American Recovery and Reinvestment Act of 2009

 What will the American Recovery and Reinvestment Act (ARRA) mean for sector initiatives and supporters around the country? Questions we are hearing at NNSP:

• How will new funding for industry-focused workforce development, such as in healthcare, energy, and transportation construction, be distributed?
• How can local workforce areas use their supplemental allocations?
• What’s the timeline for release of funds?

Following is our current knowledge of the ARRA’s workforce provisions. Read quickly! By tomorrow, there will no doubt be new developments.

Click "Read more" below for information and commentary.

Special thanks go to the National Council on Education and the Economy (NCEE) and The Workforce Alliance, who provided essential source material for this publication.

Overview

Total cost of the ARRA is $789 billion, divided as follows:

• Tax cuts ($288 billion)
• State and local fiscal relief ($144 billion)
• Federal spending programs ($357 billion)

Links:

• Text of the ARRA
• Recovery.gov (Federal recovery homepage)
• The Stimulus Plan: How to Spend $787 Billion (New York Times analysis)
• A Breakdown of the Final Bill (Washington Post chart)
• Wikipedia’s entry

Education and Training

$52.3 billion goes to education and training (excluding state fiscal stabilization funding). Most goes to elementary, secondary, and post-secondary education:

• Elementary and Secondary Education – Title I ($13 billion)
• IDEA - Individuals with Disabilities Education Act ($12.2 billion)
• Increasing Pell Grant maximum by $500 ($15.6 billion)

Workforce investment receives $3.95 billion of the remaining allotment:

• Adult WIA formula ($500 million)
• Dislocated Worker formula ($1.25 billion)
• Youth formula ($1.2 billion)

Please note that departments other than Education and Labor also include training funds, which will be described below.

WIA Allocations

WIA allocations will be highly time-sensitive. Preliminary guidance to states from the U.S. Department of Labor (DOL) is expected by March 6, with state allocations likely announced the following week. Final guidance from DOL to states will go out March 17, with funds released March 18. Then states will need to give guidance to locals.

Other specific provisions or concerns:

• DOL, concerned that local areas will spend recovery funds and conserve pre-existing formula allocations, has specified that this is not the intent of ARRA funding and will likely include provisions to discourage the practice.
• Summer youth programs are a priority (to subsidize youth employment and contribute to economic activity); these will need to ramp up very quickly.
• Similarly, other programs which subsidize employment and contribute to economic activity, such as On-the-Job Training, will likely be prioritized. Training stipends and other forms of support may also be promoted.
• Local areas are concerned about getting funds out quickly and may seek regulation waivers; DOL can grant some but not others, depending on which (such as qualifying youth for summer programs) are included in statute.
• To encourage training for high demand occupations and sectors, workforce boards may contract for training with institutions of higher education and other eligible training programs. Group contracts (not simply ITAs) are allowed.

High Growth and Emerging Industry Sector Grants

$750 million is provided for competitive grants for high growth and emerging sectors:

• $500 million for “green jobs”
• $250 million for other high-demand sectors, with priority on healthcare but including other sectors

Notes:

• Funding is competitive at the discretion of the Secretary of Labor. Applications will likely go to DOL in a process not yet determined. Other funding priorities, such as WIA formula allocations, will likely receive attention first.
• The definition of “green jobs” comes from the Green Jobs Act of 2007, which was previously passed but not fully funded. That Act's primary sponsor was Hilda Solis, now Secretary of Labor. While the ARRA is not required to follow the outlines of the Green Jobs Act, it is likely to do so, including provisions about partnerships with labor and community groups.
• Promoting the creation of "green jobs" is also a high priority for the Vice President's Middle Class Task Force, which chose to focus on green jobs at their first meeting on February 27.

Links:

• Text of the Green Jobs Act (H.R. 2847, eventually included in H.R. 3221)
• Green for All's frequently-asked questions about the Green Jobs Act
• Green Jobs: A Pathway to a Strong Middle Class (Middle Class Task Force)

Trade Adjustment Assistance

The Trade Adjustment Assistance (TAA) program is reauthorized through December 31, 2010.

In addition to extending TAA to additional categories of workers, making benefits more accessible and flexible, and increasing TAA training allocation to $575 million per year, the reauthorization creates new grant programs for trade impacted communities:

• $50 million for community colleges to offer programs for eligible workers
• $50 million for sector-based training partnerships
• $150 million for strategic planning and projects for economic adjustment

The definition of “trade-impacted communities” may not yet be determined.

Links:

• TAA Reauthorization in the American Recovery and Reinvestment Act: Key Workforce and Training Provisions (The Workforce Alliance)
• Industry or Sector Partnership Grant Program for Communities Impacted by Trade (The Workforce Alliance)
• Trade Adjustment Assistance for Communities (The Workforce Alliance)

Other Workforce Funding

Other DOL training funds included in the Act:

• YouthBuild ($50 million)
• JobCorps ($250 million)
• National Emergency Grants ($200 million)

In addition to DOL, the ARRA also provides funding for training in the following areas:

Transportation:

• $20 million is provided to support programs that enhance training opportunities for minorities and women. It is unclear how these funds will be administered.
• 0.6% of highway funding states receive may be used for workforce training, according to current law. This is likely to apply to recovery funds, perhaps at the discretion of state transportation departments.

Healthcare:

• The Health Resources and Services Administration (HRSA) will receive $500 million to address health professions workforce shortages – by helping workers access scholarships, loan repayment, and grants for training programs – primarily directed to nurses, doctors, and dentists. This does not appear to create a new grant program.

Energy:

• $100 million is provided for worker training activities related to electricity delivery and energy reliability.

General Services Administration

• $3 million is provided for registered pre-apprenticeship and apprenticeship programs for construction, repair, and alteration of Federal buildings.

Other funding related to employment and workforce development:

• $400 million for Reemployment Grants (State Employment Service)
• $120 million for Community Service Employment for Older Workers
• $540 million for Vocational Rehabilitation
• $1 billion for Community Service Block Grants
• $2 billion for Community Development Block Grants
• Recovery Zone Bonds, which may be used (among other purposes) to pay for job training in areas especially hard-hit by the economic downturn.

Links:

• Side-By-Side: American Recovery and Reinvestment Act (The Workforce Alliance)
• The American Recovery and Reinvestment Act of 2009: Workforce and Related Provisions (NCEE)

Other Notes

Because many key aspects of workforce provisions are not articulated in the ARRA, the agencies responsible for implementing those provisions may look to Congressional debate for indicators of legislative intent.

The Murray Harkin Colloquy, which encourages services for the hard-to-serve, urges innovative service delivery (including sector and career pathway approaches to training), encouraged adequate supportive services, and clarified that ABE and ESL are allowable under contracted training if connected to jobs in high demand occupations, may play an important role in shaping implementation.

For a full description of the colloquy in the February 13 NNSP Newswire, click here.

Also note that the recovery package points to future reforms to job training that may be continued in the recently-unveiled budget and further legislation (such as WIA reauthorization, expected this summer or fall, and the SECTORS Act).

Important reform elements include:

• Focus on green jobs
• Promotion of innovative approaches, such as transitional jobs, career pathways, and sector partnerships
• Investments in YouthBuild
• Resources for ex-offenders and returning veterans

For Further Information

• Subscribe to The Workforce Alliance’s updates.
• View a map with links to state recovery websites.
• Access DOL's recovery website.

The American Recovery and Reinvestment Act