THE 112 th CONGRESS An ongoing debate over the role of government JOHN COLBERT, Esq.

1. THE 112th CONGRESS An ongoing debate over the role of government JOHN COLBERT, Esq.

2. What is the current state of play in Washington?

3. Current state of play – Budget issues dominate agenda Short term – FY 11 Continuing Resolution – completed FY 12 funding debate underway – two components: Budget Resolution Appropriations bills

4. Current state of play – Budget issues dominate agenda Long term debate – two intertwined components Extension of the debt limit Must occur by August 2nd Republicans seeking further cuts Deficit reduction plan

5. How did we get to this point?

6. Current Environment 2010 Elections Largest Republican landslide election in 65 years Immediately changed the dynamic in Washington Focused changed from economic recovery to deficit reduction Republicans believe they have a mandate to reduce spending Offered major budget cuts in FY 11 CR and FY 12 budget resolution Sought to eliminate all WIA funding in FY 11 CR

7. Republicans Masterful in Budget Debate Pre 2010 elections, the Republican Minority: Blocked all appropriations bills Extended tax cuts Post election – “we are broke”

10. What to Expect Two year debate over spending Ideological fight Fundamental disagreement between the parties over the role of government Large budget cuts on the table 2012 elections necessary to break log jam The issue is no longer whether there will be further cuts, rather how large the cuts will be

11. Key landmarks in the budget debate this year FY 11 Continuing Resolution: done Budget Resolution Debt Limit Debate: Deadline August 2nd Long term deficit reduction? FY 12 Appropriations

12. What Happened in the FY 11 Continuing Resolution?

13. FY 11 Continuing Resolution The “Deal” - $38.5 billion in cuts below FY 10 $13 billion in cuts to Labor, HHS, and Education programs $307 million in cuts to WIA formula programs Elimination of much DOL grant making authority: career pathways funding immediately rescinded green jobs and transitional jobs funding eliminated for next year Added $125 million in WIA Innovation funds **WIA funding reserved for states reduced from 15% to 5%

14. FY 11 Continuing Resolution -“Lessons learned” President’s priorities protected Administration did not allow for the elimination of the workforce system funding House Republicans vs. Administration Major victory for House Republicans Control 1/3 of government and got 2/3 of cuts sought Power of the House Republican Freshmen The deal included larger cuts than original proposed by House leadership

15. Next step in debate: FY 12 budget resolution

16. President’s FY 12 Budget Request • Freeze domestic discretionary spending for 5 years at the FY 2010 level • Discretionary budget = $1.116 trillion

17. President’s FY 12 Budget Request & WIA • DOL overall budget 5% cut below FY 10 • WIA funding = $3.187 billion, only $12 million below FY 10 • $295 million above FY 11 CR level • $380 million for the “Workforce Innovation Fund” • Shift half of the 15% (about $140 million) of WIA funds held by Governors to the Workforce innovation Fund (WIF).

18. House FY12 Budget Resolution Overall discretionary spending - $1.019 trillion ($97 billion below the Administration’s request) Five year discretionary spending at pre FY 2008 levels $5.8 trillion in total cuts over 10 years Domestic discretionary budget = $30 billion below FY 11 CR

19. House FY12 Budget Resolution & WIA • Cuts Education and training cut by $126 billion over ten years - no specifics • “Career scholarships” • Next 10 years: • 2/3 of his budget cuts target programs that serve low income individuals and families

20. What to Anticipate with the FY 12 Budget • House and Senate will have radically different Budget Resolutions • Senate will have difficulty passing a budget • Senate Budget Resolution to be released this week • Expect $4 trillion in overall cuts in the next 10 years • House Republican Unity cracking over Medicare proposal

21. What to Anticipate with the FY 12 Budget • No Conference agreement • Budget negotiations will most likely stretch past the October 2011 deadline • Long term deficit negotiations - may provide best chance for overall budget deal

22. Will there be a long term deficit reduction deal?

23. Why the focus on the deficit? • Current U.S. debt limit is $14 trillion and counting • Treasury Dept. expects U.S. to exceed the statutory limit of $14.3 trillion by early August • Republicans have vowed to secure further spending cuts before increasing the debt limit • Democrats willing to negotiate – but wish to balance spending cuts with revenue increases

24. President offered new deficit reduction plan last month • Mix of tax increases and spending cuts • Spending cuts that would lower the federal deficit by $4 trillion over the next 12 years • Everything is on the table. • But he “will not sacrifice core investments we need to grow and create jobs.” • Ending tax cuts for the wealthiest American • Domestic spending decreases • Health Care spending reductions • Decrease Defense funding

25. President offered new deficit reduction plan Hill Republicans rejected the Administration’s plan Republicans seeking $6 trillion in cuts over 10 years with no tax increases Sharp cuts to Medicare, Medicaid, and domestic spending Protects defense related spending

26. Long Term Deficit Solution – two potential options 1) White House Commission • Led by Vice President Biden with bipartisan House and Senate leadership • First met last week • Looking for areas where common ground • Ex. - Eliminate unpopular subsidies – oil and farm

27. Long Term Deficit Solution – two potential options 2) Gang of 6 Senate members • Negotiations ongoing for several months • 60 Senators wrote to the President urging a long term deficit solution

28. Long Term Deficit Solution Any expected solution will include: Statutory fix – enforceable budget deal signed by the President Budgetary enforcement mechanisms with automatic cuts when deficit or spending levels exceeded

29. Long Term Deficit Solution Major stumbling blocks: Democrats – unwilling to cut Medicare Republicans – oppose any tax increases As a result, narrowing window of programs Congress willing to cut Annual domestic spending could potentially be vulnerable once again in this debate

30. Long Term Deficit Solution What to anticipate: Incremental approach Larger deal more likely post 2012 elections

31. At the same time – annual appropriations moving forward– what does it mean for WIA?

32. FY 12 Appropriations: House • House Budget - $30 billion in cuts to domestic programs below CR 11 level • Appropriations Subcommittees to be given they funding allocations this week • Expect FY 06 funding level for Labor HHS Subcommittee (10% below CR 11 levels) • Keep in mind the House FY 11 proposal eliminated all WIA funding • Expect big proposed cuts again • House Appropriations bills will be completed before the August recess

33. FY 12 Appropriations: Senate • Overall funding level TBD • Labor HHS Subcommittee protected WIA in CR • Chairman Harkin tried to protect the local workforce system by reducing funding for states from 15 to 5% • Technical problem may prevent this in the short term

34. What to Expect on Budget Issues in this Uncertain Environment Deals will be cuts between House Republicans & the Obama Administration House and Senate Republicans will continue to closely coordinate strategically on major issues Senate Democrats hamstrung Key question: Will Obama continue to triangulate or act as leader of Democratic party?

35. What Do We Need To Do in this current budgetary environment? • Tell the story: • Educate your Member about how WIA is part of the solution • Congressional strategy: • Target new Members of the delegation – most have little exposure to WIA programs • Work with the local press to develop stories • Engage regional business leaders to validate importance of WIA with Congressional delegation

36. What you can do today to help WIA funding • Ask Members to support WIA funding in their FY 12 program letters • House Deadline: May 20th • Senate Deadline: June 10th

37. New Congress Key Congressional players

38. 112th Congress • House • 87 new House Republican Members – half have no political experience • Over half of the Republican Members on Education and Workforce Committee are freshman • New Members are uniformly focused on cutting spending and reducing the size of government

39. House Education & Workforce Republicans Subcommittee on Higher Ed & Workforce Training Republicans • Chair, Virginia Foxx, North Carolina • John Kline, Minnesota • Thomas E. Petri, Wisconsin • Buck McKeon, California • Judy Biggert, Illinois • Todd Platts, Pennsylvania • Phil Roe, Tennessee • Glenn Thompson, Pennsylvania • Richard Hanna, New York • Larry Bucshon, Indiana • Lou Barletta, Pennsylvania • Joe Heck, Nevada Democrats • Rubén Hinojosa, Texas(Ranking Member) • John Tierney, Massachusetts • David Wu, Oregon • Timothy Bishop, New York • Robert Andrews, New Jersey • Robert Scott, Virginia • Susan Davis, California • Raul Grijalva, Arizona • David Loebsack, Iowa

40. House Labor HHS Appropriations Chairman Denny Rehberg (R-MT) Ranking Member – Rosa DeLauro (D-CT) Recent hearing – effectiveness of job training programs

41. Senate HELP Committee • Majority (12 D) • Sen. Tom Harkin (D IA) • Sen. Barbara Mikulski (D MD) • Sen. Jeff Bingaman (D NM) • Sen. Patty Murray (D WA) • Sen. Bernie Sanders (I VT) • Sen. Robert P. Casey Jr. (D PA) • Sen. Kay Hagan (D NC) • Sen. Jeff Merkley (D OR) • Sen. Al Franken (D MN) • Sen. Michael F. Bennet (D CO) • Sen. Sheldon Whitehouse (D RI) • Sen. Richard Blumenthal (D CT) • Minority (10 R) • Sen. Mike Enzi (R WY) • Sen. Lamar Alexander (R TN) • Sen. Richard Burr (R NC) • Sen. Johnny Isakson (R GA) • Sen. Rand Paul (R-KY) • Sen. Orrin G. Hatch (R UT) • Sen. John McCain (R AZ) • Sen. Lisa Murkowski (R AK) • Sen. Pat Roberts (R KS) • Sen. Mark Kirk (R IL)

42. Senate Labor – HHS Appropriations • Republicans • Sen Richard Shelby (Ranking) (R AL) • Sen Thad Cochran (R MS) • Sen Kay B. Hutchison (R TX) • Sen Lamar Alexander (R TN) • Sen Ron Johnson (R WI) • Sen Mark Kirk (R IL) • Sen Lindsey Graham (R SC) • Sen Jerry Moran (R KS) • Democrats • Sen Tom Harkin (Chairman) • Sen Daniel Inouye (D HI) • Sen Herb Kohl (D WI) • Sen Patty Murray (D WA) • Sen Mary Landrieu (D LA) • Sen Dick Durbin (D IL) • Sen Jack Reed (D RI) • Sen Mark Pryor (D AR) • Sen Barbara Mikulski (D MD) • Sen Sherrod Brown (D OH)

43. Workforce System in the Crosshairs House • GAO report highlighting 47 job training programs • Republicans – concerned about duplication and effectiveness • Coburn report • House Budget Resolution proposed “career scholarships” • Authorizers will not fight for funding

44. Workforce System in the Crosshairs Senate - Stronger bipartisan support Murray Enzi Harkin Chairs authorizing and appropriations committees Democrats identified WIA reauthorization as a key issue to their economic and educational agenda

45. WIA Reauthorization – Expectation from the Administration • President Obama: • make necessary reforms and get the bill done • Will not offer its own bill • Providing technical assistance

46. WIA Reauthorization - Administration • Main reform idea - Innovation fund: • Scale up best practices • Work across WIA program titles • More comprehensive service delivery

47. WIA Reauthorization: Senate • Accelerated timetable • Bipartisan draft being finalized • Title I and II drafts have been completed

48. WIA Reauthorization: Senate • Senate will protect local business led workforce delivery system • regional collaboration in the planning and delivery of workforce services; • sector-based initiatives that focus on dual customers; • career pathways for low-skilled individuals; and system alignment. • Require strategic planning across WIA programs; • Will remove business majority from state board

49. WIA Reauthorization – Senate Authorize innovation grants; Require regional convening, planning, service delivery and partnerships among workforce boards to spur innovation, economic growth, and the leveraging of funds; Identify common performance measures across WIA programs that include interim measures, measures of credential attainment, and encourage longer-term service strategies for low skilled adults; Increase emphasis on training and wrap around services; Encourage integrated service delivery models, particularly between adult education, WIA and postsecondary programs.

50. WIA Reauthorization: House • Chairman Kline • WIA reauthorization a priority–no specific timetable • Piece by piece approach • Consolidation – concerned by GAO report of 47 job training programs • Will work with Virginia Foxx – Subcommittee Chair • Challenge – 12 new Committee Republicans