Workforce Faces Cuts in Reconciliation Bill
Washington Update
Budget Reconciliation
Democrats have spent their recess time promoting the $3.5 trillion budget reconciliation bill, which, if passed, would be the most significant expansion of the social safety net since the 1960s. As lawmakers negotiate to finalize the bill, several workforce development and education proposals - including increased investments in training, boosting Pell grants, free community college, and universal pre-K - are potentially on the chopping block as congressional leaders seek to secure both progressive and moderate support. Currently, the House and the Senate are at odds over the level of workforce funding to include in the bill with the Senate looking at lower levels (we’ve heard $14 - $18 billion) and the House requesting $80 billion. Both of these levels are below the $100 billion investment originally called for by President Biden in the American Jobs Plan, and that the workforce system needs to combat the impact of the pandemic. It appears lawmakers are confusing investments in community colleges with workforce development, and must be educated on how the two systems are complementary but serve very different purposes.
Budget/Appropriations
Government funding will run out at midnight on September 30 and it is widely assumed a stopgap spending bill will be sent to President Biden to stave off a shutdown. It is unclear how long that short-term funding bill will be, but a December deadline might be the most likely. Democrats might try to tie a debt limit waiver to a funding bill in September. Top lawmakers think the Treasury Department will be able to coast along until October or November before risking a default on the nation’s loans. Democrats don’t want to use the budget reconciliation process to handle the debt limit on their own, and most Republican senators say they won’t help with the votes.
Federal Unemployment Benefits
On Sunday, September 5, the federal unemployment benefits due to the COVID-19 pandemic ended for millions of Americans. More than 7 million people in the U.S. are now without any jobless benefits as the rampant delta variant continues to severely impact the nation’s economic recovery. Approximately 26 states already ended the enhanced benefits ahead of the expiration date with many governors citing the benefits as a disincentive for Americans to return to work. There is no indication that Congress, the White House or any states plan to extend these enhanced benefits. Economists have cautioned that ending the benefits would reduce overall spending, which could slow the economic recovery.
In August, U.S. Secretary of Labor Marty Walsh and Treasury Secretary Janet Yellen told states that they could extend the enhanced unemployment benefits on their own using allocations from the American Rescue Plan State and Local Fiscal Relief Funds. A survey of the 33 states that were still participating in some or all of the UI programs in August found that not a single one of those states plans to extend the programs on their own.
Unemployment Rate
On Friday, September 3, the Department of Labor (DOL) Bureau of Labor Statistics (BLS) released the August jobs report, which indicated employers added only 235,000 payrolls last month - far fewer than the 720,000 expected. The unemployment rate dropped to 5.2% from 5.4% but the rate of unemployment among Black workers rose in August to 8.8% from 8.2% in July. The increase in Black unemployment is even more troubling in light of the fact that the labor force participation rate among Black workers rose last month and is about tied with the rate for white workers at 61.6%. So, despite a greater percentage of Black people either working or looking for work, a greater proportion were unable to land a job. Many economists pointed to the increase in COVID-19 cases as a reason for the lackluster job numbers.
Click here to access the full jobs report.