To assist workers who are laid off as a result of international trade, the Trade Expansion Act of 1962 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 statute. For fiscal year 2004, about $1.1 billion was appropriated for income support and about $269 million for training and other benefits. 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 the production of an article; 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 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 and doubled the amount of funds available for training annually. The act also changed some administrative requirements in an effort to accelerate the process of enrolling workers in the program; increased the maximum number of weeks of income support available, to match the maximum number of weeks of training available; added two new benefits, a Health Coverage Tax Credit and a wage expanded program eligibility to include some secondary workers affected by trade with countries other than Canada and Mexico as well as more workers affected by a shift in production (see table 1). Most of the changes included in the act—including the petition-processing time limit, the training enrollment deadline, and the expanded group eligibility criteria—took effect for petitions filed on or after November 4, 2002. Congress allowed more time for the implementation of the new benefit programs created by the act, giving Labor until August 2003 to implement the wage insurance program and certain components of the Health Coverage Tax Credit. Under the current revised 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). Extended income support. Participants may receive up to 104 weeks of extended income support benefits beyond 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 either 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. 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 either be 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 new 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. The Internal Revenue Service (IRS) along with other federal agencies administers the tax credit; states are required to regularly submit to the IRS lists of potentially eligible TAA participants. Wage insurance. The wage insurance program—known as the Alternative TAA (ATAA) program—is a demonstration project designed for older workers 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 provides 50 percent of the difference between the participant’s pre- and postlayoff earnings up to a maximum of $10,000 over 2 years. In order for the workers covered by a petition for TAA assistance to qualify for the benefit, the petition must include a specific request for ATAA eligibility. The petition must stipulate that a significant proportion of the workers covered by the petition are age 50 and older and that the workers lack easily transferable skills. 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 law requires Labor to complete its investigation, and either certify or deny the petition, within 40 days after it has received the petition. Labor investigates whether a petition meets the requirements for TAA certification by taking steps such as contacting company officials, surveying a company’s customers, and examining aggregate industry data. 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. 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 in one of several ways. Table 2 summarizes these statutory eligibility requirements for the TAA program. If Labor denies a petition for TAA assistance, the workers who would have been certified under the petition have two options for challenging this denial. They may request an administrative reconsideration of the decision by Labor. To take this step, workers must cite reasons why the denial is erroneous according to the facts, the interpretation of the facts, or the law itself, and must mail their request to Labor within 30 days of the announcement of the denial. Workers may also appeal to the United States Court of International Trade for judicial review of Labor’s denial. Workers must appeal a denial to the U.S. Court of International Trade within 60 days of either the initial denial or a denial following administrative reconsideration by Labor. (See app. II for a summary of final decisions made by the U.S. Court of International Trade since fiscal year 1999 on TAA appeals.) The Workforce Investment Act (WIA) of 1998 encouraged greater coordination between the TAA program and other federal employment and training programs. WIA required the use of a consolidated service delivery structure—called the one-stop center system—and mandated that services for about 17 categories of federal employment and training programs, including TAA, be accessible through this system. These programs must ensure that certain services, such as eligibility determination and assessment, are available through at least one one-stop center in each local area. The WIA dislocated worker program, also a mandated partner in the one- stop delivery system, is the federal government’s primary employment and training program designed for laid-off workers. Funded at almost $1.5 billion in fiscal year 2004, the dislocated worker program includes two components: formula funds that Labor annually distributes to states (about $1.2 billion) and the national reserve (about $300 million). Labor uses part of the national reserve to award national emergency grants to states, based on their requests throughout the year, to help them respond to disasters and major layoffs. Labor also uses part of the national reserve to award national emergency grants specifically to serve trade-affected workers who are also eligible for the TAA program. States report that most trade affected workers are enrolling in services sooner than in prior years because of some of the key provisions of the TAA Reform Act, but the new training enrollment deadline has had unintended consequences for some workers. The new 40-day time limit for Labor to process petitions has enabled workers to receive services more quickly after being laid off. In addition to setting the new petition processing time limit, the act also established a new training enrollment deadline for workers, and states reported to us that most workers are now enrolling in training sooner as a result of this deadline. However, states reported that some workers have been negatively affected by the deadline. For example, some workers may not enroll in the most appropriate training or may miss the deadline and lose extended income support. These problems are heightened in the case of large layoffs, some states reported.