DUELING JOBS PROPOSALS

This past week, the Administration offered its American Jobs Act proposal which would provide $447 billion in additional funding, through a combination of tax cuts and new investments, focused on putting Americans back to work. The Administration has offered to pay for this proposal by increasing taxes on wealthy Americans and the removal of tax breaks on a variety of special interests. All of these revenue offsets were rejected in earlier negotiations with Congress earlier this year.

On Thursday, Speaker of the House John Boehner (R-OH), will offer his own ideas on job creation entitled focused on the House Republicans “Plan for America’s Job Creators” that would create new jobs by removing tax and regulatory barriers to private sector growth.

These dueling approaches highlight the stark differences between the parties on jobs creation and it remains to be seen whether the parties will be able to find common ground in policies to help put Americans back to work.

Administration officials that NAWB has spoken with expect that elements of the President’s jobs proposal will ultimately be included in the plan for debt reduction that the “Congressional Supercommittee” must present to Congress before Thanksgiving. The Supercommittee’s recommendations are viewed as must pass legislation by many in Congress, as a 7.8% across the board cut is looming for most programs in FY 13 if the Supercommittee’s recommendations for savings are not enacted before the end of the year.

If components of the Administration’s jobs proposal do end up getting included in the Supercommittee’s bill, it will add to the $1.1 trillion in savings the Supercommittee is mandated to recommend (according to CBO’s latest estimates) over the next ten years.

While there was largely a courteous reception to the President’s proposal at the Joint Session of Congress last week, the partisan rancor has edged up a notch as the President holds rallies this week in support of his proposal in each of the states of Members of the House and Senate Republican leadership. Senate Minority Leader Mitch McConnell (R-KY) sharply criticized the President’s proposal on the Senate floor on Tuesday and it appears that the parties positions are already beginning to harden.

What do you need to know about the President’s jobs proposal?

The bill would create a new $5 billion Pathways to Work fund that is comprised of three elements:

1) $2 billion for subsidized employment - this proposal would build off of the Recovery Act’s TANF Emergency Fund, which helped put 250,000 workers into transitional jobs. However, there are some differences from the TANF Emergency Fund from this proposal, as the new fund would be targeted to adults and overseen by DOL, allowing states to utilize either their TANF or Workforce agencies (or both) to provide localities with formula funds to operate these transitional jobs programs. The TANF emergency fund had solely been operated by HHS and was also a significant mechanism to provide summer jobs funding.

2) $1.5 billion for summer and year round youth activities - this funding would be provided through the WIA formula to localities to assist youth ages 16-24 in educational and occupational attainment.

3) $1.5 billion competitive grant program to assist low income adults and youth - this fund would allow DOL to provide national grants to local areas and regions to help put people back to work expeditiously utilizing programs of demonstrated effectiveness. The eligible entity for these grants would be the local chief elected official, in partnership with the WIB, and could include a variety of models and additional partners such as adult education and literacy providers, community colleges, and CBOs. High poverty and high unemployment areas would be priorities for funding.

FY 12 APPROPRIATIONS UPDATE

As we approach the end of the fiscal year on September 30th, there is a universal acknowledgement in Congress that a Continuing Resolution (CR) will be necessary to keep the government open while the FY 12 funding bills are completed. The CR will be expected to run though November 18th and will be taken up in the House next week before moving over to the Senate for final passage.

Unlike the debate over FY 11 spending, the House Republican leadership will not press for additional cuts as a price for passage of the CR. House Majority Leader Eric Cantor (R-VA) indicated the leadership will abide by the overall spending level for domestic programs included in the debt limit agreement, which added nearly $25 billion to what passed in the House Budget Resolution earlier this year.

A number of House conservatives are upset with the additional spending in the debt limit deal and have been pressing for further cuts in the FY 12 appropriations bills. The House leadership has resisted these calls for further cuts, but this intraparty dispute has resulted in the remaining House appropriations bills, including Labor-HHS, to be put on hold to avoid these disputes from airing publicly.

Appropriations insiders tell NAWB that an Omnibus appropriations bill that will likely be necessary to roll most, if not all, of the FY 12 appropriations bills, including Labor-HHS, together into one giant bill.

While the House Labor-HHS bill has stalled, the Senate Labor-HHS Appropriations Subcommittee will mark up its FY 12 funding bill this coming Tuesday. The Senate bill is $300 million (0.2%) below last year’s funding level, meaning that most programs expect close to level funding this year. The House bill, if it does move forward, is $3 billion (2%) below last year’s level. House and Senate Appropriators will have to resolve this overall difference in the size of their bills when they meet later this year to negotiate an Omnibus Appropriations bill.

Sincerely,

Ronald D. Painter