To assist workers who are laid off as a result of international trade, Congress passed the Trade Expansion Act of 1962 and created the Trade Adjustment Assistance program. Historically, the main benefits available through the program have been extended income support and training. Participants are generally entitled to income support, but the amount of funds available for training is limited by federal statute. Labor certifies groups of laid-off workers as potentially eligible for TAA benefits and services by investigating petitions that are filed on the workers’ behalf. Workers are eligible for TAA if they were laid off as a result of international trade and were involved in making a product or supplying component parts to or performing finishing work for directly affected firms. Workers served by the TAA program have generally been laid off from the manufacturing sector. Congress has amended the TAA program a number of times since its inception. For example, in 1974 Congress eased program eligibility requirements, and in 1988 Congress added a requirement that workers be in training to receive income support. In 1993 Congress created a separate North American Free Trade Agreement Transitional Adjustment Assistance (NAFTA-TAA) program specifically for workers laid off because of trade with Canada or Mexico. The most recent amendments to the TAA program were included in the TAA Reform Act of 2002 (Pub. L. No. 107-210), which was signed into law in August 2002. The Reform Act consolidated the former TAA and NAFTA-TAA programs into a single TAA program, doubled the amount of funds available for training annually, expanded program eligibility to more workers, extended the time periods covered by the program, and added new benefits. Under the current TAA program, eligible participants have access to a wider range of benefits and services than before, including: Training. Participants may receive up to 130 weeks of training, including 104 weeks of vocational training and 26 weeks of remedial training (e.g., English as a second language or literacy). On-the-job training is also available under TAA. Participants in TAA-approved training must attend training full-time. Extended income support, or Trade Readjustment Allowances (TRA). Participants may receive up to 104 weeks of extended income support benefits after they exhaust the 26 weeks of UI benefits available in most states. This total includes 78 weeks while participants are completing vocational training and an additional 26 weeks, if necessary, while participants are completing remedial training. The amount of extended income support payments in a state is set by statute at the state’s UI benefit level. During their first 26 weeks of extended income support, participants must be enrolled in training, have completed training, or have a waiver from this requirement; to qualify for more than 26 weeks of extended income support, participants must be enrolled in training. The TAA statute lists six reasons why a TAA participant may receive a waiver from the training requirement, including that the worker possesses marketable skills or that the approved training program is not immediately available. States must review participants’ waivers at least every 30 days and if necessary may continue to renew participants’ waivers each month throughout the initial 26 weeks of extended income support. Job search and relocation benefits. Payments are available to help participants search for a job in a different geographical area and to relocate to a different area to take a job. Participants may receive up to a maximum of $1,250 to conduct a job search. The maximum relocation benefit includes 90 percent of the participant’s relocation expenses plus a lump sum payment of up to $1,250. Health Coverage Tax Credit (HCTC). Eligible participants may receive a tax credit covering 65 percent of their health insurance premiums for certain health insurance plans. To be eligible for the credit, trade-affected workers must be either receiving extended income support payments, or they must be eligible for extended income support but are still receiving UI payments, or they must be recipients of benefits under the wage insurance program. As a result, trade-affected workers who are still receiving UI rather than extended income support may register for the HCTC only if they are in training, have completed training, or have a waiver from the training requirement. Wage insurance. The wage insurance program—known as the Alternative TAA (ATAA) program—is a demonstration project designed for workers age 50 and older who forgo training, obtain reemployment within 26 weeks, but take a pay cut. Provided the participant’s annual earnings at his or her new job are $50,000 or less, the benefit reimburses 50 percent of the difference between the participant’s pre- and postlayoff earnings up to a maximum of $10,000 over 2 years. The process of enrolling trade-affected workers in the TAA program begins when a petition for TAA assistance is filed with Labor on behalf of a group of laid-off workers. Petitions may be filed by entities including the employer experiencing the layoff, a group of at least three affected workers, a union, or the state or local workforce agency. The TAA statute lays out certain basic requirements that all certified petitions must meet, including that a significant proportion of workers employed by a company be laid off or threatened with layoff. In addition to meeting these basic requirements, a petition must demonstrate that the layoff is related to international trade. The law requires Labor to complete its investigation, and either certify or deny the petition, within 40 days after it has received it. When Labor has certified a petition, it notifies the relevant state, which has responsibility for contacting the workers covered by the petition, informing them of the benefits available to them, and telling them when and where to apply for benefits. Workers generally receive services through a consolidated service delivery structure called the one-stop system, where they can access a broad range of services beyond TAA, including the Workforce Investment Act (WIA) Dislocated Worker program, the Wagner-Peyser Employment Service (ES) program, and services funded by the WIA National Emergency Grants. Training for trade-affected workers may be funded by TAA or by one of the WIA funding sources. Workers often meet one on one with a case manager who may assess worker’s skills and help decide what services they need. Because the TAA program has limited funds that can be used for case management and program administration, these case management services are often performed by ES or WIA Dislocated Worker program staff. When this occurs, participants are often co-enrolled in WIA or ES as well as TAA. About $750 million was appropriated for income support for trade-affected workers for fiscal year 2005, while another $259 million was appropriated for training, job search and relocation allowances, and administrative costs. Of the $259 million, $220 million is set aside for training, and Labor allocates 75 percent of it to states according to a formula that takes into account each state’s previous year allocations, accrued expenditures, and participant levels. Labor holds the remaining 25 percent of training funds in reserve, to distribute to states throughout the year according to need. To cover administrative costs associated with training under the TAA program, Labor allocates additional administrative funds to each state equal to 15 percent of its training allocation. Labor is responsible for monitoring the performance of the TAA program. In fiscal year 1999, Labor introduced a new participant outcomes reporting system, the Trade Act Participant Report (TAPR), that was designed to collect national information on TAA program participants, services, and outcomes. States are required to submit TAPR reports to Labor each quarter, with data on individuals who exited the TAA program. The TAPR data submitted by states are used to calculate national and state outcomes on the TAA performance measures for each fiscal year, which include (1) the percentage of participants that found jobs after exiting the program (reemployment rate), (2) the percentage of those participants who were employed after exiting the program who were still employed 9 months later (retention rate), and (3) the earnings in their new jobs compared to prior earnings (wage replacement rate). Labor’s guidance requires states to include in their TAPR submissions all TAA participants who exit the program, that is, stop receiving benefits or services. Under Labor’s guidance, a participant is defined as any individual who receives any TAA benefit or service, including extended income support payments, training, or job search and relocation allowances. According to this definition, participants would include those who, for example, received only extended income support and a waiver that allowed them to forgo training. TAPR reports include data on each exiter’s characteristics, services received, and employment outcomes. Data on characteristics, for example, should include the worker’s date of birth, gender, ethnicity, educational level, and layoff date. Data on services received should include data on training (such as dates the participant entered and completed training, and the type of training received), on other TAA benefits received (such as extended income support, job search allowance, and relocation allowance), and on co-enrollment in WIA or other federal programs. Data on outcomes should include the date the worker exited the TAA or other federal program, whether the worker was employed in the first full quarter after exit, whether the worker was employed in the third full quarter after exit, and the worker’s earnings in these quarters. Where possible, outcome data are to be obtained from state UI wage records. Labor uses the TAPR data to track TAA program outcomes against national goals. Unlike the WIA programs, however, TAA has no individual state performance goals, and states do not receive incentives or sanctions based on their performance levels, nor are they otherwise held accountable for their performance. At the national level, the TAA program has failed to meet at least one of its performance goals each year since 2001, the first year for which goals were set. Table 1 shows goals and outcomes for fiscal years 2004 and 2005.