Federal Policy

Decades-Long Decline in Federal Spending on Job Training and Workforce Development

/ The Old Crank

In a recent article for the Center for American Progress, Joy Moses lists 10 reasons why cutting poverty programs to address the government’s fiscal issues is a bad idea. Reason number three is that spending on many individual programs is “stagnating or declining.” She cites workforce and job training programs as a prime example:

Chart from "Top 10 Reasons Why Cutting Poverty Programs to Resolve the Fiscal Showdown Is a Bad Idea"

Source: Joy Moses, “Top 10 Reasons Why Cutting Poverty Programs to Resolve the Fiscal Showdown Is a Bad Idea”

I went and looked at the OMB spreadsheet she cites as a source and it looks like those numbers make sense, although I wonder if there is a bit of an apple/oranges problem when comparing federal job programs from 1972 with 2012. I’m also not sure why she compares the 2007 investment with 1972’s expenditure, when it looks like job training spending spiked even higher in the late 70s-1980. (I assume there is a good reason, I just don’t know what it is.) But none of that takes away from her overall point, which should be helpful to workforce/job training advocates.

One slightly more substantive quibble: I’m not sure that I’d describe federal job training as strictly a “poverty program,” since these services are not exclusively aimed at people living in poverty. In fact, as others have pointed out, low-income people currently represent only about half of those receiving job training or related services with federal adult employment and training funding, despite their increased rates of unemployment. It would be useful (and possibly make her argument even stronger) to look at whether the number of low-income individuals receiving federally funded job training and related services has declined in the same proportion as the overall decline in funding.

Senator Durbin: Federal Education Spending Boosts Economy

/ The Old Crank

His comments about Medicare and Social Security got most of the attention, but in his speech yesterday at the Center for American Progress, Senator Dick Durbin (D-IL) also came pretty close to taking the position that education should be firewalled off from any further spending cuts that are included in the deal to avert the year-end fiscal cliff.

According to my notes, he said that if the deal includes caps on spending, it should not apply to things that “create jobs and growth and opportunity in our economy.” In that category he included education, infrastructure, and research. In fact, he said that, if anything, we should be spending more in this category, particularly on infrastructure.

He did identify one area where savings could be found in federal education spending: financial aid that ends up at for-profit schools, citing some figures from the Harkins report on the percentage of federal college loans that goes to for-profit tuition and the high default rates on those loans.

Senator Durbin also made the point that probably can’t be said enough: if spending cuts do end up being part of the deal, it’s important to note that $1.5 trillion in savings were already created by capping funding for discretionary programs in the Budget Control Act, and a disproportionate amount of those savings came from non-defense programs. 

Literacy Advocacy from Inside the Conservative Bubble

/ The Old Crank

From the No-Publicity-Is-Bad Publicity (maybe) Department:

Turns out the secret to President Obama’s victory was “the illiterate vote.”

The writer goes on to argue that this creates a political imperative for Republicans to make a big investment in literacy. That he arrives at the conclusion that such an  investment would be a good idea by way of a trip through the most cynical back alleys of Crazy Town is a little disturbing (as is the entire piece). But ultimately, if Republican lawmakers decide they want to invest more in literacy because it’s the only way to combat Obama’s illiterate zombie army, I think we’d take it.

Small Businesses Worried about Cuts to Education and Job Training

/ The Old Crank

According to this poll, a majority (57%) of small business owners think that spending cuts for education, health care, and infrastructure would hurt the economy more than a tax increase on the wealthiest 2%. In addition, a huge majority (86%) are concerned that part of the solution to the “fiscal cliff” problem might include additional cuts to state grants for career and technical education and job-specific technical training. A solid majority (66%) are specifically concerned that there will be cuts to Workforce Investment Act (WIA) state grants.

It’s also interesting to me that in terms of taxes, a large majority of small business owners said that they are worried about increases to employee payroll taxes, because this could lead to a decrease in disposable income—which could lead, in turn, to a decrease in demand from potential customers.

The poll was conducted by the Small Business Majority.