Trade Adjustment Assistance:

Reforms Have Accelerated Training Enrollment, but Implementation Challenges Remain

GAO-04-1012: Published: Sep 22, 2004. Publicly Released: Sep 22, 2004.

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The Trade Adjustment Assistance (TAA) Reform Act of 2002 consolidated two programs serving trade-affected workers and made changes to expand benefits and decrease the time it takes for workers to get services. GAO was asked to provide information on (1) how key reform provisions have affected program services, (2) what have been the challenges in implementing new provisions, (3) whether demand for TAA training has changed and how states are meeting this demand, and (4) what is known about what the TAA program is achieving.

Most workers are enrolling in services more quickly than in prior years, partly because of a new 40-day time limit Labor must meet when processing a request, or petition, for TAA coverage. Labor reduced its average petition-processing time from 107 days in fiscal year 2002 to 38 days in fiscal year 2003 after the Reform Act took effect. Also, most states reported that workers are enrolling in training sooner because of a new deadline requiring workers to be enrolled in training by the later of 8 weeks after petition certification or 16 weeks after a worker's layoff. However, this deadline may have negatively affected some workers--especially during large layoffs--as it does not always leave enough time to assess workers' training needs. States reported challenges implementing some new provisions of the TAA Reform Act. Officials in most of the states we visited reported an increased administrative workload from issuing training waivers to allow workers to qualify for the Health Coverage Tax Credit (HCTC)--over 40 percent more waivers were issued in fiscal year 2003 than in 2002. While officials in all the states we visited said workers are or are likely to be interested in the wage insurance provision (Alternative TAA, or ATAA) that supplements the wages of certain workers aged 50 and over, it is still unclear how many workers will take advantage of this benefit. However, some found the provision's eligibility criteria problematic, partly because they require workers to lack easily transferable skills yet find reemployment within 26 weeks of layoff. Demand for TAA training increased substantially in fiscal year 2002, prior to the implementation of the reforms. States have struggled to meet this higher demand with available TAA training funds, even though TAA training funds available nationally doubled between fiscal years 2002 and 2003. Most states have responded by using other federal employment and training resources. Information on TAA program results has been limited, but Labor is making improvements by requiring states to use wage records to track TAA outcomes. Labor also initiated a new, 5-year evaluation study.

Status Legend:

More Info
  • Review Pending-GAO has not yet assessed implementation status.
  • Open-Actions to satisfy the intent of the recommendation have not been taken or are being planned, or actions that partially satisfy the intent of the recommendation have been taken.
  • Closed-implemented-Actions that satisfy the intent of the recommendation have been taken.
  • Closed-not implemented-While the intent of the recommendation has not been satisfied, time or circumstances have rendered the recommendation invalid.
    • Review Pending
    • Open
    • Closed - implemented
    • Closed - not implemented

    Recommendations for Executive Action

    Recommendation: Labor should monitor issues related to the implementation of certain provisions of the TAA Reform Act that may have had unintended consequences for some workers, and propose legislative changes as deemed necessary. In particular, Labor should track over time the ability of workers to meet the new training enrollment deadline and of states and local areas to provide appropriate assessments to all trade-affected workers within the deadline, especially when responding to very large layoffs.

    Agency Affected: Department of Labor

    Status: Closed - Implemented

    Comments: Labor has developed new guidance for its regional offices on how to monitor states' implementation of the Trade Adjustment Assistance (TAA) program. This guidance addresses our recommendation because it includes instructions on monitoring the effects of the training enrollment deadline. Implementation of this guidance should help Labor develop a better overall understanding of how the training enrollment deadline has affected workers nationally.

    Recommendation: Labor should monitor issues related to the implementation of certain provisions of the TAA Reform Act that may have had unintended consequences for some workers, and propose legislative changes as deemed necessary. In particular, Labor should track over time whether the eligibility criteria for the new wage insurance program are resulting in the denial of services to some older workers who could benefit from the program.

    Agency Affected: Department of Labor

    Status: Closed - Implemented

    Comments: Labor has developed new guidance for its regional offices on how to monitor states' implementation of the Trade Adjustment Assistance (TAA) program. This guidance addresses our recommendation because it includes instructions on monitoring the effects of the wage insurance eligibility criteria. Implementation of this guidance should help Labor develop a better overall understanding of how the wage insurance eligibility criteria have affected workers nationally.

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