1. IAJVS 2012 Annual Conference April 23, 2012 Houston, TX

2. www.nationalskillscoalition.org Our Vision We seek an America that grows its economy by investing in its people, so that every worker and every industry has the skills to compete and prosper.

3. www.nationalskillscoalition.org Our Mission We organize broad-based coalitions seeking to raise the skills of America’s workers across a range of industries. We advocate for public policies that invest in what works, as informed by our members’ real-world expertise. And we communicate these goals to an American public seeking a vision for a strong U.S. economy that allows everyone to be part of its success.

4. www.nationalskillscoalition.org Federal Funding

5. www.nationalskillscoalition.org FY 2013 Budget and Appropriations Process President’s budget (early Feb.) starts year-long process on the Hill – Budget resolution (April 15) – Appropriations (June-September) – Sequestration (December-January)

6. www.nationalskillscoalition.org New Year, Same Old, uh, Stuff Overarching political focus still on deficit reduction Any policy discussion driven by this debate Budget / Appropriations process being used for policy change

7. www.nationalskillscoalition.org Reminder: What’s Happened So Far (Appropriations) FY 2011 House passed HR 1, $4B in cuts (including elimination of WIA)—eventually cut $1B FY 2012 similar dynamic. House proposed about $2.5B in cuts to DOL + $44B in Pell cuts

8. www.nationalskillscoalition.org FY 2013: More of the Same

9. www.nationalskillscoalition.org House Budget Resolution: Job Training $28B below BCA caps for non-defense discretionary programs More than $16B in cuts for “Function 500” programs Clearly targeting job training (again) for very deep cuts

10. www.nationalskillscoalition.org House Budget Resolution: Pell Huge cuts— potentially more than $100B Would further reduce income protection allowance and “automatic zero” EFC Would eliminate eligibility for less- than-half-time students

11. www.nationalskillscoalition.org Key Takeaways Focused on much smaller government Includes huge new tax cuts for the very wealthy 62% of cuts come from low-income programs Includes job training in safety net programs

12. www.nationalskillscoalition.org Next Steps Senate Budget Committee will pass its own budget resolution Appropriations cycle will start (mid-May) Will almost certainly wind up with a CR/omnibus negotiated between WH and House

13. www.nationalskillscoalition.org Reminder: What’s Happened So Far (Budget Control Act) Debt ceiling deal $1T in cuts through new spending caps Created “super committee” to develop another $1.2T in cuts Included sequestration trigger if super committee failed

14. www.nationalskillscoalition.org Let’s Talk about Sequestration! Sequestration is simply the process by which automatic cuts are made Written into law as part of the BCA Goes into effect January 2013

15. www.nationalskillscoalition.org But What Does Sequestration Actually Do? Automatic cuts each year, 2013 through 2021 $109B, equally divided between “national defense” and all other (non- defense) programs

16. www.nationalskillscoalition.org How Do the Cuts Work? Non-defense cuts include both mandatory and discretionary programs But many mandatory programs exempt – Social Security, SNAP, child nutrition, SSIA, EITC and child tax credit, etc. Exempt mandatory programs means discretionary program must absorb more of the cuts

17. www.nationalskillscoalition.org What Does That Mean? Sequestration is across- the-board in that the overall caps are lowered (so there is less money equally for all programs) However, specific cuts will be achieved through regular appropriations process

18. www.nationalskillscoalition.org An Exception to the Rule Sequestration functions differently in 2013 than in other years About $16B in non- defense cuts from mandatory programs, another $38.7B from across-the-board discretionary programs (estimated 9.1%)

19. www.nationalskillscoalition.org Process on Auto-Pilot All the “easy” cuts have been made at this point—no more low- hanging fruit But additional cuts *must* be made (by law) and debate is not around undoing previous cuts or even preventing additional cuts—just where those cuts will fall

20. www.nationalskillscoalition.org Questions?

21. www.nationalskillscoalition.org Federal Policy

22. www.nationalskillscoalition.org All Policy Discussion Derives From Budget Debate Policy conversation is entirely within the context of fiscal austerity and smaller government Policy change primarily implemented now through budget and appropriations

23. www.nationalskillscoalition.org Success at the Message Level... The message about a skills gap resonates—lots of policymakers are adopting this language

24. www.nationalskillscoalition.org …But not Translating to Policy “I am no fan of the federal government being involved in education. And I use the word education, because I don’t like the word training when it comes to human beings. You train animals….you educate people. If I had my way, there wouldn’t be any federal job training programs.” –Rep. Virginia Foxx (R-NC)

25. www.nationalskillscoalition.org Workforce 2012 – New Reality 2003-2010—No WIA reauthorization, but general agreement that an appropriate (if shrinking) federal investment 2011—New reality: – Fiscal challenges – FY 2011, 2012 efforts in House to gut workforce funding – Political challenges – GAO report (“47 programs…”) puts consolidation on the front burner.

26. www.nationalskillscoalition.org New Focus on WIA Reauthorization To protect the workforce system, reauthorization critical vehicle for reform (linked to preserving funding) To eliminate system, reauthorization a vehicle for cuts (via consolidation)

27. www.nationalskillscoalition.org Foxx-McKeon-Heck WIA Bill (HR 4297) Consolidates 27 programs, creates single “Workforce Investment Fund” Not clear that low- skill, low-income, other vulnerable populations well served under the bill

28. www.nationalskillscoalition.org Tierney-Miller-Hinojosa WIA Bill (HR 4227) Maintains existing structure Much greater focus on career pathways and sector partnerships Expands use of OJT, transitional jobs, and subsidized jobs New investments in community colleges

29. www.nationalskillscoalition.org WIA’s Future… Republican bill will pass out of committee on party-line vote; will pass full House Senate will not take up House bill (not clear if House activity will trigger Senate) House bill will become de facto starting point for any on-going conversations

30. www.nationalskillscoalition.org Questions?

31. www.nationalskillscoalition.org December 2012 (The Mayans Were Right) Everything leads to December: Presidential/ Congressional elections Bush-era tax cuts expire Debt ceiling likely to be reached Sequestration begins January 2013

32. www.nationalskillscoalition.org Building the Strongest Argument All of the debate around investing in skills—including WIA reauthorization—are stepping stones on a path toward the decisions that must be made in December

33. www.nationalskillscoalition.org What This Means for Workforce… There will be cuts – the only question is how much Will depend on how lawmakers—even allies—weigh workforce against other key priorities We cannot be the least bad option—must reinforce importance of skills to economic prosperity, growth

34. www.nationalskillscoalition.org Questions?

35. www.nationalskillscoalition.org Stay Connected Visit us our website. Sign up for our member email list. Follow us on:

36. www.nationalskillscoalition.org Contact Rachel Gragg Federal Policy Director rachelg@nationalskillscoalition.org 202-223-8991, ext. 102