Funding for Workforce Development in the American Recovery and Reinvestment Act (ARRA) of 2009
Released: 2009-02-19T00:00:00

O n On February 13, 2009, both the House and the Senate passed the conference version of H.R. 1 , the American Recovery and Reinvestment Act of 2009 (ARRA, hereafter referred to as the "conference version"). The primary purposes of the ARRA focus on promoting economic recovery, assisting those most affected by the recession, improving economic efficiency by "spurring technological advances in science and health," investing in infrastructure, and stabilizing state and local government budgets. The House had previously passed its version of H.R. 1 (hereafter referred to as the "House bill") on January 28, 2009, while the Senate passed S.Amdt. 570 , an amendment in the nature of a substitute to H.R. 1 (hereafter referred to as the Senate bill), on February 10, 2009.

Under the House bill and the Senate bill, funds would have been provided to several existing workforce development programs administered by the U.S. Department of Labor (DOL), including programs authorized by the Workforce Investment Act (WIA). The conference version provides $4.81 billion in funding for these workforce development programs.

This report provides a brief overview of the key provisions related to workforce development programs administered by DOL that were included in the conference version under Division A, Title VIII, Department of Labor. It also provides estimates of state grants for programs for which these estimates are relevant and for which data needed to produce the estimates are available. The estimates are shown in appendix tables that present state-by-state allocations for adult, youth, and dislocated worker programs. It also includes a discussion of relevant provisions that were included in the House- and Senate-passed versions of H.R. 1 .

Funding Overview

Under the House bill, an additional $5.0 billion would have been provided for existing workforce development and related programs administered by DOL; the Senate bill would have provided $3.93 billion for these same programs. The conference version provides $4.81 billion for workforce development programs. Table 1 gives an overview of the specific funding provided under the House and Senate bills and the conference version. The remainder of this report provides a more detailed discussion of the specific funding provisions.

Funding for Workforce Development

The House and Senate bills would have provided, and the Conference version did provide, funding for a number of existing workforce development programs, including the three state formula grant programs that provide funding for youth, adults, and dislocated workers—Title I-B of the WIA. Other programs authorized by the WIA will receive funding from the Conference version (and would have received funding under the House and Senate bills): National Reserve (WIA Title I-D, Section 173), YouthBuild (WIA Title I-D, Section 173A), and Pilot and Demonstration Programs (WIA Title I-D, Section 171). Additional workforce development programs provided for in the ARRA include state unemployment insurance and employment service operations, Title V of the Older Americans Act of 1965, and DOL management. Provisions applicable to each of these programs are discussed below.

WIA Title I Programs Included in the ARRA

The Workforce Investment Act of 1998 ( P.L. 105-220 ) provides job training and related services to unemployed and underemployed individuals. WIA programs are administered by the DOL, primarily through its Employment and Training Administration (ETA). State and local WIA training and employment activities are provided through a system of One-Stop Career Centers. Authorization of appropriations under WIA expired in FY2003 but is annually extended through appropriations acts.

WIA authorizes numerous job training programs, including:

state formula grants for Youth, Adult, and Dislocated Worker Employment and Training Activities; Job Corps; and national programs, including the Native American Program, the Migrant and Seasonal Farmworker Program, the Veterans' Workforce Investment Program, Responsible Reintegration for Young Offenders, the Prisoner Reentry Program, Community-Based Job Training Grants, and YouthBuild. In FY2008, programs and activities noted above were funded through the WIA at $5.2 billion, including $3.1 billion for state formula grants for adult, youth, and dislocated worker training and employment activities. This section discusses WIA Title I programs that received additional funding through the ARRA. Where appropriate, appendix tables provide estimates of the amounts that states will receive.

Title I-B Grants to States for Adult Employment and Training

The adult program provides training and related services to individuals ages 18 and older through formula grants allocated to states, which in turn allocate funds to local entities. Any individual may receive "core" services (e.g., job search assistance). To receive "intensive" services (e.g., individual career planning and job training), an individual must have received core services and need intensive services to become employed or to obtain or retain employment that allows for self-sufficiency. To receive training services (e.g., occupational skills training), an individual must have received intensive services and need training services to become employed or to obtain or retain employment that allows for self-sufficiency.

Both the House and Senate bills would have provided an additional $500 million for Title I-B grants to states for adult employment and training activities, which would have been available for obligation on the date of enactment of the ARRA. The Senate bill would have required that priority for use of these funds be given to recipients of public assistance and other low-income individuals for intensive services and training. The House bill, however, did not indicate prioritization for use of funds under this section of the act.

The conference version provides an additional $500 million for Title I-B grants to states for adult employment and training activities. Similar to the Senate bill, the conference version requires that priority for use of these funds be given to recipients of public assistance and other low-income individuals for intensive services and training.

Funds for adult employment and training are allocated through the state grant formulas. Estimated state grants were calculated using these formulas after reserving 0.25% of the total appropriation for the outlying areas (as is done when making regular Title I-B allocations). Appendix Table A-1 details the results of these calculations.

Title I-B Grants to States for Youth Activities

The youth program provides training and related services to low-income youth ages 14-21 through formula grants allocated to states, which, in turn, allocate funds to local entities.

Both the House and Senate bills would have provided a total of $1.2 billion for grants for youth activities, including summer employment, which would be available for obligation on the date of enactment of the ARRA. Each measure includes provisions affecting the expenditure of these funds:

The House and Senate bills specified that no portion of this additional funding would be available for Youth Opportunity Grants. The House and Senate bills would have changed the age for an "eligible youth" in these programs from 21 to 24. The House bill would have stipulated that the only performance measure to be used in assessing the effectiveness of summer jobs for youth is attainment of basic skills and, as appropriate, work readiness or occupational skills. The Senate bill would have required the use of the same performance indicator but would have applied it to all youth activities supported with funds from this section.

The conference version provides $1.2 billion for grants for youth activities and specifies that:

no portion of this additional funding is available for Youth Opportunity grants; the age for an "eligible youth" in these programs from will increase from 21 to 24 years of age; the only performance measure to be used in assessing the effectiveness of summer employment for youth is attainment of basic skills and, as appropriate, work readiness or occupational skills; and the formula allocation for grants provided under this section is to remain the same as if the total allocation were less than $1 billion.

Appendix Table A-2 provides estimated state grants under this program.

Title I-B and I-D Grants to States for Training and Employment of Dislocated Workers

A majority of WIA dislocated worker funds are allocated by formula grants to states (which in turn allocate funds to local entities) to provide training and related services to individuals who have lost their jobs and are unlikely to return to those jobs or similar jobs in the same industry. The remainder of the appropriation is reserved by DOL for a National Reserve account, which in part provides for National Emergency Grants to states or local entities (as specified under Section 173).

Both the House and Senate bills would have provided a total of $1.0 billion for formula grants to states for employment and training activities for dislocated workers, which would have been available for obligation on the date of enactment of the ARRA.

The House bill would have provided a total of $500 million for the Dislocated Workers National Reserve for grants to eligible entities serving areas of high unemployment or high poverty and experiencing major economic dislocations. Additionally, the House bill would have directed the Secretary of Labor to ensure that applicants for these funds demonstrate the manner in which supportive services (e.g. income support, child care) necessary for participation in job training would be provided.

The Senate bill would have provided a total of $450 million for the Dislocated Workers National Reserve, $200 million of which would have been for national emergency grants. Additionally, the Senate bill would have directed the remaining $250 million for competitive grants to train workers for high growth and emerging industry sectors (see details in section on " Title I-D Grants for High Growth and Emerging Industry Sectors ," below).

The conference version provides a total of $1.25 billion for formula grants to states for employment and training for dislocated workers. In addition, the conference version provides $200 million for the Dislocated Workers National Reserve, which is used for technical assistance, projects, and emergency grants.

Appendix Table A-3 provides estimated state grants under this program.

Title I-D Grants for YouthBuild

This competitive grant program funds projects that provide education and construction skills training for disadvantaged youth. Since its inception in 1992, the program was administered by the Department of Housing and Urban Development, but was moved to DOL by the YouthBuild Transfer Act ( P.L. 109-281 ), effective for FY2007. Participating youth work primarily through mentorship and apprenticeship programs to rehabilitate and construct housing for homeless and low-income families.

Both the House and Senate bills would have provided additional funding for YouthBuild, which would be available for obligation on the date of enactment of the ARRA. The House bill would have provided $50 million for YouthBuild activities, but, unlike the Senate bill, did not specify any stipulations on expenditures. The Senate bill would have provided $100 million for YouthBuild grants. However, the Senate bill would have allowed, in program years 2008 and 2009, participation for individuals who have dropped out of high school and re-enrolled in an alternative school. In addition, the Senate bill would have allowed a local YouthBuild board to award a training contract to an institution of higher education if such a choice would facilitate the training of multiple individuals in high-demand occupations.

The conference version provides $50 million for YouthBuild and, similar to the Senate bill, allows, in program years 2008 and 2009, participation for individuals who have dropped out of high school and re-enrolled in an alternative school, if that re-enrollment is part of a "sequential service strategy" (see footnote 8 ).

Title I-D Grants for High Growth and Emerging Industry Sectors

Funds for this program would be distributed by a competitive grant process to provide worker training and placement in high growth and emerging industry sectors.

The House bill would have provided a total of $750 million for these grants. Of the total proposed allotment in the House bill, $500 million would have been reserved for research, labor exchange, and job training projects that prepare workers for careers in the following energy efficiency and renewable energy industries:

energy-efficient building, construction, and retrofits industries; renewable electric power industry; energy-efficient and advanced drive train vehicle industry; biofuels industry; deconstruction and materials use industry; energy efficiency assessment industry serving the residential, commercial, or industrial sectors; and manufacturers that produce sustainable products using environmentally sustainable processes and materials.

In the House bill, the remainder of $250 million would have been allocated on the basis of priority for projects preparing workers for careers in the health care industry.

The Senate bill would have required the Secretary of Labor, in awarding the $250 million from the Dislocated Workers National Reserve, to give priority to projects that prepare workers for careers in the energy efficiency and renewable energy industries listed above and for careers in the health care sector.

The conference version provides $750 million for competitive grants for worker training in high-growth and emerging sectors. The conference version specifies that:

of the $750 million, $500 million is reserved for research, labor exchange, and job training projects that prepare workers for careers in energy efficiency and renewable energy industries (listed above); the Secretary of Labor should give priority to projects in the health care industry when granting the remaining $250 million; a local workforce investment board may award a training contract to an institution of higher education if such a choice would facilitate the training of multiple individuals in high-demand occupations; and the $750 million is to remain available through June 10, 2010.

Job Corps

Job Corps is a residential job training program first established in 1964 that provides services to low-income individuals ages 16-24 primarily through contracts administered by DOL with corporations and nonprofit organizations. Currently, there are 122 Job Corps centers in 48 states, the District of Columbia, and Puerto Rico. On February 8, 2007, DOL announced that three new centers will open, including the first centers in each of the remaining two states, New Hampshire and Wyoming.

The House bill would have provided a total of $300 million to the Job Corps program, and the Senate bill would have provided $160 million for the Job Corps program. Both allocations would have been available for obligation on the date of enactment of the ARRA and would have remained available for obligation through June 30, 2010. While both the House and Senate bills would have allowed the Secretary of Labor to transfer up to 15% of the allocated funds for operational needs of Job Corps Centers, the House and Senate bills contained different stipulations:

Funds provided in the House bill would have been available for construction, rehabilitation, and acquisition of Job Corps Centers; in the Senate bill, funds were to be used only for the construction, rehabilitation, or repair of facilities. The House bill would have allowed a partial exception to the requirement to close an account after five years, in order to give priority to projects that can begin construction within 120 days of enactment of the act. The House bill would also have given priority to activities that could start promptly and would have had the greatest impact on the energy efficiency of Job Corps facilities. The House bill would have required the Secretary of Labor to report to the Committee on Appropriations in the House and Senate on actual obligations, expenditures, and unobligated balances for each activity funded by this section. The initial report would have been due by September 30, 2009, and quarterly thereafter. The Senate bill would have required the Secretary of Labor, within 90 days of enactment of the bill, to provide to the Committee on Appropriations in the House and Senate an operating plan describing the uses of funds in this provision.

The conference version provides $250 million for the construction, rehabilitation, and acquisition of Job Corps Centers, with the following provisions:

The funds will remain available for obligation through June 30, 2010. There will be a partial exception to the requirement to close an account after five years, in order to give priority to projects that can begin construction within 120 days of enactment of the act. The Secretary of Labor is permitted to transfer up to 15% of the allocated funds for operational needs of Job Corps Centers. The Secretary of Labor is required to provide to the Committee on Appropriations in the House and Senate an operating plan on the allocation of funds and a report on actual obligations, expenditures, and unobligated balances for each activity funded by this section. The initial report is due by September 30, 2009, and quarterly thereafter.

Additional Workforce Development Funding in the ARRA

In addition to adding funds to the job training programs in Title I of WIA, both the House and Senate bills would have provided additional funding for three related programs:

The House bill would have allocated $500 million for state employment services operations, 50% of which would have been allocated for reemployment services for unemployment insurance claimants. In addition, the House bill would have altered the allocation formula for funds under this provision. The Senate bill would have allocated $400 million for these services, would have required that $250 million be allocated for reemployment services for unemployment insurance claimants, and would have required the Secretary of Labor to establish planning and reporting procedures to provide oversight of these funds. Both the House and Senate bills would have allocated $120 million for the Community Service Employment for Older Americans program, which would have been allotted in proportion to grantees' PY2008 allocation within 30 days for the enactment of this legislation. The House bill would have provided $80 million for DOL Departmental Management for the enforcement of worker protection laws, oversight, and coordination activities related to the infrastructure and unemployment insurance investments in the ARRA. The Senate bill would have provided $3 million for the DOL Office of the Inspector General to provide oversight and audit of programs, grants, and projects funded under this act.

The conference version also provides additional funding for three workforce development-related programs:

$400 million for state employment services operations, $250 million of which must be used for reemployment services for unemployment insurance claimants; it would also require the Secretary of Labor to establish planning and reporting procedures to provide oversight of these funds. The funds are to remain available to states through September 30, 2010. $120 million for the Community Service Employment for Older Americans program, which is to be allotted in proportion to grantees' PY2008 allocation within 30 days for the enactment of this legislation. Funds are to remain available through June 30, 2010. $80 million for DOL Departmental Management for the enforcement of worker protection laws, oversight, and coordination activities related to the infrastructure and unemployment insurance investments in the ARRA. $6 million for the DOL Office of the Inspector General to provide oversight and audit of programs, grants, and projects funded under this act.

Appendix. Estimated State Grants for Selected Programs