President’s Budget Calls for New Investments in Workforce and Basic Skills Services

Mar 07, 2014

By Neil Ridley

President Obama’s FY 2015 budget released on Tuesday calls for new investments that prepare workers for jobs in demand and put unemployed people back to work. The proposal comes at a time of weak job growth, with the national unemployment rate still above 6 percent. Long-term unemployment, in particular, remains high;  3.8 million workers have been out of work for 27 weeks or longer and nearly 6.7 million young adults ages 16-24 are neither working nor in school. The budget proposal also comes a few months after the release of international data showing that 36 million Americans have low basic skills and are likely to have difficulty obtaining family-supporting jobs. 

The FY 2015 budget request for workforce and basic skills programs is consistent with the spending cuts established in last year’s budget agreement. Funding levels for state and locally administered programs under the Workforce Investment Act (WIA) and most national workforce programs are maintained at the FY 2014 level. The proposal signals a new direction by including targeted investments amounting to about 5 percent of WIA formula grants in three areas:

  • $80 million for incentive grants to encourage states that improve employment and earnings outcomes for workers who face the most difficulty in the labor market;
  • Increased funding, up to $60 million, for competitive grants through the Workforce Innovation Fund; and
  • $15 million for industry-based partnerships focused on preparing workers for jobs in demand.

The proposal also calls for $20 million in Skills Challenge grants on top of the formula grants provided to states every year for adult education and literacy. This new grant program would fund partnerships implementing bridge strategies and other models that integrate basic skills preparation with occupational skills training. These strategic investments in workforce and basic skills services would support innovative approaches and encourage greater attention to the needs of individuals with low education and skill levels and barriers to employment. The proposal also includes proposed investments in job creation for disadvantaged workers.

In addition to the budget request, the President seeks congressional approval for a $56 billion Opportunity, Growth and Security Initiative (OGSI) that proposes additional investments for key priorities, including expanded access to early childhood education, infrastructure and jobs, research, public health, and national security. Included in the priorities for employment and training are:

  • $750 million (in addition to more than $3 billion in the budget request) to restore recent cuts to Workforce Investment Act formula grants to states, increase support for research and innovation, and make targeted investments in programs that serve individuals with barriers to employment;
  • $1.5 billion for the first year of a four-year Community College Job-Driven Training Fund, which will provide competitive grants designed to increase the number of training programs and apprenticeships supported by employers and focused on jobs in demand; and
  • $125 million (in addition to $25 million in the budget request) to expand the research-based Jobs Plus model, which connects public housing residents with job opportunities.

The release of the President’s budget is the first step in the annual budget and appropriations process. It is now up to Congress to set priorities for the budget and determine program funding levels. The blueprint released on Tuesday can guide lawmakers as they consider critical investments to prepare more low-income adults and youth for jobs and careers in what is still a tough labor market.

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