LABOR AND ECONOMIC DEVELOPMENT COMMITTEE

LABOR AND ECONOMIC DEVELOPMENT PROGRAMS IN THE PRESIDENT’S FY2009 BUDGET

On Monday, February 4, 2008, President Bush released his budget proposals for Federal Fiscal Year 2009. This begins the federal process for determining the funding level for programs beginning in October 1, 2008. Some of the proposals in the President’s Budget for FY2009 look very familiar to those who follow labor and economic development spending. Many program changes and funding cuts have been previously proposed by the Administration. The following document examines the funding levels that the President has proposed for key labor and economic development programs for 2009.

The release of the President’s Budget is only the beginning of a long and often contentious process. The next major step in the process is the passage of a congressional budget resolution. The budget resolution is considered by the House and the Senate and does not require the President’s signature. It lays out the position of Congress on program funding levels for fiscal year 2009. Under regular order, the Appropriations Subcommittees then make their decisions based on their budget allocations form the budget resolution. Following that, the appropriations bills move to full committee and then the floor.

DEPARTMENT OF COMMERCE

The President’s FY2009 budget requests $8.2 billion in discretionary funding for the Department of Commerce, an increase of $1.3 billion from FY2008. Much of the increase in discretionary spending is in support of the preparations for 2010 Decennial Census. In fact, more than a quarter of the FY2009 request is for the 2010 Census. The Administration identified three major goals it intends to accomplish with the proposed budget for FY2009:

Maximize U.S. competitiveness and enable economic growth for American industries, workers, and consumers
Promote U.S. innovation and industrial competitiveness
Promote environmental stewardship

Budget Highlights

Economics and Statistics Administration (ESA)

ESA provides policy makers, business leaders, households, and individuals with essential economic data including the gross domestic product (GDP) and other regional, national, international, and industry-specific economic indicators and information. The President’s FY2009 budget requests $91 million in funding for ESA and increase of $10 million from FY2008.

International Trade Administration (ITA)

ITA provides support to U.S. commercial interests through a variety of activities including strengthening the competitiveness of American industries and workers, promoting trade and investment, and ensuring compliance with both domestic and international trade laws and agreements. The President’s FY2009 budget requests $420 million for ITA, an increase of $15 million from FY2008.

Economic Development Administration (EDA)

EDA assists states, regions and communities in promoting a favorable business environment through capacity building, planning, infrastructure investments, research grants, and initiatives. The President’s FY2009 budget proposes funding EDA at $133 million and reducing funding to EDA programs by $149 million in order to support other administration priorities.

Minority Business Development Administration (MBDA)

MBDA promotes the ability of minority businesses to grow and participate in the global economy through increasing access to the marketplace and financing. The President’s FY2009 budget proposes $29 million in funding, an increase of $377,000 from FY2008.

Department of Commerce FY2009 Budget Online Version:
http://www.whitehouse.gov/omb/budget/fy2009/pdf/appendix/com.pdf

DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT (HUD)

President Bush’s FY2009 HUD Budget request is $38.5 billion and includes funding to support housing choice vouchers, project-based Section 8 housing, homeless assistance programs, vouchers for homeless veterans, housing counseling, Public Housing Agencies, and affordable housing programs such as the HOME Investment Partnerships Program.

Budget Highlights

Office of Community Planning and Development

The Community Development Block Grant program provides flexible annual formula grants to state and local governments to benefit mainly low-to moderate- income persons. The President’s FY2009 budget proposes $3 billion in funding a decrease of $866 million from FY2008.

The HOME Investment Partnership Program (http://www.hud.gov/offices/cpd/affordablehousing/programs/home/) provides federal block grants to states and localities that communities use to fund a wide range of activities that build, buy, and/or rehabilitate affordable housing for rent or homeownership or provide direct rental assistance to low-income people. The President’s FY2009 budget proposes $1.9 billion in funding an increase of $263 million from FY2008.

HUD programs such as Brownfields Economic Development Initiative, Community Development Loan Guarantee Program, and Rural Housing and Economic Development are proposed for termination.

Department of Housing and Urban Development FY2009 Budget Online Version:
http://www.hud.gov/about/budget/fy09/fy09budget.pdf

DEPARTMENT OF LABOR (DOL)

The President’s FY2009 budget request for the Department of Labor is $10.5 billion with a focus on the following priorities:

Protecting workers’ safety and health;
Protecting workers’ pay, benefits, pensions, and union member rights;
Effectively serving our Nation’s veterans and transitioning service members;
Modernizing the temporary foreign labor certification programs; and
Increasing the competitiveness of America’s workforce by continuing reforms and strengthening policies that encourage growth, job creation, and opportunity.

Additionally, in FY2009 the Department plans on focusing more efforts on scrutinizing base funding to shift resources from lower priority, less effective programs, to those found to be a higher priority and more effective.

Budget Highlights

Employment and Training Administration (ETA)
ETA administers federal government job training and worker dislocation programs, federal grants to states for public employment service programs, and unemployment insurance benefits. The President’s FY2009 budget proposes $7.9 billion in funding for ETA, a decrease of $1.6 billion from FY2008.

Career Advancement Accounts (CCA)
CCAs are self directed accounts of up to $6,000 over two years that would be available to adults, out-of-school youth. A new program that according to the Department of Labor would maintain existing One-Stop Career Centers but reduce duplication and increase efficiency by consolidating funding for Workforce Investment Act (WIA) Adult, Dislocated Worker, and Youth and Employment Service programs into a single funding stream for states. $2.8 million in funding is proposed for FY2009. Adult Employment, Dislocated Worker, Youth Activities and WIA Competitive Grants would all be zeroed out as part of the proposal. Combined funding for these programs was $2.9 million in FY2008.

For additional information, please contact Diana Hinton Noel (202-624-7779; diana.hinton@ncsl.org) or Robert Strange (202-624-8698; robert.strange@ncsl.org).