Final Budget Deal Cuts Workforce Development Spending

Apr 15, 2011

By Neil Ridley

Congressional wrangling over FY 2011 appropriations still resulted in cuts to workforce programs, but they are less damaging than those originally proposed by the House.

The final bill to be signed by President Obama today reduces formula grants for the Workforce Investment Act (WIA) adults, dislocated workers and youth programs by more than $300 million. At the same time, it shrinks the pool of funds that governors use for statewide workforce activities from 15 percent to 5 percent. This policy change is expected to maintain current funding levels for local workforce areas, but it will sharply reduce the resources that some states have relied on to support industry-focused training initiatives, integrated education and training, on-the-job training, career pathways and other promising workforce strategies.

The FY 2011 bill breaks new ground by creating a $125 million Workforce Innovation Fund that will support competitive grants to states and regional partnerships. This new national fund, as presented in the President's FY 2011 and FY 2012 budgets, is intended to promote development and replication of innovative workforce development strategies and build a knowledge base about effective approaches.

The final bill imposes the most severe cuts on a range of national grant programs administered by the U.S. Department of Labor. It eliminates additional funding for the Green Jobs Innovation Fund and the Enhanced Transitional Jobs Demonstration Project. In addition, the final CR zeroes out new funding for the Career Pathways Innovation Fund and rescinds $125 million authorized in FY 2010.

Although the bill sharply reduces national grant programs, it avoids making deep and counterproductive cuts to the nation's public workforce system.

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