the way we got to see some 
very special people achieve. One young returning Vietnam vet 
became a store manager, then bought that store, later bought a 
second store from us, now owns his own building and is also in 
the motel business. Bill Schepeler of Miles City, Montana has 
and is playing a role in building three communities. I also 
consider him to be one of my good friends. He went through a 
workforce training program that we had approved in conjunction 
with the federal government.
    My wife has also served on several boards that dealt with 
training and jobs and is currently on the Advisory Committee On 
Apprenticeship of the Department of Labor. She and I know that 
real opportunity in America comes from the small business 
sector where the American dream can still happen.
    One-Stop Career Centers are the focal point of WIA's 
employment and training services. I don't see One-Stop Centers 
as different buildings. I see them as a single system--a system 
through which the resources of different programs can be used 
to deliver services in a complementary manner.
    As we seek to improve this system through reauthorization, 
we should keep the following principles in mind:
    1. WIA should be demand driven and responsive to the needs 
of employers--both large and small.
    2. WIA should provide a workforce development system that 
works in rural as well as urban areas.
    3. WIA should provide flexibility to meet state, local, and 
individual workforce development needs.
    4. WIA should call for accurate data collection, reporting, 
and performance measures that are not unduly burdensome.
    I'd like to briefly discuss each of these principles.
    First, WIA should be demand driven and responsive to the 
needs of employers--both large and small. As the General 
Accounting Office (GAO) reported, engaging the private sector 
in guiding the system's development has been difficult, 
sometimes unsuccessful. To be effective, WIA must provide 
employment and training services that meet employers' workforce 
needs. We don't want to train workers for skills that aren't 
needed. Nor should we view human resources activities in 
isolation from economic development activities. Doing so will 
discourage linkage with the private sector. Workforce 
development should be in coordination with--not in competition 
with--economic development. Job training and job creation 
should work hand-in-hand. Also, we should ensure that our 
workforce development system is responsive to the unique 
challenges and opportunities of small businesses.
    Second, WIA should provide a workforce development system 
that works in rural as well as urban areas. What works in 
Washington D.C. or Washington state, doesn't necessarily work 
in Wyoming. Rural and frontier areas, like Wyoming, face unique 
workforce development challenges. I want to focus on removing 
the barriers to successful implementation of WIA in rural and 
frontier areas.
    Third, WIA should allow flexibility to meet state, local, 
and individual workforce development needs. The Federal 
government is not--and should not be--best suited to determine 
state, local and individual workforce development needs. By 
passing WIA in 1998, Congress recognized this fact and the fact 
that flexibility is the key to a successful workforce 
investment system. However, services available to WIA 
participants have been implemented in an overly restrictive 
manner. WIA reauthorization should ensure that participants 
have the ability to receive services that are appropriate for 
their circumstances. We should empower individuals to make 
choices that are best-suited for them. We should also empower 
states and localities to make choices that are appropriate for 
their workforce needs.
    Fourth, WIA should call for accurate data collection, 
reporting, and performance measures that are not unduly 
burdensome. The system must have accountability. However, as 
GAO reported, WIA's performance measures need to be fixed. The 
17 current performance measures should be simplified to more 
accurately and easily depict the impact WIA is having. GAO also 
found that some training providers don't want to participate in 
WIA due to the law's excessive data collection and reporting 
requirements. As a result, training options for job seekers may 
be decreasing rather than increasing. GAO also found that 
documenting low-income eligibility for youth is costly and 
burdensome to providers and difficult for youth most at risk. 
As a result, some eligible youth are being denied services. By 
reducing administrative complexity, more WIA resources can be 
devoted to delivering services rather than doing paperwork.
    WIA made dramatic changes to the publicly-funded workforce 
investment system. The law also dramatically changed the role 
the Department of Labor plays in the workforce investment 
system. The Department's guidance and technical assistance is 
critical to the successful implementation of the law at the 
state and local level. As we reauthorize WIA this year, the 
role of the Department in successful implementation becomes 
even more critical.
    Today, we will hear from Deputy Secretary Findlay about the 
Administration's approach to reauthorization of WIA. While the 
today's hearing is focused on WIA reauthorization, I will want 
to address the President's plan to create Personal Reemployment 
Accounts to help unemployed workers get back to work quickly. 
These worker-managed accounts would give unemployed workers the 
flexibility to receive the services they need most--the 
customer more in control of the product.
    I look forward to working with the Administration, with 
Senator Murray, with the rest of my Colleagues, and with 
stakeholders to Reauthorize the Workforce Investment Act. A 
demand-driven, flexible, and accountable system that works in 
all areas of the country and all economic times--this is what 
we can achieve through reauthorization of this landmark 
legislation.
    Senator Enzi. At this time, I would recognize the 
distinguished ranking member, Senator Murray from Washington.

                  Opening Statement of Senator Murray

    Senator Murray. Thank you very much, Mr. Chairman and it is 
an honor to join you on this subcommittee. And as you said, it 
is hard to envision the subcommittee without Senator Paul 
Wellstone and his passion and energy, and I do not think I can 
ever fill his shoes and wave my arms as much, but I do hope I 
can bring the same kind of passion and energy and commitment to 
this role.
    And I am confident we will work well together. I think the 
fact that we were both born in Washington State means that we 
can work well in our efforts here.
    I want to thank Deputy Secretary Findlay for coming to 
discuss the administration's proposal to reauthorize the 
Workforce Investment Act. We passed WIA back in 1998 and 
consolidated Federal job placement and training programs to 
create a flexible, comprehensive system that is driven by the 
private sector.
    Since most states chose to delay full implementation of WIA 
until July of 2000, we have not had enough time to fully 
analyze the success and failures of the current system. 
However, WIA is beginning to show some real benefits in many 
places, including the State of Washington.
    Here in Congress, we need to build on the foundation of 
empowering workers and local employers to address their 
workforce needs in this reauthorization. As we work to update 
this important program I will be focusing on three priorities. 
First. we cannot allow funding cuts to hurt our workers and our 
local economies. Unfortunately, WIA's success has been 
undermined by recent cuts. The fiscal year 2003 funding bill 
cuts $655 million from WIA activities from the year before and 
this year the President has proposed further cuts for WIA 
efforts.
    This is not the time, in my opinion, to cut our investment 
in worker training and employment. In just the last 18 months, 
Washington State has lost nearly 80,000 jobs. During that time, 
the number of people coming into one-stop centers has doubled. 
Yet since 1985 the funds available to help these workers have 
dropped by 25 percent.
    These cuts have a big impact on young people, especially 
low income and at-risk kids, who are served by the WIA Youth 
Program. We should be strengthening the connection between WIA, 
local businesses, and young people, not scaling it back as some 
have suggested.
    Second, we should empower WIA's two customers, business and 
labor. We should empower them to use their first-hand knowledge 
to meet local employment needs and we should encourage 
incentives to bring people and businesses into one-stop 
centers. We should make WIA's efforts more efficient at every 
level by streamlining the performance reporting and eligibility 
criteria and knocking down barriers to job training.
    We should not limit a partner's ability to invest in one-
stop centers.
    And finally, we should provide greater flexibility so that 
local areas can negotiate performance measures that reflect the 
type of work and labor market that is being served.
    Before I close, I do want to say a word about the 
President's proposal for personal reemployment accounts. This 
could be a good idea for States like Washington but we 
certainly need to know more. We need to know whether WIA will 
replace the current efforts of one-stop centers or if it will 
supplement them. We need to know if the President's plan would 
require unemployed workers to choose between WIA and PRAs.
    We have got to recognize that the President's proposal to 
provide $3,000 is not enough for training. In fact, the average 
training program costs nearly $5,000.
    And finally we have got to make sure that a proposal that 
sounds good when it is unveiled is not undermined when it comes 
time to fund it. In this stagnant economy the stakes are too 
high to leave our workers without a lifeline to get a good job.
    Fortunately, WIA has always been a bipartisan effort and I 
look forward to working with Chairman Enzi and the 
administration on this effort.
    Thank you very much, Mr. Chairman, and I will have several 
questions.
    [The prepared statement of Senator Murray follows:]

                  Prepared Statement of Senator Murray

    Senator Murray. Thank you, Mr. Chairman. This is my first 
hearing as the Ranking Member of this subcommittee, and I'm 
looking forward to working with you closely on employment 
issues.
    I'm confident that we'll work well together, and I think 
that the fact that we were both born in the State of 
Washington, bodes well for our efforts here.
    I want to thank Deputy Secretary Findlay for coming to 
discuss the Administration's proposal to reauthorize the 
Workforce Investment Act.
    Passed in 1998, WIA consolidated federal job placement and 
training programs to create a flexible, comprehensive system 
that is driven by the private sector.
    Since most states chose to delay full implementation of WIA 
until July of 2000, we have not had enough time to fully 
analyze the success and the failures of the current system.
    However, WIA is beginning to show some real benefits in 
many places, including the state of Washington.
    Here in Congress, we must build on the foundation of 
empowering workers and local employers to address their 
workforce needs in this reauthorization.
    As we work to update this important program, I'm focusing 
on three priorities.
    First, we can't allow funding cuts to hurt our workers and 
our local economies. Unfortunately, WIA's success has been 
undermined by recent cuts.
    The FY03 funding bill cut $655 million from WIA activities 
from the year before.
    This year, the President has proposed further cuts for WIA 
efforts. This is not the time to cut our investment in worker 
training and employment.
    In the last 18 months, Washington State has lost nearly 
80,000 jobs. During that time, the number of people coming into 
one-stop centers has doubled. Yet since 1985, the funds 
available to help these workers have dropped by 25 percent.
    These cuts have a big impact on young people especially low 
income and at-risk kids who are served by WIA youth program. We 
should be strengthening the connection between WIA, local 
businesses, and young people--not scaling it back as some have 
suggested.
    Second, we should empower WIA's two customers business and 
labor.
    Let's empower them to use their first-hand knowledge to 
meet local employment needs.
    Let's encourage incentives to bring people and businesses 
into one-stop centers.
    Finally, let's make WIA's efforts more efficient at every 
level. We should streamline the performance, reporting and 
eligibility criteria.
    We should knock down barriers to job training. We shouldn't 
limit a partner's ability to invest in one-stop centers.
    We should provide greater flexibility so that local areas 
can negotiate performance measures that reflect the type of 
work and labor market being served.
    Before I close let me say a word about the President's 
proposal for Personal Reemployment Accounts. This could be a 
good idea for states like Washington, but we certainly need to 
know more.
    First, we need to know whether WIA will replace the current 
efforts of one-stop centers or if it will supplement them.
    Second, we need to know if the President's plan would 
require unemployed workers to choose between WIA and PRA.
    Third, we've got to recognize that the President's proposal 
to provide $3,000 is not enough for training. The average 
training program costs nearly $5,000.
    Finally, we've got to make sure that a proposal that sounds 
good when it's unveiled isn't undermined when it comes time to 
fund it. In this stagnant economy, the stakes are too high to 
leave our workers without a lifeline to good job. Fortunately, 
WIA has always been a bipartisan effort and I look forward to 
working with Chairman Enzi and the Administration in this 
effort. Mr. Chairman, I will have several questions.
    Senator Enzi. We do have a vote scheduled at 10:30. I plan 
to recess when the halfway point comes so that we can go do the 
vote.
    Before we begin I have a statement from Senator Kennedy.
    [The prepared statement of Senator Kennedy follows:]

                 Prepared Statement of Senator Kennedy

    I commend my colleagues Senator Enzi and Senator Murray for 
calling this important hearing today and for their leadership 
on these issues over the years.
    The Workforce Investment Act has reshaped federal job 
training programs, moving to a one-stop service concept created 
to help workers acquire the skills needed by local businesses. 
It was a significant step in simplifying and strengthening 
federal job training programs to meet the needs of workers and 
employers.
    Today's economy puts this system to a critical test. In the 
past two years, over 2.3 million private sector jobs have been 
lost. Nearly 8.3 million Americans are out of work, not 
including another 1.7 million who are long-term unemployed.
    The new job training system is helping workers and their 
families. One-Stop Centers are helping workers identify 
available jobs and obtain the skills to qualify for them. But 
more should be done to meet the urgent need today.
    We have the chance this year to reauthorize the Act to 
enable the system to respond more effectively to the needs of 
workers and business.
    To strengthen the system, we must look at the needs of both 
workers and businesses. We must look at ways to help them 
survive in a down-turned economy. We must maintain targeted 
funding to see that dislocated workers have the support they 
need in difficult economic times.
    We must target resources to teenagers and young adults to 
prepare them for good jobs. We need a job creation program for 
these young people--a program that will give them the incentive 
they need to go to college or to move into the workforce.
    We must also do more to meet the needs of low-wage 
workers--hard-working Americans who lack the skills for better-
paying jobs. We should work with employers to provide skills 
training for these workers long before they are unemployed. 
Raising the skill levels of low-skilled workers adds to the 
productivity of business and makes our country stronger.
    The workforce system must also continue to be a safety net 
in this unstable economy. Migrant and seasonal farmworkers 
deserve specific support to meet their specific needs. Ex-
offenders deserve help in becoming productive citizens, and 
making the transition back into their communities. If we don't 
give them the support they need, no one else will.
    For all of these reasons, the Department of Labor's budget 
is a disappointment. Consolidating funding streams doesn't 
change the fact that the Department's job training budget is 
$650 million less than the FY02 budget. We can--we must--do 
better.
    Greater investments in job training and unemployed workers 
will help jump-start the economy and keep workers afloat. Many 
of us are concerned, however, that the Administration's recent 
proposal for Personal Re-employment Accounts is the wrong 
approach. The accounts would exclude too many workers, and 
deprive unemployed workers of job training services. These 
accounts are no replacement for investments in proven job 
training and unemployment assistance. Instead, we should invest 
these resources in the Workforce Investment Act and the One-
Stop services available under the Act. We should also extend 
unemployment benefits for the one million hardest hit workers, 
who were left out in the January legislation, and we should 
cover the part-time and low-wage workers who have paid into the 
unemployment system, but don't receive unemployment benefits.
    All of us on both side of the aisle in Congress want to 
work with the Department to provide strong support for the 
nation's workers.
    I thank the Deputy Secretary for his testimony today, and I 
look forward to working with you on this reauthorization.
    Senator Enzi. So without further ado, I will call on Mr. 
Deputy Secretary.

  STATEMENT OF D. CAMERON FINDLAY, DEPUTY SECRETARY OF LABOR, 
                      DEPARTMENT OF LABOR

    Mr. Findlay. Thank you, Chairman Enzi.
    Thank you very much, Senator Murray. We look forward very 
much to working with you in your new role as ranking member of 
this subcommittee.
    I want to thank you for inviting me to testify on the 
administration's proposal to reauthorize the Workforce 
Investment Act. We view this proposal as a critical part of the 
President's strategy to get unemployed Americans back to work 
and to get the economy moving again.
    I have submitted detailed written testimony. I ask that 
that be included in the record, but I would like to briefly 
summarize some of the key points of the written testimony.
    As both Chairman Enzi and ranking member Murray said, 5 
years ago, in large part as a result of the leadership of this 
subcommittee, Congress passed a landmark legislation, the 
Workforce Investment Act, by large bipartisan majorities.
    WIA was truly a groundbreaking piece of legislation and it 
has sparked dramatic improvements in the delivery of employment 
and training services nationwide. But our challenge now is to 
build on these reforms to make the system even more effective 
and even more responsive to the needs of local labor markets.
    We propose to do this in several ways. First, we want to 
create a more effective governance structure to ensure that 
services get to workers as soon as possible. Too often in the 
past State and local boards have been mired in administrative 
details rather than focused on connecting skilled workers with 
job opportunities.
    The administration proposes to strengthen the role of the 
State and local boards in various ways. State boards would 
still be chaired and directed by employers but these boards 
would have increased representation by one-stop partner 
programs. This would, among other things, ensure that these 
partner programs have a place at the table when State boards 
decide the policies and priorities for the delivery of 
workforce services through the one-stop delivery system.
    Local boards, for their part, would be streamlined to 
provide an increased voice for employers. Also, for community 
groups and worker advocates in order to make the boards more 
responsive to local needs. And the requirement that workforce 
investment boards establish local youth councils would be 
eliminated, though governors and elected officials would retain 
the authority to create youth councils if they find them 
useful.
    Second, our proposal would strengthen the one-stop system 
by creating a new way to fund and maintain the system. In the 
past, the system has been hampered at times by turf battles 
among service providers and the lack of a stable funding stream 
for local one-stop centers. We propose to fund the one-stop 
system by creating a separate funding stream for one-stop 
infrastructure funding. This would alleviate a great deal of 
the current local negotiation issues around operations and 
would allow local areas to focus on what is most important, 
meeting the needs of businesses and workers.
    In addition, we want to ensure that all one-stop centers 
make available a broad array of employment training and 
supportive services. We particularly want to strengthen 
connections between the one-stop delivery system and programs 
such as adult education and Temporary Assistance for Needy 
Families or TANF.
    Third, we propose to eliminate obstacles to getting money 
where it is needed by combining the WIA Adult Dislocated and 
Wagner-Peyser funding streams into a single program. This 
change would result in streamlined program administration at 
the State and local level and reduce the current complexities 
of management across three separate programs.
    We also propose to permit more flexibility in the delivery 
of services to adults in order to encourage greater 
collaboration and integration of programs in the one-stop 
setting.
    Under current laws many State and local areas have 
misinterpreted the sequence of service strategy to require 
individuals to spend a specific amount of time in one tier of 
service before moving on to the next tier of service. Under our 
proposal, individuals would have the opportunity to receive the 
services that are most appropriate for their unique needs.
    We also propose to eliminate burdensome eligible trainer 
provider requirements to create incentives for more training 
providers to participate in the system.
    Fourth, we propose to create a targeted approach to serving 
youth. Currently funds for the WIA Youth Program are spread 
very thinly across the country due to the statutory formula and 
frankly, a lack of strategic focus. The administration 
recommends reforming current WIA youth programs by focusing 
resources on out-of-school youth through a targeted State 
formula program and challenge grants to cities in rural areas.
    Finally, we propose to address the concerns many States and 
local areas have raised about the performance accountability 
provisions in WIA. The 17 statutory performance indicators 
under WIA Title I are simply too many and they are overly 
burdensome. Through reauthorization, the number of WIA Title I 
indicators would be reduced from 17 to eight, four for youth 
and four for adults. As part of the administration's new common 
performance measures initiative for employment and job training 
programs. These indicators would cut across all Federal job 
training programs and would have a common set of definitions 
and datasets.
    An exciting complement to our WIA reauthorization proposal 
is our proposal to create personal reemployment accounts or 
PRAs. These accounts would contain up to $3,000 and could be 
used by unemployed workers for a purchase of variety of 
training and supportive services. The personal reemployment 
accounts would allow workers to custom design a reemployment 
services package in accordance with their individual needs. For 
example, some individuals may determine they need extensive 
retraining in order to compete for jobs in a high-growth 
industry. Others may need only to complete a short-term 
computer course, while still others may need to purchase child 
care or transportation in order to search for work.
    By enabling unemployed workers to obtain the reemployment 
services that they need most, PRAs would increase the 
likelihood that individuals will get jobs quickly.
    Under this proposal workers may also keep any unused 
portions of their PRAs as reemployment bonuses to assist 
workers in making the transition to employment.
    The President's proposal would provide $3.6 billion in 
additional resources to States to fund the PRA accounts in 
fiscal year 2003 and it is anticipated these funds would permit 
States to serve up to 1.2 million unemployed workers.
    To conclude, this administration does believe strongly that 
workforce investment is integral to economic development. And 
we also believe that a better trained workforce promotes 
economic growth. The administration's proposals to perform the 
Workforce Investment Act and to establish innovative new 
personal reemployment accounts show our commitment to enhance 
economic growth and get Americans back to work.
    Secretary Chao and I look forward to working with this 
committee on these issues in the weeks and months ahead.
    That concludes my prepared remarks and I would be happy to 
take any questions you might have.
    [The prepared statement of Mr. Findlay follows:]

                Prepared Statement of D. Cameron Findlay

    Good morning. Chairman Enzi and members of the Subcommittee, I 
thank you for inviting me to testify on the Administration's Workforce 
Investment Act reauthorization proposal.
                          wia reauthorization
    In 1998, under the strong leadership of this committee, Congress 
passed by a large bipartisan majority the Workforce Investment Act 
(WIA). WIA was a groundbreaking piece of legislation that has sparked 
important improvements in the delivery of employment and training 
services nationwide. The authorization of appropriations for the Act 
expires on September 30, 2003. Now our challenge is to build on these 
reforms in order to make the Act even more effective and responsive to 
the needs of States and local labor markets.
    Over the past year, the Department of Labor has gone to 
considerable effort to gather input from stakeholders on how the 
workforce investment system can be strengthened to address the 
challenges of globalization, technological advances, and the 
demographic changes that the American workforce is currently facing. 
The Department gathered public input on WIA reauthorization through a 
series of public forums. The Department held twelve forums around the 
country in the spring of 2002. In addition, the Department held a forum 
focused on services to individuals with disabilities in June of 2002. 
This latter forum was held in partnership with the Department of 
Education, the Department of Health and Human Services and the Social 
Security Administration. In addition, the Department held two forums on 
Indian and Native American programs in the fall of 2002. In total, over 
1,400 people attended the forums, and more than 240 of them presented 
oral remarks. Moreover, in February of 2002 the Department sought 
public comment on reauthorization issues in the Federal Register. Over 
370 comments were received in response to this announcement. A summary 
of the oral and written comments is available on the Employment and 
Training Administration's web site.
    The input from our stakeholders, our experience at the Federal 
level, recent research findings, and reports issued by the General 
Accounting Office have informed the Administration's proposal for WIA 
reauthorization. The Administration's proposal is designed to continue 
to transform the One-Stop Career Center delivery system into a cohesive 
workforce investment system that can respond quickly and effectively to 
the changing needs of employers and workers in the new economy and can 
address the needs of special populations, including individuals with 
disabilities. It builds on and improves what works, and fixes what does 
not work. Finally, the proposal seeks to connect better with the 
private sector and with post-secondary education and training, social 
services, and economic development systems to prepare the 21st century 
workforce for career opportunities and skills in high-growth sectors. 
Many of these reforms are outlined in the President's Fiscal Year 2004 
budget.
    The Administration's WIA reauthorization proposal addresses five 
key areas of reform. Those areas are: (1) creating a more effective 
governance structure; (2) strengthening the One-Stop Career Center 
System; (3) delivering comprehensive services for adults; (4) creating 
a targeted approach to serving youth; and (5) improving performance 
accountability.

             CREATING A MORE EFFECTIVE GOVERNANCE STRUCTURE

    The Workforce Investment Act's vision for implementing a 
comprehensive workforce preparation and employment system depended on 
the creation of an effective WIA governance structure. Under the Act, 
State and Local Workforce Investment Boards are responsible for 
overseeing WIA at the State and local levels, while youth councils 
coordinate local youth programs and initiatives.
    The Administration proposes to strengthen the role of the State and 
local boards by, among other things, streamlining the membership 
requirements. Under the Administration's proposal, One-Stop partner 
programs will have a stronger role on the State Board to ensure their 
investment in, and commitment to, the integrated service delivery 
system.
    How can a one-stop system affect economic development?--The State 
Board will still be chaired and directed by business and will be 
charged with setting policies and priorities for the One-Stop Career 
Center system. Such policies include the development of minimum service 
delivery standards, comprehensive outreach strategies, and economic 
development strategies.
    How would State board membership correct under usage?--Providing 
State-level administrators of One-Stop partner programs with more 
authority over One-Stop Career Centers will result in increased support 
for and partner usage of the system. It will also create a more global 
approach to addressing workforce needs in a community.
    As for local boards, membership will be streamlined to provide an 
increased voice for employer representatives, community groups, and 
worker advocates. Too often in the past these boards have been unwieldy 
and mired in administrative detail rather than focused on connecting 
skilled workers with job opportunities. These changes will make the 
boards more flexible and responsive to local needs. Local boards will 
focus on strategic planning and policy development activities.
    Numerous stakeholders at the WIA reauthorization forums across the 
country indicated that Youth Councils have not always added value to 
local system efforts as envisioned under WIA. Because the contribution 
of Youth Councils has varied across local areas, the reauthorized 
legislation will eliminate the statutory mandate for local Youth 
Councils. Under our reauthorization proposal, Youth Councils will no 
longer be required, but Governors and chief elected officials will be 
provided the authority to create or continue Youth Councils if they are 
valuable in their State or local area.

            STRENGTHENING THE ONE-STOP CAREER CENTER SYSTEM

    The cornerstone of WIA's workforce investment vision was the 
institution of the ``One-Stop'' delivery system, designed to integrate 
workforce programs and services under a single, comprehensive, 
customer-focused workforce investment system. The Act stipulates that 
the costs of those centers are to be shared by the One-Stop partners 
programs that are overseen by various Federal agencies. In practice, 
however, stakeholders overwhelmingly indicate that local One-Stop 
systems are compromised by the lack of stable funding for local One-
Stop Career Centers, turf battles among service providers, and the 
complexities of local cost allocation methodologies.
    We believe that WIA reauthorization should create a new way to fund 
the cost of the One-Stop system. One-Stop infrastructure funding would 
alleviate a great deal of the current local negotiation issues around 
operations and allow local areas to focus on what is most important--
meeting the service needs of businesses and workers. The Department of 
Labor is analyzing current One-Stop operating costs and considering 
different methods of funding the WIA infrastructure, in consultation 
with other involved agencies. Our intention is not to increase 
administrative overhead, but to clarify funding sources to promote 
improved services to One-Stop customers. This funding would help cover 
the cost of non-personnel operational items such as rent, general 
operating expenses, and information technology.
    In addition, we want to ensure that all One-Stop Career Centers 
make a broad array of employment, training and supportive services 
available to both job seekers and employers. We particularly want to 
strengthen connections between the One-Stop delivery system and 
programs such as Adult Education and Temporary Assistance for Needy 
Families (TANF).
    Proposal should clarify how these activities would be financed--
Often One-Stop Career Centers offer employment and training assistance 
to a universal worker population, but do not offer a broad range of 
products and services (such as work supports and other supportive 
services) to low-wage workers. These services could improve with better 
coordination among programs, including TANF, that target this 
population. For instance, focusing on access to financial work supports 
(such as Food Stamps and Medicaid) and retention and advancement 
services (such as child care and training during nontraditional hours) 
in a One-Stop setting will address the needs of both employers and 
members of the country's low-wage workforce. These supports and 
services will be funded by a variety of One-Stop partners and made 
available through the One-Stop system.

              DELIVERING COMPREHENSIVE SERVICES FOR ADULTS

    The One-Stop delivery system created by WIA currently provides 
adults and dislocated workers with an array of workforce services and 
labor market information. However, the current system faces several 
barriers to preparing a truly competitive labor force capable of 
meeting the needs of the nation's employers. Two such barriers are, 
first, separate funding resources and, second, a limited capacity to 
respond effectively to individual needs.
    The Administration's proposal will address the first issue by 
combining the WIA Adult, WIA Dislocated Worker and Wagner-Peyser 
funding streams into a single formula program. This change will 
streamline program administration at the State and local level and 
reduce the current complexities of management across three separate 
``programs.'' Our proposal builds upon both current law and our recent 
budget requests, which allow up to 20 percent and 40 percent, 
respectively, to be transferred between the Adult and Dislocated Worker 
funding streams by giving complete flexibility within one new 
comprehensive program.
    With respect to the second barrier, WIA reauthorization also should 
include more flexibility in the delivery of services. This will allow 
for greater collaboration and integration of programs in the One-Stop 
setting. Under current law, many States and local areas have sometimes 
misinterpreted WIA's ``sequence of service'' strategy (how a 
participant moves from core to intensive to training services) to 
require all individuals to spend a specific amount of time in one tier 
of service before moving onto the next. In some extreme circumstances, 
this has resulted in individuals being placed in low-paying jobs 
without access to the additional services they need in order to succeed 
in today's competitive economy.
    WIA reauthorization should provide greater flexibility in the 
delivery of core, intensive and training services. Individuals should 
have the opportunity to obtain the services that are most appropriate 
for their unique needs. While WIA must retain a strong emphasis on 
returning unemployed individuals to work as quickly as possible, it 
must also provide an individual access to a wide array of services that 
he or she needs to obtain suitable employment, any of which could be 
core, intensive or training, if necessary.
    As you are well aware, the current eligible training provider 
requirements have often had the unintended effect of reducing customer 
choice due to the limited number of eligible training providers in a 
particular local area. Many of them consider the system created under 
WIA burdensome and have opted out. The Administration's proposal will 
provide Governors with greater authority to determine what standards, 
information and data are required for the eligible training providers 
in their States. This change will result in an improved eligible 
training provider system and ensure the continuation of such key 
principles as customer choice and provider accountability, while also 
making it easier for training providers to participate in the system.
    We also propose to improve upon Individual Training Accounts by 
making them more flexible and responsive to individual needs. In 
addition, we want to incorporate the Personal Reemployment Account 
concept featured in the President's growth package by authorizing the 
use of such accounts as part of WIA. Later in my testimony, I will 
discuss these accounts further.

             CREATING A TARGETED APPROACH TO SERVING YOUTH

    Currently, funds for the WIA youth program are spread too thinly 
across the country due to the statutory formula and lack of strategic 
focus. Over the past year, we have held numerous discussions with youth 
practitioners, academics and other experts on how best to focus the 
Department of Labor's youth dollars. We also worked closely with the 
Department of Education to ensure our strategies and priorities do not 
overlap. As a result, the Administration recommends reforming current 
WIA youth programs by focusing resources on out-of-school youth through 
a Targeted State Formula grant program and Challenge Grants to cities 
and rural areas.
    The Targeted State Formula program will be used at the local level 
to serve out-of-school youth. In addition, the Department will award 
``Challenge Grants'' on a competitive basis to cities and local areas, 
with funds going to programs proven effective at serving out-of-school 
youth as well as high-quality programs that provide activities in a 
non-school setting that lead to high academic achievement.

                  IMPROVING PERFORMANCE ACCOUNTABILITY

    Finally, we propose to address the concerns many States and local 
areas have raised about the performance accountability provisions in 
WIA. The seventeen statutory performance indicators under WIA title I 
are perceived to be too numerous and overly burdensome. Through 
reauthorization, the number of WIA title I indicators will be reduced 
from 17 to 8 (4 for youth and 4 for adults). As part of the 
Administration's new initiative that creates common performance 
measures for employment and job training programs, these indicators 
will cut across Federal job training programs and will have a common 
set of definitions and data sets. This will help to integrate service 
delivery through the One-Stop Career Centers at the local level. In 
addition, Governors will have the authority to add measures for use 
within their States as needed to manage their programs and ensure high 
performance.

      SUPPORTING JOB GROWTH THROUGH PERSONAL REEMPLOYMENT ACCOUNTS

    In January, President Bush announced a comprehensive economic 
growth and jobs package to help the economy grow and create millions of 
jobs and deliver critical help to unemployed citizens.
    One proposal that would immediately help unemployed men and women 
get back to work is the proposal to establish Personal Reemployment 
Accounts. The Administration urges quick action on this proposal. These 
accounts 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 reemployment. They will empower individuals by 
giving them more flexibility, personal choice and control over their 
job search and career. They will be administered through the One-Stop 
Career Center system established under WIA.
    Because experience has shown that unemployed workers have a wide 
range of needs, the Personal Reemployment Accounts will allow each 
worker to design a custom reemployment services package in accordance 
with his or her needs. For example, some individuals may determine they 
need extensive retraining in order to compete for jobs in a high-growth 
industry, others may only need to complete a short-term computer course 
in order to return to work quickly; still others may need to purchase 
child care in order to search for work.
    By enabling unemployed workers to obtain the reemployment services 
they need most, they will likely return to work sooner and in a job for 
which they are more prepared and better skilled.

    IMPLEMENTATION OF THE ACCOUNTS--INDIVIDUAL AND STATE FLEXIBILITY

    The President's budget included one-time special funding of $3.6 
billion in additional resources to States to fund the Personal 
Reemployment Accounts in fiscal year 2003. It is anticipated that these 
funds will allow States to serve a total of at least 1.2 million 
unemployed workers during fiscal years 2003 and 2004.
    The receipt of account funds will not adversely affect an 
individual's ability to be eligible for and receive Unemployment 
Insurance benefits. The accounts are targeted at those newly unemployed 
workers eligible for at least 20 weeks of Unemployment Insurance who 
have been determined by the States to be likely to exhaust UI benefits 
before finding a new job. In addition, States will have the option of 
making accounts available to certain current UI claimants who were 
previously found likely to exhaust UI or to certain workers who have 
already exhausted their UI benefits.
    Subject to broad State-established safeguards to prevent abuse, 
account holders will be able to use the funds to purchase intensive 
reemployment services (such as counseling and case management), 
training, and supportive services (such as transportation and child 
care) available either through the One-Stop Career Center system, from 
other sources outside the One-Stop system, or in combination. This is a 
flexible way for unemployed workers to obtain access to services and 
benefits that they need to return to work faster.
    Another important aspect of the proposed reemployment account is 
the ``Reemployment Bonus.'' New UI claimants who become reemployed by 
the thirteenth week for which UI benefits are paid will receive any 
cash remaining unspent in their account as a Reemployment Bonus. 
Similarly, the groups added at State option--certain UI claimants who 
were previously identified as likely to exhaust UI and certain UI 
exhaustees--that become reemployed by the thirteenth week of the 
effective date of the account can also receive the Reemployment Bonus.
    The bonus would be paid to the individual in two installments: 60 
percent at employment and 40 percent after six months of job retention. 
Individuals who do not find employment within the thirteenth week rule 
would not be able to ``cash out'' their account but would continue to 
be able to purchase intensive reemployment, training and supportive 
services for up to one year from the effective date of the account.

       LEARNING NEW LESSONS THROUGH INNOVATIVE SERVICE STRATEGIES

    At various times from 1984 to 1989, four States (Illinois, New 
Jersey, Pennsylvania, and Washington) conducted controlled experiments 
to determine the effectiveness of providing reemployment bonuses to 
unemployed workers. In these experiments, a random sample of new UI 
claimants were told they would receive a cash bonus if they became 
reemployed quickly.
    The Department of Labor's evaluation of the reemployment bonus 
experiments conducted in the States of Washington, New Jersey, and 
Pennsylvania showed that a reemployment bonus of $300 to $1,000 
motivated the recipients to become reemployed, reduced the duration of 
UI by almost a week, and resulted in new jobs comparable in earnings to 
those obtained by workers who were not eligible for the bonus and 
remained unemployed longer. Similarly, a study of an experiment 
conducted in Illinois found that a reemployment bonus of $500 reduced 
the duration of unemployment by more than a week and did not lead to 
lower earnings at the worker's next job.

                               CONCLUSION

    Workforce investment is an integral part of economic development, 
and a better-trained workforce promotes economic growth. I believe the 
Administration's proposals for reforms to the Workforce Investment Act 
and Personal Reemployment Accounts respond effectively to both current 
economic conditions and future trends. Secretary Chao and I look 
forward to working with this committee as we move ahead.
    This concludes my remarks. I would be glad to respond to any 
questions you have. Thank you.

    Senator Enzi. Thank you for your presentation.
    I also want to thank you for the opportunity that I have 
had to meet with you and members of your staff to go over some 
of the things in the Workforce Investment Act and some plans 
that you have and the extra detail has been extremely helpful 
and I would encourage members of the committee to do the same, 
and would hope that you would work with them as well.
    Mr. Findlay. I would be delighted to.
    Senator Enzi. I always have to ask some questions about 
rural and frontier areas because Wyoming is the least populated 
State in the Nation, so we can kind of take it from that 
prospective.
    Distances and limited access to training providers have 
been a barrier to successful implementation of WIA in rural and 
frontier areas. And since we cannot do anything to change the 
distances and do not seem to be able to do anything about 
changing the size of the towns, what plans do you have to 
propose improving rural access to services?
    Mr. Findlay. I think the way that this proposal will 
improve access for people that live in rural areas is that it 
will enhance the State flexibilities that are necessary to have 
a effective workforce system.
    As you said or Senator Murray said, I can't remember, one 
size does not fit all. You need different strategies in New 
York City and in rural Wyoming. So we are trying to get 
authority to State workforce boards to design strategies that 
are most effective for their State and also to local workforce 
investment boards to customize strategies for particular 
localities.
    So I think that the key to serving rural areas better than 
we have is to give flexibility to States and to localities to 
design their strategies to fit best the needs of the area.
    Senator Enzi. Could you expand a little bit on the role of 
State boards versus the local boards in your WIA proposal? If 
the State boards are given more control how will you ensure 
that the local workforce needs are met?
    Mr. Findlay. As you know Senator, there have been a lot of 
concerns over the past few years about how cumbersome the State 
and local workforce investment boards have been. At the State 
level some of these boards include 50 or 60 people. As anyone 
who has ever served on a committee knows that is a very large 
group to act effectively.
    So at the State level we would propose to streamline the 
boards and also to give a greater role to the one-stop partner 
program so they will be able to participate in the overall 
strategic planning for the State.
    As for local boards, they have also become too big. Again, 
some of these local boards are 40 or 50 people. And more 
fundamentally, the local boards have devolved into arguing 
about operational issues rather than the strategic and policy 
issues that they ought to be worrying about.
    The local board ought to decide what is the best strategy 
for getting people training in this area. Instead what they 
have ended up talking about are how do we fund our one-stop 
centers and issues like that.
    So at the local level we want to enhance the role of 
employers who, after all, are the ones that actually have jobs 
and know what training will be effective. And we want to focus 
those local boards on the sort of strategic and policy issues 
rather than the operational issues.
    Senator Enzi. We have talked about the boards and the 
employers. We also need to empower workers to choose services 
that are best suited for their workforce development needs. How 
does the proposal give individuals more flexibility to select 
the services that are right for them?
    Mr. Findlay. I think, under the WIA proposal, we are 
continuing to refine the idea of individual training accounts 
and we are going to convert them to be career scholarships that 
will provide even more flexibility for individual workers.
    But I think this is a good time to talk about our proposal 
for personal reemployment accounts, which really are a very 
innovative way to give workers a lot of choice and flexibility 
in choosing the services that they want.
    With these PRAs, a worker could decide to spend all of the 
money on training. The worker could decide that he or she 
wanted to spend part of the money on training and part on child 
care while he or she works for work. They can spend part of the 
money on transportation.
    We think that people should be entrusted to make choices 
about their own lives and the PRAs are a good example of a way 
that we intend to do that.
    Senator Enzi. Thank you. Senator Murray.
    Senator Murray. Thank you, Mr. Chairman.
    I want to welcome Senator Jeffords to the committee, too. 
He has done a great deal of work on workforce investment and I 
really appreciate his help and work with us as we go through 
this reauthorization.
    Mr. Secretary, the fiscal year 2003 Omnibus Appropriations 
Bill that was just passed by Congress and signed into law by 
the President cuts $655 million from WIA activities from the 
previous year's bill. And the President's fiscal year 2004 
budget does not restore that funding.
    The administration has stated it can sustain these cuts and 
still retain services due to a funding carryover in WIA formula 
programs. But that is contrary to a recent GAO report finding 
that States and localities are spending WIA funds at a faster 
rate than the Act requires.
    How does your administration's plan ensure that the 
delivery of WIA services are not impacted despite these large 
funding cuts, increased demand and the GAO's finding that any 
so-called carryover is already being spent?
    Mr. Findlay. That is a lot to respond to. Let me try and 
take it in pieces.
    We respectfully disagree with the GAO as to whether this 
money is being spent. The GAO said that the money was 
obligated.
    We actually track expenditures and the fact that money is 
obligated does not mean that it is being spent. It means that 
it is committed to being spent some time in the future.
    So we think the focus ought to be on training and services 
getting to workers. And we are confident that our budget levels 
will ensure that the level of services will be held constant 
over the years.
    As you say, this is because there is this $1.7 billion a 
year carryover from 1 year to the next, and it has happened 2 
years in a row now, where States have been unable to spend 
funds that was allocated to them.
    This actually points out why it is so important to 
reauthorize WIA. WIA was a great law but there were some 
difficulties with WIA in terms of organizing these local boards 
to spend the money on the people that we want to get the money 
to. As boards have tussled over operational issues sometimes 
the money has carried over or even lapsed.
    In the State of Washington, for example Senator Murray, the 
State of Washington carried over money from program year 1999 
and actually had to turn it back to the Federal Government. It 
could not even carry it over because it had held it so long. 
The State of Washington has also carried over money----
    Senator Murray. Is that not a function though that they 
were just beginning to implement some of the programs that were 
being put in place, that they had gotten this great big new law 
and they were trying to figure it out? I think it was not a 
function of that they could not use it. It was a function of 
trying to transfer to a new program.
    Mr. Findlay. That may be the case but the fact is the money 
was not used and so it is still available for the next year.
    Senator Murray. By Washington State?
    Mr. Findlay. By Washington State. It was available for 
Washington State for several years in which they were unable to 
get it out to the people who needed it and so it lapsed back to 
the Federal Government. And that is even separate and apart 
from the money that is carried over year to year. I think in 
the State of Washington the carryover, in the most recent 
numbers I have, were $26 million that the State was unable to 
spend. Now we want that money to be spent and we would like to 
see it fill up.
    Senator Murray. But in 1999 Washington State was actually 
using JTPA, which is why.
    Mr. Findlay. But Washington has had carryovers under WIA, 
as well.
    Senator Murray. Because they were using JTPA funds.
    Mr. Findlay. I guess the point is the money is there. The 
people are not being denied services because of a lack of 
funding. they are being denied services for another reasons.
    Senator Murray. I am just worried that we get into this 
accounting gimmick where we say we had this big change in 
program, we moved from JTPA to WIA. There are carryover funds, 
therefore we can cut.
    I am going to tell you again, we have 80,000 jobs lost in 
the State of Washington and people are scrambling to get people 
into jobs. There are not necessarily jobs there today. And I am 
worried that if we take a look at a time when we were in 
transition as the mark as to how much money is being used, we 
will not fairly and accurately look at what is actually going 
to be used now that people are really getting into using these 
funds after the transition.
    Mr. Findlay. I think we agree on one thing, Senator Murray, 
and that it is that we completely agree that we should not be 
worrying about these accounting issues and that what we ought 
to be focusing on is figuring out ways to get money to the 
people, the training and services to the people that need them.
    That is why our WIA reauthorization proposal tries to 
eliminate some of these rigidities that have kept money say in 
one pot where it could not be transferred to another pot when 
people needed assistance.
    So I think that the sort of carryovers that we have seen in 
Washington and other States point out why it is so important to 
reform WIA to eliminate these sorts of rigidities.
    Senator Murray. Which we did and we are all working 
through, so I will just tell you I am very concerned about 
that.
    My time is limited so let me ask you about the youth 
policy. Your proposal shifts the focus of youth policy in WIA 
from both out-of-school and in-school youth to primarily out-
of-school populations. Right now about 30 percent of the money 
must be used for out-of-school youth. The rest is used to 
partner with schools to motivate at-risk youth to stay in 
school and allow kids to get the skills that they need to 
compete for the jobs of tomorrow.
    You propose that 75 percent of youth funds be used to serve 
out-of-school kids. Reaching out-of-school youth is important. 
I think we all agree on that. We are concerned about juveniles 
who are on the streets. They need help in reconnecting with the 
education system and getting needed skills so they can find 
employment.
    But with the proposed elimination of the Youth Opportunity 
Grant Program and the proposed elimination of the statutory 
requirement for youth councils and the shift in resources to 
out-of-school youth, what is going to be left for in-school 
programs?
    Mr. Findlay. In developing our reauthorization proposal, we 
worked very closely with the Department of Education to try and 
avoid the sort of duplication and turf battles that have taken 
place over the past few years. What we decided made sense was 
for the Department of Labor to focus its resources on the 
population that most needs assistance, and that is out-of-
school youth.
    And so our proposal does target our funds to out-of-school 
youth, and in particular the most at-risk youth. The target 
formula grants would be focused on school dropouts, on kids who 
are in the criminal justice system, and those sorts of very 
high at-risk youth. We feel like we have got to get those 
people into the economic mainstream before we do----
    Senator Murray. So philosophically, you are looking at the 
out-of-school youth and expecting the Department of Education 
to do in-school. I guess I would be more comfortable with that 
if you were not dramatically cutting the Department of 
Education at the same time.
    I am going to tell you who gets left behind in that is the 
kids who do not have any motivation to go on to college, who do 
not have necessarily the skills, and these kinds of programs 
have to be addressed. They are not being addressed by the 
Department of Education. They are trying to do No Child Left 
Behind and all of these other things, ad cutting back after 
school and everything.
    So I think your philosophy may sound reasonable but in 
actuality, the funding is not going to be there for the 
Department of Education to pick up what you are handing them.
    Mr. Findlay. I do not want to speak about the Department of 
Education's programs but I can say that in a world of finite 
resources that, given that we do not have infinite resources to 
spend in this area, we think that we should target our youth 
funds on the most at-risk youth, the ones that are most likely 
to end up in the criminal justice system or find themselves 
unemployed for many years. And if we can get these kids into 
the economic mainstream, we will have accomplished something.
    I should also say that we do make some allowances for 
serving in-school youth but in out-of-school programs because 
we just do not feel like there should be that kind of 
duplication in the schools, where both the Department of Labor 
and the Department of Education are there.
    Senator Murray. Mr. Chairman, I know that we have a vote 
and Senator Jeffords wants to get his questions in. I do have a 
number of questions about the PRAs, as well as a number of 
concerns about the communities, about the flexibilities. It 
sounds great, but $3,000 is not enough to get actual training. 
Where is that money going to come from? What account will be 
robbed to pay for it? And most importantly, how are we going to 
ensure that that money is actually being used to help people 
get jobs that give them a better income and it does not just 
force them into cleaning cars or working at McDonald's because 
they get the easy cash to begin with? And then we have left a 
generation of workers without the skills to get where they are 
going.
    So I have a number of questions about that. If I do not 
have an opportunity to ask them, I will submit them for the 
record. But I appreciate the opportunity, Mr. Chairman.
    Mr. Findlay. Thank you, Senator. We will be happy to do our 
best to answer them.
    Senator Enzi. I am pleased to be joined by the Senator from 
Vermont, Senator Jeffords, a very active member of the 
committee. If you want to make a statement and ask questions, 
the floor is yours.
    Senator Jeffords. I would like to say that I sympathize 
with the questions that were asked by Senator Murray. I spent a 
great deal of time in setting up the programs that we presently 
have, and visited China and Germany and other areas to see how 
they handle these kind of situations. And those of us who wrote 
WIA felt very strongly that voc-ed and adult-ed and vocational 
rehabilitation must be coordinated with job training programs.
    I would like to hear your assessment of that coordination 
and your suggestions as to how that coordination can be 
improved from the Department of Labor's perspective.
    Mr. Findlay. One of the themes that runs through this 
year's reauthorization proposal is to eliminate silos and 
eliminate rigidities that have prevented services getting to 
the people that need them. It has gone beyond our proposal to 
combine several funding streams within WIA.
    We also are seeking to establish linkages with other 
departments that provide similar services. I mentioned TANF as 
one possibility. We also are working with the Department of 
Education to establish linkages between all of their programs 
and our one-stop system.
    So I think that is one of the themes in our reauthorization 
proposal is to avoid the kind of segmenting that we do here in 
Washington and provide flexibility to those people on the 
ground who are actually out providing the services.
    Senator Jeffords. A good portion of the testimony focuses 
on the $3.6 billion personal reemployment account proposal that 
the administration would like included in the comprehensive 
growth package. How do you justify spending $3.6 billion on 
setting up a new one, a temporary program alongside WIA, when 
the administration is cutting the overall job training budget?
    Mr. Findlay. Senator, I guess I would challenge your 
premise that we are cutting the overall job training budget 
because, as I discussed with Senator Murray, the level of 
services will be held constant because of the $1.7 billion 
carryover that is out in the system for the second year in a 
row.
    But the PRAs we view as a different delivery mechanism, an 
innovative new delivery mechanism, to get services to workers 
that need them. The $3.6 billion is not being taken out of the 
WIA system. It is in addition to the WIA system.
    Senator Jeffords, I guess I am a little confused why you 
set up two job training programs? What is the necessity?
    Mr. Findlay. We are not setting up another job training 
program. They can use the PRA to access services through the 
one-stop. We do not have a separate training system set up for 
PRAs. We do not have a separate employment services system set 
up. They can just use this different delivery mechanism to 
access the same services.
    Senator Jeffords. I am a little confused on that.
    How much of the $3.6 billion would be spent on 
administrative costs?
    Mr. Findlay. It would depend completely on how the States 
set up the system. One of the nice things about this program is 
that we would allow States to be laboratories of democracy. 
Each State could set up a PRA system in the way it wanted 
subject to certain concerns we would put upon them. So I think 
it is impossible to answer the question of much would be spent 
on administrative costs.
    I think the idea is that of that $3.6 billion, none of it 
would be on administrative costs because that money would go 
out to the people to use through the existing system.
    Senator Jeffords. In regard to youth training, you mention 
a proposal to create a new targeted State formula program in 
addition to challenge grants. How will these programs be 
funded? And will these have separate funding streams? How are 
they going to work?
    Mr. Findlay. I think that of the youth funding stream--what 
is the percentage? 75 percent would go by formula and 25 
percent through these challenge grants. As I discussed earlier, 
the formula funds would be targeted at out-of-school youth but 
the challenge grants could be used for innovative programs by 
cities or rural localities for whatever needs they have.
    Senator Jeffords. How will Job Corps be integrated into 
your youth proposal?
    Mr. Findlay. Job Corps would be essentially untouched by 
this proposal. It would be a separate system in the way it is 
now, really. But we do integrate Job Corps into the WIA by 
identifying people that would be good candidates for Job Corps 
through the one-stop system among other places.
    Senator Jeffords. So they will be in a separate funding 
stream?
    Mr. Findlay. I think Job Corps is a separate funding 
stream.
    Senator Jeffords. They would be maintained there?
    Mr. Findlay. Yes.
    Senator Jeffords. I agree with you that our out-of-school 
youth must be a focus. However, at the same time we must 
continue to provide opportunities for school youth, those youth 
in particular who are on the verge of dropping out. Have you 
considered creating some type of an apprenticeship program for 
in-school youth?
    Mr. Findlay. As I said, money could be used for programs to 
serve in-school youth and it just would not be spent through 
the school system. It would be for out-of-school programs for 
in-school youth. So I guess the answer is yes, that we would 
consider programs for in-school youth but just not provided 
through the school.
    Senator Jeffords. In the Department of Labor's budget 
request I noticed that the reintegration for youth offenders 
program was eliminated. The fastest growing high schools in my 
State are youth corrections facilities. In Vermont between the 
ages of 18 and 25, one in seven males are in the youth 
corrections facility. I do not think that this is unique to 
Vermont.
    I would ask you to re-examine the elimination of this 
program. I think it is a serious mistake.
    Mr. Findlay. We would be happy to take a look at that, 
Senator Jeffords. Let me tell you what our thinking was.
    I think it goes back to something I said earlier, that we 
have a lot of different job training programs that are 
segmented throughout the Department and, in fact, throughout 
the United States Government. And one of the things we want to 
do is to break down the silos. We do not want to have specific 
little job training programs that may be accumulating funds and 
cannot be spent on other things.
    The best example of this proposal to consolidate the three 
adult, dislocated and the Wagner-Peyser funding streams, where 
in many cases there is lots of money in one funding stream and 
none in another but we cannot transfer it over.
    So our theme in this year's proposal is to break down these 
rigidities and permit more flexibility for providers.
    Senator Jeffords. I have no quarrel with that. I just want 
to make sure you understand that in this Nation we are having 
terrible troubles with youth ending up in trouble with the law. 
And if we do not have the way to first interdict before they 
get to the graduation level; and second, to take care of them 
after they have had the problems, we are not going to service a 
huge number.
    Mr. Findlay. We could not agree more and that is reflected 
in our youth proposal, because we have proposed to target the 
youth funds, among other things, on youth who are involved in 
the correctional system.
    Senator Jeffords. Thank you.
    Mr. Findlay. Thank you.
    Senator Enzi. Thank you very much for your testimony and 
the questions that you have answered.
    We all have some questions that are unanswered and I 
suspect that other members of the committee do, too. So we will 
leave the record open so that written questions can be 
submitted, and we will appreciate your answers on that. We will 
make sure that the answers are circulated.
    Thank you for your attendance, and Senator Jeffords.
    And the meeting is adjourned.
    [Additional material follows.]

                          ADDITIONAL MATERIAL

 Statement of the American Network of Community Options and Resources 
                                (ANCOR)

    The American Network of Community Options and Resources (ANCOR) 
appreciates this opportunity to provide comments and recommendations to 
the Senate Health, Education, Labor, and Pensions Subcommittee on 
Employment, Safety, and Training on the reauthorization of the 
Workforce Investment Act of 1998 (WIA). ANCOR is the national 
organization representing more than 750 private providers of community 
living and employment supports and services to more than 360,000 
individuals with mental retardation and other disabilities.
    WIA holds the promise of assisting all Americans including 
individuals with mental retardation and other significant disabilities 
to obtain and retain employment in their communities through a 
comprehensive, collaborative system of public and private partners. WIA 
is an important part of our nation's fabric to address the employment 
of individuals with disabilities. Indeed, many individuals with mental 
retardation and other significant disabilities want to work and are 
able to do so, given appropriate supports and services.
    ANCOR members are committed to assisting the individuals they 
support in their chosen employment. Yet, the current workforce 
investment system is not working for people with disabilities as 
Congress had intended. Individuals with disabilities have faced 
numerous barriers when attempting to access the workforce investment 
system. ANCOR members and other community employment providers who want 
to participate in the system and assist individuals with disabilities 
to gain and retain employment have also faced challenges, making it 
extremely difficult even precluding them from assisting individuals 
with disabilities under the workforce investment system.
    Despite the challenges, ANCOR and its members remain committed to 
WIA and believe reauthorization presents an opportunity to strengthen 
WIA the nation's comprehensive employment system to meet the employment 
needs of individuals with disabilities and assist private providers in 
being true partners in the nation's workforce investment system. ANCOR 
believes that the workforce investment system must be re-tooled, with a 
direct focus on individuals with disabilities and their needs to obtain 
and retain employment. ANCOR also believes that WIA must include a 
focus on the direct support professional workforce crisis, as these 
workers provide the necessary community living and employment supports 
that enable individuals with disabilities to live and work in the 
community.
    As the Senate considers reauthorization of WIA, ANCOR believes that 
Congress must ensure that the nation's workforce preparation and 
employment system fulfills its promise to individuals with disabilities 
and create the true partnership with private providers supporting 
individuals with disabilities that Congress envisioned by: Putting the 
employment of people with disabilities at the forefront of WIA; 
Recognizing community employment provider expertise. Workforce 
Investment Boards and One-Stops must make effective use of the valuable 
expertise that local community providers have to offer; Increasing 
collaboration of VR and other programs; Ensuring physical and 
programmatic accessibility of all One-Stop Career Centers; Meeting the 
individualized needs of individuals with the most significant 
disabilities; Addressing the direct support workforce crisis facing 
private providers; and, Providing Adequate Funding for One-Stop 
Services.
    ANCOR offers the following comments and recommendations in these 
areas to better strengthen the workforce investment system.

I. PUTTING THE EMPLOYMENT OF PEOPLE WITH DISABILITIES AT THE FOREFRONT 
                                 OF WIA

    An underlying principle of WIA is universal access any individual 
who can benefit from the workforce investment system and its programs 
and services may access the system. Unfortunately, all too often the 
concept of universal access has been in name only and not in practice. 
While there has been only a short implementation period from which to 
draw conclusions, it is clear that individuals with disabilities have 
not benefited from WIA to the extent Congress envisioned. Individuals 
with disabilities cannot physically access One-Stops. Service delivery 
and programs have not focused on the needs of individuals with 
disabilities. The focus on core and intensive services over training 
has left many individuals with disabilities and especially individuals 
with the most significant disabilities without the necessary supports 
and services to gain and maintain employment. In short, there is much 
that can be improved within WIA and the workforce investment system to 
better meet the needs of individuals with disabilities and will have 
the ultimate effect of improving the nation's workforce system for all.
    The employment of individuals with disabilities must be at the 
forefront of WIA, its programs, and its services. WIA must be re-
tooled, so that the nation's workforce investment system effectively 
addresses the short-term and long-term employment needs of individuals 
with disabilities.
    Recommendation: All WIA programs and services must emphasize 
individuals with disabilities and their employment needs.
    Recommendation: Section 106 of WIA should be amended as follows:
    The purpose of this subtitle is to provide workforce investment 
activities, through statewide and local workforce investment systems, 
that increase the employment, retention, and earnings of participants, 
including individuals with disabilities, and increase occupational 
skill attainment by participants and, and a result, improve the quality 
of the workforce, reduce welfare dependency, and enhance the 
productivity and competitiveness of the Nation.
    Recommendation: ANCOR recommends creating a third adult program, 
``Adults with Disabilities'' under Chapter 5 of WIA, with dedicated 
resources to fund new and existing supports and services specific to 
individuals with disabilities. Funding must be from new budget 
authority, not existing programs.

         II. RECOGNIZE COMMUNITY EMPLOYMENT PROVIDER EXPERTISE

    Under WIA, Congress established a public-private partnership from 
which all job seekers could benefit. Critical to the success of WIA's 
public-private partnership is actively involving all relevant 
stakeholders in the system. Unfortunately, state Workforce Investment 
Boards (SWIBs), local Workforce Investment Boards (LWIBs) have failed 
to adequately and effectively involve an essential partner: community 
organizations with experience in providing employment supports and 
services to individuals with mental retardation and other significant 
disabilities (community employment providers).
    Congress understood the important role that community employment 
providers play in assisting job-seekers with disabilities and included 
provisions in WIA that community organizations be represented on both 
SWIBs and LWIBs. To address the needs job seekers with disabilities, 
Section 111 (b)(1)(C)(v) of the Act states that SWIBs shall include 
representatives of organizations that have experience and expertise in 
the delivery of workforce investment activities, including community 
organizations within the State [emphasis added]. Section 
117(b)(2)(A)(iv) of the Act states that membership of each local WIB 
shall include representatives of community organizations including 
organizations representing individuals with disabilities for a local 
area in which such organizations are present [emphasis added].
    Unfortunately, many state and local boards do not fully understand 
the need to involve community employment providers. While the law's 
intent was for WIBs to create new partnerships to assist local 
officials in their planning, development, implementation, and resource 
coordination responsibilities, the practice has fallen far short. 
ANCOR's private providers report frustration in gaining access to both 
state and local WIBs. Many state and local WIBs do little outreach to 
involve such organizations, nor recognize community employment 
providers that wish to participate. For example, many WIA grant 
programs encourage state or local boards to form consortia with 
community organizations to apply for available grant funding. However, 
community employment providers report that their WIBs do not and will 
not work with them to apply for specific WIA grants. In fact, overall 
there is little interest in involving these community organizations.
    Not only do many WIBs show little or no interest in involving these 
community employment providers, but as new partners, these providers 
are often viewed as threatening the old way of doing business. 
Preserving the status quo was not a goal of WIA. In fact, a new 
collaboration was envisioned one that would make effective use of 
expertise to improve the delivery of services to people with 
disabilities. WIA offered the hope of opening up a workforce 
preparation and employment system that invited efficiencies, 
challenging states and localities to improve services. However, a 
highly politicized environment all too often remains one that is intent 
upon preserving old collaborations and viewing community employment 
providers' expertise as competition. The result does not improve 
services to people with mental retardation and other disabilities.
    ANCOR understands that the Department of Labor's (DOL) is proposing 
to streamline membership on state and local WIBs. If this nation is 
truly committed to assisting individuals with disabilities in obtaining 
employment, it is imperative that all SWIBs and WIBs have 
representation from community employment providers. ANCOR employment 
providers have continuously demonstrated that people with mental 
retardation and other severe disabilities can work and be productive 
employees. They have a long history in working with employers and have 
demonstrated to local businesses the benefits of hiring people with 
mental retardation and have experience in tailoring jobs for those 
previously unseen as potential employees. In addition, community 
employment providers can serve a dual role they are employers 
themselves and have a first-hand understanding of their state and local 
workforce needs.
    Local One-Stops must also reach out to and involve community 
organizations. ANCOR private providers are excellent and appropriate 
resources for One-Stops and can provide the missing training, 
employment services, and needed wrap-around supports to sustain 
successful employment of people with disabilities. Being on the front 
lines each and every day, they have developed creative approaches to 
jobs and job-training options that enable those with the most 
significant disabilities to become productive employees. Unfortunately, 
many One-Stops are reluctant to include ANCOR private providers as part 
of One-Stops or even refer individuals to them for necessary services. 
One-Stops must draw upon community employment providers as partners in 
the One-Stop system.
    Recommendation: Amend WIA to require community employment providers 
as mandatory partners on state WIBs. Section 111(b)(1)(C)(v) should be 
amended as follows:
    (v) representatives of individuals and organizations that have 
experience and expertise in the delivery of workforce investment 
activities, including chief executive officers of community colleges, 
community employment providers who offer supports and services to 
individuals with disabilities, and other community-based organizations 
within the State;
    State associations of private provider organizations exist in most 
states and, if needed, SWIBs should reach out to solicit involvement of 
such organizations.
    Recommendation: Amend WIA to require community employment providers 
as mandatory partners on local WIBs. Section 117(b)(2)(A)(iv) should be 
amended to read as follows:
    (iv) Representatives of community employment providers who offer 
supports and services to individuals with disabilities and other 
community-based organizations representing individuals with 
disabilities and veterans, for a local area in which such organizations 
are present);
    Recommendation: Require State Departments of Workforce Development 
Authorities to enforce Section 117(b)(2)(A)(iv), as amended.
    Recommendation: Require local WIBs to outreach to community 
employment providers for local activities, such as applying for grants. 
Again, state provider associations are excellent resources for local 
WIBs to utilize to identify employment providers in their local area.
    Recommendation: Require One-Stops to partner with community 
employment providers serving individuals with mental retardation and 
other severe disabilities.
    Recommendation: The Department of Labor and states should create 
incentives to encourage One-Stops to serve individuals with 
disabilities and partner with community employment providers.

            III. PROMOTING COLLABORATION WITH OTHER PROGRAMS

    The state vocational rehabilitation (VR) program is a mandatory 
partner under the One-Stop system. Including VR as a mandatory partner 
was intended to ensure that individuals with disabilities including 
those with the most significant disabilities have effective and 
meaningful participation in the One-Stop system and have full and 
complete access to all of the services provided through that system. 
One-Stops can respond effectively to some people with disabilities; 
however, individuals with severe disabilities cannot depend upon the 
One-Stops alone. The VR program provides access to other programs and 
services specific to the needs of individuals with mental retardation 
and other severe disabilities, such as supported employment and 
assistive technologies.
    While the VR program is flawed, it is important that the program 
itself continue to be a mandatory partner. However, it is still unclear 
how well the VR and the workforce investment system are working. While 
ANCOR understands that some state and local VR agencies are working 
effectively with WIBs and One-Stops, many more are not working well 
together. It is important that these two systems work collaboratively. 
One-Stops often facilitate access to VR and VR facilitates access to 
community employment providers who have unique expertise to assist 
individuals with the most significant disabilities to become employed. 
And while the VR program has its flaws, ANCOR also believes that the VR 
program must remain a distinct entity parallel to, but separate from 
the One-Stop system with separate and adequate Federal funding. VR's 
separate system of supports, which is more specialized than the broader 
array of services which One-Stops are capable of providing and provides 
access to additional employment options and providers, is necessary to 
support successful employment for some people with disabilities. 
Without the separate VR system, people with severe disabilities have 
even less of a chance to work.
    At the same time, individuals with significant disabilities can 
benefit from including other public partners that administer Federal 
and state benefit programs specific to individuals with significant 
disabilities. These partners include state and local Medicaid, mental 
retardation/developmental disabilities, housing, transportation, and 
Social Security, and Temporary Assistance to Needy Families (TANF) 
agencies. While these programs and funding should remain separate, 
including these disability-specific programs will enhance the creation 
of a seamless system for people with disabilities a goal of WIA.
    Furthermore, while ANCOR believes that individuals with 
disabilities benefit from VR and other public disability programs 
partnering with One-Stops, funds designated to serve individuals with 
disabilities must continue to be dedicated for these purposes only.
    Recommendation: The VR program must remain a separate program under 
WIA, with separate, dedicated funding.
    Recommendation: WIA should require other state disability-specific 
programs (including state and local Medicaid, mental retardation/
developmental disabilities, housing, transportation, and Social 
Security, and TANF agencies) to be mandatory partners in the One-Stop 
system to better serve individuals with disabilities. Funding for these 
programs must remain separate.

   IV. ENSURING PHYSICAL AND PROGRAMMATIC ACCESSIBILITY OF ONE-STOPS

    Individuals with disabilities including those with mental 
retardation and other significant disabilities remain the largest 
untapped pool of prospective employees in the nation. Individuals with 
the most severe disabilities want to work and, as ANCOR members have 
long demonstrated, they can work when provided with appropriate 
services and supports. Obtaining employment supports and services 
through One-Stops have been a challenge for many individuals with 
disabilities and, in particular, individuals with the most significant 
disabilities. Barriers to accessibility are keeping many of them 
looking in from the outside.
    When seeking services from One-Stops, the first step is physical 
accessibility getting inside the door of the One-Stop. Once they are in 
the door, individuals with disabilities must have access to needed 
services and supports. WIA requires physical and programmatic access to 
One-Stops and their services, as does the Americans with Disabilities 
Act (ADA) and Sections 504 and 508 of the Rehabilitation Act of 1973, 
as amended services. Many One-Stops remain physically inaccessible to 
individuals with disabilities. Individuals with communicative, 
cognitive, and sensory disabilities must have access to assistive 
technologies, alternative formats, accessible communications equipment, 
and other accommodations necessary to facilitate participation of 
individuals with mental retardation and other disabilities in 
employment services and training offered by One-Stops.
    ANCOR understands from anecdotal reports that some One-Stops have 
simply stated that they do not serve people with disabilities and 
automatically refer them to VR, thus eliminating the need for them to 
be physically and programmatically accessible. ANCOR believes that 
Congress did not envision this as part of WIA and this thinking goes 
directly against WIA's principle of universal access. Accessibility of 
One-Stop Centers and services must be a primary goal of One-Stops and 
their partners. Along with that, responsibility for expenses associated 
making One-Stops accessible should be borne by the One-Stop.
    Recommendation: The workforce investment system must ensure 
physical and programmatic accessibility of all One-Stops and the 
workforce investment system must be inclusive of all individuals with 
disabilities.
    Recommendation: All One-Stops must be physically accessible to 
individuals with disabilities.
    Recommendation: One-Stops must have and use their own dedicated 
funding to achieve physical and programmatic accessibility. Funding 
must not be obtained using set-asides from mandatory partners' 
appropriations.

             V. ENSURING ACCESS TO INDIVIDUALIZED SERVICES

    Once job-seekers with disabilities can gain physical access to One-
Stops, they must be able to access necessary services and supports. 
Individuals with disabilities including those with the most significant 
disabilities often need a broad array of individualized services and 
supports to assist them in obtaining and retaining, employment.
    While there are some comprehensive One-Stops, many One-Stops do not 
offer the array of services and supports necessary to assist 
individuals with mental retardation and other significant disabilities. 
Needed services and supports may not be available from any One-Stop or 
may be provided at another One-Stop on the other side of town, or in 
the next town ten miles away. As noted above, many individuals with 
disabilities cannot physically access One-Stops. Obtaining services 
should not be further complicated by requiring individuals with 
disabilities many of whom lack access direct access to transportation 
or live in areas without accessible public transportation-to go 
somewhere else, some other time, on some other day for services that 
should be readily available.
    WIA's ``work-first approach'' has also hampered the ability of 
individuals with disabilities to access needed services and supports 
and, in particular, training. The ``work-first approach'' promotes 
employment at any job as soon as it can be found, without consideration 
of an individual's interests, capabilities, abilities, and without 
consideration of multiple and complex supports need to obtain or 
sustain employment. Individuals with mental retardation and other 
severe disabilities may need a comprehensive array of training services 
and supports before they begin working. For many people with mental 
retardation, this may be their first attempt at employment. Thus, they 
may need on-going or post-employment training in order to maintain 
their employment or achieve future employment goals.
    Inadequate levels of training funds have also been an impediment 
for individuals with disabilities. Limited training dollars impact the 
type and amount of training individuals can receive. Individuals with 
the most significant disabilities often need training before, during, 
and after they are employed and are more likely to benefit from 
individualized training that community employment providers offer. Less 
than adequate funding for training has resulted in many individuals 
with disabilities without needed training, and some without any 
training at all.
    The limited number of eligible training providers has adversely 
impacted individuals seeking training. While many One-Stops do not have 
the expertise nor the funding to provide individualized training, ANCOR 
members and other community employment providers can provide necessary, 
individualized training. However WIA's burdensome reporting 
requirements have discouraged many providers from participating, 
leaving job-seekers with disabilities with limited or no consumer 
choice of training providers.
    The Administration's WIA reauthorization proposes to change the 
``work-first approach'' to one that is more flexible, so individuals 
would have the opportunity to receive the services that are most 
appropriate for their unique needs. The Administration is also 
proposing to transform Individual Training Accounts (ITAs) into 
``Career Scholarships'' that can be used for training as well as to 
facilitate access to post-secondary employment, and is proposing to 
eliminate the burdensome reporting requirements for providers who opt 
to provide training.
    While ANCOR is pleased that the Administration is changing the work 
first approach so that individuals can access services that are the 
most appropriate for them, any changes must ensure that job-seekers 
with disabilities will be able to access necessary training when they 
need it, including during pre- and post-employment. Adequate levels of 
funding for training must be included so that all individuals can 
access the training services needed. Because little detail exists in 
the public domain regarding the newly proposed ``Career Scholarships'', 
ANCOR recommends that individuals with disabilities be able to access 
and utilize these scholarships without restrictions.
    Recommendation: WIA must ensure access to individualized supports 
and services at all One-Stops.
    Recommendation: Delivery of One-Stop services must be flexible so 
that individuals with disabilities can access individualized training 
as appropriate.
    Recommendation: Adequate resources must be made available for 
individualized training purposes so that private providers cover the 
costs of providing training and other services and supports.
    Recommendation: Community providers providing training must not be 
burdened with extensive administrative and reporting requirements that 
detract from providing supports and services, consume valuable time and 
limited resources, and add little to the overall outcome of employing 
individuals with disabilities.

          VI. ADEQUATE FUNDING NECESSARY FOR ONE-STOP SERVICES

    To ensure the comprehensive, seamless One-Stop system that WIA set 
to create, One-Stops and their public and private partners must have 
adequate funding to deliver the services and supports required by all 
job-seekers, including individuals with disabilities. To date, funding 
levels for One-Stops and their services have not kept pace with the 
demand. As the nation's economy fails to rebound as quickly as hoped, 
as state budgets deficits continue to grow, and as more individuals 
find themselves struggling in today's economy, it is imperative that 
the nation's workforce investment system have appropriate funding to 
support the demands on the system.
    At this critical time, the President's Fiscal Year (FY) 2004 budget 
proposal provides only level funding for WIA programs from the 
President's FY 2003 proposal. In addition, the Administration is 
proposing to consolidate funding for all three of the WIA Title I adult 
programs adults, dislocated workers, and the Wagner-Peyser state grants 
into one single grant, creates a set-aside program from mandatory 
public partners to fund One-Stop infrastructure, and allows governors 
to apply for block grant authority for discretionary adult and youth 
program funding.
    ANCOR is very concerned, that at a time with great demands on the 
nation's workforce system, the Administration has proposed no 
additional funds for WIA adult programs and provides states with 
greater flexibility that may ultimately hurt individuals with 
disabilities seeking employment. The Administration contends that 
consolidating the adult program funding streams may free up some money 
because less funding will be dedicated for administrative purposes. 
ANCOR is concerned that, by consolidating funding streams into one 
single fund, dislocated workers will be able to access a 
disproportionate amount of funding, crowding out individuals with 
disabilities seeking individualized supports and services as adult 
workers.
    ANCOR is also concerned with the proposal to create a set-aside 
program to fund One-Stop infrastructure. It must be the obligation of 
One-Stops not the mandatory partners to support One-Stop 
infrastructure. In addition, taking money off the top of Federal 
appropriations or requiring partners to contribute a set amount or 
percentage of their overall funding will further divert scarce 
resources from their authorized purpose and leave more and more 
individuals including individuals with disabilities without access to 
services to which they are entitled.
    ANCOR is also concerned with the block grant authority proposal. 
Providing governors with new block grant authority for adult and youth 
discretionary programs will offer an opportunity for governors many of 
whom are currently struggling with state budget deficits to divert 
necessary resources away from meeting the needs job-seekers under WIA 
programs toward other state needs. Although ANCOR would hope that 
governors applying for such authority would use the available funding 
within the system as needed, there is no such guarantee.
    Recommendation: Separate funding for WIA adult, dislocated worker, 
and Wagner-Peyser grants programs must be maintained.
    Recommendation: As stated above, a new adult program, ``Adults with 
Disabilities'', should be authorized in WIA and separate funding for 
this new program must be include.
    Recommendation: A separate line item with new Federal funding must 
be made available to support One-Stops' infrastructure.
    Recommendation: Funding for all WIA adult and youth programs must 
be dedicated to providing supports and services within the One-Stop 
system.

    VII. DIRECT SUPPORT WORKER CRISIS REQUIRES NATIONAL STRATEGIES 
                      INCLUDING WIA TARGETED GRANT

    Since the enactment of the WIA in 1998, there have been significant 
developments to spur the nation toward reducing the chronically high 
unemployment rate among Americans with disabilities and to spur the 
nation in achieving the goals of integrating individuals with 
disabilities in the mainstream of life including living and working in 
the community. The 1999 landmark U.S. Supreme Court decision in 
Olmstead affirming the integration mandate of the American's with 
Disabilities Act; the enactment of the Ticket to Work and Work 
Incentives Improvement Act of 1999 designed to transform disability 
benefits' systems acknowledging the need to continue critical health 
care benefits as people with disabilities enter the workforce and its 
expansion of choice and access to private employment services; and 
President Bush's New Freedom Initiative, present the nation with 
additional tools to address not only the unemployment rate among 
Americans with disabilities, but the necessary supports and services to 
ensure that persons with disabilities are integrated into America's 
neighborhoods and workforce.
    WIA is an important part of the nation's fabric to address 
employment and to complement the President's New Freedom Initiative. We 
must seize the opportunity of WIA authorization to ensure that no 
individual with a disability who wants to work is left behind. However, 
one of the major barriers to fulfilling the U.S. Supreme Court's 
Olmstead decision and the goals of the President's New Freedom 
Initiative is the nation's direct support professional workforce 
crisis. The Workforce Investment Act must be used as a catalyst to help 
employers, local and state governments, and individuals with 
disabilities and their families and employers to train, recruit, and 
retain direct support professionals to provide the necessary living and 
employment supports to sustain individuals with disabilities to live 
and work in their communities.
    ANCOR private community providers are in a unique situation in that 
they are both service providers in which they can assist individuals 
with disabilities who seek services from local One-Stops but they are 
also employers of individuals who provide necessary community living 
and employment supports.
    Like other employers in their community, private providers seek to 
employ well-trained, qualified individuals. However, during this time 
of economic uncertainty when many local businesses are down-sizing or 
even closing their doors, private providers continue to seek qualified 
staff to address what has now become a crisis for many ANCOR members: 
the shortage of direct support professionals.
    The relationship between quality workers and quality supports and 
services is well documented. What has always been a longstanding 
concern to ANCOR providers the development of a stable, quality 
workforce has become a national concern for federal, state and local 
policymakers. Whereas the traditional labor pool for direct support 
workers has included a relatively stable replacement pool of women 
between the ages of 18 and 45, this is no longer the case.
    What has traditionally been viewed as just a provider problem 
dealing with turnover and vacancies has now reached a crisis level that 
threatens to undermine the promise of Olmstead, the New Freedom 
Initiative and, ultimately, the security and freedom of many 
individuals with disabilities to live, work, and actively participate 
in their communities.
    Although there has been significant attention paid to the nation's 
nurse and nursing home aide crisis, there has been little national 
attention given to a similar crisis in the shortage of long term care 
paraprofessionals in general with relatively little notice given to the 
availability of direct care workers who provide supports and services 
to people with disabilities.
    While this crisis is gaining recognition in some quarters, it is 
less frequently raised in connection with employment policies. Of 
course, most people associate the worker crisis with elderly long-term 
care need where retirement means the cessation of employment. However, 
just as the direct support worker crisis is generally overlooked when 
it comes to people with disabilities, it is even less frequently raised 
in connection with employment policy regarding individuals with 
disabilities.
    The lack of an adequately paid, trained, stable workforce to 
provide quality community living and employment supports and services 
long recognized by providers as a real threat to community integration 
is now a national crisis. No longer just a problem for providers to 
figure out on their own, the current gap in long term supports and 
service workers is expected to persist and increase in the near future 
as more than 77 million baby boomers reach retirement and place 
increased demands on the nation's long term supports and services 
delivery system.
    This crisis inevitably affects workforce preparation and 
employments services to people with significant disabilities. Without, 
a quality stable workforce to provide the array of supports needed to 
assist people with mental retardation and other disabilities get 
dressed, bathed, prepare and eat their meals, maintain their homes, 
traverse their community, go to work, and live safely in their homes, 
the goals of WIA can not be met.
    In addition to recognizing that the direct care workforce crisis 
will have an adverse impact on the WIB's role in providing successful 
employment outcomes to people with disabilities, this shortfall in 
direct care workers presents a legitimate workforce investment 
opportunity for State and local WIBs.
    A recent report by BDO Seidman, LLP (On The Growing Crisis in 
Recruiting and Retaining the Direct Support Workforce, December 2002) 
for ANCOR outlined the following key findings:
    Over the past decade, both the dollar amount and percentage 
increase in hourly wage rates for ``Direct Support Workers'' are far 
below that of comparable job categories as well as the national minimum 
wage.
    The agencies serving individuals with developmental disabilities 
cannot attain and retain qualified employees when wages in competitive 
markets are increasing at a much faster rate.
    The demand for ``Direct Support Workers'' continues to increase 
faster than the civilian labor force and is compounded by an aging 
population and increase in individuals with disabilities seeking 
support services.
    The skyrocketing cost of health insurance premiums prevents 
agencies from improving their benefit offerings.
    State funded systems, including those that rely on Medicaid, are 
held to fixed appropriations based upon state policy choices and 
economic conditions and are not as responsive as the private sector in 
adjusting to labor supply and demand factors. The demand for ``Direct 
Support Workers'' continues to increase while current funding levels 
are being held constant or declining.
    Without increased funding to improve the competitive position of 
private sector providers relative to workforce recruitment and 
retention, both access to and quality of services could be compromised 
in the future.
    In the direct support worker/paraprofessional labor market, most of 
the past 30 years have witnessed increasingly larger numbers of 
potential workers (high supply) who, because of low skills and other 
employment barriers, had relatively few job opportunities other than 
entry-level health care and health-related jobs (low demand). However, 
near the end of the 1990s, these dynamics have changed. One obvious 
cause was our nation's high-employment economy. Less obvious, however, 
is that a significant shift had occurred within the U.s. population 
that dramatically changed the relative supply of direct support worker 
labor. During the decade of the 1990s, growth in the traditional source 
of entry-level direct support workers women in the civilian workforce 
between the ages of 25 and 44 had begun to slow dramatically.
    While total employment in the U.S. workforce is projected to grow 
by just 15.2 percent from 2000 to 2010, the demand for home health 
aides will increase by 47 percent, and personal care aides by 62 
percent. The Bureau of Labor Statistics now projects that by the end of 
the decade in 2010, direct support jobs in long-term care will require 
780,000 net new positions an increase in demand for paid workers of 39 
percent. Using conservative estimates for those leaving 
paraprofessional work during that same period, the BLS further predicts 
that the total number of new job openings (growth plus replacements) 
will require 1,048,000 new paraprofessional long-term direct support 
workers in the coming decade. (Long-Term Care Financing and the Long-
Term Care Workforce Crisis: Causes and Solutions, prepared for Citizens 
for Long Term Care by The Paraprofessional Healthcare Institute, 
September 2002)
    As the following chart from ANCOR's BDO Seidman report 
demonstrates, labor statistics clearly indicate a growing need for 
direct support workers. The severity of the crisis is compounded as the 
U.S. population ages and individuals with disabilities seek support 
services to live and work in their communities.

    ANCOR is heartened by two steps taken by the Department of Labor. 
First, we are pleased that ANCOR's voice and that of others was heard 
in the Administration's 2001 listening sessions on the New Freedom 
Initiative. We are glad that the Department of Labor through the Office 
of Disability Employment Policy and the Employment and Training 
Administration has included the increase in the availability and 
quality of personal assistants and community workers in its agency 
report on removing barriers to community integration. In addition, the 
Centers for Medicare and Medicaid included the inadequate availability 
of personal assistance and direct support workers as a barrier to the 
goals of the President's New Freedom Initiative.
    Secondly, the Department has officially recognized the Direct 
Support Specialist occupation in its Dictionary of Occupational Titles 
(195.367-900). The apprenticeship will allow the Department to formally 
recognize a direct support training program under its Apprenticeship 
umbrella and provide national recognition for each agency registered. 
Creating the Direct Support Specialist occupation is a big step toward 
recognizing it as a career opportunity.
    Reauthorization of the Workforce Investment Act presents an 
opportunity to address a major barrier to the community living and 
employment goals in the President's New Freedom Initiative. ANCOR 
offers the following recommendations in conjunction with WIA 
reauthorization as a means of emphasizing the need to address the 
direct support professional workforce crisis.
    Recommendation: The reauthorization should include provisions that 
recognize and seek to address the community direct support worker 
crisis as eligible WIB collaborative activities under WIA.
    Recommendation: ANCOR supports maintaining dedicated funding 
streams for adult, dislocated worker, and youth activities to One-
Stops.
    ANCOR recommends WIA authorized funding to assist with training, 
recruitment and retention of direct support workers within adult and 
dislocated worker and youth activities
    Recommendation: WIA should authorize DOL to target specific WIA 
grant funds to state and local WIBs to address direct support workforce 
preparation and employment services for workers that provide supports 
and services to individuals with disabilities.
    Recommendation: WIA should authorize DOL to provide incentive 
grants to local One-Stops to work with employers of direct support 
workers to address training, recruitment and retention of direct 
support workers.
    Recommendation: WIA should authorize DOL to make available 
technical assistance funding on a national competitive basis to 
organizations to assist providers with promising practices in the 
recruitment and retention of direct support workers.
    Recommendation: WIA should authorize the DOL to provide targeted 
grant funds for collaborations with community providers and educators 
to develop direct support apprenticeship programs.
    Recommendation: WIA should authorize the DOL to use discretionary 
funds to fund the national College of Direct Support web-based training 
and its use with SWIBS and LWIBS.
    ANCOR appreciates this opportunity to provide the Subcommittee with 
recommendations for the reauthorization of the Workforce Investment 
Act. It is imperative that WIA be strengthened to ensure that all 
Americans who want to work including individuals with disabilities are 
given the opportunity to do so. ANCOR looks forward to working with the 
Subcommittee to ensure the WIA and its programs meet the needs of 
individuals with disabilities. Should there be any questions regarding 
ANCOR's statement, please contact Suellen Galbraith, Director for 
Public Policy or Kara Freeburg, Public Policy Analyst, at (703) 535-
7850.

                    Prepared Statement of Tony Young

    NISH welcomes the opportunity to provide this comment the 
reauthorization of the Workforce Investment Act during the 108th 
Congress. We appreciate the work of this Subcommittee in addressing 
this important legislation and are grateful for your attention to the 
concerns we have outlined in this statement. NISH is a national 
nonprofit organization, established in 1974 as part of the Javits-
Wagner-O'Day (JWOD) Act, whose mission is to create employment 
opportunities for people with severe disabilities by securing federal 
contracts. NISH has a network of more than 515 community rehabilitation 
programs that produce quality products and provide a variety of 
services to federal customers nationwide.
    NISH is committed to helping its associated agencies succeed in 
providing employment opportunities to individuals with severe 
disabilities. For many community programs, government procurement and 
the JWOD Program represent unfamiliar territory. For this reason, the 
Committee for Purchase from People Who Are Blind or Severely Disabled 
designated NISH to provide agencies and their federal partners with the 
tools they need for successful contract management. Among many other 
services, NISH offers its agencies legislative and regulatory 
assistance, communications and public relations materials, information 
technology support, engineering and technical assistance and an 
extensive professional training program.
    In FY 2001, through the JWOD Program, 518 NISH-affiliated agencies 
provided products and services to the federal government. People with 
disabilities are working on projects in all 50 states, the District of 
Columbia, Puerto Rico and Guam. In FY 2001, more than 33,000 
individuals with severe disabilities employed through JWOD contracts 
collectively earned nearly $216 million in wages. With its headquarters 
in Vienna, VA, NISH has regional offices in California, Washington, 
Georgia, Virginia, Texas and Illinois. Nationwide, NISH is committed to 
quality service and increased employment for Americans with severe 
disabilities nationwide.
    When Congress passed the Workforce Investment Act in 1998, it set 
in motion significant changes in the workforce investment system, 
including governance, accountability and increased coordination and 
collaboration among federally funded partner programs. Among the 
organizing principles of WIA is universal access where a set of cores 
services are intended to be available to any individual who needs them. 
A second principle is the concept of a One Stop service delivery system 
whereby federal assistance and services can be made available through 
partnership organizations which, in many cases, are located under one 
roof to facilitate ease of access and enhanced customer service. The 
One Stop delivery system, through statewide and local workforce 
development systems, was intended to increase the employment, 
retention, earnings, and skills attainment of participants, including 
people with disabilities.

VOCATIONAL REHABILITATION AND COMMUNITY REHABILITATION PROGRAMS WORKING 
                                TOGETHER

    An effectively operating Vocational Rehabilitation (VR) program is 
essential to long-term employment success for people with disabilities, 
especially people with severe disabilities. The VR services delivered, 
either by state agency personnel or in partnership with a Community 
Rehabilitation Program (CRP), can prepare participants with the skills 
needed for work.
    The Rehabilitation Act must encourage and promote collaboration and 
cooperation among the various agencies and organizations providing 
employment-related services to people with disabilities. This should 
include collaboration and cooperation among federal, state and local, 
public and private agencies and programs, including between and within 
various departments within federal and state government. All 
stakeholders should be included in the design and policy making process 
for providing employment services.
    The Rehabilitation Act should acknowledge that individuals with 
disabilities may benefit from other federal and state job training and 
rehabilitation related programs, including the Javits-Wagner-O'Day 
Program (JWOD). The Rehabilitation Act must require State VR Agencies 
to collaborate and cooperate with these programs to ensure the full 
participation of individuals with disabilities in the benefits of these 
state and federal programs. State VR Agencies must only provide the 
technical assistance needed to assist and facilitate the physical and 
programmatic accessibility of all job training and rehabilitation 
related programs for persons with physical, mental, sensory and 
cognitive disabilities.
    The VR program and the JWOD program must work cooperatively to 
create employment opportunities for people with severe disabilities and 
to prepare them to succeed in these opportunities. Policies, practices, 
and events of recent times have limited the cooperation of these two 
venerable programs. Common ground should be identified on which the 
employment of people with severe disabilities can once again be the 
focus of their cooperative efforts.

               SELF-DETERMINATION THROUGH INFORMED CHOICE

    People with severe disabilities should be empowered to determine 
their own employment goals, including employment under the Javits-
Wagner-O'Day Program, from among a variety of options consistent with 
their strengths, priorities, concerns, abilities, capabilities, 
interests, and informed choice. VR agencies should respect and act upon 
the informed choices made by people with severe disabilities to work to 
the fullest extent of their capabilities.
    The Rehabilitation Act must require the facilitation of informed 
consumer decision-making for individuals with disabilities through the 
exploration of options regarding choices among vocational goals and 
objectives; the selection of services and supports necessary and 
sufficient to achieve those goals and objectives; the identification 
and selection of the providers of those services; and the involvement 
of family members and authorized representatives as appropriate. The 
options that are explored must be consistent with the individual's 
strengths, priorities, concerns, abilities, capabilities, interests, 
and informed choice.

                          EMPLOYMENT SUPPORTS

    The Rehabilitation Act must require that a full range of employment 
supports, including personal assistance services, assistive technology/
rehabilitation engineering, and other types of accommodations, be 
available to individuals seeking or receiving services funded under the 
Rehabilitation Act to ensure a successful employment outcome.
    All services provided under the Rehabilitation Act must be 
individualized based on the strengths, resources, priorities, concerns, 
abilities, capabilities, and interests of the individuals seeking 
assistance. Such individualized services must include the provision of 
appropriate support services, accommodations, assistive technology/
rehabilitation technology services, and personal assistance services. 
These services must be provided as necessary to accommodate a person's 
disability, facilitate assessments and evaluations, maximize the 
benefits of training programs, and provide equal access to training and 
employment opportunities.

                                OUTCOMES

    The Rehabilitation Act must mandate a measure for successful 
outcomes that reflects the goals of the Rehabilitation Act to empower 
individuals to maximize employment, economic self sufficiency, and 
independence. The measure for successful outcomes should take into 
account such things as: 1) severity of disability; 2) long-term 
success; 3) informed choice; 4) wages and benefits; and 5) customer 
satisfaction.

   ENSURING THE ACCESSIBILITY OF JOB TRAINING PROGRAMS, EDUCATIONAL 
                  PROGRAMS AND OTHER SERVICE PROGRAMS

    The vision of the One Stop Career Centers established under the 
Workforce Investment Act (WIA) of 1998 was to be the culmination of a 
collaborative service delivery system that serves all Americans who 
encounter barriers to employment, including individuals with 
significant disabilities. Collaboration between the State Units 
administering the Public Vocational Rehabilitation (VR) Program and 
DOL-funded workforce investment services is intended to produce better 
information, more comprehensive services, easier access to services and 
improved long-term employment outcomes for individuals with 
disabilities.
    Under the Americans with Disabilities Act (ADA) and Sections 504 
and 508 of the Rehabilitation Act, the One Stop Career Centers created 
under the Workforce Investment Act are required to be both physically 
and programmatically accessible. Generic service providers, including 
One-Stop centers are responsible for serving individuals with 
disabilities under the same terms and conditions as they serve non-
disabled individuals. Congressional intent, which is consistent with 
the ADA and Section 504, was and is, that programmatic access to 
individuals with disabilities at the One Stops--those related to 
individuals with communicative, cognitive and sensory disabilities--
must include alternate formats (both Braille and large print), 
assistive technology, auxiliary aids and services, including 
interpreters and readers, and accessible software and related-
communicative equipment. These accommodations--which are necessary to 
facilitate the participation of individuals with physical, mental, 
sensory and cognitive disabilities in educational programs, vocational 
training, and other types of employment services provided by generic 
service providers--are the responsibility the generic service provider.
    As a required partner, State VR Agencies may provide technical 
assistance on identifying and providing needed accommodations and 
information on how to make physical facilities accessible to 
individuals with different types of disabilities. However, State VR 
Agencies should not be covering expenses associated with making One-
Stop facilities and programs accessible to individuals with 
disabilities. That responsibility must remain with the One-Stop Centers 
and the public and private providers they use to provide educational, 
employment and training services. In addition, State VR Agencies should 
not be asked to assume the expenses associated with the provision of 
core services in a One-Stop center merely because some individuals with 
disabilities will be benefiting from those services. This is especially 
important in that the comprehensive services provided by the State VR 
and Blind Agencies are not duplicative of the services provided by the 
One Stop Centers. One Stops need to assure that people with 
disabilities have access to the full range of services including 
Individual Training Accounts.
    While some progress has been made to effect physical accessibility 
to individuals with disabilities at some of the One Stops, many 
challenges remain particularly with regard to programmatic 
accessibility. The message is simple: If individuals with disabilities 
cannot get through the door of the one-stop career centers (or are 
unable to have meaningful access to information and services once 
inside), they cannot and will not be served or secure employment.

                FUNDING OF WIA ONE STOP SERVICE CENTERS

    Current obligations of the State Vocational Rehabilitation agencies 
already exceed their level of funding. During consideration of the WIA 
legislation in the Senate, the then-Chairman of the Subcommittee on 
Employment and Training, Senator Mike DeWine (R.OH.) stated that 
``While the VR program is to be linked to the workforce investment 
system, funds appropriated for the VR program are not to be compromised 
or diverted to other workforce populations.''
    There are ample requirements regarding accountability for VR funds 
in the specifically crafted Rehabilitation Act of 1973, as amended. In 
Section 16(a), the Transfer of Funds section states in part: ``No funds 
appropriated under this Act for any program or activity may be used for 
any purpose other than that for which the funds were specifically 
authorized.'' Relatedly, Section 3(b) of the Rehab Act states: ``The 
Secretary shall take whatever action is necessary to ensure that funds 
appropriated pursuant to this Act are expended only for the programs, 
personnel and administration of programs carried out under this Act.''
    When WIA was authorized, it was believed that the intent of 
Congress was for mandatory partners to contribute resources to the 
statewide workforce investment system consistent with the partner's 
authorizing legislation. NISH holds to this belief and fully supports 
the cost-allocation methodology that is currently defined in the 
Department of Labor's Employment and Training Administration's (DOL/
ETA) Final notice entitled ``Resource Sharing for Workforce Investment 
Act One-Stop Centers: Methodologies for Paying or Funding Each Partner 
Program's Fair Share of Allocable One-Stop Costs (published in the 
Federal Register on May 31, 2001), and the DOL/ETA's ``One-Stop 
Comprehensive Financial Management Technical Assistance Guide'' (dated 
July 2002). Since this methodology of sharing resources permits 
mandatory partners to contribute their fair share to the support of the 
system, based on utilization and benefit to their target population, 
NISH would oppose any alternative efforts or prescribed methods for 
garnering additional resources from the Public VR Program.
    NISH opposes any efforts to set aside a percentage of the Public VR 
Program's Title I funds to support the infrastructure of the One Stop 
Career Centers.

                ACCOUNTABILITY AND PERFORMANCE MEASURES

    The Administration has proposed to refine the performance measures 
for the One Stops to bring them in line with the common set of measures 
across federal employment and job training programs. The four measures 
for adults are: entered employment, retention in employment, earnings 
gains and program efficiency. For youth the measures are: placement in 
employment or education, degree or certificate attainment, literacy and 
numeracy gains, and program efficiency. This proposal will result in 
the unintended consequence of eliminating many individuals with 
disabilities from the programs being measured by these standards. 
Performance measures for both the vocational rehabilitation program and 
the One Stops must allow for alternative forms of evaluation. 
Flexibility must guide the measurement standards, allowing the systems 
to account for the ways in which they were able to meet the unique and 
individualized needs of the people they serve.

 ENSURING REPRESENTATION OF DISABILITY INTEREST ON THE STATE WORKFORCE 
                        INVESTMENT BOARDS (SWIB)

    Nearly five years after implementation of the Workforce Investment 
Act (WIA), States are attempting to meet the requirement to include a 
representative of the Public VR Program on the SWIB by having the head 
of the umbrella agency housing the Designated State Unit administering 
the Public VR Program serve as the VR representative on the SWIB. In 
addition, States that, based on the grandfather clause in Title I of 
WIA, decided to use existing boards to operate as the SWIB may not have 
anyone at all representing VR. Neither of these actions meet the intent 
of WIA to ensure inclusion of the needs of people with disabilities at 
all levels of the WIA system.
    Further, in some regions, community-based providers have reported 
that their One-Stops view them as direct competition, and prohibit 
their participation on local or state boards. In fact, in some of those 
areas, it is now the community-based provider that serves the role of 
providing individuals with disabilities the information, training, and 
resources necessary to obtain or regain employment with diminishing 
resources. WIA job seekers in general and individuals with disabilities 
in particular, stand to benefit from the WIA envisioned public-private 
partnerships between the One-Stops and community-based providers that 
current practice now impedes.
    Although in some areas excellent relationships have been 
established between Local Boards, One-Stops, VR, people with 
disabilities, and community-based providers, other regions are sorely 
lacking such relationships and have expressed concerns over the 
inability to found such relationships. States and the One-Stops should 
take additional steps to get more representation from the disability 
community in the WIA system by ensuring direct representation of 
Vocational Rehabilitation (VR), community-based providers, and people 
with disabilities on State Workforce Investment Boards.
    Recognizing the expertise of individuals staffing State VR 
Agencies, community-based providers, and consumer organizations as a 
valuable resource for the WIA system, NISH believes each State 
Workforce Investment Board (SWIB) must include in its membership at 
least one individual with a disability, one representative of 
community-based providers, and the State's VR Director, i.e., the 
person who is responsible for overseeing the administration of the 
State Plan for VR Services, or an individual designated by the VR 
Director. In States where State law has established a separate State VR 
Agency to serve individuals who are blind and visually impaired, the 
Director of that specific VR program should also be a voting member of 
the SWIB.
    NISH recommends that Sec. 111(b)(1)(C)(v) of WIA be amended to read 
as follows:
    (v) representatives of individuals and organizations that have 
experience and expertise in the delivery of workforce investment 
activities, including chief executive officers of community colleges 
and community-based organizations within the State (including 
organizations representing and providing employment service to 
individuals with disabilities);
    NISH also recommends that Sec. 111(b)(1)(C)(vi)(I) of WIA be 
amended to read as follows:
    Sec. 111(b)(1)(C)(vi)
    (I) the lead State agency officials with responsibility for the 
programs and activities that are described in section 121(b) and 
carried out by one-stop partners; and
    Add a new subsection (vi)(II) to read as follows:
    (vi)(II) in the case of the Public Vocational Rehabilitation 
Program authorized under title I of the Rehabilitation Act of 1973 (29 
U.S.C. 720 et seq.), the Vocational Rehabilitation Director employed by 
the Designated State Unit or the Vocational Rehabilitation Directors in 
States that have a separate State entity that is responsible for the 
rehabilitation of individuals who are blind and visually impaired; and
    Redesignate current subsection (vi)(II) as (vi)(III).
    (vi)(III) in any case in which no lead State agency official has 
responsibility for such a program, service or activity, a 
representative in the State with expertise relating to such program, 
service, or activity; and

  ENSURING THE CONTINUED REPRESENTATION FROM VR AND INDIVIDUALS WITH 
         DISABILITIES ON THE LOCAL WORKFORCE INVESTMENT BOARDS

    Currently, WIA requires Local Workforce Investment Boards (WIBs) to 
include representatives of local community-based organizations 
(including organizations representing individuals with disabilities and 
veterans). As a result of this requirement, many Local WIBs include 
representatives of the Public VR program and individuals with 
disabilities. NISH recommends strengthening this language to ensure 
that the interests of people with disabilities continue to remain a 
part of local WIA implementation by making specific reference to a 
representative of the Public VR Program, a representative of community-
based providers, and a least one individual with a disability.

  TRANSITION PROGRAMS NEED TO INCLUDE STRONG PARTNERSHIPS WITH SCHOOLS

    We are concerned that the administration has proposed a targeted 
approach to serving youth that limits the programs to out of school 
youth. The schools are an incredibly important partner in services for 
youth who are ``at risk'' of a jobless future when they leave school. 
Youth with disabilities who remain in school certainly fall within that 
``at risk'' category. The youth program must include a strong component 
of partnership with the school system, to ensure a seamless transition 
for youth with disabilities from school to postsecondary educational, 
job training, and job placement opportunities.

                               CONCLUSION

    While NISH believes in the dignity of work and the power of 
partnerships to empower individuals with disabilities to live, work, 
and recreate in their community, we must insist that these partnerships 
include meaningful supports and services to ensure full participation. 
While we support continued partnership at the One Stop Career Centers, 
we remain concerned about the present and future participation of 
individuals with disabilities in a system that remains largely 
inaccessible to them. We appreciate any assistance you can provide in 
addressing these issues.

                               IN SUMMARY

    NISH will continue to support the participation of the programs 
administered under the Rehabilitation Act of 1973, as amended, together 
with the other mandatory partners, through existing Cost Allocation 
Guidelines.
    NISH does not believe that State VR Agencies should be covering 
expenses associated with making One Stop facilities and programs 
accessible to individuals with disabilities.
    NISH believes that VR participation on the State and local WIBs is 
critical. We further believe that individuals with disabilities and 
community-based providers should be represented on the both the SWIB 
and LWIB and support any effort to make this language stronger.
    NISH supports youth programs that include strong partnerships with 
the school system.
    Thank you for your attention to our comments. We would be happy to 
discuss this further and answer any questions you may have. Please 
contact Tony Young, Assistant Vice President, Governmental Affairs and 
Workforce Development, NISH, via email at [email protected] or by 
telephone on 571-226-4567.

    [Whereupon, at 10:45 a.m., the subcommittee was adjourned.]

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