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Budget Analysis: 2021 request has important skills proposals but big cuts to Labor and Safety Net programs

  ·   By Katie Spiker, Katie Brown, and Kermit Kaleba
Budget Analysis: 2021 request has important skills proposals but big cuts to Labor and Safety Net programs

National Skills Coalition's 2021 budget analysis finds important education proposals recognizing the role of skills in the workforce, but massive cuts to safety net programs that help workers complete training and find good jobs.

The President’s Fiscal Year (FY) 2021 budget request highlights the administration’s stated goal of “[p]reparing for a changing labor market” as the first step in his plan for economic prosperity in the U.S. Increasing vocational training, closing the skills gap, and retooling the American workforce are all included as goals under this heading.

In several places in the budget request, the administration moves in this direction. Proposed increases to Career and Technical Education (CTE) respond to business and worker demand for more investment in skills. Continued commitment to expanding Pell grants to high-quality, short-term programs would help modernize higher education to work better for students, workers, and businesses. And investments in high-quality work-based learning, and increased opportunities for workers to earn in-demand skills while earning a paycheck, are important to address the mismatch between skills workers can access and those in-demand by businesses.

At the same time, the administration continues a narrative around the need for program elimination and proposes deep cuts to safety net programs that help workers support their family and often connect them to opportunities to build skills. Taken together, the significant decreases in funding undercut smaller increases in skills programming.  

In 2018, the Council of Economic Advisers recognized the U.S. would need to spend $80 million more on active labor market policies just to reach the median level investment of other industrialized countries. Despite important recognition of the role of skills and increases for CTE, taken together, this year’s budget request moves in the wrong direction compared to our international peers.

The budget request in context

In 2019, Congress agreed to a two-year budget deal that set nondefense discretionary funding for Fiscal Year 2021 at $626.5 billion. This is $5 billion higher than spending limits in FY2020 and above the levels proposed in the administration’s request. Congress will almost certainly spend to levels agreed to in the budget deal, in part because 2020 is an election year and there is pressure on incumbents to deliver on their constituents’ priorities.

While the budget request is unlikely to be a roadmap for negotiations on the Hill given these lower levels and the election year politics, it does send an important message about the administration’s priorities. Several policy proposals could gain momentum in the coming year, including continued progress on short-term Pell and modernizing Trade Adjustment Assistance (TAA) for workers.

Below is an analysis of skills programming supported through the Departments of Education, Labor, Health and Human Services and Agriculture. For more overview of the budget request, see this video short, a statement from Kermit Kaleba, NSC’s managing director for Policy, on the budget and our initial overview blog with top level analysis of what works for workers – and what doesn’t – in the administration’s FY2021 budget request. 

National Skills Coalition will continue to share resources on the impact of the FY2021 budget request on workers, businesses and communities.

Department of Education

In his FY2021 budget request, the President proposes a 7.8 percent funding across-the-board cut to Education Department (ED) programs. These cuts are reflected in a decrease in funding or a consolidation of funding across several valuable programs, including Federal Work Study, Childcare Access Means Parents in School (CCAMPIS), and Federal Supplemental Education Opportunity Grants (FSEOG)—all of which help provide support to low-income students.

Career and Technical Education– While the President’s budget does call for an overall cut to ED programs, it prioritizes CTE, which is vital for helping students of all ages access the skills they need to succeed in today’s economy. The budget provides nearly $900 million in additional funding directed to CTE, which is composed of a roughly $680 million increase for Perkins Basic State Grants, an $83 million increase for Perkins National Programs and $100 million in additional funds that could be generated for Perkins through changes to the H-1B visa program (discussed below).

The budget stresses that the significant plus up for Perkins National Programs would support an expansion of the Innovation and Modernization (I&M) grant program with a focus on science, technology, engineering, and mathematics (STEM) fields including computer science. I&M grants were recently authorized under Perkins V and are awarded to educational institutions to help fund a broad range of strategies, including designing new courses, building capacity in computer science and coding, and creating work-based learning opportunities for students.

Adult Education- While National Skills Coalition and many other organizations were encouraged by the significant increase to CTE funding proposed by the administration, the same emphasis was not placed on adult education. The President’s FY 2021 budget included $657 million for Adult Basic and Literacy Education State Grants and $14 million for Adult Education National Leadership Activities. Both of these proposed levels did not change from the White House’s FY 2020 request but provided a minor plus-up in funding compared to the levels agreed to by Congress for this fiscal year.

In the U.S., low basic skills are more common than in other countries—and low-basic skills impact employment, earnings, and economic mobility. Considering this, access to education and literacy services for adults is of the utmost importance when it comes to ensuring that individuals have the skills they need to compete in today’s economy. NSC looks forward to continuing to work with both Congress and the Administration to advocate for strong funding and federal support for adult education.

Pell Grants– The President’s budget calls for the funding necessary to support a maximum Pell grant award of $6,345 which is on par with the maximum award amount settled on by Congress in their FY 2020 appropriations package. The proposal also calls for notable changes to Pell grant eligibility, including allowing students enrolled in “high-quality, short-term programs that provide students with a credential, certification or license in a high-demand field” to participate in the program.  This provision echoes the sentiment of the bipartisan JOBS Act—an NSC supported policy that has gained momentum in Congress and is supported by likely 2020 voters on both sides of the aisle as well as small and mid-sized business leaders.

Additionally, the budget request calls for the extension of Pell grants to incarcerated individuals—which is another proposal that has bipartisan support in Congress. NSC highlighted the importance of this proposal, or Second Chance Pell, in a recently released report entitled The Roadmap for Racial Equity, which calls on Congress to overturn the ban on Pell grants for incarcerated individuals.

Federal Work Study (FWS) – Despite interest from the Administration in modernizing the FWS program so that it better supports career-oriented training opportunities, the budget proposes to cut the program by more than 50 percent, down to $500 million. The justification for this change is that FWS will be focused more workforce development for low-income undergraduate students and less on subsidized employment for campus-based jobs. The proposal would also reform the FWS allocation formula to better ensure that limited funds are going to Pell recipients.

This recommendation is in line with a new experimental site announced by the ED in 2019, which would expand FWS to private sector jobs. The experimental site would give colleges and universities the flexibility to allow students to receive FWS funds in apprenticeships, internships, clinical rotations and other situations not currently included in the federal aid program.

Members of Congress on both sides of the aisle have introduced proposals to overhaul the FWS program, making it more responsive to the education and training needs of today’s students and employers. However, these proposals have largely included a plus-up in FWS funding to help educational institutions partner with employers to make these changes.

Notable Cuts and Consolidations

  • Child Care Access Means Parents in School (CCAMPIS) – The CCAMPIS program is designed to support low-income parents enrolled in postsecondary education through the provision of campus-based childcare services. Despite the importance of non-tuition support services = to ensuring student success, the President’s budget cuts the already underfunded CCAMPIS program from $53 million to $15 million.

  • Federal TRIO Programs – As in past years, the budget proposed to consolidate TRIO programs—federal outreach and student services programs designed to identify and provide services to individuals from disadvantaged backgrounds—into a single state block program and slash overall funding levels by 13%. In addition to decreased funding for TRIO, the proposal also seeks to combine TRIO with the GEAR UP program and the College Access Migrant Program (CAMP), spreading funding thinly across all three programs. Congress has so far pushed back against the Administration’s efforts to consolidate these programs, choosing instead to fund each of them separately.

  • Federal Supplemental Education Opportunity Grants (FSEOG) – FSEOG is a grant program reserved for students with the greatest need for financial aid. These grants can help low-income students bridge the gap between what Pell grants will cover and the cost of postsecondary education or training. The President’s budget proposes to fully eliminate these grants, deeming them as duplicative to Pell grants.

  • Public Student Loan Forgiveness program (PSLF) – The PSLF program helps teachers, government employees and other public servants by cancelling their student loan debt after they make consistent payments for 10 years. The Administration has proposed to eliminate the program for the past few years; a move that Congress has not adopted.

Department of Labor

WIOA Title I. The administration’s FY 2021 budget request would provide level funding for WIOA title I state grants for Adults, Dislocated workers and Youth programming with current FY2020 levels. In FY2020, Congress increased funding for these programs by $30 million, and it’s important that the administration’s budget request supported this increase. However, it is still notable that funding for WIOA state grants has declined by 40% in the past two decades and is far from enough to meet the needs of today’s workers or those who will be impacted by technological change over the next decade.

Apprenticeship. The budget request also included an increase of $25 million in funding for apprenticeship grants. Congress appropriated $175 million in funding for apprenticeship in the FY2020 omnibus – restricting the use of this funding to registered programs. The budget request would reverse that restriction – and language found in the administration’s budget request for FY2020 – and instead direct DOL to use this funding for “expanding opportunities relating to apprenticeship programs…” The language in the FY2021 request removes a reference to the National Apprenticeship Act and to WIOA, opening up the funds to be spent on the administration’s proposed Industry Recognized Apprenticeship Programs (IRAP). Final regulations on IRAPs are expected out late spring, and NSC submitted comments on IRAP encouraging the department to consider  changes from the draft regulations released last year better link programs to the workforce and education systems and align with state workforce priorities.  

Program cuts and consolidation. Unfortunately, this increase was coupled with a continued narrative about program elimination and deep cuts. The administration proposed eliminating the Workforce Data Quality grants, which support state development of longitudinal data systems and are critical to measuring impact and success of workforce programs. The request also would cut $110 million from the Dislocated Worker National Reserve, reversing the $50 million increase Congress included in December’s omnibus package to support training at community and technical colleges, partnering with business and the workforce system. The budget request also proposed to eliminate several WIOA national programs, including Native American programs and the Migrant and Seasonal Farmworkers program, and had cuts to Youth Build and Ex-Offender activities.

The budget also included significant – more than 40% - cut to Job Corps funding. At his hearing on the FY2020 DOL budget request, former Labor Secretary Acosta proposed a new demonstration project at Job Corps sites and the program has been the center of attention from across party lines in Congress, but members remain committed to investment in the latest appropriations bill, increasing funding levels up to $1.74 billion.  

In the narrative around these proposed cuts and program elimination – and in the description of the proposed elimination of the Senior Community Service Employment Program under the Older Americans Act – the administration tasked the workforce system with serving these target populations.

Alignment between national programs and the work happening at the local level is vital for improved efficiency and outcomes for businesses and workers. Tasking local workforce areas – and states – with serving workers with the greatest needs, with continually decreased funding levels, is not efficient, it’s setting up workers, businesses and communities up for failure.

H-1B funds. The budget request included several legislative proposals reflective of the administration’s priorities. First, the administration repeated their proposal – also included in the FY2020 request – to double the fees associated with H-1B visas, awarding the funds to community and technical colleges to support training for in-demand industries.

TAA. Finally, the Administration proposed an update to Trade Adjustment Assistance for Workers, including a call to reauthorize the program through 2031. Like what has been included in FY2019 and FY2020 budgets, the administration proposes shifting a focus in TAA for workers to encourage more access to work-based learning for participants. The FY2021 budget request also reflected an intention to foster closer alignment between services provided under TAA and the public workforce system, consistent with a Congressional report earlier this year and draft regulations released by the Department of Labor late 2019. Spending under TAA for workers is authorized – based on the number of claims against the program – up to $450 million, but the administration estimates lower FY2021 costs, if their legislative proposal is adopted, and only estimates spending just over $400 million on the program in FY2021.

Safety Net Programs

The President’s budget calls for drastic cuts and policy changes to a range of public assistance programs across different agencies, consistent with past budget proposals and ongoing regulatory efforts by the administration to reduce access to needed benefits.

SNAP. The budget calls for changes to the Supplemental Nutrition Assistance Program (SNAP) that would tighten work requirements for individuals between the ages of 18-65, which the Department of Agriculture estimates will result in cuts of $36.6 billion over ten years. These proposals would come on top of regulatory actions by the administration to reduce access to SNAP, including a recently finalized rule that restricts the ability of states to waive work requirements for certain SNAP participants in areas of high unemployment. That rule is expected to take effect as of April 1, and it is anticipated that as many as 700,000 individuals will lose access to SNAP benefits due to the new requirements. These proposals come despite the fact that Congress recently reauthorized SNAP as part of the bipartisan 2018 Farm Bill, and specifically rejected expanded work requirements as part of that compromise legislation. 

Medicaid. The Administration proposes expanding work requirements to Medicaid recipients, building on current efforts to give states the authority to impose such requirements through waivers. At least ten states have gotten approval from the administration to experiment with work requirements, with poor results: initial efforts in Arkansas resulted in approximately 18,000 individuals losing access to health coverage with no demonstrated improvement in employment outcomes. The proposed changes in the budget would lead to estimated cuts of approximately $150 billion over ten years, as more individuals would lose access to health benefits.

TANF. The Administration also proposes a ten percent cut to the Temporary Assistance for Needy Families (TANF) state grant program – reducing budget authority from the current $16.7 billion to $15.2 billion, and would eliminate the TANF contingency fund, which is designed to help states provide assistance to qualifying participants in times of economic hardship. These cuts would come despite the fact that funding levels for the TANF block grant have not increased since 1996, resulting in a nearly 40 percent erosion in purchasing power for TANF over the past 20 years due to inflation.

While it is highly unlikely that Congress will adopt the administration’s legislative proposals with respect to these programs, the budget signals the administration’s continued insistence on work requirements as a strategy for moving low-income workers out of poverty, despite strong evidence that indicates such requirements are ineffective and mostly serve to reduce access to critical nutrition, health, and other supports for the least fortunate. If enacted, these proposals would significantly undercut state and local efforts to better connect individuals on SNAP, TANF, and other programs to high-quality education and training, and would make it difficult for millions of low-income workers to find and keep family-supporting jobs. National Skills Coalition strongly opposes efforts to expand work requirements, and we look forward to working with Congress to reject these harmful proposals and instead focus on strategies that connect individuals to the skills and credentials they need to succeed in today’s economy.

Infrastructure

In the FY2021 budget request, the administration also includes a supplemental description of a $1 trillion infrastructure investment, dividing the funds between a surface transportation bill, funding for new infrastructure, for improving freight safety, bridge rebuilding, broadband access to rural areas and for repairing transit. The supplemental – despite the administration’s inclusion in the past – is silent on funding being allocated to support the workers who would complete the projects.

Congressional leadership and the White House have engaged in several negotiations over infrastructure, and the issue remains a bipartisan priority. According to the Georgetown Center on Education and the Workforce, a $1 trillion investment could create 11 million new jobs – new workers on top of the already steep skills mismatch that exists in infrastructure industries like construction, manufacturing and utilities.

Coupled with drastic cuts to labor programs, and comparatively small increases in education programs, any infrastructure conversation needs to include funding and support for helping workers in the communities with infrastructure projects develop skills necessary to succeed in those jobs.

  FY 2021 - Authorized Levels  Current Levels - FY 2020 FY2021 President's Budget Request FY2021 Budget Request to FY2020 Levels
Department of Labor        
Workforce Innovation and Opportunity Act Title 1 - State Forumla Grants   $2,819,832,000    
WIOA Adult NA $854,649,000 $854,649,000 -
WIOA Dislocated Worker NA* $1,052,053,000 $1,052,053,000 -
WIOA Youth NA $913,130,000 $913,130,000 -
Wagner-Peyser / Employment Service Grants NA

$668,000,000

$668,052,000 -
Workforce Data Quality Inititative Grants NA $6,000,000 - -$6,000,000
Apprenticeship Grants NA $175,000,000 $200,000,000 $25,000,000
DW National Reserve NA $270,859,000 $160,859,000 -$110,000,000
Native American Programs NA $55,000,000 - -$55,000,000
Ex-offender Activities NA $98,079,000 $93,079,000 -$5,000,000
Migrant and Seasonal Farmworkers NA $91,896,000 - -$91,896,000
Youth Build NA $94,534,000 $84,534,000 -$10,000,000
Senior Community Service Employment Programs NA $405,000,000 - -$405,000,000
JobCorps NA $1,743,655,000 $1,015,897,000 -$727,758,000
Trade Adjustment Assistance $450,000,000 $450,000,000 $450,000,000 -
Department of Education         
Career and Technical Education State Grants NA $1,282,598,000 $1,962,598,000 $680,000,000
Adult Education and Family Literacy State Grants NA $656,955,000 $656,955,000 -
Posted In: Federal Funding