Secretary Perez to Congress: TAA is a Critical Lifeline for American Workers

Secretary Perez to Congress: TAA is a Critical Lifeline for American Workers

1. 1. SECRETARY OF LABOR WASHINGTON. D. C. 20210 June 11.2015 Dear Member ofCongress: l write to express my strong support for the Trade Adjustment Assistance (TAA) bill included as Title II in H. R. 1314. The TAA legislation would aid American workers displaeed by globalization and trade by expanding current TAA eligibility, including robust beneftts for workers and full funding for job training for six years. If we do not act now, this program which has provided a lifeline to over 2.2 rnillion workers will expire at the end of the liscal year. I applaud Members for their tireless efforts on behalfofworkíng families and support for job training programs. ln 201 1. 189 Democrats (all voting Democrats), including 125 current Members of the eaueus. supported '1`AA authorization legislation comparable to the bill currently in front ofthe House. That bill locked in a robust TAA program for only two years, while the version you will consider authorizes TAA for six years. While 1 appreciate that there are differing views on Trade Promotion Authority, the TAA program has always received strong support because it provides a critical lifeline to workers who need assistance and training to transition to new careers. We have a shared interest in helping working families and the TAA proposal under consideration does exactly' that. This legislation provides an opportunity for Congress to act to meet the key needs for a successful program. The bill would restore key eligibility provisions first passed by Congress and signed into law by President Obama in 2009. providing an estimated 24,000 to 30.000 additional participants a year with TAA benefits. many of whom are currently not eligible. It would provide up to 130 weeks of 'Trade Readjustment Allowance (TRA) beneíits. the length generally neeessary to complete two-year training programs. lt would also restore funding for individualized case management and employment services that are not currently available. but are critical to assisting workers in selecting and completing training programs and in obtaining suitable reemployment. Finally. it would provide nearly twice the amount of annual funding for training than the current program. The legislation would ensure TAA benefits are available to service sector workers who have not been covered since January 1. 2014. Over the last 17 months. over half of all petitions submitted-impacting over an estimated 17,500 workers- -were denied TAA beneiits because they were not covered under the current. more limited. version of TAA. Under this legislation, these petitions would be reconsidered. Moreover. additional workers who didn`t apply because they knew they would not be eligible under current law will have the opportunity to submit petitions.
2. 2. The Department of Labor issued over 2.700 service sector certitications covering over an estimated 151 .300 service sector workers when this eligibility was available under the 2009 and 201 1 programs. Restoring these benelits would provide opportunities for people such as Caleigh, a single mother of two who was laid off from her service sector job with a health care company. The TAA program enabled her to enroll in college and she is now employed as a Family Support Eligibility' Specialist. ln addition, the legislation would ensure TAA benefits are available to workers whose jobs are adversely affected by trade from countries that are not parties to Free Trade Agreements (FTAs) with the United States. including China and India. The Department of Labor certified over 3.500 non-FTA petitions covering over an estimated 253300 workers when this coverage was available under the 2009 and 2011 programs. Restoring those benefrts would provide opportunities for people such as Nicketa, who was a Senior Customer Service Representative at a telecommunications company until her job was outsourced. Thanks to the TAA program. she was able to switch careers by entering a Registered Nursing program. which allowed her to secure a full-time job as a Registered Nurse. A number of people have expressed criticism that Medicare provider savings are being used to offset the cost of the TAA legislation. That offset would be reversed in the eompanion Trade Preferences and Extension Act. ln fact, the new offsets raise revenue by combatting tax fraud and noncompliance. Some critics of the legislation contend that it does not include sufficient funding for job training and that it falls short because it does not cover public sector workers. With regard to job training funding. the Department of Labor estimates the $45O million cap on training and other activities would be sufficient to provide full benefits to all eligible workers, and is nearly double what the program operates with today. This estimate is based on offreial budget economic assumptions and factors in estimates of the number of TAA partieipants, as well as the training take-up rate. the average annual cost of training. and the average state expenditures for administration. case management. and employment services. lt is important to note that funds provided in a tiscal year are available for expenditure for three years. and the legislation continues these tlexibilities that allow unused funds to be recaptured and reallocated to states with a need for these funds. As a result. even in the depths of the Great Recession a $45O million cap would have been sufficient to cover all TAA job training expenses. Over the last three F iscal Years. the program spent an average of $3OO million annually - - meaning that with a $45O million cap the Department of Labor would have $150 million in unspent funds carried over in each year. The Department of Labor currently has significant carry-over from prior years to supplement the $45O million annual appropriations that would occur following enactment of the legislation you will consider. This carry over will provide annual job training funding substantially higher than $45O million well into the authorization period. The TAA program has always provided income support and job training opportunities to all eligible workers impaeted by imports from, or a shift in production to, countries with whom we
3. 3. have Free Trade Agreements (FTA). However, nearly 40 percent of TAA certifications since the beginning of Fiscal Year 2010 have been made for workers impaeted by globalization, and this legislation would cover these workers as well. Finally, the last TAA authorization bill supported unanimously by Democrats in 2011 did not include coverage for public sector workers. TAA for workers has been authorized by Congress for over 40 years, with tens of thousands of petitions received over that period, and the only time it ever included public sector workers was in the 2009 Program, which was discontinued in 2011. During this period, the Department of Labor did not receive any petition for workers in a public agency that met the eligibility criteria, and therefore no public sector worker groups were certifred as eligible to apply for TAA benefrts. ln fact, none of the petitions submitted even alleged that American workers lost their jobs because their services were being provided by a foreign country. While over an estimated 17,500 private sector workers will not have their petitions reconsidered should the bill you will consider fail to get enacted, there are zero public sector workers similarly at risk. The TAA program works. In Fiscal Year 2014, nearly 77 percent of TAA participants found employment within 6 months of program completion, and 90 percent of those who found work retained their jobs 6 months later. ln addition, nearly 83 percent of program participants who completed training and received a post-secondary credential went back to work within 6 months of completing the program. This legislation provides the best - and possibly the only - plausible path to achieving a robust extension of TAA, and in particular, one that locks in place for a significant period of time the expansions first secured by the President and Congressional Democrats. Not acting on the legislation will likely lead to the tennination of a program that has provided a lifeline for over 2 million American workers since its inception 40 years ago. Again, l applaud you for your support of our shared priorities on behalf of working families, including job training. I urge you to once again support TAA legislation so that we can provide American workers with the support and tools they need to compete in a 2lst Century global economy. Sincerely. @~gí. C§ THOMAS E. PEREZ