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2003 Performance

3. The ETA FY 2003 Budget

ETA Strategic Goals and FY 2003 Budget

The Employment and Training Administration proposes a FY 2003 budget request that addresses major workforce issues, maximizes resources, continues to restructure its own workforce, and is based on the Agency's 5-year Strategic and Annual Performance Plans. The request totals $10.3 billion, $906 million less than what is available in FY 2002. Of this total, $9.3 billion is available for discretionary programs and $1.1 billion is available for mandatory spending.

ETA's FY 2003 request does not introduce new programs. Rather, it focuses on the programs and initiatives already in place and on reforms and strategies that improve program performance and financial accountability to ensure the most effective and efficient use of the American taxpayers' money. The request invests in programs that have proven effective and reduces spending on, or eliminates, those less effective or duplicative efforts. For example, resources are requested to continue expansion of the highly successful Job Corps program, a residential job training program for disadvantaged youth. In contrast, the request would end H-IB Skills Training Grants, Migrant and Seasonal Farmworker national programs, and new Youth Opportunity Grants. The budget supports fully ETA's mission and principles for preparing workers for the 21st Century workforce and the changing nature of work and the workplace.

A primary focus will be to bring about much needed reforms in the Unemployment Insurance and Employment Service programs. These reforms will make UI and ES more responsive to the needs of workers and employers, give states flexibility, and promote economic growth.

The following is a summary, by appropriation account, of ETA's FY 2003 budget request. This budget summary encompasses all ETA programs and activities included in the following appropriation accounts: Training and Employment Services; Community Service Employment for Older Americans; State Unemployment Insurance and Employment Service Operations; Federal Unemployment Benefits and Allowances, Program Administration; and the Advances Account.

Training and Employment Services: The Training and Employment Services (TES) appropriation funds a decentralized system of education, skill training and related services directed toward increasing the post-program employment and earnings of current and future workers, particularly low-income persons, dislocated workers, and other unemployed or underemployed individuals. $5.0 billion is requested, $687.0 million below the FY 2002 level. The only increase requested is $73.4 million for Job Corps to support operations and construction for new centers and for an initiative to provide high school accreditation at all Job Corps Centers. The Administration will propose legislation on pension and health care benefits.

Community Service Employment for Older Americans: This appropriation funds the Senior Community Service Employment Program (SCSEP), which is authorized under Title V of the Older Americans Act Amendments of 2000. SCSEP is a part-time employment program for low- income persons age 55 or older. The ETA request is $440.2 million, $4.9 million below FY 2002 funding level.

State Unemployment Insurance and Employment Service Operations: This appropriation provides temporary income support to unemployed workers while they seek new employment or wait to return to their previous jobs. It also supports matching of employers seeking workers with workers seeking jobs, and provides funding for national activities relating to employment service activities and the Federal-State Unemployment Insurance program, and funding for State One-Stop Center networks.

The request is for $3.7 billion, $93 million below the FY 2002 level, based on the latest economic assumptions. There are two significant changes in this account: (1) The budget request includes $10,000,000 in State Administration to reduce erroneous payments, a major Administration goal. Also included are added resources to finance projected workload increases due to higher claims workload and the normal growth of the workforce and covered employers. (2) ETA proposes to shift H-1B fee generated resources from training programs in the Training and Employment Services account to the State Unemployment Insurance and Employment Service Operations account to eliminate the backlog in the permanent foreign labor certification programs. ETA continues to make progress in developing a more streamlined system, but the higher workloads will require additional resources to prevent backlogs from further growing and extending the time it will take to clear them.

Federal Unemployment Benefits and Allowances: The Federal Unemployment Benefits and Allowances (FUBA) appropriation provides for the payment of Trade Adjustment Assistance (TAA) benefits, training, job search and relocation allowances to workers adversely affected by increase imports. Additionally, the FUBA appropriation provides for the payment of benefits, training, job search and relocation allowances to workers impacted by trade with countries covered by the North American Free Trade Agreement (NAFTA).

The request for FY 2003 is for $461.7 million, $15 million above the FY 2002 level, based on the latest economic assumptions, for the TAA and NAFTA-TAA programs.

Program Administration: The ETA request is for $172.1 million and 1,441 FTE, an increase of $10.6 million. The total FTE is comprised of 1,328 funded from the appropriation and 113 FTE funded from reimbursements and H-1B fees. The budget includes a 29 FTE decrease pursuant to OMB Circular A-76 and outsourcing a number of activities presently performed by Federal employees. Of the increase, $5.5 million and 75 FTE is for National Emergency Grants, contingent upon the enactment of the Administration's Worker Relief package, $1.9 million for contractor services to provide specialized financial and program performance management information to all level of ETA organizations. This request includes an increase of $577 thousand for the increased space costs of the San Francisco regional office and $4.2 million for built-in cost increases. The Administration will propose legislation on pension and health care benefits.

Decreases include $1.1 million and 13 FTE for Youth Opportunity Grants, $300 thousand and 3 FTE for School-to-Work, and $100 thousand and 2 FTE for Public Affairs. In addition, 38 FTE will be redeployed to performance management and accountability activities from other, lower priority, activities.

A legislative proposal included in the 2003 budget shifts H-1B fee-generated resources from training programs in the Training and Employment Services account to the State Unemployment Insurance and Employment Service Operations account. These fees will be used to eliminate the backlog in the permanent foreign labor certification program. Six million dollars of these funds will be allocated to the Program Administration account to finance an additional 60 FTE to reduce permanent program backlogs in ETA Regional Offices.

Advances Account: The ETA request includes $463 million, an decrease of $1 million below FY 2002, for the Advances to the Unemployment Trust Fund and Other Funds account for use by the Employment Standards Administration for the Black Lung Disability Trust Fund.

The ETA requests $12,000,000 for incentive grants to States. Section 503 of the Workforce Investment Act provides that the Secretary of Labor shall award an incentive grant to each State that exceeds the State adjusted levels of performance for Titles I and II and the Carl Perkins Vocational and Applied Technology Education Act. Incentive funds allow ETA to reward those States that achieve or exceed negotiated performance levels and to provide technical assistance and possible sanctions for those States that do not.

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