<DOC> [108th Congress House Hearings] [From the U.S. Government Printing Office via GPO Access] [DOCID: f:86384.wais] WORKFORCE INVESTMENT AND REHABILITATION ACTS: IMPROVING SERVICE AND EMPOWERING INDIVIDUALS _______________________________________________________________________ HEARING BEFORE THE SUBCOMMITTEE ON 21ST CENTURY COMPETITIVENESS OF THE COMMITTEE ON EDUCATION AND THE WORKFORCE HOUSE OF REPRESENTATIVES ONE HUNDRED EIGHTH CONGRESS FIRST SESSION _________ HEARING HELD IN WASHINGTON, DC, MARCH 11, 2003 _________ Serial No. 108-6 _________ Printed for the use of the Committee on Education and the Workforce 86-384 ____________________________________________________________________________ For sale by the Superintendent of Documents, U.S. Government Printing Office Internet: bookstore.gpo.gov Phone: toll free (866) 512-1800; DC area (202) 512-1800FAX: (202) 512-2250 Mail: Stop SSOP, Washington, DC 20402-0001 COMMITTEE ON EDUCATION AND THE WORKFORCE JOHN A. BOEHNER, Ohio, Chairman THOMAS E. PETRI, Wisconsin GEORGE MILLER, California CASS BALLENGER, North Carolina DALE E. KILDEE, Michigan PETER HOEKSTRA, Michigan MAJOR R. OWENS, New York HOWARD P. "BUCK" McKEON, California DONALD M. PAYNE, New Jersey MICHAEL N. CASTLE, Delaware ROBERT E. ANDREWS, New Jersey SAM JOHNSON, Texas LYNN C. WOOLSEY, California JAMES C. GREENWOOD, Pennsylvania RUBEN HINOJOSA, Texas CHARLIE NORWOOD, Georgia CAROLYN McCARTHY, New York FRED UPTON, Michigan JOHN F. TIERNEY, Massachusetts VERNON J. EHLERS, Michigan RON KIND, Wisconsin JIM DeMINT, South Carolina DENNIS J. KUCINICH, Ohio JOHNNY ISAKSON, Georgia DAVID WU, Oregon JUDY BIGGERT, Illinois RUSH D. HOLT, New Jersey TODD RUSSELL PLATTS, Pennsylvania SUSAN A. DAVIS, California PATRICK J. TIBERI, Ohio BETTY McCOLLUM, Minnesota RIC KELLER, Florida DANNY K. DAVIS, Illinois TOM OSBORNE, Nebraska ED CASE, Hawaii JOE WILSON, South Carolina RAUL M. GRIJALVA, Arizona TOM COLE, Oklahoma DENISE L. MAJETTE, Georgia JON C. PORTER, Nevada CHRIS VAN HOLLEN, Maryland JOHN KLINE, Minnesota TIMOTHY J. RYAN, Ohio JOHN R. CARTER, Texas TIMOTHY H. BISHOP, New York MARILYN N. MUSGRAVE, Colorado MARSHA BLCAKBURN, Tennessee PHIL GINGREY, Georgia MAX BURNS, Georgia Paula Nowakowski, Chief of Staff John Lawrence, Minority Staff Director SUBCOMMITTEE ON 21st CENTURY COMPETITIVENESS HOWARD P. "BUCK" McKEON, California, Chairman JOHNNY ISAKSON, Georgia, Vice Chairman DALE E. KILDEE, Michigan JOHN A. BOEHNER, Ohio JOHN F. TIERNEY, Massachusetts THOMAS E. PETRI, Wisconsin RON KIND, Wisconsin MICHAEL N. CASTLE, Delaware DAVID WU, Oregon SAM JOHNSON, Texas RUSH D. HOLT, New Jersey FRED UPTON, Michigan BETTY McCOLLUM, Minnesota VERNON J. EHLERS, Michigan CAROLYN McCARTHY, New York PATRICK J. TIBERI, Ohio CHRIS VAN HOLLEN, Maryland RIC KELLER, Florida TIMOTHY J. RYAN, Ohio TOM OSBORNE, Nebraska MAJOR R. OWENS, New York TOM COLE, Oklahoma DONALD M. PAYNE, New Jersey JON C. PORTER, Nevada ROBERT E. ANDREWS, New Jersey JOHN R. CARTER, Texas RUBEN HINOJOSA, Texas PHIL GONGREY, Georgia MAX BURNS, Georgia Table of Contents OPENING STATEMENT OF CHAIRMAN BUCK MCKEON, SUBCOMMITTEE ON 21ST CENTURY COMPETITIVENESS, COMMITTEE ON EDUCATION AND THE WORKFORCE..................................................2 OPENING STATEMENT OF RANKING MEMBER DALE KILDEE, SUBCOMMITTEE ON 21ST CENTURY COMPETITIVENESS, COMMITTEE ON EDUCATION AND THE WORKFORCE..................................................4 STATEMENT OF EMILY STOVER DeROCCO, ASSISTANT SECRETARY OF LABOR, EMPLOYMENT AND TRAINING ADMINISTRATION, U.S. DEPARTMENT OF LABOR, WASHINGTON, D.C...................................................6 STATEMENT OF ROBERT H. PASTERNACK, ASSISTANT SECRETARY FOR SPECIAL EDUCATION AND REHABILITATIVE SERVICES, U.S. DEPARTMENT OF EDUCATION, WASHINGTON, D.C...................................................8 STATEMENT OF THOMAS J. WHITE, PRESIDENT AND CEO, GREATER DURHAM CHAMBER OF COMMERCE, DURHAM, NC..................................................35 STATEMENT OF JOHN TWOMEY, PRESIDENT, NATIONAL WORKFORCE ASSOCIATION, WASHINGTON, D.C...................................................37 STATEMENT OF STEVEN SAVNER, SENIOR STAFF ATTORNEY, CENTER FOR LAW AND SOCIAL POLICY, WASHINGTON, D.C...................................................39 STATEMENT OF BETTIE SHAW-HENDERSON, DISTRICT MANAGER, MICHIGAN DEPARTMENT OF VOCATIONAL REHABILITATION, KENTWOOD, MI..................................................42 APPENDIX A - WRITTEN OPENING STATEMENTOF CHAIRMAN BUCK MCKEON, SUBCOMMITTEE ON 21ST CENTURY COMPETITIVENESS, COMMITTEE ON EDUCATION AND THE WORKFORCE..................................................51 APPENDIX B - WRITTEN STATEMENT OF EMILY STOVER DeROCCO, ASSISTANT SECRETARY OF LABOR, EMPLOYMENT AND TRAINING ADMINISTRATION, U.S. DEPARTMENT OF LABOR, WASHINGTON, D.C...................................................57 APPENDIX C - WRITTTEN STATEMENT OF ROBERT H. PASTERNACK, ASSISTANT SECRETARY FOR SPECIAL EDUCATION AND REHABILITATIVE SERVICES, U.S. DEPARTMENT OF EDUCATION, WASHINGTON, D.C...................................................79 APPENDIX D - WRITTEN STATEMENT OF THOMAS J. WHITE, PRESIDENT AND CEO, GREATER DURHAM CHAMBER OF COMMERCE, DURHAM, NC..................................................87 APPENDIX E - WRITTEN STATEMENT OF JOHN TWOMEY, PRESIDENT, NATIONAL WORKFORCE ASSOCIATION, WASHINGTON, D.C...................................................93 APPENDIX F - WRITTEN STATEMENT OF STEVEN SAVNER, SENIOR STAFF ATTORNEY, CENTER FOR LAW AND SOCIAL POLICY, WASHINGTON, D.C...................................................103 APPENDIX G - WRITTEN STATEMENT OF BETTIE SHAW-HENDERSON, DISTRICT MANAGER, MICHIGAN DEPARTMENT OF VOCATIONAL REHABILITATION, KENTWOOD, MI..................................................119 APPENDIX H - SUBMITTED FOR THE RECORD, STATEMENT OF CARLOS LOPEZ, ON BEHALF OF HERMELINDA SAPIEN, EXECUTIVE DIRECTOR, CENTER FOR EMPLOYMENT TRAINING, SAN JOSE, CA..................................................127 APPENDIX I - SUBMITTED FOR THE RECORD, STATEMENT OF THE ASSOCIATION FOR PERSONS IN SUPPORTED EMPLOYMENT (APSE), RICHMOND, VA..................................................135 APPENDIX J - SUBMITTED FOR THE RECORD, STATEMENT OF THE COUNCIL OF STATE ADMINISTRATORS OF VOCATIONAL REHABILITATION (CSAVR)..................................................147 APPENDIX K - SUBMITTED FOR THE RECORD, STATEMENT OF CONSORTIUM FOR CITIZENS WITH DISABILITIES ON BEHALF OF VARIOUS ORGANIZATIONS LISTED HEREIN..................................................167 APPENDIX L - SUBMITTED FOR THE RECORD, STATEMENT OF TREVA ROANHORSE, PRESIDENT, CONSORTIA OF ADMINISTRATORS FOR NATIVE AMERICAN REHABILITATION, WINDOWROCK, AZ..................................................177 Table of Indexes..................................................181 WORKFORCE INVESTMENT AND REHABILITATION ACTS: IMPROVING SERVICE AND EMPOWERING INDIVIDUALS ___________________ Tuesday, March 11, 2003 Subcommittee on 21st Century Competitiveness Committee on Education and the Workforce U. S. House of Representatives Washington, D.C. The Subcommittee met, pursuant to call, at 2:00 p.m., in Room 2175, Rayburn House Office Building, Hon. Howard P. "Buck" McKeon, Chairman of the Subcommittee, presiding. Present: Representatives McKeon, Boehner, Johnson, Ehlers, Gingrey, Burns, Kildee, Tierney, Wu, McCarthy, Van Hollen, Ryan, Payne and Hinojosa. Staff Present: Stephanie Milburn, Professional Staff Member; Stacey Dion, Professional Staff Member; Travis McCoy, Legislative Assistant; Krisann Pearce, Deputy Director of Education and Human Resources Policy; Maria Miller, Coalitions Director for Education Policy; David Cleary, Professional Staff Member; Amanda Farris, Professional Staff Member; Jo-Marie St. Martin, General Counsel; Kevin Frank, Professional Staff Member; Deborah L. Samantar, Committee Clerk/Intern Coordinator. Mark Zuckerman, Minority General Counsel; Michele Varnhagen, Minority Labor Counsel/Coordinator; Denise Forte, Minority Legislative Associate, Education; Alex Nock, Minority Legislative Associate, Education; Joe Novotny, Minority Clerk/Staff Assistant, Education; Dan Rawlins, Minority Staff Assistant, Labor. Chairman McKeon. A quorum being present, the Subcommittee on 21st Century Competitiveness will come to order. We are meeting today to hear testimony on the Workforce Investment and Rehabilitation Acts: Improving Services and Empowering Individuals. If other Members have statements, they may be included in the record, but we will hear Opening Statements from the Ranking Member and myself today. With that, I ask unanimous consent for the hearing record to remain open 14 days to allow Members' statements and other extraneous material referenced during the hearing to be submitted in the official hearing record. Without objection, so ordered. Good afternoon. Good to see you all here. Nice warm place out of the snow. I was in sunny California yesterday. It was 90 degrees. I was sure glad to get out of that heat. OPENING STATEMENT OF CHAIRMAN BUCK MCKEON, SUBCOMMITTEE ON 21ST CENTURY COMPETITIVENESS, COMMITTEE ON EDUCATION AND THE WORKFORCE Thank you for joining this important hearing today to hear testimony on recommendations for reauthorization of the Workforce Investment Act of 1998 and the Rehabilitation Act. This will be our fourth hearing on the Workforce Investment Act within the last 2 years and first hearing focusing on the Rehabilitation Act. In 1998, under this Committee's leadership, Congress passed the Workforce Investment Act to reform the nation's job training system that formerly was fragmented, contained overlapping programs, and did not serve either job seekers or employers well. WIA consolidated and integrated employment and training services at the local level in a more unified workforce development system. The act created three funding streams to provide for adult employment and training services, dislocated workers employment and training services, and youth development services. The local, business-led workforce investment boards direct these services. One of the hallmarks of the new system is that in order to encourage the development of comprehensive systems that improve services to both employers and job seekers, local services are provided through a One-Stop delivery system. At the One-Stop centers, assistance ranges from core services such as job search and placement assistance, to access to job listings and an initial assessment of skills and needs, intensive services, such as comprehensive assessment and case management, and if needed, occupational skills training. In addition, to further promote a seamless system of services for job seekers and employers, numerous other federal programs also must make their services available through the One-Stop system. Vocational rehabilitation is one of the mandatory partners in the workforce development system. The WIA system contains the federal government's primary programs for investment in our nation's workforce preparation. Even though the system is still maturing since its full implementation in July of 2000, States and local areas have created comprehensive services and effective One-Stop delivery systems. The system is serving the needs of unemployed workers seeking new jobs in this time of economic recovery. In addition, the training services provided through WIA are invaluable in helping employers find the workers they need in areas of the country facing skill shortages. Nonetheless there have been challenges with the system. For example, we have heard of the need to increase the financial contribution of the mandatory partners in the One-Stop career centers, while at the same time increasing the service integration among the partner programs. This includes serving through the One-Stop system special populations that have unique needs. We have heard recommendations to simplify the local and State governance processes and to strengthen the private sector's role. In addition, we have heard about the need to increase training opportunities and improve performance and accountability. We look forward to hearing our witnesses' comments on these issues as we seek to enhance the system so that it will continue to meet the training and employment needs of the information-based, highly skilled 21st century workforce. We also are considering the Rehabilitation Act, which authorizes the nation's major program providing comprehensive vocational rehabilitation services to help persons with disabilities become employable and achieve full integration into society. The 1998 reauthorization simplified certain aspects of vocational rehabilitation to expand consumer choice of services and providers, coordinate the vocational rehabilitation system with the One-Stop delivery system, and to increase consumers' involvement in the planning process and development of employment goals. The vocational rehabilitation system largely has succeeded in achieving its purpose of providing more control to the individuals it serves; however, we do look forward to examining the degree to which the system is integrating with workforce development and how well the One-Stop system is serving individuals with disabilities. Today we have the opportunity to hear reauthorization recommendations from the Administration and several important stakeholder groups. First we will hear from Assistant Secretary Emily DeRocco from the Department of Labor and Assistant Secretary Robert Pasternack from the Department of Education regarding the Administration's proposals for reauthorization of these two vital programs. Then we will hear from leaders in the fields of business, workforce development, and vocational rehabilitation to learn their thoughts and recommendations for these Acts. The Subcommittee welcomes your insights as we move toward reauthorization. I look forward to working with the Members of this Committee, the Administration and all stakeholders as we work to craft legislation that will build upon and improve the systems we created in 1998 and continue to empower individuals in improving their careers. WRITTEN OPENING STATEMENTOF CHAIRMAN BUCK MCKEON, SUBCOMMITTEE ON 21ST CENTURY COMPETITIVENESS, COMMITTEE ON EDUCATION AND THE WORKFORCE - SEE APPENDIX A Mr. McKeon. I now yield to my good friend Congressman Kildee, Ranking Member of the Subcommittee, for any opening statement that he may have. OPENING STATEMENT OF RANKING MEMBER DALE KILDEE, SUBCOMMITTEE ON 21ST CENTURY COMPETITIVENESS, COMMITTEE ON EDUCATION AND THE WORKFORCE Thank you, Mr. Chairman. I am pleased to welcome Assistant Secretaries Pasternack and DeRocco and our other witnesses today. I am looking forward to hearing their testimony. Our nation's system of job training and vocational rehabilitation is a key component of ensuring our nation's workers, the disabled and non-disabled alike, have the skills they need to secure long-lasting, high-paying employment. I have toured a One-Stop center in my hometown of Flint, Michigan recently, and I have seen the positive impact that an accessible One-Stop center can have. While WIA and its One-Stop center system are relatively young, they have begun to show their success. Vocational rehabilitation is also an enormously critical and important program both for our nation as a whole and for adults with disabilities. Our nation benefits from vocational rehabilitation programs when adults with disabilities are able to return to work and contribute to our economy. Our entire country benefits from maximizing the potential of all our citizens. Unfortunately today's economic situation is grave. We have 8.3 million individuals who are out of work. We have some of the highest unemployment rates in a decade. My own city of Flint, Michigan, and the area around there is certainly suffering. We have growing budget deficits projected to top $300 billion this fiscal year, and our economy continues its downturn. Workers and their families are struggling to secure high-paying, long-lasting employment. These are serious, serious issues facing our Nation. In light of these economic conditions, I have grave concerns about the Administration's WIA reauthorization proposal. Rather than constructively addressing the challenges facing the WIA system, I fear this proposal would significantly hamper the progress being made by many of our One-Stop centers. First, the Administration's proposal to block grant adult dislocated workers and employment service funding streams is shortsighted and likely to lead to reduced funding for job training. I have been in Congress for 27 years, and over time I have seen block granting, and I have seen diminution of spending. A program tends to lose its identity, and it loses its advocacy and then loses its spending. I have seen this time and time again. So whenever I see block grant, I have to go back to my own experience on that. I would think the biggest diminution took place in 1981 when David Stockman was OMB Director and we went into block grants. So I have a concern about that. Second, the Administration's proposals to eliminate services for in-school youth and eliminate youth councils will result in less focus on these issues. Our youngest workers are the hardest to employ. Third, WIA should not require mandatory partners to contribute a set percentage of their funds for One-Stop center operations while also eliminating their seat on local workforce boards. I am particularly disappointed that the Administration would seek to carve out funding of mandatory partners such as vocational rehabilitation and adult education. Funding increases for these programs have been paltry and even nonexistent over the years. Instead we should be seeking to provide operational funding for the One-Stops through a separate line item. Lastly, we must make it easier for community colleges and other providers to participate in the One-Stop system. Community colleges in general have cited burdensome reporting requirements. We must alleviate these barriers while ensuring that we maintain accountability for the use of WIA funds. I am hopeful that the Administration's reauthorization ideas for the Rehabilitation Act are more positive than its proposal for WIA. The top priority for reauthorization should be a dedicated funding stream to help State agencies work with school districts to make the transition for children with disabilities more effective. Too often children with disabilities are left without any services once they leave our K-12 schools. That is a deficiency we have to address. This reauthorization must provide resources to address this issue. As we contemplate changes to these programs, it is critical for to us consider how those who receive services will be affected. Under WIA we cannot lose sight of the need to serve unemployed workers. However, we must also focus on how we can improve access and services to low-income individuals, minorities and women. These populations are critical as we ensure that everyone has the opportunity to benefit from job training. Under vocational rehabilitation we cannot forget that 37 State agencies presently do not have the resources to serve all individuals with disabilities and are operating under an order of selection. I believe that is intolerable. The needs of individuals served by these programs should be our paramount concern. I would be remiss also if I did not express disappointment at this hearing being our only opportunity to discuss issues about the reauthorization of these programs. We have been informed that the Committee intends to complete its work on these programs prior to the Easter break. This does not leave sufficient time to examine the Administration's proposals. It also effectively bars us from consideration of comments and suggestions that Chairman McKeon and I requested on a bipartisan basis earlier this year. Mr. Chairman, I think the individuals who are served by these programs would be best served if we took sufficient time to hold additional hearings on these programs and allow for a more thoughtful reauthorization process. This would allow us the time to carefully consider the impact of many changes being sought for these programs. Mr. Chairman I wish we had more time. You and I have always worked well together. We utilize time well together. And if we can have more time, I think we could do a better job. But thank you very much, Mr. Chairman. Chairman McKeon. Thank you, Mr. Kildee. We have two panels of witnesses today. I will begin by introducing the first panel. The first witness is Assistant Secretary Emily DeRocco. Before becoming the Assistant Secretary for the Employment and Training Administration at the Department of Labor, Ms. DeRocco was a Cabinet officer for both the Department of the Interior and the Department of Energy during the Reagan Administration. That is pretty good experience. She also served 10 years as the Executive Director for the National Association of State Workforce Agencies, and comes very well qualified to her position, as does Assistant Secretary Robert Pasternack, our second witness. Before serving as Assistant Secretary for Special Education and Rehabilitative Services, Dr. Pasternack was the State director for the New Mexico State Department of Education. Dr. Pasternack also served as chair of the New Mexico Developmental Disabilities Plan and Council and as CEO of New Mexico's first licensed comprehensive children's community mental health center. Before the first panel begins their testimony, I would like to remind the Members that we will ask questions after the panel has testified. In addition, Committee rule 2 imposes a 5-minute limit on all questions. Assistant Secretary DeRocco, you may begin, please. STATEMENT OF EMILY STOVER DeROCCO, ASSISTANT SECRETARY OF LABOR, EMPLOYMENT AND TRAINING ADMINISTRATION, U.S. DEPARTMENT OF LABOR, WASHINGTON, D.C. Thank you, Chairman McKeon and Members of the Subcommittee. Thank you for the opportunity to come before you today to testify on the Administration's Workforce Investment Act reauthorization proposal. Our proposal is designed to strengthen the workforce investment system and its One-Stop career centers that States and local communities have developed to serve the workforce needs of businesses and individuals. As you know, 5 years ago under the strong leadership of this Subcommittee, Congress passed the Workforce Investment Act. WIA was groundbreaking law that has dramatically improved the delivery of employment and training services nationwide, and it expires on September 30th, 2003. Over the past year the Department of Labor has widely consulted with stakeholders on how the workforce investment system could be further strengthened. Our challenge is to make WIA more effective and responsive to the needs of local labor markets and to build on the innovations that have been developed. We propose to do this in six ways. First, we want to create a more effective governance structure. Too often the State and local boards are too large and unwieldy, and they have been mired in administrative detail rather than focused on strategic policy matters. The Administration proposes to strengthen the role of State and local boards by changing the membership and refining their focus. State boards should continue to be chaired by business, and a minimum set of membership requirements should consist of the State agency One-Stop partners, business and worker representatives, and State legislators. The State Board sets statewide policies and priorities for the delivery of workforce services through the One-Stop delivery system. Local boards would be streamlined by eliminating the partner programs to provide an increased voice at the local level for employers, community groups and worker advocates, making the boards more responsive and strategic. And the requirement for a local youth council would become an optional feature. Second, the operational cost of the One-Stop system would be financed through dedicated One-Stop infrastructure funding. Each partner program would contribute to the One-Stop infrastructure funding at either the federal level or in a State set-aside. This would create a greater sense of partner ownership of the system and would alleviate a great deal of the current local negotiation around operations. In addition, we believe this partner buy-in will better connect the One-Stop delivery system with other programs, such as adult education and TANF. Third, we do propose to combine the WIA Adult, Dislocated Worker and Wagner-Peyser funding streams into a single formula program. This change would greatly aid program integration, help the system be more responsive to local labor market conditions, and result in streamlined program Administration at both the State and local level by reducing the current complexities of managing across three separate funding streams. We also propose to permit more flexibility in the delivery of services to adults. Under current law some have misinterpreted the sequence of service requirements, and they believe that it means spending a certain amount of time in each level of service before moving on to the next. Under our proposal individuals would receive the services that are most appropriate for their unique needs. Additionally, we do propose to eliminate the burdens of eligible training provider requirements to incentivize more education and training providers to participate fully in the workforce investment system. Fourth, we propose to create a targeted approach to serving youth. The Administration recommends focusing WIA resources on out-of-school youth through a targeted State formula program and challenge grants to cities and rural areas. Fifth, we propose to strength the performance accountability system and address many of the concerns we have heard from our State and local partners about the performance accountability provisions of WIA. We want to focus on four performance measures for youth and four for adults. And as part of the coming performance measurement systems, these indicators would cut across all Federal job training programs and would have a common set of definitions and data sets. Finally, we propose to provide States with the flexibility to design and implement the most effective workforce system and program for their citizens. The Administration recommends that statutory limitations for increased waiver authority be removed, and that the current Work-Flex in WIA be simplified to allow Governors to apply for block grant authority. Under such authority, if granted, Governors would have discretion as to how to administer WIA Title I formula programs for adults and youth. In closing, we need to ensure our workforce investment system provides business and workers with the opportunities and tools they need to be successful. I believe that the Administration's proposal for reforming the Workforce Investment Act will continue to steer our Nation's workforce system in this direction. Secretary Chao and I look forward to working with this Subcommittee and with all Members as we move ahead. This concludes my prepared remarks, and I look forward to answering your questions. WRITTEN STATEMENT OF EMILY STOVER DeROCCO, ASSISTANT SECRETARY OF LABOR, EMPLOYMENT AND TRAINING ADMINISTRATION, U.S. DEPARTMENT OF LABOR, WASHINGTON, D.C. - SEE APPENDIX B Chairman McKeon. Thank you very much. Dr. Pasternack. STATEMENT OF ROBERT H. PASTERNACK, ASSISTANT SECRETARY FOR SPECIAL EDUCATION AND REHABILITATIVE SERVICES, U.S. DEPARTMENT OF EDUCATION, WASHINGTON, D.C. Mr. Chairman, Members of the Subcommittee, thank you for the opportunity to appear before you today on behalf of the Department of Education and with my colleague Emily DeRocco, the Assistant Secretary of Labor for Employment and Training. She and I have been working together to ensure that the workforce investment system provides accessible, effective and appropriate job training and employment services to all individuals, including those with disabilities. The New Freedom Initiative is one of the very first policy statements released by the President in his Administration. The major goal of the New Freedom Initiative, as you know, sir, is increasing the ability of Americans with disabilities to integrate into the workforce. Although many people with disabilities are obtaining jobs and remaining employed, the unemployment rate for people with disabilities is still unacceptably high. The reauthorization of the Workforce Investment Act provides us an opportunity to strengthen and improve programs that will play an important role in improving employment and community integration outcomes for individuals with disabilities, to help fulfill the President's vision articulated in the New Freedom Initiative. Employment is vital to the full participation and so many other aspects of American life for individuals with disabilities. The Vocational Rehabilitation State Grants Program administered by the Department of Education is the primary Federal vehicle for assisting individuals with disabilities, particularly those with the most significant disabilities, to prepare for, obtain or retain employment consistent with their capabilities, interests and informed choice. In 2004, this $2.7 billion program will provide a wide range of services to assist over 240,000 individuals with disabilities obtain meaningful, competitive, integrated employment. The Voc Rehab State Grants Program is currently a mandatory partner in the local One- Stop service delivery system established under WIA. WIA's One-Stop system connects employment, education and training services into a coherent network of resources designed to help individuals obtain jobs and assist employers to find qualified workers. Many of the individuals who are unemployed and seeking assistance at the One-Stops are people with disabilities. The New Freedom Initiative notes the unemployment rate of the 54 million adults with disabilities continues to be at 70 percent, and unfortunately this rate has not changed in the last decade. As partners in the One-Stop centers, State voc rehab programs have contributed significantly to the enhancement of the One-Stop system and the expansion of its capabilities in meeting the needs of people with disabilities. State VR agencies provide expertise relating to needs of people with disabilities in many of the local workforce areas. Participation of the voc rehab agencies has also been instrumental in creating an awareness of the consumer population among the partners. In addition to providing assistance and evaluating and monitoring the accessibility of One- Stop centers, local voc rehab programs through their mandatory partnerships continue to be instrumental in training other partner programs and their staff concerning the specialized assistance many people with disabilities need to become employable and maintain employment. Although One-Stop centers have made progress in modifying their programs and facilities, barriers still remain, and the level of physical and programmatic accessibility varies widely among centers across the country. Barriers to technology, such as the availability of appropriate computerized information systems, present an even larger challenge in some centers. We are committed to working with our partners to ensure that individuals with disabilities can participate fully in the One-Stop system, allowing these individuals to obtain competitive, meaningful, integrated employment. The One-Stop system facilitates access to the services provided by the VR program. There are some individuals with disabilities who with the accommodations or modifications can take advantage of the services One-Stops offer as intended in WIA. However, there are many individuals with disabilities, particularly those with the most significant disabilities, whose complex needs require the expertise and specialized services of the State vocational rehabilitation program. Most of the people served through the voc rehab program, about 87 percent of the people served in 2002, are individuals with the most significant disabilities. The largest category of consumers of voc rehab is persons with mental or cognitive disabilities. Due to their complex needs, they require specialized services such as various therapeutic services, adaptive technology, transportation devices, sign language interpretation such as you see occurring in this very hearing room, communication aids, personal assistance services, mobility training, and a variety of accommodations which occur at the workplace and also in the home. The State voc rehab program has an 80-year history of providing a wide range of rehabilitation training, employment placement and other more specialized services to our country's individuals with disabilities, and it has a proud history. Voc rehab agency staff members and their community-based providers receive specialized training and have tremendous collective expertise in assessing the comprehensive rehabilitation needs of individuals with disabilities and providing individualized programs of vocational rehabilitation to address those needs. Given these specialized services, the cost of serving some of these individuals is typically higher than the cost of serving individuals with less significant disabilities. Because of the cost of resource limitations, nearly one-half of all State voc rehab agencies are operating under an order of selection, as Congressman Kildee indicated in his opening remarks. Our partnership in WIA allows greater access to the traditional employment and training resources of One-Stop centers for individuals with less significant disabilities who might otherwise be forced to wait for services or not receive any employment services at all. The voc rehab program has also benefited from closer coordination and collaboration among related workforce programs and services and from increased exposure to an array of additional service providers and resources, such as the individualized training accounts under the current WIA. The Department of Labor will be proposing changes to WIA that will strengthen the role of the State Workforce Investment Board in the management and coordination of services within each State. Despite its significant size and unique needs of its consumers, many State VR programs have had only indirect representation on State Workforce Investment Boards as part of a larger umbrella agency. We believe the VR program and the specialized employment needs of individuals with disabilities must be directly represented, particularly if the State Board is to have an enhanced management role. Finally, we must all work together to increase the participation of individuals in the competitive labor market. I look forward to working with Members of this Committee and my WIA partners to improve the workforce investment system so that it can provide accessible, effective and appropriate services to all individuals, including those with disabilities. I think the message, Mr. Chairman and Members of the Committee, is that disability is not an inability, and that people with disabilities can make profoundly important contributions to the workforce in this country if they are given the right kind of support services and accommodations. I look forward to answering any questions that you may have, and, again, thanks for the opportunity to be here today. WRITTTEN STATEMENT OF ROBERT H. PASTERNACK, ASSISTANT SECRETARY FOR SPECIAL EDUCATION AND REHABILITATIVE SERVICES, U.S. DEPARTMENT OF EDUCATION, WASHINGTON, D.C. - SEE APPENDIX C Chairman McKeon. Thank you very much. Ms. DeRocco, in your testimony you note that WIA attempted to move local boards away from operational details and towards strategic planning, yet that shift has not occurred in many areas. Could you please talk in more detail about how your proposal will make such a shift occur? Ms. DeRocco. Absolutely, Mr. Chairman. As we have met with many local boards across the Nation and many representatives of business interests across the nation, their principal complaints on both sides have been that many businesses tried their hand at sitting on the local workforce investment board, but found that the agendas for discussions and meetings were mired in the administrative details of the cost allocation plans, or of the square footage in One-Stop career centers. They didn't have an opportunity to focus in with the limited time that those business members had available to contribute to the system on the kinds of strategic economic development planning that would make a workforce investment system a true player in economic development for communities across the country. Our proposal is to give the partner programs their administrative and policy voice on the State Board level. Then allow the business representatives, worker advocates, and community and educational institutions at the local level to focus all of their time and attention on understanding what the declining industries in the local economy are, what the growth industries are, what skill sets are required for good jobs at good pay in those growth industries, and then direct the workforce investment resources to assure that that is what we are training dislocated and unemployed workers to accomplish, a good job at good pay with a career pathway. That seems to implement the vision of the Workforce Investment Act in a far better way than we have been able to with the large boards mired in administrative detail. Chairman McKeon. Thank you. In your proposal, taking the three programs down to the one funding stream, the State is going to give up some responsibility, and the local workforce investment boards are going to pick up more responsibility. Are we in agreement that they will receive more funding? Ms. DeRocco. Actually the Administration's proposal for the allocation of the funding stream, Mr. Chairman, is a 50-50 split. As you know, the current funding streams in the Wagner-Peyser is 100 percent State; the adult funding stream is 15 percent State, 85 percent local; and the dislocated worker-funding stream is 40 percent State, 60 percent local. When you combine them, we had to look at the most equitable way to achieve a balance among the State and local interests, and our proposal from the Administration is to have a 50-50 split. The 50 percent distributed to the locals would be 40 percent by statutory formula and an additional 10 percent by a formula that is designed to meet the economic and demographic characteristics of the local labor markets. And then the state would have 50 percent at its disposal to provide rapid response services, to develop a statewide quality assurance for the delivery of services in the One-Stop, and also to determine precisely how to deliver the core services in the One-Stop that have in many cases been traditionally delivered by the employment services under Wagner-Peyser. Chairman McKeon. I took a pencil to those figures, and I came up with the local workforce boards losing money. We are going to have to get together and talk about this because we are going to have to work together to pass something. Ms. DeRocco. I understand that. Chairman McKeon. I can't support those levels. So we will have to come up with a compromise that we can work with, and we will have to do this quickly. We have talked about this before. Ms. DeRocco. Yes, we have. Chairman McKeon. I just wanted to get it on the record because it is very important that with the increased responsibility of the local workforce investment board, they have more funding to carry on the additional responsibilities. Ms. DeRocco. If I may clarify, Mr. Chairman, if you take the three funding streams and run the current appropriations separately, the split is about 52 percent local, 48 percent State. So we came as close as we could to the equity in our proposal that we send forward to you. I understand that is an item would you like to work more on. We look forward to working more with you. Chairman McKeon. I know one time I was helping one of my children with their homework, and the teacher said "jungle math" doesn't work. But that is what I learned. And we will look at the figures and see how we come out on that. My time is up, but I have some questions for Dr. Pasternack. If we don't have another round, I will get them to you, and maybe you could answer me in writing. Dr. Pasternack. I would be happy to respond to any questions you have, Mr. Chairman. Chairman McKeon. Thank you very much. Mr. Kildee. Mr. Kildee. Thank you, Mr. Chairman. I concur with you on your math and your principle on getting more money to the local level. So we will work together on that. First of all, I want to welcome both of you here. Through the years, Secretary Pasternack, I have enjoyed working with you and your predecessor doing some very, very good work, and look forward to working with you in the future. I wish we could have a separate hearing on voc rehab itself, because I think that would be very helpful to us as we go through this reauthorization. Secretary DeRocco, Congress time and time again has made the determination that dislocated workers have different job assistance needs than other job seekers, and has allocated separate funding and attention to their needs. Why has the Administration decided to change Congress's priority for dislocated workers? Ms. DeRocco. We don't believe we are changing Congress's priority for dislocated workers. In fact, in large measure what we have seen in the past year at many local boards and in many States with plant closings and mass layoffs occurring in communities across the country is the need for dislocated worker assistance. Funding has been significantly greater in many areas than the need for funding specific to the adult disadvantaged population and the WIA allows for some waiver authority for the Secretary of Labor. The majority of waivers that have been requested have enabled the local boards and States to transfer funding between the adult funding stream and the dislocated worker funding stream to assure that they can meet the very specific needs of their local labor market. In general, the services available to both adults and dislocated workers under WIA include the core employment services, the intensive services of case management or assessment of skills and determination of employment plan, as well as training opportunities and supportive services that are made available to allow individuals in both the dislocated worker population and the adult population to access those training services. So we see great similarities between the services that are available to the adult population and to dislocated workers, and we would like to extend those services to the greater population. Mr. Kildee. In my institutional memory of the Congress, we have seen differences in the needs of the dislocated worker, and the other job seekers. We have seen this in the old industrial northern rust belt where people had worked for a number of years, say, in the auto industry, with good wages, mortgages on their home, children in college, and car payments. All job seekers have problems, but because dislocation is so disruptive to their lives Congress really felt that there should be a separate funding stream. And I still am reluctant not to have some distinction made there. They do have different needs do they not? Ms. DeRocco. Every individual job seeker that comes into a One-Stop career center has unique needs in some respect. We serve eighteen million of the universal population that comes by for core services. But the core and intensive and training services that WIA has made available will not change under the Administration's proposal. There will still be those three sets of services that are available to every job seeker. Many dislocated workers, as you have noted, will require all three. They will need information and the job referral assistance, but their skills may not be transferable in their local labor market. They may need additional assessment of their skills and intensive services, and very definitely they may need training services to take on new skills that will make them marketable in the local labor market. We are absolutely committed to those dislocated workers and getting them back to work as quickly as possible. We believe our proposal strengthens the local workforce boards and the local One-Stops' ability to provide those very important services to every job seeker that comes to the One-Stop career center. Mr. Kildee. Thank you very much. Dr. Pasternack, what can be done to encourage a better transition from IDEA to voc rehab for those children with disabilities, because there is not a smooth transition very often? Dr. Pasternack. Well, Congressman, unfortunately you are right. Twenty-eight years into the implementation of the IDEA, we should be doing a better job of helping students with disabilities transition from school to postsecondary opportunities, and employment and postsecondary education, if that is their choice. We are working on some proposals that we look forward to talking with you about during the upcoming reauthorization of the IDEA. We are looking at joint monitoring between the Rehab Services Administration and the Office of Special Education programs as they go to States and we are looking at developing a closer working relationship between the voc rehab system and the special education system. We are looking at issues where the independent living centers perhaps can play a stronger role in meeting the needs of younger people with disabilities than they currently do. We are looking at perhaps some conforming language that might exist in the IDEA and the upcoming reauthorization of the Rehab Act. We are looking at constantly building the capacity of people in special education and voc rehab to more effectively meet the needs of individuals with disabilities as they seek competitive, meaningful, integrated employment, entrepreneurship opportunities. One of the major issues we are concerned about, Congressman, is the fact that we still have way too many students with disabilities dropping out of school before they get a diploma. As you well know, sir, someone's life trajectory is fundamentally different if they have a high school diploma compared to not having a high school diploma. So, for example, in the last annual report that we submitted to Congress, the 23rd report, we documented that the graduation rate for students with disabilities has changed to the highest rate ever. However, we still have 40 percent of the students with disabilities in the 14 categories out of the 6-1/2 million kids currently receiving special education in this country that are leaving school without a standard diploma. So we have to do a better job in making sure we accomplish the President's vision of leaving no child behind, and that we help these students receive the free appropriate public education in the least restrictive environment they are entitled to under the IDEA. Mr. Kildee. I am grateful you have given so much thought and attention to this. This is a very grave concern of mine. I am glad to see you focusing on that. I appreciate that. Chairman McKeon. Thank you. Mr. Ehlers. Mr. Ehlers. Thank you, Mr. Chairman. I am going to do something a little bit unusual. I hope you don't mind. But frequently at our hearings we have just a few people. Today we have a lot of people. Obviously they are deeply interested in this topic and very concerned about it. But by the time they get a chance to speak, you will be gone. So I am going to ask each of you if could give a quick summary of what the major objections to the Administration's proposals you hear from people are. Give your response to us as to why you think your proposal is, in fact, good and why the objections being raised are not particularly valid, and how they will be met by the legislation you are proposing. Dr. Pasternack, you have been getting the short end of the stick, so we will start with you and go the other way. Dr. Pasternack. Thank you, Congressman. That is an excellent question. I think that what I would like to do is just confine my remarks to the relationship between the voc rehab system and the Workforce Investment Act, which I think is the primary topic of today's hearing. I think the objection that we are hearing is that there hasn't been enough attention paid to the need for the State voc rehab agencies to be mandatory partners in the Workforce Investment Act system by increasing the capacity of the entire One-Stop system to more effectively meet the needs of people with disabilities. We need to make sure we differentiate the fact that One-Stops can do a wonderful job, and that the promise of the One-Stops is to help people with less significant disabilities who are looking for competitive, meaningful, integrated employment. People can come in the door and find that there is a capacity there to meet their needs, so we can maintain the integrity of the vocational rehabilitation system in meeting the needs of people with more significant disabilities. I have heard people say that we are trying to gut the voc rehab system by supporting the One-Stop system, and that is quite the contrary. What we are trying to do is strengthen the ability of the One-Stop system to meet the needs of all people who are seeking employment and send the message that disability is not inability, and people with disabilities can make profoundly important contributions to the workforce if they are given the opportunity to work with the accommodations to which they are entitled under law. It is incumbent upon us as members of the voc rehab community to help build the capacity of the entire system to more effectively address the needs of people with disabilities who arrive at that system looking for work and who are currently unable to find the hope that they need. I think that is probably the loudest objection we have heard to the work that we are doing to try to more effectively partner within the voc rehab system and the One-Stop system. Mr. Ehlers. Are you convinced that the money you are proposing will be sufficient to accomplish those tasks? Dr. Pasternack. Congressman, I think we need to look at a financial contribution that would help build the infrastructure of the workforce investment system and the One-Stop system to effectively meet the needs of all the people who are coming into the system looking for work. I think the Administration would support a decision where States have an opportunity to consider what is the best way for the mandatory partners to contribute. To build the infrastructure that is required for these systems to be more effective is something that my colleague and I are currently discussing very actively and will hopefully be able to come to you in the very near future with more substantial information on the actual amounts. Mr. Ehlers. Thank you. Secretary DeRocco, what are you hearing, and what is your response? Ms. DeRocco. First, let me just say how committed I am to the commitment you have just heard from Assistant Secretary Pasternack to make the One-Stop career center system an incredibly valuable and important tool for individuals with disability. That is something we are working so closely on together and we are both passionate about. The two concerns that I have heard most often that I would like to respond to today are, number one, Mr. Kildee's concern related to the consolidation of three funding streams. And my response to that concern, in addition to what I was able to articulate in response to his question, is that we do believe that the consolidation of the three funding streams will allow our local workforce boards and One-Stops to better serve their local labor markets, businesses, and the job seekers who need the kinds of services that the One-Stop makes available. This will ensure that the local levels are not constrained by federally set eligibility requirements or set percentage of dollars that can be used for certain individuals so that they have the freedom to serve the needs of their local community. We believe that was the vision of the Workforce Investment Act, and we believe it is important to remove the remaining constraints in quality service to individuals at the local level. We also believe the consolidation will move to far greater integration of services. Particularly unfortunate in some States and communities, the employment service has not been well integrated as the provider of core services in the One-Stop career centers, and we believe that integration should occur and will occur under the Administration's proposal. And last, we believe that because we will be removing some additional administrative costs associated with managing three funding streams, there will be additional dollars available to actually fund training for the individuals the system is intended to serve. So that is one concern and three responses. The second concern we have heard is related to the Administration's proposal for focusing the State formula dollars on out-of-school youth as opposed to in-school youth. And this was a very, very difficult area for us to come to grips with to determine an appropriate proposal for WIA dollars. I have a personal passion for the vocational education needs of in-school youth, but what we have found is that the workforce investment system in many cases is the only answer for out-of- school youth. Very eloquent, well-versed and well-researched youth development experts counseled us that the three most at-risk populations of out-of-school youth are dropouts, court- involved youth, and youth aging out of foster care. If we could successfully target the available WIA youth resources to those young people, we would be contributing to their future, in fact opening doors to a future that they otherwise simply wouldn't have. So we feel committed to focusing the available resources through workforce investment youth activities on those three targeted at-risk youth populations. Mr. Ehlers. I have one last comment, Mr. Chairman. If you do succeed in your goal of moving local boards away from operational details and towards strategic planning, perhaps you can help the Congress do the same. Thank you very much. Chairman McKeon. Thank you. Mrs. McCarthy. Mrs. McCarthy. Thank you, Mr. Chairman. I want to follow up on the financing again because looking at the statistics that are put out by the Department of Labor, between 2002 and 2004 there is a cut of 12.46 percent. We are asking the States to take on a burden that 48 of them are not going to be able to afford because all of them are in deficit now. I am looking at New York State alone and these figures, which probably are a little bit higher right now, 6.3 percent as far as New York State unemployment, 8.4 percent of the labor force unemployed. So we are going to have to work on those numbers, because if you actually want to really do the job, we can't hand an unfunded mandate back down to our States. Another thing as far as the summary of the Administration's WIA reauthorization proposal, this part bothers me under services states that priority services would go first to the unemployed, obviously we should do that, and if funds were limited, then to low-income individuals. So we are not going to be able to service the people that really need to go to work, and how are you going to do this? I am looking at the same numbers as my Chairman, and I don't know how you are going to put this program together. One of the other things that I see that you have zeroed out is for veteran's employment. Well, according to this Department of Labor source, veteran's employment is zeroed out between 2002 and 2004. Ms. DeRocco. I am not responsible for the Veterans Employment and Training Service, but I guarantee they are not zeroed out. What I think that is reflecting is there was an Administration proposal between fiscal year 2002 and in the President's 2003 budget to move the Veterans Employment Training Service to the Department of Veterans Affairs. That did not happen. There was no authorization for that. So I can guarantee you they are fully funded in the President's 2004 budget. I am not sure what that paper reflects. Mrs. McCarthy. Let me follow up my question on veterans. Number one, we don't have enough money in the veterans funding for all the services they need now. So if you were going to turn it over to the Veterans Employment and Training Center, I would doubt that they would even have the money. Unfortunately, if we are facing a war coming down the road, we are going to have more veterans than ever that will possibly need to be retrained. Ms. DeRocco. Absolutely. We are not turning anyone away seeking advance employment and training services at this juncture. There was a proposal to change department management in the 2003 budget that didn't happen. There is a fully functional Veterans Employment and Training Service now within the Department of Labor. They actually deliver employment and training services through two sets of specialized staff. They are called disabled veterans outreach personnel, DVOPs, and local veterans employment representatives, or LVERs. And those two sets of staff actually work out of the One-Stop career centers to provide very focused attention on all veterans who come to the One-Stop career centers to access this array of services that is available through the Workforce Investment Act and other partner programs. So they are fully funded in the 2004 budget, and services continue to be delivered through those specialized staff. In fact, there is a new law that gives a higher level of veteran's priority in all of our training programs to assure that they get a focused priority treatment for the availability of services; Congress just passed that law last year. We are in the throes of implementing it with the help of the Veterans' Affairs Committees in both the House and Senate. As it relates to our consolidated grant proposal, when added together to support the consolidated funding stream the actual funding levels in the 2003 budget for each of the three is exactly the same amount. There has been no cut in the WIA funding streams that we are proposing to consolidate. Some of the differences you are seeing between FY 2002 and FY 2004 relate, for example, to one-time appropriations that occurred in 2002. One, in fact, was a $32.5 million one- time appropriation to New York City to respond to the terrorist attacks of September 11th. There are several programs in there whose authorization expired in 2003; for example, the H1-B Training Grant Program and the National Skills Standards Board. Mrs. McCarthy. So basically you are saying there is an increase. Ms. DeRocco. I am saying there is no cut in the WIA programs between FY 2003 and FY 2004. Mrs. McCarthy. Is it flat? Ms. DeRocco. That is correct. Mrs. McCarthy. So you have put nothing in for inflation or anything else especially with the numbers of unemployed. If there is high unemployment, certainly these needed extra services are going to be on the lower end. Ms. DeRocco. What we do know is that the States are still carrying over. Mrs. McCarthy. States aren't going to have any money. Ms. DeRocco. They are carrying over about $1.7 billion in both of these programs, from 2002 to 2003 and 2003 to 2004, according to our projections. Mrs. McCarthy. So you are saying the States have the money to do these programs. Ms. DeRocco. Yes, ma'am, I am, to maintain the level of services they are currently producing. Mrs. McCarthy. New York State is $10 billion in debt, and you are saying they have money left over. Ms. DeRocco. They have money in these programs to expend on the workers who are coming into the One-Stop career center system to access these services, but they are appropriated dollars for these purposes only, so the debt is apparently in other areas of the State budget. Mrs. McCarthy. If I may, Mr. Chairman, if you are going to do this in block grants, is there any guarantee that the money is going to go definitely for these services, or could the Governor have the flexibility to use that money towards their debt? Ms. DeRocco. No, ma'am, I would absolutely believe the funds must be used for services authorized under the Workforce Investment Act. Mrs. McCarthy. Thank you, Mr. Chairman. Chairman McKeon. I think that is something we will have to watch very carefully. I know in our State of California the Governor has used monies from IDEA for other portions. So we will have to watch that very carefully. Mrs. McCarthy. I agree with you, Mr. Chairman. Thank you. Chairman McKeon. Mr. Johnson. Mr. Johnson. Thank you, Mr. Chairman. Her questions on veterans reminded me of one I have. In our area just this past week, veterans who are out of work were refused work training because they owned a home. They had too much money. Is that part of our law or not? Ms. DeRocco. No, sir, it is not part of the law. Mr. Johnson. So they should be helped under any circumstance if they need work. Ms. DeRocco. Yes, sir. Mr. Johnson. And veterans do have priority. Ms. DeRocco. They have priority of service for all employment and training programs under the Department of Labor's jurisdiction. Mr. Johnson. Okay. I will jump their case when I get back there. Ms. DeRocco. So will I, if you tell me where they are. Mr. Johnson. You indicated in your testimony that you believe the boards are too large to effectively address all the concerns. I have been to some of those board meetings. I swear I don't know how they get anything done. So what is your proposal to fix that? Ms. DeRocco. Our proposal is to focus the membership of the boards and thus their mission. At the State level we want to focus on a business-led board, but primarily on the partner programs in the One-Stop career center system to ensure that those partner programs are invested in the service delivery system and contributing to its success by integrating services to best serve the businesses and job seekers. Mr. Johnson. How are you going to reduce the size of the board? Ms. DeRocco. That actually does reduce the size of the board. The current law has a lengthy list of required members on both the State and local boards. We are suggesting that that be replaced with a minimum set of membership requirements at the State level, the partner programs, business worker advocate and State legislature representative. At the local level we suggest removing those 17 partner programs and focusing on business education, worker advocates and community-based organizations. Mr. Johnson. That is the recommendation you are making. Ms. DeRocco. That is correct. Mr. Johnson. Okay. You also state that while customized OJT is authorized, it is kind of bureaucratic. How are you going to get around that? Ms. DeRocco. We are recommending making it clear in the legislation that at the State level, incumbent worker training and customized on-the-job training are permissible activities with State dollars, and at the local level 10 percent of their funds could be used likewise. We are sure that the system is going to respond to a very important need that the employer community has identified for us, because it is through incumbent worker training that employers build the skills of their current workers and move them up the career ladders, opening up the door for new entry-level workers to come in. That is the important part of the dynamics of the labor market that we want this system to encourage. Mr. Johnson. Thank you. Dr. Pasternack, the Subcommittee is considering requiring mandatory partners to contribute a small percentage of their funds to help pay for infrastructure at the One-Stops. Do you support that? Dr. Pasternack. Yes, Congressman. We are talking about the fact that each partner needs to contribute a portion of funds to support the infrastructure of the system. I think the amount is something that needs to be determined at the State level based on the different models that are occurring across the country currently. Mr. Johnson. So you believe in giving the States the authority to figure that out? Dr. Pasternack. Yes, sir. That is the proposal that we are currently discussing with our colleagues at the Department of Labor. Mr. Johnson. That is super. Thank you both very much. Thank you, Mr. Chairman. I Yield back the balance of my time. Chairman McKeon. Thank you. Mr. Tierney. Mr. Tierney. Thank you, Mr. Chairman. I thank both of you for testifying and for the work that you do. I don't know whether to direct this to one or the other of you, both of you, or the Chairman. Mr. Chairman, are we going to have a second round of questioning here today? Chairman McKeon. I think our rules say if you ask for a second round, we will have a second round. Mr. Tierney. Like you, I think I will have more questions than we will have time for. I am more than a little disturbed by the fact that the current Workforce Investment Act is authorized until September of 2003, and we are jamming this into a couple of weeks. It smacks of a political effort to get some rhetoric out there about the state of our economy, and it doesn't sit well. You just look around this room at the number of people that are involved and interested in this issue. I can tell you that when I went back home, I am the only Member from New England; we had a series of meetings throughout the region set up for people involved in this workforce investment system to meet and provide input on what they wanted to have in this bill. And it is more than a little distressing to find that the Majority here, if it is the Majority, or the Administration is jamming this thing through on some political index as opposed to making sure we do the most thorough and appropriate job we can do. I would hope that we can do that in relatively short order, but I can tell you I don't think it is a good idea that we have so few hearings. Chairman McKeon. Is that a question for me? Mr. Tierney. No. That is a statement, Mr. Chairman, and I hope you heard it, because I think the folks at home certainly will hear that they have been disenfranchised on this aspect or whatever. And I don't think it helps either of the Assistant Secretaries to do their jobs, because I think you are dedicated people who want to do the job right on this, and I think you are being put in a difficult position. Let me ask some of the questions that I have. You are combining the Workforce Investment Act, Adult and Dislocated Worker and Wagner-Peyser funds into one stream in your proposal. So my question would be are you going to have a caveat that decisions concerning the allocation of those funds will remain at the local level? Or where is that going to be? Ms. DeRocco. Yes, there will be an allotment of the funding across the States, and then the States will have a statutory formula for distribution of the funds. Within the State, the use of the funds is a local determination. Mr. Tierney. So they will still decide how to use the funds? Ms. DeRocco. Yes, absolutely. Mr. Tierney. Would you do me the favor of defining career scholarships in a little more detail for me, because I look at it in the materials you sent out, Assistant Secretary, and you say "expanded use of individual training accounts no longer are going to be restricted to the WIA Title I Adult and Dislocated Workers." You want to expand that out. Expand it out to what? The only thing I can find is that you want to pay employers for the systems that they set up, employer-paid systems. So is this some sort of an effort to pick up a cost that the employers should be picking up and taking that away from them? Ms. DeRocco. No, absolutely not. We are trying to recognize that in today's economy, some 80 percent of the jobs that are created, not enough are created, I grant you that, require some postsecondary education and training. That means that individuals need a greater opportunity to access education and training. In some instances it is longer-term training than the publicly funded workforce investment system has been equipped to provide in the past. So it is an opportunity to assure that an individual employer can add funds of his or her own. An employer could contribute to an individual training account to assure the completion of training that would benefit both the worker and the employer, and to assure that other sources of public funds like Pell Grants could be added to the benefits of an individual training account. Mr. Tierney. Do you expect that to be spelled out more clearly in your final presentation? Ms. DeRocco. Yes. Mr. Tierney. I hope so, too. I won't even get into the implications of your remarks about sometimes needing a little bit more education and training with respect to the personal reemployment accounts. Those questions will go on for a while. You want to reduce performance measures from 17 to 8, saying that they are too burdensome and too numerous. But my local boards tell me, in fact, they don't want to shed the ones that relate to consumer response, and that is what you are recommending, as far as I see it. What they say clearly is that those are the primary drivers of what they call continuous quality improvement at the One-Stop centers. They are the drivers that give employers and job seekers the opportunity to feed back and indicate what it is they want. So can you tell me what you are about on that? Ms. DeRocco. I absolutely agree with them and believe they should collect customer satisfaction responses and use them for their management responses if they deem that appropriate. The surveys were done in different ways: a roll-up nationally of customer satisfaction responses. Some were what one would call smile surveys; others were scientifically based labor market information- driven surveys. A national aggregate of that is not a helpful barometer for us to create any technical assistance or training through the system that would be useful. We think it is very useful at the local level, and we are particularly encouraged by the Massachusetts One-Stops who use them very effectively, and certainly wouldn't be precluded from using them. We would encourage them to do so. We are just not requiring them as a Federal barometer. Mr. Tierney. Can you explain to me in some detail your intentions with regard to the block grant? The way I read it in your memorandum is there is going to be very little local control left. You will allow Governors to determine just how much they will provide to the sub-State entities, and then the Governor is going to select what partner programs are going to be involved and what array of services will be distributed. So it appears in the memorandum that you are letting the Governors write their own program. Ms. DeRocco. No, that is not what we envision. As Mr. McKeon said, obviously we have some work to do on the distribution, the quantity of funds, but under our proposal there would be a formula distribution of 40 percent of the funds directly to the locals, which they would determine how to use, where to use, whom to serve, and what their priorities would be. An additional 10 percent would be distributed directly to the locals based on economic and demographic factors in the State, which differ State by State, as you know. And again, that percentage of funds would be available for local workforce boards to determine the investment priorities and the clientele. Mr. Tierney. But then you are giving 50 percent to the Governor. Ms. DeRocco. We are giving 50 percent of the consolidated grant to the Governor, which is about what he gets now under the separate funding streams. Our breakout, as I said to the Chairman, was 52/48. Mr. Tierney. Under the block grant program? Ms. DeRocco. We propose 50-50; keeping in mind those Governors who sought to provide more directly to the locals would have the flexibility to do that. Mr. Tierney. But they would also have the flexibility not to pass it along in that respect. Okay. Thank you. Chairman McKeon. Thank you. Mr. Gingrey. Mr. Gingrey. No questions. Chairman McKeon. Mr. Hinojosa. Mr. Hinojosa. Thank you, Mr. Chairman. I want to thank both of you for coming to testify before this Subcommittee. We appreciate all the work that you do to handle this very difficult problem that we have nationally. My first question is addressed to Madam Secretary DeRocco. I believe that we must get the community colleges more involved in this Workforce Investment Act. I happen to be the founding chairman of a community college board of directors in south Texas, and they are a very important component of helping us with those who are unemployed or laid-off for different reasons. Would the Administration change the training provider requirements that have discouraged community colleges from serving as providers under WIA? Ms. DeRocco. Absolutely. Part of our proposal is eliminate those burdensome eligible provider training provisions that have required community colleges to report outcomes on all students, not just those that are WIA-funded. I have worked very closely with the community colleges across the country in the context of providers of choice for workforce development skills, and we have embarked upon numerous national models of how the workforce investment system, community colleges and businesses can really address the economic development needs in communities across the country. So our proposal will address those reporting requirements. We hope it will bring all community colleges back to the table as providers of services under WIA. Mr. Hinojosa. In the proposal that they submit to be considered as the providers, is there a way in which they could receive a few extra points that would give them an advantage so that we can get them back to the table, because we did a poor job here over the last few years. Ms. DeRocco. I believe from the many meetings I have had with community colleges, presidents and trustees across the country, they are just waiting for to us eliminate these burdensome requirements and are calling upon Congress and the Administration to do that. Then they are ready to come to the table, to be board members at the local level to ensure that their thoughts about the education and training requirements in a community are fully voiced at the local workforce board level, and we want them there. I think they are ready to come with that additional incentive. Mr. Hinojosa. All right. The second question that I have for you is, for example, in my area we have a lot of textile workers who lost their jobs after NAFTA was implemented. So in this determination the dislocated workers have different job assistance needs than other job seekers have, and separate funding and attention allocated for their needs. Why has the Administration decided to change Congress's priority for these dislocated workers? Ms. DeRocco. Again, we don't think we have changed your priority at all. We have allowed the full array of services to be provided to dislocated workers all across the country under the consolidated funding treatment. If anything, in some areas where dislocated workers are the primary population to be served, there will probably be more resources allocated by the local workforce boards for dislocated worker services, be they intensive services, training services or supportive services. This gives the local communities and the local workforce investment boards the opportunity to really target and address those needs. Mr. Hinojosa. I want to address our concern for limited English proficient individuals who have worked for companies like Haggar and Levi's for 20 to 25 years, done a good job, been loyal workers, and then lost their jobs because the companies were moved to another country. Therefore, we ask for customized programs that would deal with their limited English proficiency so that they could be retrained for new jobs. What have you done about that? Ms. DeRocco. Numerous things. One, we are working very closely with the Department of Education, because we do believe that the adult education program is a tremendous resource to address limited English proficiency and the identification of literacy and language skills to help adults reconnect with the workforce through the One-Stop career center system. Number two, we now have a task force at the Department of Labor dealing specifically with limited English proficiency to provide the State and local workforce system the kinds of tools they need to begin to address in a much more aggressive way the literacy and language skills that so many of our new workers to the American workforce require to be successful in our labor markets. We are dedicating resources, we are dedicating staff expertise, and we are working very closely with the Department of Education on the adult education program to make sure these resources are brought to this particular issue. Mr. Hinojosa. Because my time has run out, I will wait and see if during the second round I can ask Bob a question or two. But give me the name of the program that the Department of Education uses for addressing this concern. Ms. DeRocco. The limited-English proficiency program? Mr. Hinojosa. Yes. Ms. DeRocco. We would like the adult education program to focus on English and language skills. Mr. Hinojosa. Let me tell you, adult education was not even funded by the Administration for 2004. Ms. DeRocco. I believe adult education was. You may be thinking of something else. Mr. Hinojosa. I would like somebody to look that up. I was very concerned about programs that were zero or flat funded. Our adult education proposals were hurt severely in the 2004 budget. Ms. DeRocco. We will get that information for you immediately. I feel quite comfortable that adult education was funded, or there was a proposal for funding. Mr. Hinojosa. Thank you, Mr. Chairman. Chairman McKeon. Thank you. All right, everybody has had a chance on the first round, so I will begin the second round. In responding to the statement that was made that we were rushing too quickly on this, I guess the thing that I have learned in my 10 years here in Congress is either things go too slowly or too quickly. Generally if the majority party is moving on something faster than the minority wants, they are moving too quickly; if they are moving slower than the minority wants, they are moving too slowly. I understand the frustration because I spent my first term in the minority. There were times when I sat on this Committee and I felt as if we had no voice whatsoever and we might as well not have been here. Mr. Tierney. Will the gentleman yield for one second? Chairman McKeon. I will as soon as I am finished making my wonderful statement here. Mr. Tierney. You will be the judge of that, though, right? Chairman McKeon. I think political statements are constantly made on both sides, but I don't believe that we can always know the motives of people and why they are asking for something to move quickly. I would prefer to say that we are moving quickly on this so that we can better help people. When we go through the whole legislative process, we have the Subcommittee, we have the Full Committee, we have the Floor, and after that we hope that the Senate will move, and then we go to Conference. So there is quite a ways to go before we will get this bill done. My goal is to finish it this year. If it takes getting our side to finish before April so we can get the process moving quicker, I think that is better. I yield for one second to the gentleman from Massachusetts. Mr. Tierney. Mr. Chairman, it is nice of you to say those things, except that the way I understand your schedule, we are having a Subcommittee markup next week, Full Committee the week after, and to the Floor by mid-April. In 1922, the JTPA Act had 22 hearings, and in 1998 the WIA act had 36 hearings. One was a Democratic majority; the other was a Republican majority. We spent quite a bit of detail on this. Again, this Act is in effect until September of 2003. Twenty-two hearings, 36 hearings, and one hearing, there is a significant difference there. We may have had four hearings total, I guess, over a period of time. But there is a sharp distinction in those things. I think there are a number of people here and in our respective districts that would like a lot more input on that. I again express my disappointment. I have always had a good working relationship with the Chair. You have been absolutely involved in this particular piece of legislation in the past. You have had the hearings. I think it is totally out of character, and we can ascribe whatever motives we want for it, but certainly I can only see one myself. I think other people may also see that. Chairman McKeon. Now back to the questioning. Assistant Secretary Pasternack, some of the questions I had for you were answered, but one of the highlights of the 1998 reauthorization was increasing consumer choice and control. In your opinion, has the system met this objective since it was passed in 1998? Has it moved in that area? Dr. Pasternack. Mr. Chairman, I think we are clearly moving in that area under Olmsted, and we recognize the importance of providing choice for individuals with disabilities. I think there is a significant importance in having a variety of options available for people to choose from. I think we are truly committed to this notion of consumer empowerment and consumer choice. I think the President very clearly, in articulating the New Freedom Initiative, which he released in his first month in office, talks about the barriers that are still in place preventing Americans with disabilities from fully participating in American life. For example, if you have 70 percent of the 54 million adults with disabilities unemployed, it makes sense why less than 10 percent of individuals with disabilities own their own home. If you cannot work and demonstrate to a bank a credit history, you cannot choose to own your own home. You cannot exercise one of the fundamental rights many Americans enjoy as part of fulfilling the American dream. We are really trying to move from this culture of dependence and helplessness, which seems to still be in play, to a culture of empowerment and independence. That is something that we are clearly committed to working on in this Administration and in the rehabilitation community. Finally, as an example of what we are trying to do, we have struck a partnership between the Department of Education and the U.S. Chamber of Commerce and their 3 million members to make the business case that it is a good business decision to hire people with disabilities. I think for too long we have tried to appeal to people's sense of fair play, sympathy, and pity. We are trying to present some data that it is a good business decision. People with disabilities make good employees. They are motivated, productive, and they have lower turnover rates, they are better for employee morale. There are things we can do to bring data and evidence to bear on the business community to convince them it is a good business decision. Also by creating a disability-friendly work environment, they attract some of the $175 billion that the 54 million adults with disabilities will have in disposable income this year that they would choose to spend in a business that might be considered disability friendly. I think all of that really relates to the notion of creating choice and opportunity and empowerment. That is part of the mentorship proposal we have in the 2004 budget as well as in terms of showing people with disabilities that there are role models of success, some of whom are here in this room today, sir. Chairman McKeon. Thank you very much. Mr. Kildee. Mr. Kildee. Thank you, Mr. Chairman. I certainly agree that it is a good business decision to hire people with disabilities. Several years ago, I hired somebody on my staff that did extraordinarily great work for me and is now working over in your shop, and it cost me less than $4 to make an adjustment to the desk for that hiring. I got someone who has done so much to make this country a better country, and to make education better. So it is a good business decision, I think, to make sure these people have meaningful employment. Just prior to Thanksgiving, Dr. Pasternack, the Administration initially released the findings of a longitudinal study on vocational rehabilitation mandated by the 1992 authorization. My understanding is that the results of this study were subsequently pulled back. Why is the Administration not releasing this data, since it speaks to the largely positive work of State rehab programs? Dr. Pasternack. Thank you, Congressman Kildee. Those data are clearly important, and currently those documents are in the clearance process within the Department. I am sure that as soon as they work their way through the Department clearance process, we will look forward to releasing them to you and to the American public that are entitled to see that data. I think it is just a matter of the Department doing what it does to move those documents through the clearance process that has been established by the Secretary's office. Mr. Kildee. Does that clearance process include the dark hole of the OMB? Dr. Pasternack. Congressman Kildee, we look forward to working with our colleagues at the Office of Management and Budget, and to their fine help in reviewing a variety of documents that we issue, sir. Mr. Kildee. Thank you very much, Doctor. Dr. Pasternack. Thank you. Chairman McKeon. Mr. Tierney. Mr. Tierney. Thank you, Mr. Chairman. There is a part of your memorandum, Mr. Undersecretary, which says that the Secretary's reallotment should be based on expenditures, not obligations. Would you share an example with me of how that might otherwise be the case now? Someone would go out and draw your attention to this, and how would you take this situation under your consideration and how would it work differently? Ms. DeRocco. Sure. The issue of expenditures versus obligations has been much discussed since, apparently, the time WIA was passed in the Department, and the State and local systems tended to have different definitions, different reporting requirements, from local to State and State to the Federal Government. It became of great concern as we realized what was happening, which is that the Department did not give good guidance on exactly what it was requesting for financial management purposes under the Workforce Investment Act. The financial management experts in the Federal Government tell me that the use of expenditures is the appropriate accounting measure that should be used for Federal financial reports. Most of the folks in the system I have talked to have told us to simply make it clear in WIA reauthorization what you need and how you define it, how we can report appropriately, and then all of us as a system, local, State and Federal, can have a better handle on the amount of money currently available in the system to provide services. That is the amount of money that might be in the budgetary state of an obligation under an individual training account; at what point it is incumbent upon the local board and One-Stop operator to check on whether or not that obligation has turned into an expense or is going to turn into an expense; and then to appropriately report those, so we are all speaking the same language. It is our intention to make that clear. In the reauthorization we have proposed that we use expenditures. I am quite certain that the local boards will want to continue to use some obligating information in order to manage their accounts. That will be entirely appropriate. But the reporting to us will be on an expenditure basis pursuant to our proposal, at least, and that will be helpful to us in responding to the very difficult questions of our colleagues at the Office of Management and Budget. Mr. Tierney. How do you propose that is going to impact the local boards that have money obligated but not yet expended? Ms. DeRocco. Only in that they will be able to make clear to us what the actual expenditures are, and we will be better able to report to our colleagues within the Administration and on Capitol Hill. Mr. Tierney. I want to visit the block grant again, because I am not clear. In your memorandum, you talk about simplifying and allowing a State option where governors could apply for block grant authority under reauthorization. Under that option, governors would have complete discretion on how to administer WIA Title I formula programs, Adult and Youth. The governors would determine some State funding and governing structures. The block grants would be guided by a set of guiding parameters. However, governors would have the responsibility for selecting partner programs and the array of services. Governors administering the programs in the State options would just submit a plan. To me that reads as if you are giving all the money to the governors, and then the governors are deciding who the partner program is going to be, what the WIA services that will be provided are going to be, and who among the local entities are going to get the money that the Federal Government has given to the governor to disburse, as opposed to all the other scenarios that you outlined earlier. Ms. DeRocco. I am sorry; I thought you were referring to the consolidated grant when you asked the question. We are proposing that there be an option in the reauthorized WIA that would position the WIA system to be looked at in the same manner in which Congress and the Administration looked at TANF, which was a block grant authority. If the governor submitted a plan, spoke to how he or she was going to meet the performance outcomes required by the Congress in the Workforce Investment Act and provided the services that are authorized in the Workforce Investment Act, that plan would then be subject to review and approval before a block grant were issued. This is not unlike the Work-Flex provisions that are in the current WIA, that to the best of my knowledge no governor has taken advantage of. Certainly while I have been there, there have been no applications. Mr. Tierney. Notwithstanding the popularity, you still want to enlarge those programs? Ms. DeRocco. Notwithstanding the popularity, under TANF there seems to be substantial agreement among all the authors and implementers of TANF that the block grant approach is what made that program work in States all across the country. Mr. Tierney. Apparently, it is obviously not what is making this program work, because people seem quite comfortable working under the current system. Ms. DeRocco. Perhaps, but we have a whole new slate of governors, too, so there may be a different approach to working within the workforce investment system and its implementation within States. So we simply wanted to propose in our reauthorization that that option be available for the application of governors. Mr. Tierney. You are not trying to infer that the governors have initiated this path? They have not asked for this. I am not aware of any formal requests from the governors' associations or even any number of individual governors who have asked for this; are you? Ms. DeRocco. I have talked with governors who have indicated that they would be interested in at least considering such an option. Mr. Tierney. So you proposed it and they said it might be considered, but there is not a groundswell of governors coming up and beating you over the head to ask you for this. Ms. DeRocco. Thank heavens, no. Mr. Tierney. It is interesting that you are offering something nobody is even pushing for. My time is up. Chairman McKeon. Mr. Hinojosa, we have the answer to the question about the education funds. In the previous 2003 budget, there was a line for Adult Education State Grants. The Administration felt there needed to be more emphasis put on the basics of reading and language skills, which it seems to me, would answer the question you had. They added the line "Adult Basic and Literacy Education State grants," and they increased the funding from $575 million to $584.3 million. Chairman McKeon. I recognize the gentleman. Mr. Hinojosa. Thank you, Mr. Chairman. I would like to comment on that concern that I expressed when my time ran out. Then I will ask a question of Assistant Secretary Bob Pasternack. The point that concerns me is that there are millions of people waiting for training. When we cut the $8 million that went to helping people with learning basic English, or limited English- proficient candidates, that brought it down to $575 million that was available in the 2003 budget. In the 2004 budget, knowing that we are serving only a small percentage of those eligible, you only asked for $9 million more than we are getting in 2003. That is of grave concern as the unemployment continues to soar, because just remember, a year ago in the State of the Union Address, the President said my policies are going to create jobs. A year later, we lost 2 million jobs, and in the last 2 weeks we lost another half a million jobs. And at the rate the stock market is plummeting, a bunch of companies are closing up and laying off people. How can a $9 million increase take care of this skyrocketing unemployment? Ms. DeRocco. One of the important factors to remember when looking at the Workforce Investment Act is the array of One-Stop partners. The adult education program is under the jurisdiction of the Department of Education, so it is not within my jurisdiction to request specific funding for that program. However, it is an important partner in the One-Stop career center system that provides its resources, its expertise, and its services to workers. Under the Workforce Investment Act Title I training programs, we also can include language and literacy skills for immigrant and new workers, and those training providers are eligible training providers under the Workforce Investment Act. I think it is clear in many local labor markets around the country, and it is particularly true in Texas, Florida, and in California, that this is a key area where the local workforce boards are focusing a significant amount of their attention, their resources, and their understanding that this is what workers need in their local labor market. Mr. Hinojosa. Just let the record show that it is inadequate funding, and the reason for great concern that caused so many people to be here. The first question that I have for Bob is that vocational rehab only has sufficient funding for 1.2 million individuals with disabilities each year. Yet the most recent estimates tell us there are 54 million individuals with disabilities. So why has the Administration not sought additional funding for this program, as I voiced on the other one? Dr. Pasternack. Thank you, Congressman. First of all, the mission of the vocational rehabilitation system is to focus on the individuals with the most significant disabilities. I think that the figure we use in terms of the 54 million adults with disabilities includes a number of individuals who don't need the specialized services that are available in the vocational rehabilitation system. It is a mandatory funded program, so the CPI request was reflected in the President's 2004 budget. I think that the issue for us, with the money that is available, is to spend that money more effectively, and to make sure that the kinds of services that are being provided are evidence-based, and that in fact we are encouraging people to use the services that we know work, and that we are achieving greater accountability for results in the services that are provided. Mr. Hinojosa. Of these 1.2 million individuals that you say you are servicing because they have the greatest disabilities, what about the 37 States that don't even offer it because there is no money? Dr. Pasternack. There are 80 programs in five States that are funded through the vocational rehabilitation program, because there are some programs that focus on just the older blind. Mr. Hinojosa. What percentage of the 1.2 million eligible is served? Dr. Pasternack. I would have to get back to you with the specific numbers on that, Congressman. I can tell you that in the study we did, there were approximate 230,000 individuals with significant disabilities of that 1.2 million that were served last year who found competitive, gainful employment. Mr. Hinojosa. If you can get me that number, I would like to know what percentage you are serving. The last question is on children with disabilities who leave K-12 programs in public schools that are most likely to need additional services through vocational rehab to make sure they obtain employment. Why hasn't the Administration advocated for additional funding for that group of young people? Dr. Pasternack. As you know, Congressman, the President's 2004 budget contains another $1 billion. In 2003 he is proposing the largest single Presidential requested increase in IDEA funding in the 28-year history of the program. So I believe the President should be commended for demonstrating his significant commitment to keeping the IDEA strong. I know that time is precious, but since you are asking the important question about community colleges, I just wanted to tell you something we are doing. Under the IDEA right now, it is permissible to have concurrent enrollments of students with disabilities in high school and community colleges. I met with 25 presidents from community colleges recently to talk about experimenting with a program where we have concurrent enrollment. As you know, if a student graduates from high school, it terminates their eligibility for identified services. We are looking at piloting some programs where a student would be concurrently enrolled in high school and the community college, and not just get their diploma, but receive services both through the high school and the community college as a way of increasing what is now the highest level of postsecondary participation ever, 9 percent. However, this Administration believes that is not enough, and if students with disabilities want to go on to postsecondary opportunities, we ought to be giving them those kinds of opportunities. Mr. Hinojosa. I am very familiar with concurrent enrollment and the community colleges working with the school districts. I certainly endorse that, and I would support it. Dr. Pasternack. Thank you, Congressman. Mr. Hinojosa. Thank you, Mr. Chairman. Chairman McKeon. Thank you, Assistant Secretary DeRocco and Assistant Secretary Pasternack. I think you have done an outstanding job of answering our questions. I appreciate your being here. I appreciate your valuable testimony. You may now step down and I will ask the second panel to take their seats. We will take a short recess while that happens. [Recess] Chairman McKeon. The Subcommittee will come to order. We will now be introducing the second panel of witnesses. Our first witness today is Thomas J. White. Mr. White serves as President and Chief Executive Officer of the Durham, North Carolina, Chamber of Commerce. He received his undergraduate degree in English from Duke University and his master of public affairs degree from North Carolina State University. Mr. White has served as President of the Durham Day Care Council and Chairman of the Durham United Way Campaign. Our second witness is Mr. John Twomey, President of the National Workforce Association, Washington, D.C. Mr. Toomey also serves as the Executive Director of the New York Association of Training and Employment Professionals. From 1977 until 1978, he served as Assistant Director and Project Director of the Northwest Bronx Community and Clergy Coalition. He received his Bachelor of Arts degree in communication from Fordham University in 1974. Next we have Steven Savner. Mr. Savner is a Senior Staff Attorney at the Center for Law and Social Policy, Washington, D.C. Mr. Savner has also served at the Massachusetts Law Reform Institute in Boston, and he has worked as an attorney for the National Employment Law Project in New York City. I understand Mr. Ehlers would like to introduce our fourth witness. I yield to the gentleman from Michigan, Mr. Ehlers, for that purpose. Mr. Ehlers. Thank you for yielding, Mr. Chairman. I understand the next witness is also a close friend of Mr. Kildee, so I will do the courtesy of yielding him time after my introduction if he wishes to add a comment or two. It is my pleasure today to introduce one of my constituents, Betty Shaw-Henderson, who is from the greater Grand Rapids area and is the District Manager, Michigan Department of Career Development and Rehabilitation Services, which provides vocational rehabilitation services to approximately 2,100 customers with disabilities, as well as providing business services to the employer community in the Grand Rapids area. She has provided extensive national and statewide leadership in the vocational rehabilitation profession. She has served as President of the Michigan Rehabilitation Association, and as President of the National Rehabilitation Association, so she comes with great credentials, and we are eager to hear what she has to put on the record for us. I want to thank Ms. Shaw-Henderson for coming here to testify. I will be pleased to yield briefly to Mr. Kildee. Mr. Kildee. I thank the gentleman for yielding. Betty Shaw-Henderson is one of those people that, whatever she has done for people, those people are so much better off. She served so well in the Flint area community. We love her dearly over there. I can truly say that there are certain people that I have met, and from knowing them, have emerged as a better person. I am certainly a better person for knowing Betty Shaw- Henderson. Thank you, Betty. Mr. Ehlers. Reclaiming my time, we are very proud to have you here today, Betty. I yield back the balance of my time. Chairman McKeon. Thank you, Mr. Ehlers and Mr. Kildee. Mr. White, you may now begin. STATEMENT OF THOMAS J. WHITE, PRESIDENT AND CEO, GREATER DURHAM CHAMBER OF COMMERCE, DURHAM, NC Thank you, Mr. Chairman, Members of the Subcommittee. In addition to serving as President and Chief Executive Officer of the Greater Durham Chamber of Commerce, I have the pleasure and privilege of serving on our local Workforce Development Board and its Executive Committee. For most of my 25-year career with our Chamber, I have been involved in economic development, recruiting companies to our community and helping existing enterprise expand. I have also enjoyed serving for 4 years as the Chamber's Director of the Private Sector Initiative Program, a unique partnership between the city of Durham and our Chamber that sought to promote extensive business involvement in both our CETA and JTPA programs. Very briefly, I would like to cite just a few specific examples of how the workforce development system is integrally important to economic development. We were recognized by President Ronald Reagan in 1995 for our role in implementation of a Ford Foundation program entitled Women in Electronics, a public/private collaboration under the JTPA Private Industry Council, that helped welfare recipients develop academic competencies and occupational skills to secure good-paying jobs with outstanding companies such as IBM, General Electric, Northern Telecom, all anchor tenants in our Research Triangle Park. That unique, effective partnership reinforced our organizations firmly held conviction that business can and should play a key role in the operation of our Nation's employment and training system. We were able to forge an effective partnership comprised of public welfare agency officials and private human resource officials that led to hundreds of economically-disadvantaged citizens securing good jobs at good wages. In late 1998, the year of the implementation of the Workforce Investment Act, our Chamber announced that Aisin AW, a Japanese firm manufacturing transmissions for Toyota, had selected Durham for a $100 million investment comprised of a 125-acre land purchase, the construction of a 300,000 square foot production facility, and most importantly, the creation of 300 good-paying jobs. Last June, the company broke ground on phase 2 of their project, adding another $160 million worth of capital and 450 additional jobs. The company has a sole source agreement with our Employment Security Commission, which happens to be our One-Stop job link career center operator, for employee recruitment, and our community college, which will conduct all of the company's pre-employment and occupational skills classroom training at a satellite campus near Aisin AW's facility. Here is the essential point of this mini-case study: Both the site selection consultants and the corporate human resource managers indicated that the workforce development resource provision was the key factor in their determination to both locate in Durham, as well as to expand. We have been most fortunate to be selected by the U.S. Chamber of Commerce Center for Workforce Preparation for participation in the Workforce Innovation Networks demonstration project. The superior technical assistance and professional support services offered us by the center staff have enabled us to establish and enhance this economic development/employment and training linkage to the maximum benefit of not only our corporate prospects and our Chamber members, but also our WIA public constituencies, including dislocated workers, TANF recipients, at-risk youth, and other workforce participants who stand to benefit from a truly effective public/private partnership. That is what is so commendable about the centers' WINs demonstration that is reminiscent of the underlying principles of our success in that "Women in Electronics" demonstration under JTPA. When the U.S. Chamber and the National Association of Manufacturers partners with the Ford Foundation, the Annie Casey Foundation, and Jobs for the Future in a spirit of common cause, the coalescence of those organizations and institutions has the capacity to produce some very impressive outcomes; in this instance, helping low-income workers gain access to the new jobs being created as a result of effective Chamber-driven economic development. The lesson in these demonstration projects is that our communities, our States, and our Nation are far more competitive and productive when we design and operate a workforce system that includes business and government as full-fledged partners. We stand a far better chance of achieving success, as measured by tax base expansion, capital investment, job creation, and poverty reduction, when our Nation's workforce system is fully integrated with our economic development system so that all our citizens can take advantage of and reap the benefit from the economic opportunities created by new and expanding industry. Thank you, Mr. Chairman. Chairman McKeon. Thank you, Mr. White. WRITTEN STATEMENT OF THOMAS J. WHITE, PRESIDENT AND CEO, GREATER DURHAM CHAMBER OF COMMERCE, DURHAM, NC - SEE APPENDIX D Chairman McKeon. Mr. Twomey. STATEMENT OF JOHN TWOMEY, PRESIDENT, NATIONAL WORKFORCE ASSOCIATION, WASHINGTON, D.C. Thank you, Mr. Chairman, Mr. Kildee, distinguished Members of the Subcommittee. I apologize for being a little raspy. It was 87 degrees cooler when I left Albany this morning than when the Chairman left home yesterday. In New York in my everyday job, as the Chairman mentioned, I am director of our workforce association. We represent 33 areas, 72 pretty eclectic groups across a full range of associate members. Since 2001, the workforce board chairs have asked our association to help organize them. I have been asked in my remarks today to briefly address two issues, an assessment on the implementation progress of the Workforce Investment Act, and the National Workforce Association's reauthorization positions. I would like to applaud Chairman McKeon and Mr. Kildee as authors of the Workforce Investment Act. I think it is a very visionary piece of legislation that is trying to change 40 years of a completely supply-side federal workforce policy focused only on the job seeker, to a two- customer system: job seekers and businesses. I think that we recognize the need for a One-Stop system in this country. I think, whether we like it or not, it is true that people are changing jobs, and often careers, every 5 years. We do need that system. The National Workforce Association would urge the Subcommittee to build on a locally driven, private sector-led vision. We think it took a while for workforce boards and One-Stops to get up and running, to get traction. We would respectfully urge the Subcommittee to look at tweaking, not major overhauls. We think the system is progressing well. The Government Accounting Office has said the workforce boards have gone beyond their required mandate. In terms of One-Stops, integration has improved. We have a long way to go. I think there is a movement on a continuum from collocation to collaboration and ultimately to integration. One of the biggest challenges since the passage of the Workforce Investment Act is resource allocation. Because there have not been enough resources, there has been reduction in training and there has been a disproportionate pull on the adult money. That adult money, Title I WIA money, is the only money that can be used that comes to the locals for upgrading low-wage workers and also for universal access into a One-Stop, so you are pulled to use it for infrastructure instead of providing more training that we desperately need, particularly in these times of high unemployment. My colleagues in States like Michigan, Massachusetts, Texas, and Florida told me it took about 3 years to really get up and running and get the kinks out. We only have two full years of reporting in most of the country. In terms of business services, this is a major change from all its predecessor legislation. Unlike JTPA, under the Workforce Investment Act we can work with people while they are working. In States and many local areas there has been very innovative incumbent worker training, excellent sector approaches, identification of key industry clusters, and career ladders. In New York State, with the governor's State WIA funds (15 %), we have done some wonderful work with manufacturers, upgrading skills and keeping the firms competitive. High tech firms were aided. And local workforce areas received funds to conduct local skills-gap analyses. I don't think there has been enough training. I agree with the earlier comments that we need to make the list less burdensome for community colleges, but a lot of that also is just because money has been diverted. In terms of youth, I think it is a new system. It has taken a while to figure out the full array of services. There is definitely not the money there for the task involved. In this economic downturn, research has shown that half of all job loss is for persons less than 25 years of age. Finally, the number one priority of the National Workforce Association would be to find some way to fund the One-Stop infrastructure. I think it was a good attempt to do it through negotiations, it just did not pan out. Trying to negotiate these agreements and then doing cost allocations and reconciliations has not yielded money and it has diverted a tremendous amount of energy and time that could have gone into improved services for job seekers and businesses. We heard earlier today that you are struggling with how to do this, whether by block grant, or funding off the top. There are, of course, political pitfalls in both. I think that we would be willing to work with you in any way we could to try to make this work. It is probably one of the biggest challenges. I am not going to go into our differences on expenditures obligation with my friend and colleague, the Assistant Secretary, too much. Let me just say that the National Workforce Association agrees with GAO that States and locals are spending their money well within the statutory time frame, and will continue to do so. In governance, we want to see stronger business-led workforce investment boards. We agree that they should be more into policy development, and getting memoranda of understanding; moving them to the partner table will do that. Unfortunately, the workforce boards have very robust rhetoric and direct control over these programs. I am going to stop there. Thank you for the opportunity to be here today to comment, and for your work on this legislation, and your support of local control. Thank you. WRITTEN STATEMENT OF JOHN TWOMEY, PRESIDENT, NATIONAL WORKFORCE ASSOCIATION, WASHINGTON, D.C. - SEE APPENDIX E Chairman McKeon. Thank you, Mr. Twomey. Mr. Savner. STATEMENT OF STEVEN SAVNER, SENIOR STAFF ATTORNEY, CENTER FOR LAW AND SOCIAL POLICY, WASHINGTON, D.C. Mr. Chairman, Mr. Kildee, Members of the Subcommittee, thank you very much for inviting me to testify today. I am at the Center for Law and Social Policy, CLASP, which is a nonprofit. We do work on the Workforce Investment Act. We look at the research, and we often visit and talk with administrators, program operators, and individuals who are affected by these programs; so we have been following the implementation of the Workforce Investment Act very closely over the last several years. Just following up on what Mr. Twomey mentioned, it is important to appreciate we really have only about 2-1/2 years of experience with the fully phased-in Workforce Investment Act. We think for that reason, because of the limited information we have, Congress should move cautiously in making further changes to the Act at this time, and that the areas of change that Congress does move on should be limited to those where there is a sound basis in our experience for the proposed change and broad agreement that there is need for the change. Within this framework, though, we do think the data suggests several important challenges Congress should address. First is the problem of the dramatic decline in training we have seen. In program year 2000, it appears that between 85,000 and 100,000 adults and dislocated workers received training. The 2001 data, which was attached to Assistant Secretary DeRocco's testimony today, does suggest that there was an increase, but we are still far behind the over 300,000 people that received training in 1998 under the Job Training Partnership Act, so we think Congress should move to address this. I will suggest some options for that. We also think that we do need to address the problem of providers dropping out of the system because the reporting requirements are too burdensome for them to comply with the eligible provider certification system. To respond to those two major challenges, first we think more funding needs to be made available for training services. Again, whether we separate out funding for One-Stops or separate out money for training, more resources are needed to do the job that we need to do in terms of the One-Stop system and to provide further training. We would much prefer to see the $3.6 billion that is going into personal reemployment accounts be used to provide unemployment insurance extensions under the current system and that there are funds available to target for additional training for adults and dislocated workers. We also think we can increase the number of people getting training by eliminating the sequential eligibility rules. We applaud the Administration for including that initiative in their proposal. Finally, with regard to provider certification, rather than reducing the requirements around certification, what we would prefer to see is for the system to take up the cost of reporting and collecting that information. The information that providers are supposed to make available is critical to the success of the individual training accounts and to knowledgeable consumers being able to make choices, so we much prefer to see the system pay for that, rather than not have that information available. I would like to focus on a few of the Administration's proposals now, and particularly the consolidation of funding for adult services and their waiver provisions. As I mentioned, there are some other provisions that they have proposed that we think are more moderate and are likely to be more effective, but we think in these two areas the Administration's proposals are unwarranted and unwise. Similarly, although we are not experts in the youth provisions of this, we understand from colleague organizations that there are significant concerns about the elimination of the youth councils and the total exclusion of in-school youth from services under the youth provisions. But focusing on the consolidation proposals, we think it is unwise to consolidate these three funding streams. There is not any evidence that we have seen yet, that duplication or inefficiencies are resulting from the division between dislocated and adult workers. Historically, Congress has provided guidance on the distribution of these funds. We know that there is current transfer authority, but we have no idea how many local areas are taking advantage of that transfer authority and how many of them are at the 20 percent cap that was in place; so we think it is inappropriate at this time to completely merge those two funding streams. The point here is not to quarrel about which hundred thousand people get training; the point we should be worried about is how we can get more training delivered to more people, and combining these funding streams will not accomplish that. We are also troubled by the elimination of the Wagner-Peyser employment service. The Administration has made a number of proposals concerning unemployment insurance, devolution of the Administration, replacement with personal responsibility accounts or personal reemployment accounts, extended benefits, and now elimination of the employment service. We think that all of these threaten to undermine the unemployment insurance structure that we have in place and, again, are not warranted. There may be more modest efforts needed to spur further collocation between the employment service and the One-Stops. There may be more need for local workforce investment boards to coordinate with the employment service that is State administered, but those can be accomplished with more modest changes. Finally, we are very troubled by the waiver provisions. There is no basis in experience for allowing States to secure waivers to undermine the authority of local boards, to change the distribution of local funds. There is no basis for eliminating the current protections against non- displacement and nondiscrimination. That is what both of the new waiver provisions would do. So we urge you not to include those waiver changes in the bill that you mark up in the near future. Thank you very much. WRITTEN STATEMENT OF STEVEN SAVNER, SENIOR STAFF ATTORNEY, CENTER FOR LAW AND SOCIAL POLICY, WASHINGTON, D.C. - SEE APPENDIX F Chairman McKeon. Thank you, Mr. Savner. Ms. Shaw-Henderson STATEMENT OF BETTIE SHAW-HENDERSON, DISTRICT MANAGER, MICHIGAN DEPARTMENT OF VOCATIONAL REHABILITATION, KENTWOOD, MI Congressman McKeon, Congressman Kildee, Congressman Ehlers, and Members of the Subcommittee, thank you for inviting me to testify today on what I and many others consider to be one of the most effective, evidence-based job training employment programs in the history of the workforce world, the Public Program of Vocational Rehabilitation which is administered under the Rehabilitation Act of 1973, as amended, in the United States Department of Education. I am pleased to be here today on behalf of the National Rehabilitation Coalition, a newly formed coalition whose co-chairs include the National Rehabilitation Coalition, the Council of State Administrators of Vocational Rehabilitation, and the Association of Persons in Supported Employment, and other well-recognized disability organizations. In my role as a Vocational Rehabilitation Counselor within the Michigan Department of Career Development and Rehabilitation Services, my job and my passion was and is to assist eligible individuals with disabilities, including individuals with significant disabilities, in securing quality employment by providing informed choice and access to individualized services and supports that they require to obtain employment, live independently, and contribute to our communities and to our great nation. During the 1998 reauthorization of the Rehabilitation Act, which comprises Title IV of the Workforce Investment Act, all of us, including consumers, worked together to enhance informed choice of individuals with disabilities, one of the many hallmarks of the public VR service delivery system. The 1998 VR amendments also significantly reduced paperwork requirements associated with submission of the State plan, which allowed staff to spend more time with individuals with disabilities while maintaining success and accountability within the Public VR Program. During my time in the Flint, Michigan area, I came to know Congressman Kildee as a good friend and a supporter of our program. He continues to understand and be open to the needs of the program. He understands that millions of people have disabilities and what it takes to assist people to secure employment. I also had the pleasure of meeting with Congressman Ehlers in Grand Rapids on several occasions, and thank you, Congressman Ehlers, for your continued support of the Public VR Program. In its 83 years of history, the Public Program of VR has assisted 14 million eligible individuals with disabilities in obtaining employment. In fiscal year 2001 alone, this Public Program of VR served more than 1.2 million eligible individuals with disabilities, of which 233,000 entered or reentered the world of work. That is pretty impressive. These same employed individuals earned $3.4 billion in wages and paid $977 million in federal and state and local Social Security and Medicare taxes. Moreover, evidence-based research has shown that individuals with disabilities who are employed rely less on income-supported programs and other forms of State and Federal assistance. A recently rolled-out longitudinal study which was commissioned by the Congress in 1992 to the Rehabilitation Act tracked over a 5-year period 85 selected applicants, consumers of the VR program, from 37 VR agencies. The impressive findings of this study found that the Public VR Program works effectively in employing individuals with disabilities, in securing quality employment and reentering employment by services that are provided by qualified rehabilitation counselors. The public vocational rehabilitation program in your State is a strong State/Federal partnership. It promotes the independence and employment of individuals with disabilities, and maintains longstanding successful partnerships with a wide array of individuals, public/private providers of vocational rehabilitation services and supports, including community rehabilitation programs, and, of course, our many employers in businesses. One of the many partnerships of the VR program includes its collaboration and linkage of the workforce investment system. The Public VR Program is a mandatory partner in the One-Stop system included under the Workforce Investment Act of 1998. The National Rehabilitation Coalition continues to believe in the power of productive partnership to respect and respond to the needs of individuals with disabilities, especially those with the most significant disabilities. The Public VR Program, which comprises Title IV of the Workforce Investment Act, could write the book on partnerships, because we have been successfully partnering and collaborating for decades with employers and stakeholders at the Federal, State, and local levels. We know how to do it, and we do it well. State Vocational Rehabilitation continues to support and promote participation in One-Stop centers on a cost allocation basis, which we have been doing since the implementation of the Workforce Investment Act, consistent with what we believe was the congressional intent, that the mandatory partners continue to contribute to the system consistent with the partners' authorizing legislation. Productive partnerships for individuals with disabilities must ensure that physical, pragmatic accessibility requirements are met consistent with the Americans with Disabilities Act and sections 504 and 508 of the Rehabilitation Act of 1973, as amended. Though some progress has been made to effect physical accessibility for individuals with disabilities entering One-Stop, programmatic access remains an important challenge we must meet. We need to continue to work with it if individuals with disabilities, especially those with the most significant disabilities, are to be effective and to effect access to all services offered through One- Stop centers. The message to all is a simple one: If individuals with disabilities cannot get through the door of One-Stop centers or are unable to meaningfully access the information services once inside, they cannot be served or have the opportunity to access meaningful information about the world of work. They cannot access the program. A few final observations, if I may. I ask your support for continuation of mandatory funding for Title I programs of the Rehabilitation Act, which funding, although woefully inadequate, at least provides some grant for this job placement program. Presently, 37 States are on an order of selection, which places priority for services on those individuals most significantly disabled. I would respectfully ask, however, if at all possible, that you would please consider additional funding for Title I, for the Title I program, and other programs that I believe have demonstrated that the programs administered under the Public Programs of VR embody the ABCs of solid vocational rehabilitation practice. They are accountability, bipartisanship, and they are comprehensive and cost effective. Most importantly, they assist in empowering millions of individuals with disabilities to enter or reenter the world of work. I would like to take this opportunity to thank Congress for instituting separate funding in the fiscal year 2003 budget for three important programs under the Public Programs of VR, which are programs related to projects with industry, supported employment, and funding for migrant and seasonal farm workers. Lastly, I would like to thank you for this opportunity to testify on Public Programs of VR I promise that if you entrust the State VR agencies with additional funds to administer this successful employment program and if I am invited back to the next reauthorization, I will have more impressive information to share with you. May I encourage you, if you have not already, and I know most of you have already done this, to visit your State VR office in your district. Please do so. I know you will be impressed with our success, and the difference that we, and particularly our qualified staff, working in collaboration with individuals with disabilities can make in achieving quality employment. Again, thank you. I would be more than glad to answer any questions at this time. WRITTEN STATEMENT OF BETTIE SHAW-HENDERSON, DISTRICT MANAGER, MICHIGAN DEPARTMENT OF VOCATIONAL REHABILITATION, KENTWOOD, MI - SEE APPENDIX G Chairman McKeon. Thank you very much. Let us get through with this one before we invite you back to the next one, but I appreciate your offer. Mr. White, you outlined examples of how the Chamber collaborated with the economic development system to bring new jobs to the Durham area. Can you elaborate on the outreach to the business community in which you engage, and how you have successfully formed these connections? Mr. White. Thank you, Mr. Chairman. We have within our economic development program plan an inclusiveness that involves the manager of the Employment Security Commission, the venue that houses the One-Stop career link center. That individual also serves on the Durham Chamber of Commerce board of directors, so there is almost daily interaction. Thanks to the U.S. Chamber's leadership, the Center for Workforce Preparation, and our WINS demonstration project, we have actually created within our Chamber a workforce development division that is very compatible with our economic development function, so we have an internal staff manager who goes out with our corporate recruiter and actually works with the site selection team in the process of trying to recruit them to a facility for a land purchase, for an expansion of an existing enterprise. So that is done on a daily basis. The gentleman from Texas mentioned the community college system. The community college president serves as our treasurer, so there is a lot of interaction. I happen to serve as a trustee and foundation director on a community college board, so there is lots of give and take. We all know what we are doing. It promotes harmony, and it needs to do that, because there have been some references made this afternoon about the disharmony that exists with different terminology and protocols. We have been able to streamline those by saying it is in all our best interests to recruit companies to give good-paying jobs to our citizens and to satisfy multiple constituencies. It satisfies our economic development interests as a Chamber of Commerce and satisfies all the One-Stop job link career partners, including vocational rehabilitation, our social services department with TANF participants, all of our school programs that serve at-risk youth, and unfortunately we have a very high dropout rate in our jurisdiction, and all of the dislocated workers. Despite the fact that we have led our State in new and expanding industry for the third consecutive year, we have also had thousands of jobs go by the wayside, and people who have never been unemployed in their lives. Unfortunately, we have a concomitantly high poverty rate for youth and adults. Even though we are home to research Triangle Park, home to Duke University, we have not been able to lift all boats, so there is still a challenge. Chairman McKeon. Thank you. Mr. Twomey, the Subcommittee has heard that the current performance measurement does not capture all of the activity at the local level and in the One-Stop system. I know I have seen this when I have visited centers; there is a real concern about that. In your testimony, you recommend using technology such as swipe cards to capture this usage. How would we capture this information without creating an unnecessary burden on local areas? Mr. Twomey. Our thirty-three areas in New York are using swipe cards now. Those ten centers are able to come up with usage information. I have been to most of the WIB meetings in New York at various times. What the business people want to know is what our penetration for job seekers and businesses is, and what our usage and repeat usage is. That is a big number to them. It is difficult without that technology to find that number. Those ten reported that that did not seem to be a big problem or intrusive to people. In fact, our business majority State board in their last meeting voted to seek State government's 15 percent money and buy a swipe card system for the other twenty-three workforce areas. They want to know how many people are using the system and how is it improving year-to-year, and if our resources are out of alignment. In order to do this, they are very sensitive to privacy concerns, so they want to bring in some of the people who are users of the system in New York, and also bring in some of the people who helped write the software. Mr. Twomey. If I could just take one second to say I visited one sub-center in Boston run by Tom Ford, just a fabulous center, and they are 100 percent swipe card. If somebody doesn't come back for 30 days, they have an outside firm contact the person to find out why and they use that data for continuous improvement. It is quite impressive. Chairman McKeon. My district changed quite a bit with redistricting. I went from a suburban area with some rural areas, to less suburban and a lot more rural areas. One of my counties is the second largest county in the country, over 10,000 square miles, with about 18,000 people. The chance of them trying to have a One-Stop where you could use that kind of technology is something we are going to grapple with as we go through this, because I am sure I am not the only one. I have been to Nebraska; I have been to some of these other States that have similar problems. We are trying to figure out how we can make the system available in rural areas like that. I know there is lots of technology available out there. We need to focus on that also, because we have very severe problems in rural areas just like we have in very urban areas. Mr. Kildee. Mr. Kildee. Thank you, Mr. Chairman. Mr. Twomey, what do you think will be the effect of the Administration's WIA reauthorization on local communities? Mr. Twomey. Congressman Kildee, we received it on Thursday, looked at it all day Friday, and were able to turn a 10-page paper into a 14-page matrix. That is kind of unusual. We find that some things in it are very encouraging and going in the right direction; and there are some, quite frankly, I find more troubling. On the positive side are smaller workforce boards dealing in real issues with, as I think Mr. White said, all the players in the community involved. That has not always been the case in many areas. Dedicated funding for the One-Stop will lead to more training. A lot of the training programs are pretty good. Career scholarships, simplifying OJT, those are positives. As for the adult block, I think that what Assistant Secretary DeRocco said is true; that there has not been the amount of integration that you gentlemen hoped there would be when you put this bill together. I don't think that would be my way of doing it. I think you could clarify the employment service role to the workforce investment boards. You could suggest to the core employment service, which would have a lot of other funds, that there could be common performance measures. Separate funding for the One-Stop would free it. The transfer authority could be done now; it has been moved to 30 with a simplified waiver. You could go to 40 and maintain the integrity. I just don't know enough details yet. I have to say I am very leery, as Steve was, of the waiver. I think we are building a system that is starting to work. It looks to me, if governors chose to, they could redraw boundaries, eliminate local boards, redraw the funding formula, and diminish the role and resources for the chief elected officials. So I need to see more there. Mr. Kildee. The waiver does concern you. Mr. Twomey. Yes, it does. But my bias is local. If my bias was more State, I might appreciate it more. Mr. Kildee. How do you feel the block grant for the adult education, the dislocated workers, and the employment services would affect the program on the local level? Mr. Twomey. Well, I think that we are moving toward that spectrum of collocation to collaboration. Collocation would be like a condo; we are all there but we really don't have much to do with each other. So we need to get spectrum integration. I thought if there was plenty of money and no turf, it was a 7-to-10-year deal. There was plenty of turf and little money. But still there is progress there. The 50/50 split concerns me. And maybe my math is just bad, but the way I looked at it in New York, it looked like we lost about $9 million off the top, from $102 million to $93 million. While I would agree from 40 percent to 50 percent would go out locally, we don't have enough infrastructure yet. I think it is because we haven't shown a value to occupational partners in the community. I bet youth councils would have been better with paid staff. Mr. Kildee. Okay, thank you very much. Thank you. I yield back. Chairman McKeon. Mr. Payne. Mr. Payne. Well, I certainly missed all the testimony and will not belabor or lengthen the hearing. I certainly have some concerns about some of the new PRAs and the WIA and the vouchers and with some of the direction that the Department of Labor is taking. I hope that we are still going to be there primarily to assist and benefit those people who have been disadvantaged by the downturn in the economy and by unemployment. My concern is in the future how we deal with unemployment. I am talking about 5 years out, 10 years out, unless unemployment is going to go away forever. Currently we heard about the new voucher system where people would be able to use up to $3,000 any way they saw fit. But it is sort of a one-shot deal. And I am just worrying about chronic unemployed people, and areas that are losing jobs in general, and whether we are going to have chronic unemployment, and just what happens to the unemployed. We have very little discussion about what happens to a person whose unemployment expires. Maybe somebody out there could tell me what happens when a person is unemployed and all their assistance has run out. Have any of you been in contact with people in those situations? What do they say, and how do they exist, where do they go, how do they live? Mr. Savner. I think it is very difficult for those families. Some of those families may be eligible to receive other forms of public assistance; many are not. Though particularly if they don't have children, we don't have much of a safety net after unemployment insurance, which is why extensions, until we recover from the recession and are really able to make sure that people get work within 26 weeks, are critically important. There is a fairly tattered array of services particularly for those individuals who don't have families. Mr. Twomey. New York is a State that has a constitutional amendment to care for the needy. So if someone would be off unemployment assistance and have no other resources, they would go 50/50 State. I think that we are in an area now where a lot of people in my State are losing jobs that were relatively well paid in manufacturing, and other jobs like that aren't there for the skill sets they have today. My colleagues have made a very good case about the impending crisis we are facing in this country between demographics and skills because the last time I looked, our Federal investment in workforce development adjusted for inflation was down almost 25 percent from 1985 to 2003. So we need to find ways to get people skilled for the jobs that are coming, and do a better job of labor market information in the One-Stops. That is a problem. Mr. White. It is a problem for us as well, Congressman. We went through some major economic dislocation in the 1980s in our market in the central Piedmont area of North Carolina, where historically our economy had an underpinning of tobacco and textiles. Those individuals could be retrained. It was more cyclical unemployment. We brought in semiconductor companies, electronics firms. Now those individuals in information technologies have been laid off, and they have been laid off for a longer length of time. Fortunately, we have an influx of biotechnology and bio-informatics, biomedical engineering. But it is a struggle indeed. Mr. Payne. I am glad you raised that point, because in New Jersey where we had benefited from, for example, telecommunications before the break up of the Bell system, the whole gamut was there; AT&T, Bell Labs, the New Jersey Bell, Bell Atlantic, and so forth. And, of course, after Judge Green and the breakup of the Bell system and the beginning of many startups, such as Sprint and GTE and all those others, we now find that people who are pretty highly skilled college graduates, technical in nature, employed at the Verizons and the rest, are having tremendous layoffs. These people are really, like I said, highly skilled and well educated but are finding an extremely difficult time in trying to find adequate employment. As a matter of fact, many of them are going to try to start small businesses. We find now there are a tremendous number of people trying to restart their lives with small businesses. But as you know, it is difficult to make a large percentage of small businesses work. So it is a very serious problem. I do have one real quick question about the $3,000 in vouchers. The $3,000 vouchers, of course, are going to cost $3.6 billion in unemployment money. And I just wonder if we you think that is going in the right direction, and at the end of the day where are we going to be? Mr. Savner. We are concerned about that proposal. The $3,000 is really intended to meet a whole range of needs: income support needs, incentives to go back to work, training needs. And we are concerned it may not be sufficient to meet any of those purposes, frankly. We did a survey of One-Stops in 2001 to find out what the limits were on training vouchers. And what we found was in most places a $4,000 to $6,000 cap on training vouchers. We are very concerned the $3,000 isn't going to buy a good quality training program. So on that score, we think it is probably not a great proposal. And we are also concerned that it is not an effective substitute for a real unemployment extension for those who need it. So finally I think on this whole issue of duplication and efficiency, on the one hand the Administration proposes to consolidate several funding streams to make things more efficient, yet they are asking us at the same time to set up a whole new structure, a different service delivery, which is ironic and runs against the notion of efficiency and non-duplication. Mr. Twomey. A positive is $1.8 billion in new money in a system that in a good year stays the same, and is never affected by inflation. Customer choice is one of the backbones of the individual training accounts. The fact is that in the earlier markup in this Subcommittee, there was a connection with the emerging local workforce system that is a positive. We are not fully aware of some of the other details yet. One of the unfortunate things, at least in New York, is that our allocations have gone down; people have dropped the amount for individual training. So as we go forward we are just exploring where we go and don't have a consensus yet. Mr. Payne. Let me thank the Chairman for allowing me to ask the questions. I would finally like to say we had some concern about the civil rights part of this, too. And if you get people who want successes and they find several women coming in to do something that they figure men have a better possibility for success, we can see women perhaps being discriminated against and without any civil rights enforcement, I think that is also going in the wrong direction. Thank you, Mr. Chairman. Chairman McKeon. Thank you. Well, as has been said by each of you, I think you have concerns about some of these issues. You see good things, and you see bad things. As we say here, the Administration proposes and then the Congress disposes. They have given us a package and we are now in the process of looking at it. We are listening to your input, we will be making changes, and we will draw up a bill. Then we will go through the amendment process through Subcommittee and Full Committee and the Floor, and then on to the Senate. So there will possibly be quite a bit of change as we go through this process, and we would like to have your continued input. We thank each of the witnesses for traveling here today, and for your valuable time. If there is no further business at this point, the Subcommittee stands adjourned. Whereupon, at 4:30 p.m., the Subcommittee was adjourned. APPENDIX A - WRITTEN OPENING STATEMENTOF CHAIRMAN BUCK MCKEON, SUBCOMMITTEE ON 21ST CENTURY COMPETITIVENESS, COMMITTEE ON EDUCATION AND THE WORKFORCE APPENDIX B - WRITTEN STATEMENT OF EMILY STOVER DeROCCO, ASSISTANT SECRETARY OF LABOR, EMPLOYMENT AND TRAINING ADMINISTRATION, U.S. DEPARTMENT OF LABOR, WASHINGTON, D.C. APPENDIX C - WRITTTEN STATEMENT OF ROBERT H. PASTERNACK, ASSISTANT SECRETARY FOR SPECIAL EDUCATION AND REHABILITATIVE SERVICES, U.S. DEPARTMENT OF EDUCATION, WASHINGTON, D.C. APPENDIX D - WRITTEN STATEMENT OF THOMAS J. WHITE, PRESIDENT AND CEO, GREATER DURHAM CHAMBER OF COMMERCE, DURHAM, NC APPENDIX E - WRITTEN STATEMENT OF JOHN TWOMEY, PRESIDENT, NATIONAL WORKFORCE ASSOCIATION, WASHINGTON, D.C. APPENDIX F - WRITTEN STATEMENT OF STEVEN SAVNER, SENIOR STAFF ATTORNEY, CENTER FOR LAW AND SOCIAL POLICY, WASHINGTON, D.C. APPENDIX G - WRITTEN STATEMENT OF BETTIE SHAW-HENDERSON, DISTRICT MANAGER, MICHIGAN DEPARTMENT OF VOCATIONAL REHABILITATION, KENTWOOD, MI APPENDIX H - SUBMITTED FOR THE RECORD, STATEMENT OF CARLOS LOPEZ, ON BEHALF OF HERMELINDA SAPIEN, EXECUTIVE DIRECTOR, CENTER FOR EMPLOYMENT TRAINING, SAN JOSE, CA APPENDIX I - SUBMITTED FOR THE RECORD, STATEMENT OF THE ASSOCIATION FOR PERSONS IN SUPPORTED EMPLOYMENT (APSE), RICHMOND, VA APPENDIX J - SUBMITTED FOR THE RECORD, STATEMENT OF THE COUNCIL OF STATE ADMINISTRATORS OF VOCATIONAL REHABILITATION (CSAVR) APPENDIX K - SUBMITTED FOR THE RECORD, STATEMENT OF CONSORTIUM FOR CITIZENS WITH DISABILITIES ON BEHALF OF VARIOUS ORGANIZATIONS LISTED HEREIN APPENDIX L - SUBMITTED FOR THE RECORD, STATEMENT OF TREVA ROANHORSE, PRESIDENT, CONSORTIA OF ADMINISTRATORS FOR NATIVE AMERICAN REHABILITATION, WINDOWROCK, AZ 181 Table of Indexes Chairman McKeon, 2, 6, 8, 11, 12, 14, 17, 19, 21, 22, 24, 26, 27, 28, 29, 31, 34, 35, 37, 39, 41, 44, 45, 46, 47, 50 Mr. Ehlers, 15, 16, 17, 34, 35 Mr. Gingrey, 24 Mr. Hinojosa, 24, 25, 26, 31, 32, 33, 34 Mr. Johnson, 19, 20, 21 Mr. Kildee, 12, 13, 14, 28, 29, 35, 46, 47 Mr. Pasternack, 8, 12, 14, 15, 16, 21, 27, 28, 29, 32, 33, 34 Mr. Payne, 48, 49 Mr. Savner, 48, 49 Mr. Tierney, 21, 22, 23, 24, 26, 27, 29, 30, 31 Mr. Twomey, 45, 46, 47, 48, 49 Mr. White, 35, 45, 48 Mrs. McCarthy, 17, 18, 19 Ms. DeRocco, 11, 12, 13, 16, 17, 18, 19, 20, 22, 23, 24, 25, 26, 29, 30, 31, 32