Interactive Map: Bush's Budget Cuts Aid to Displaced Workers

February 5, 2008

The president's 2009 budget, released on Monday, may total up to a record breaking $3.1 trillion, but most Americans won't be seeing the big bucks next year. National security and defense are getting the largest boost from Bush's budget, while domestic programs are frozen or cut.

The dislocated worker program is one such domestic program that has taken a bullet—to the tune of a $271 million budget reduction. The dislocated worker program provides grants to states to provide job training, career guidance, job placement, and other services for dislocated workers, including those who have lost their jobs due to trade. Yet if the President’s cut is adopted, nearly 65,000 fewer workers will receive job training and other services to help them find work.

Dislocated workers need more help, not less. Our current system for helping workers who lose their jobs to trade is already impossible to navigate and so narrowly tailored that even the people who the program was created for cannot capture many of its benefits. A decrease in funding will only make this dismal situation worse.

Center for American Progress Senior Fellow Gene Sperling has proposed an effective new policy solution that will fix the broken system by setting up a universal One Stop Shop for Adjustment and Reemployment.

One Stop Shop would be a national system of centers—and a single help number such as 1-800-NEW-JOBS—that would bring all unemployment benefits together in one place and offer immediate assistance to workers who lose their jobs.

As a part of One Stop Shopping, Gene Sperling has suggested that TAA’s expand its wage insurance program to benefit all workers over 50 who lose their jobs, that the federal government universally guarantee health care between jobs until a broader system of universal healthcare is established, and that the federal government build mortgage insurance into the package of available benefits for the unemployed.

Yet a stronger safety net is not enough. We must also work on putting policies in place that preempt job loss. In his work on this issue, Sperling has also presented new policy ideas such as Community Adjustment Compacts, a Flexible Education Account, and preemptive retraining assistance.

Community Adjustment Compacts are modeled on the New Markets Tax Credit and Empowerment Zones programs, which offer business investment incentives and wage tax credits to investors who open businesses and stimulate job growth in low income urban areas. Community Adjustment Compacts make these same benefits available to those who bring business investment into communities identified as “at risk” to suffering dislocation due to trade. The Flexible Education Account is another innovative policy idea that would broaden the current Life Time Learning Tax Credit and further empower workers to seek adult education and skills building courses in order to invest in themselves before as well as after job loss.

For more reading about these ideas, please see “The Pro-Growth” Progressive by Gene Sperling, Chapter 4, as well as the following links:

• How to Refloat These Boats, by Gene Sperling
• The Early-Warning Economy, by Gene Sperling 

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