A key program that is part of Gov. Asa Hutchinson’s workforce initiative to retrain and retool Arkansas’ blue collar-focused labor pool for a more technology-oriented economy could be at risk under President Donald Trump’s proposed $1 trillion budget.
As the Trump administration’s 62-page “skinny” budget shows, spending for a highly popular federal program that provides training and education programs for the nation’s working class is likely to be slashed — even as the president’s jobs agenda promises to add and bring back millions of manufacturing jobs back to the U.S. In particular, President Trump’s budget would impose a 21% cut to the U.S. Department of Labor’s $9.6 billion annual budget, a $2.5 billion cut or 21% decline from 2017 levels.
Federal support for job training and employment service formula grants would see major declines, shifting more responsibility for funding these services to states, localities and employers.
The left-leaning Center for American Progress said those cuts would impact more than 20 million workers receive some assistance through a network of federally funded and locally operated American jobs authorized under the Workforce Innovation and Opportunity Act, or WIOA.
“These programs help the long-term unemployed find jobs, retrain displaced workers for new careers, upskill incumbent workers, engage disconnected youth in school or work, and provide adults with basic literacy services, including English as a Second Language,” CAP said in a recent report.
In Arkansas, the Trump cuts to the DOL would reduce worker training and employment services to 22,000 of the 62,875 Arkansas residents that now access the state’s WOIA program, which was signed into law nearly two years ago in the 2015 session as one of the three “foundational” pillars of Gov. Asa Hutchinson’s workforce training initiative.
In July 2014, President Obama signed the WOIA after it passed with virtually unanimous bipartisan support in Congress — making it the first update to the nation’s core workforce training programs in the 16 years since the passage of the Workforce Investment Act (WIA).
Under Act 907, which was sponsored by Sen. Jeremy Hutchinson, R-Little Rock, the federally mandated Arkansas Workforce Innovation and Opportunity Act distributes federal funds to workforce investment boards across the state. The new state law also mandated a restructuring of state workforce development boards so that at least 51% of their membership must represent businesses and 20% of the membership is made up of workforce representatives in the state.
Arkansas Department of Workforce Services (DWS) officials could not provide budget details for the WOIA program in fiscal 2017. However, the Legislature has approved a budget of $50 million for the workforce training program for the fiscal year ending June 30, 2018, according to the department’s appropriations request to the Joint Budget Committee.
Steve Guntharp, DWS’ deputy director of internal operations, also would not say how the DOL cuts would impact Arkansas programs.
“Until we receive formal notice from DOL on the proposed cuts, we do not have any comment,” he said.
Meanwhile, Arkansas Economic Development Commission executive director Mike Preston defended another state program that is on the chopping block if the Trump budget discontinues federal funding for the Manufacturing Extension Partnership (MEP) program, which provides nearly $124 million annually to consulting services for small- and medium-size manufacturers.
In Arkansas, nearly $1 million of that funding comes to Arkansas Manufacturing Solutions, the Arkansas Economic Development Commission’s division that provides extension services to manufacturers across the state. By eliminating federal funding, MEP centers would transition solely to non-federal revenue sources, as was originally intended when the program was established, Trump officials said. But Preston said the MEP plays a significant role in AEDC’s efforts to maintain and grow the state’s manufacturing base.
“We are aware of President Trump’s proposed budget related to MEP funding. Over the coming months, it is imperative for Arkansas and others to highlight the economic impact of the MEP,” said the AEDC chief. “The innovation and support provided through the MEP allow Arkansas’ manufacturers to thrive in today’s economy.”
Besides the Labor Department, most of the other federal agencies will also see major declines in spending, except for the Departments of Defense and Homeland Security. In explaining his “America First” budget blueprint, Trump said he is rebuilding the nation’s military without adding to the federal deficit. In doing so, the $54 billion increase in defense spending in 2018 is offset by targeted reductions elsewhere.
“This defense funding is vital to rebuilding and preparing our Armed Forces for the future,” Trump said. “We are going to do more with less, and make the government lean and accountable to the people.”
Meanwhile, the conservative Cato Institute calls the across the board budget cuts at the Labor Department and other federal agencies “fair and necessary.” Chris Edward, director of the think tank’s “Downsizing the Federal Government” website, said nearly all of the cuts announced by the Trump administration have been recommended by the institute.
“I would rather that the government do less with a lot less, but I appreciate that Trump is proposing to fully offset his defense spending increases,” Edwards said.