House releases FY 2012 omnibus approps bill.

On December 15, the House appropriations committee posted a version of the Fiscal Year (FY) 2012 omnibus appropriation package that includes the nine remaining spending bills for this year, including the measure funding the Departments of Labor, Health and Human Services, and Education (Labor-H). As written, the bill proposes roughly $150 million in cuts to job training programs under the Department of Labor (DOL), while also including a set of permanent eligibility changes to the Pell Grant program for low- and moderate-income students. While this is technically not the final omnibus—Democratic leadership has been holding off approval of the agreement while the two sides negotiate around a separate year-end “extenders” package—the proposed language and funding levels are likely close to what the workforce field can expect from any final bill.

Impact of Omnibus on DOL/Education Programs

There has been considerable concern about how the FY 2012 cycle would unfold for job training and education programs. In October, the House released a draft Labor-H bill that made $2.2 billion in funding cuts to training programs under the Department of Labor, including $1.9 billion in cuts to Workforce Investment Act (WIA) formula grant programs, and proposed eliminating advance appropriations for DOL programs as part of an effort to shift funding from the current program year cycle to a federal fiscal year cycle. The Senate Labor-H bill did not include these proposals, but because the House placed so much emphasis on these cuts (of the $4 billion in overall savings in the House bill, more than half came from cuts to DOL) there were fears that the two sides would be forced to meet somewhere near the middle.

In the end, the cuts were lower than expected, with the bulk of the $150 million in reduced funding coming from the WIA Dislocated Workers program ($55 million below FY 2011 levels) and the Workforce Innovation Fund that was created as part of last year’s appropriations bill ($75 million below FY 2011 levels.) In addition, the bill would provide:

• $47.7 million for the Native Americans program (down from $52.7 million in FY 2011);
• $6.6 million for Pilots and Demos (down from $10 million in FY 2011);
• $80.4 million for programs for ex-offenders (down from $85.6 million in FY 2011); and
• $6.5 million for the Workforce Data Quality Initiative, which supports grants to states to modernize longitudinal data systems (down from $12.5 million in FY 2011).

The bill would eliminate advance funding for Job Corps, though it appears to maintain current funding levels for the program. The bill does not eliminate the advance appropriations for the WIA Adult and Dislocated Worker programs, as proposed in the original House draft. The bill maintains a provision included in the FY 2011 appropriations bill that reduces the allowable state set-aside from WIA formula funds from 15 percent to 5 percent.

For the Pell Grant program, the news was worse, though still not as bad as it could have been. Appropriators have spent several months debating how to address a $1.3 billion shortfall in the program for the coming academic year. The Senate had proposed to fix the funding gap by eliminating the six-month interest subsidy grace period for student loans, which was expected to generate about $2.3 billion in savings over the next two years. The House, by contrast, originally proposed a set of sweeping permanent changes in Pell eligibility that would have cut about $44 billion in funding over ten years, including eliminating eligibility for less-than-half-time students and students without high school diplomas (known as “ability to benefit” students), reducing lifetime eligibility from eighteen semesters to twelve semesters, lowering the income level at which the expected family contribution (EFC) is automatically assumed to be zero, and sharply reducing income protection allowances that limit the amount of household income considered when determining financial need.

The current bill includes some, but not all, of the House proposed changes, including:

• Eliminating eligibility for “ability to benefit” students, a move that is likely to impact career pathways initiatives targeting such students in a number of states;
• Reducing the Automatic Zero Expected Family Contribution from the $30,000 limit per year to $23,000, which will make it harder for working students to protect income needed for living expenses; 
• Changing the lifetime eligibility for Pell from eighteen semesters to twelve semesters.

The maximum Pell Grant award is maintained at $5,550. Funding for Adult Basic Education and Career and Technical Education state grants would be funded at current levels.

It appears that there are two “across-the-board cuts” that will be applied to funds under the Labor-H bill: a smaller 0.189 percent cut that will be applied only to programs under Labor-H, and a larger 1.83 percent cut applied to all non-defense discretionary spending, which is designed to offset funding under a separate disaster relief bill also up for Congressional consideration.

Movement Potentially Tied to “Extenders” Bill

According to media reports, the two sides are very close to agreement on the final details of the omnibus and it is expected that the House may vote on the bill as early as tomorrow. The government is currently operating on a short-term continuing resolution (CR) that expires at midnight tomorrow, creating some urgency for lawmakers to move quickly, although it is possible that Congress will pass a stopgap CR that carries into early next week in order to complete negotiations on the omnibus, as well as the “extenders” package that would renew authorization for expanded unemployment insurance (UI) benefits, the payroll tax holiday for employees, the TANF block grant, and other federal programs set to expire at the end of the month.

The House passed a version of the extenders bill earlier this week that includes a number of highly controversial provisions, especially around UI benefits. The bill would reduce the maximum number of weeks an individual could receive UI from the current 99 weeks to 59 weeks, and would impose minimum education requirements on UI beneficiaries, meaning that applicants would have to have a high school diploma or equivalent—or be enrolled in classes making satisfactory progress toward such a credential—in order to qualify. An estimated 284,000 unemployed Americans would likely be impacted by this proposal, meaning they would be required to enroll in underfunded and overstretched adult education and training programs, or forego the benefits they need to support their families.

The White House has threatened to veto the House bill in its current form, and Senate Majority Leader Harry Reid (D-NV) has been seeking to link passage of the omnibus with concessions on the extenders package, including removing the House-proposed changes to UI.

National Skills Coalition strongly supports ensuring access to education and training for UI recipients, but we are opposed to efforts to mandate minimum education levels or participation in training as a condition of receipt of benefits. We urge individuals to weigh in with their members of Congress, and ask them to reject any final deal that includes such requirements, while also urging them to ensure that final FY 2012 funding levels for workforce are sufficient to support the skill needs of U.S. workers and businesses. We will continue to monitor developments relating to both the omnibus and the extenders package, and provide updates to the field as new information becomes available.