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Report to the Committee on Finance, U.S. Senate:

United States Government Accountability Office:

GAO:

September 2004:

Trade Adjustment Assistance:

Reforms Have Accelerated Training Enrollment, but Implementation 
Challenges Remain:

GAO-04-1012:

GAO Highlights:

Highlights of GAO-04-1012, a report to the Committee on Finance, U.S.
Senate

Why GAO Did This Study:

The Trade Adjustment Assistance (TAA) Reform Act of 2002 which 
consolidated the two former programs serving that served trade-affected 
workers —the TAA and North American Free Trade Agreement--Transitional 
Adjustment Assistance (NAFTA-TAA) programs--and made a number of key 
changes designed to expand benefits and decrease the time it takes for 
to get workers to get services into services. GAO was asked to provide 
information on (1) how key reform provisions have affected program 
services, (2) whether demand for program services has increased and 
how states are meeting this demand, 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.

What GAO Found:

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. 

Possible path for receiving TAA services

[See PDF for image]

[End of table]

What GAO Recommends:

GAO recommends that the Department of Labor monitor the implementation 
of certain provisions of the TAA Reform Act and propose legislative 
changes if: 

* the new training enrollment deadline is negatively affecting some 
workers, or

* the eligibility criteria for the new wage insurance provision are 
resulting in denial of services to some older workers who could 
benefit from them that have presented initial implementation 
challenges, specifically .

In its comments, Labor did not raise any issues with our findings, 
conclusions, or recommendations.

www.gao.gov/cgi-bin/getrpt?GAO-04-1012.

To view the full product, including the scope and methodology, click on 
the link above. For more information, contact Sigurd R. Nilsen at 
(202) 512-7215 or nilsens@gao.gov.

[End of section]

Contents:

Letter:

Results in Brief:

Background:

Most Workers Are Enrolling in Services Sooner, but Some May Be 
Negatively Affected by the Enrollment Deadline:

New Health Care Provision Has Caused Increased Administrative Workload 
for Some Officials, While Other Provisions Have Been Difficult to Fully 
Implement:

Demand for TAA Training Has Increased, and States Have Responded by 
Supplementing Limited TAA Funds with Other Federal Resources:

Information on Program Results Has Been Limited, but Labor Is Taking 
Steps to Collect Better Data:

Conclusions:

Recommendation for Executive Action:

Agency Comments:

Appendix I: Objectives, Scope, and Methodology:

Appendix II: Final Decisions Rendered by the U.S. Court of 
International Trade on Appealed TAA Cases, Fiscal Years 1999-2004:

Appendix III: Certified Workers, Benefit Recipients, and Expenditures:

Appendix IV: State Training Allocations, Fiscal Years 2001-2004:

Appendix V: Detailed Listing of Steps States Report Taking in Response 
to Limited TAA Training Funds:

Appendix VI: Demographic Characteristics of TAA Participants:

Appendix VII: Comments from the Department of Labor:

Appendix VIII: GAO Contacts and Staff Acknowledgments:

GAO Contacts:

Staff Acknowledgments:

Related GAO Products:

Tables:

Table 1: Major Changes in the TAA Reform Act of 2002:

Table 2: TAA Eligibility Requirements:

Table 3: Labor's Fiscal Year 2003 TAA Performance and Goals:

Table 4: Site Selection Criteria:

Table 5: Local Workforce Areas Selected for Visits:

Table 6: Final Decisions Rendered by the U.S. Court of International 
Trade on Appealed TAA Determination Cases, Fiscal Years 1999-2004:

Table 7: TAA and NAFTA-TAA Certified Workers, Benefit Recipients, and 
Expenditures, Fiscal Years 1999-2003:

Table 8: State Training Allocations, Fiscal Years 2001-2003, and State 
Training Base Allocations, Fiscal Year 2004:

Table 9: Steps States Report They Have Taken in Response to Limited TAA 
Training Funds, Fiscal Years 2001-2003:

Table 10: Steps States Report They Have Taken or Anticipate Taking in 
Response to Limited TAA Training Funds, Fiscal Year 2004:

Table 11: Select Demographic Characteristics of Participants Exiting 
TAA Program, July 1, 2001-June 30, 2002:

Figures:

Figure 1: Average TAA Petition Processing Time, Fiscal Years 1999-2003:

Figure 2: Example of How TAA Program Delays May Leave Workers Less Time 
to Enroll in Training:

Figure 3: Increase in Individuals Receiving Training Waivers, Fiscal 
Years 1999-2003:

Figure 4: Estimated Number of TAA-Certified Secondary Workers, Fiscal 
Years 1999-2003:

Figure 5: Estimated Proportion of TAA-Certified Workers Who Are 
Secondary Workers, Fiscal Years 1999-2003:

Figure 6: Most States Will Have Their Wage Insurance Programs 
Operational by Mid-2004:

Figure 7: Estimated Number of TAA-Certified Workers, Fiscal Years 1999-
2003:

Figure 8: Number of Workers Entering TAA Training, Fiscal Years 1999-
2003:

Figure 9: Manufacturing Employment, Fiscal Years 1995-2003:

Figure 10: 37 States Place Limits on Training Costs per TAA 
Participant:

Figure 11: States Have Taken a Variety of Steps in Response to Limited 
TAA Training Funds:

Figure 12: States Use Various Funding Sources for TAA Case Management:

Figure 13: Number of States Using Supplemental Sources to Collect Data 
on Specific Employment Outcomes:

Figure 14: Percentage of Total TAA Participants in Selected States, 
Fiscal Years 2000-2002:

Abbreviations:

ATAA: Alternative Trade Adjustment Assistance: 
ES: Employment Service: 
GPRA: Government Performance and Results Act: 
HCTC: Health Coverage Tax Credit: 
IRS: Internal Revenue Service: 
NAFTA-TAA: North American Free Trade Agreement Transitional Adjustment 
Assistance: 
OMB: Office of Management and Budget: 
PART: Program Assessment Rating Tool: 
TAA: Trade Adjustment Assistance: 
TAPR: Trade Act Participant Report: 
UI: Unemployment Insurance: 
WIA: Workforce Investment Act: 
WRIS: Wage Record Interchange System:

United States Government Accountability Office:

Washington, DC 20548:

September 22, 2004:

The Honorable Charles E. Grassley: 
Chairman: 
The Honorable Max Baucus: 
Ranking Minority Member: 
Committee on Finance:
United States Senate:

Economists generally agree that international trade has benefited 
Americans in a number of ways, for example, through making a broader 
range of goods and services available. However, international trade has 
also contributed to layoffs in a range of industries, including the 
manufacture of textiles, paper products, and electronic equipment. The 
share of all United States employment that is in manufacturing has 
declined fairly steadily over the last several decades. Recently, the 
number of manufacturing employees in the United States fell by almost 
2.1 million over a 2-year period between 2000 and 2002, representing 12 
percent of the manufacturing sector. The sharp decline in manufacturing 
employment in the United States has focused attention on the costs to 
workers of increased global competition, and on federal efforts to 
assist these workers--workers who, some evidence suggests, tend to be 
older with fewer transferable skills than other dislocated workers. 
These factors may complicate trade-affected workers' transition to 
reemployment, and make federal efforts to help them reintegrate into 
the workforce especially important.

The federal government has a number of programs to assist workers who 
have been dislocated from their jobs. The primary program for workers 
dislocated from manufacturing because of international trade is the 
Trade Adjustment Assistance (TAA) program, established in 1962 and 
currently funded at about $1.3 billion annually. Under this program, 
workers may receive a variety of services, including training and 
income support while they are in training for up to 2 years after they 
exhaust their Unemployment Insurance (UI) benefits. In our previous 
reviews of the TAA program, we found weaknesses in the program's 
structure and operations. For example, the program allowed some workers 
to delay entering training for several years after being laid off, 
raising questions about the timeliness of the program's assistance. 
Partly in response to these concerns, Congress passed the Trade 
Adjustment Assistance (TAA) Reform Act of 2002. The act consolidated 
two former programs that served trade-affected workers--the TAA and the 
North American Free Trade Agreement Transitional Adjustment Assistance 
(NAFTA-TAA) programs--and made a number of key changes designed to 
expand benefits and decrease the time it takes to get workers into 
services. The law required that most of these changes take effect in 
November 2002, but it allowed some provisions to be implemented as late 
as August 2003. Among the changes, the act:

* shortened from 60 days to 40 days the time Labor is given to process 
petitions filed on behalf of groups of workers to determine their 
potential eligibility for services;

* established a deadline for workers to enroll in training, after they 
have been laid off or their petition has been approved, in order to 
maintain eligibility for extended income support payments;

* created a Health Coverage Tax Credit (HCTC) to help trade-affected 
workers who are enrolled in or have completed training, or have a 
waiver from this requirement, pay for health insurance;

* created a wage insurance benefit for workers age 50 and older, 
subsidizing the difference between the prior and new wages of some 
trade-affected workers who find reemployment quickly; and:

* expanded the eligibility criteria for secondary workers--defined as 
those who are indirectly affected by international trade, because they 
supply component parts to or perform finishing work for directly 
affected firms.

In light of recent changes to the program, you asked us to examine (1) 
how key provisions of the TAA Reform Act have affected program 
services, (2) what have been the challenges in implementing the TAA 
Reform Act's 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. To address these questions, we 
conducted a Web-based survey of the 50 states and Puerto Rico in March, 
2004, and received responses from all 50 states. We collected 
administrative data from the Department of Labor (Labor) on TAA 
petitions, participants, services, performance, and expenditures from 
fiscal year 1999 through 2003. We assessed all data for reliability and 
found them to be sufficiently reliable for the purposes of our 
reporting objectives. We conducted site visits to 5 states--Maine, 
North Carolina, Pennsylvania, Texas, and Washington. We selected these 
states according to several criteria, including recent experience with 
large numbers of TAA participants; representation of a range of 
adversely affected industries and, according to Labor officials, a 
range of experiences implementing TAA; and geographic diversity. On our 
site visits, we interviewed state officials, local service delivery 
staff, employers, and TAA program participants. We conducted our work 
between August 2003 and August 2004 in accordance with generally 
accepted government auditing standards. (See app. I for more details on 
our objectives, scope, and methodology.)

Results in Brief:

Most trade-affected workers are enrolling in services sooner than in 
prior years because of certain key provisions of the TAA Reform Act, 
but states report that the new training enrollment deadline has had 
unintended consequences for some workers. With the new 40-day time 
limit for processing petitions, Labor has reduced the average 
processing time from 107 days in fiscal year 2002, before the new time 
limit took effect, to 38 days in fiscal year 2003. In addition, 41 of 
the 50 states reported that workers are now enrolling in training 
sooner as a result of the new training enrollment deadline which 
requires workers to be enrolled in training or have a training waiver 
by the later of 8 weeks after the petition is certified or 16 weeks 
after the worker is laid off. However, states report that some workers 
have been negatively affected by the deadline. State officials told us 
that, as a result of the training enrollment deadline, some workers may 
not be enrolling in the most appropriate training. Officials reported 
that in order to meet the deadline, they feel pressured to assess 
workers more quickly and lack the time to adequately assess workers' 
training needs. Another negative effect of the deadline, states report, 
is that some potentially eligible workers are missing the deadline and 
therefore losing their eligibility for any extended income support 
beyond what is available through their UI benefits. Officials also told 
us that the deadline may provide workers with too little time to 
process the trauma of losing their jobs and to accept the need for 
training or other services. These difficulties are heightened in the 
case of large layoffs, because the volume of workers who need services 
within a very short time period overwhelms the program's capacity to 
provide them with appropriate skill assessments.

The implementation of the HCTC has increased the administrative 
workload for some local areas, while some other new provisions of the 
TAA Reform Act have been difficult for states to fully implement. 
States report that implementing the HCTC has required them to issue 
many more training waivers to TAA-eligible workers than in past years, 
and officials in most of the states we visited told us that issuing 
waivers has caused an increased administrative workload. States issued 
over 40 percent more training waivers in fiscal year 2003 than in 2002, 
according to Labor's data. State officials also told us that some new 
provisions of the Reform Act have been challenging to fully implement. 
For example, some states said it has been difficult to identify newly 
eligible secondary workers because, in some cases, trade-affected 
companies may be reluctant or find it difficult to provide lists of 
firms that supply them with component parts. The estimated percentage 
of workers covered by approved TAA petitions who are secondary workers 
increased from just over 1 percent in fiscal year 2002 to just over 2 
percent in fiscal year 2003. In addition, while officials in all of the 
states we visited said workers are interested in or will likely be 
interested in the new wage insurance provision, most states did not 
implement the provision in calendar year 2003--and of the 1,962 
approved TAA petitions in fiscal year 2003, 60 included approved 
requests for the wage insurance program. It is unclear how many workers 
will take advantage of the wage insurance benefit at this stage of 
implementation. Also, Labor, officials in one state, and employers 
found the wage insurance eligibility criteria problematic. The TAA 
statute clearly indicates that to be eligible for the wage insurance 
program, workers must lack easily transferable skills, yet find 
reemployment within 26 weeks of layoff. Officials in one state told us 
that these criteria exclude workers who can find reemployment quickly 
but at lower wages, and who therefore could be well served by a wage 
insurance benefit. In addition, after wage insurance coverage is 
requested, employers must confirm that their workers lack easily 
transferable skills, and an employer indicated that it is difficult to 
assess the skill levels of an entire group of affected workers, who may 
possess a diverse set of skills and skill levels.

Demand for TAA training increased substantially in fiscal year 2002, 
and states are exhausting their TAA funds and using other federal 
employment and training resources to serve many TAA-eligible workers. 
According to Labor's data, the number of participants entering training 
annually increased by over 50 percent to about 45,000 participants 
between fiscal years 2001 and 2002, and remained roughly steady at that 
higher level in fiscal year 2003. This increase in demand coincided 
with a sharp decline in manufacturing employment in fiscal year 2002, 
but predated the implementation of the TAA Reform Act in fiscal year 
2003. States have struggled to meet this higher demand with the TAA 
training funds available to them, even though TAA training funds 
available nationally doubled between fiscal years 2002 and 2003. 
According to our survey, 19 states temporarily discontinued enrolling 
TAA-eligible workers in training at some point between fiscal years 
2001 and 2003 because they lacked adequate training funds, and six 
states have taken this step during fiscal year 2004. Responding to the 
demand has been particularly difficult for states where officials have 
interpreted the TAA statutory provisions on training to mean that all 
TAA-eligible workers are entitled to training. However, Labor has 
issued guidance encouraging states to consider service options other 
than training for TAA-eligible workers, and many states are beginning 
to take additional steps to manage their TAA training funds. For 
example, several states we visited reported that they are more 
carefully screening workers to determine if training is the most 
appropriate strategy for them. Most states have responded to this 
heightened demand, consistent with guidance from Labor, by increasingly 
relying on other federal employment and training resources to support 
both case management and training for TAA-eligible workers. For 
example, since fiscal year 2001, 41 states have applied for federal 
grants designed to provide assistance to laid-off workers in order to 
supplement their TAA funds.

Historically, information on TAA program results has been limited, but 
Labor has taken steps to gather more complete and accurate data on the 
program. In 1999, Labor introduced a new performance measurement system 
that was designed to collect information on TAA program participants 
and their outcomes in order to track performance against national 
goals. However, in a previous report we found that some states did not 
report complete information to this system. In order to improve the 
quality of performance data, Labor revamped the performance measurement 
system in fiscal year 2001 and began requiring states to use UI wage 
records for reporting outcomes for TAA program participants. While wage 
records generally provide objective and consistent information, they do 
not contain information on all categories of workers. Most states do 
little to supplement wage record data with other data sources that may 
capture this information; only 12 of the states we surveyed reported 
that they collect outcome data beyond what is required by Labor. Labor 
completed a study of program effectiveness in 1993, but the study's 
conclusions are of limited usefulness in assessing the current program. 
Labor recently began a new 5-year study of the implementation and 
effectiveness of the TAA program, which it expects will provide more 
useful findings. Labor expects the first of several interim reports 
will be issued by mid-2005 and expects to issue the final report in 
2009.

We are recommending that Labor monitor the implementation of certain 
provisions of the TAA Reform Act that, according to officials, have 
presented implementation challenges and may have had unintended 
consequences for some workers, and if necessary, propose legislative 
changes to address these issues. Specifically, we are recommending that 
Labor assess (1) whether the new training enrollment deadline is having 
a negative impact on some workers affected by very large layoffs, and 
(2) whether the eligibility criteria for the wage insurance provision 
are resulting in denial of services to some older workers who could 
benefit from the program. In its comments on a draft of this report 
Labor did not raise any issues with our findings, conclusions or 
recommendations. Labor provided technical comments, which we 
incorporated as appropriate.

Background:

To assist workers who are laid off as a result of international trade, 
the Trade Expansion Act of 1962 created the Trade Adjustment Assistance 
program. Historically, the main benefits available through the program 
have been extended income support and training. Participants are 
generally entitled to income support, but the amount of funds available 
for training is limited by statute. For fiscal year 2004, about $1.1 
billion was appropriated for income support and about $269 million for 
training and other benefits.[Footnote 1] Labor certifies groups of 
laid-off workers as potentially eligible for TAA benefits and services 
by investigating petitions that are filed on the workers' 
behalf.[Footnote 2] Workers are eligible for TAA if they were laid off 
as a result of international trade and were involved in the production 
of an article; workers served by the TAA program have generally been 
laid off from the manufacturing sector.

Congress has amended the TAA program a number of times since its 
inception. For example, in 1974 Congress eased program eligibility 
requirements, and in 1988 Congress added a requirement that workers be 
in training to receive income support. In 1993 Congress created a 
separate North American Free Trade Agreement Transitional Adjustment 
Assistance program specifically for workers laid off because of trade 
with Canada or Mexico.[Footnote 3]

Changes Included in TAA Reform Act of 2002:

The most recent amendments to the TAA program were included in the TAA 
Reform Act of 2002 (Pub. L. No. 107-210), which was signed into law in 
August 2002. The Reform Act consolidated the former TAA and NAFTA-TAA 
programs into a single TAA program and doubled the amount of funds 
available for training annually. The act also:

* changed some administrative requirements in an effort to accelerate 
the process of enrolling workers in the program;

* increased the maximum number of weeks of income support available, to 
match the maximum number of weeks of training available;

* added two new benefits, a Health Coverage Tax Credit and a wage 
insurance provision; and:

* expanded program eligibility to include some secondary workers 
affected by trade with countries other than Canada and Mexico as well 
as more workers affected by a shift in production (see table 1).

Table 1: Major Changes in the TAA Reform Act of 2002:

Petition processing; 
Former TAA: 60-day time limit for Labor to conduct an investigation 
and issue a decision; 
Former NAFTA-TAA: 40-day time limit[A]; 
TAA under TAA Reform Act of 2002: 40-day time limit.

Extended income support; 
Former TAA: 52 weeks of extended income support available after 
exhaustion of UI benefits; 
Former NAFTA-TAA: 52 weeks of extended income support available after 
exhaustion of UI benefits; 
TAA under TAA Reform Act of 2002: 78 weeks of extended income support 
available after exhaustion of UI benefits (plus an additional 26 weeks 
for participants completing remedial training).

Training enrollment deadline; 
Former TAA: None[B]; 
Former NAFTA-TAA: Participant must be enrolled in training by the later 
of 16 weeks after separation or 6 weeks after certification to qualify 
for extended income support; 
TAA under TAA Reform Act of 2002: Participant must be enrolled in 
training or have a waiver from this requirement by the later of 16 
weeks after separation or 8 weeks after certification to qualify for 
extended income support.

Eligibility--secondary workers; 
Former TAA: Secondary workers not eligible; 
Former NAFTA-TAA: Secondary workers who supply component parts to or 
perform finishing work for a firm directly affected by trade with 
Canada or Mexico are eligible[C]; 
TAA under TAA Reform Act of 2002: Secondary workers who supply 
component parts to any firm directly affected by trade, or perform 
finishing work for a firm directly affected by trade with Canada or 
Mexico are eligible.

Eligibility--shift of production; 
Former TAA: Workers affected by shift of production to foreign 
countries not eligible; 
Former NAFTA-TAA: Workers affected by shift of production to Canada or 
Mexico are eligible; 
TAA under TAA Reform Act of 2002: Workers affected by shift of 
production to countries with which the United States has a trade 
agreement are eligible, and workers affected by shift of production to 
other countries under certain conditions.

Authorization for training expenditures; 
Former TAA: $80 million annually; 
Former NAFTA-TAA: $30 million annually; 
TAA under TAA Reform Act of 2002: $220 million annually.

Health Coverage Tax Credit; 
Former TAA: No provision; 
Former NAFTA-TAA: No provision; 
TAA under TAA Reform Act of 2002: Covers 65 percent of participants' 
health insurance premiums for qualified health plans.

Wage insurance (Alternative TAA); 
Former TAA: No provision; 
Former NAFTA-TAA: No provision; 
TAA under TAA Reform Act of 2002: Subsidizes difference between prior 
and new wages for older workers who obtain reemployment without TAA 
training. 

Source: GAO analysis.

[A] The 40-day time limit under the former NAFTA-TAA program included a 
10-day time limit for states to issue a preliminary eligibility ruling, 
followed by a 30-day time limit for Labor to make a final ruling.

[B] Prior to the Reform Act, workers could receive up to 26 weeks of 
extended income support without meeting any training enrollment 
deadline. However, to receive more than 26 weeks of extended income 
support, workers were required to file a training application by the 
later of 210 days after layoff or 210 days after petition 
certification. This 210-day deadline still applies under the current 
law.

[C] Secondary worker eligibility is not included in the statute that 
authorizes the NAFTA-TAA program. When the NAFTA-TAA program was 
created, however, the Clinton administration issued a Statement of 
Administrative Action making workers secondarily affected by trade with 
Canada or Mexico eligible for benefits and services through another 
federal program.

[End of table]

Most of the changes included in the act--including the petition-
processing time limit, the training enrollment deadline, and the 
expanded group eligibility criteria--took effect for petitions filed on 
or after November 4, 2002. Congress allowed more time for the 
implementation of the new benefit programs created by the act, giving 
Labor until August 2003 to implement the wage insurance program and 
certain components of the Health Coverage Tax Credit.

Under the current revised TAA program, eligible participants have 
access to a wider range of benefits and services than before, 
including:

Training. Participants may receive up to 130 weeks of training, 
including 104 weeks of vocational training and 26 weeks of remedial 
training (e.g., English as a second language or literacy).

Extended income support. Participants may receive up to 104 weeks of 
extended income support benefits beyond the 26 weeks of UI benefits 
available in most states. This total includes 78 weeks while 
participants are completing vocational training and an additional 26 
weeks, if necessary, while participants are completing remedial 
training. The amount of extended income support payments in a state is 
set by statute at the state's UI benefit level.[Footnote 4]

During their first 26 weeks of extended income support, participants 
must either be enrolled in training, have completed training, or have a 
waiver from this requirement; to qualify for more than 26 weeks of 
extended income support, participants must be enrolled in training. The 
TAA statute lists six reasons why a TAA participant may receive a 
waiver from the training requirement, including that the worker 
possesses marketable skills or that the approved training program is 
not immediately available.[Footnote 5] States must review participants' 
waivers at least every 30 days, and if necessary may continue to renew 
participants' waivers each month throughout the initial 26 weeks of 
extended income support.

Job search and relocation benefits. Payments are available to help 
participants search for a job in a different geographical area and to 
relocate to a different area to take a job. Participants may receive up 
to a maximum of $1,250 to conduct a job search. The maximum relocation 
benefit includes 90 percent of the participant's relocation expenses 
plus a lump sum payment of up to $1,250.

Health Coverage Tax Credit. Eligible participants may receive a tax 
credit covering 65 percent of their health insurance premiums for 
certain health insurance plans. To be eligible for the credit, trade-
affected workers must either be receiving extended income support 
payments, or they must be eligible for extended income support but are 
still receiving UI payments, or they must be recipients of benefits 
under the new wage insurance program. As a result, trade-affected 
workers who are still receiving UI rather than extended income support 
may register for the HCTC only if they are in training, have completed 
training, or have a waiver from the training requirement.[Footnote 6] 
The Internal Revenue Service (IRS) along with other federal agencies 
administers the tax credit; states are required to regularly submit to 
the IRS lists of potentially eligible TAA participants.

Wage insurance. The wage insurance program--known as the Alternative 
TAA (ATAA) program--is a demonstration project designed for older 
workers who forgo training, obtain reemployment within 26 weeks, but 
take a pay cut. Provided the participant's annual earnings at his or 
her new job are $50,000 or less, the benefit provides 50 percent of the 
difference between the participant's pre-and postlayoff earnings up to 
a maximum of $10,000 over 2 years. In order for the workers covered by 
a petition for TAA assistance to qualify for the benefit, the petition 
must include a specific request for ATAA eligibility. The petition must 
stipulate that a significant proportion of the workers covered by the 
petition are age 50 and older and that the workers lack easily 
transferable skills.

Certification Process and Eligibility Requirements:

The process of enrolling trade-affected workers in the TAA program 
begins when a petition for TAA assistance is filed with Labor on behalf 
of a group of laid-off workers. Petitions may be filed by entities 
including the employer experiencing the layoff, a group of at least 
three affected workers, a union, or the state or local workforce 
agency. The law requires Labor to complete its investigation, and 
either certify or deny the petition, within 40 days after it has 
received the petition.

Labor investigates whether a petition meets the requirements for TAA 
certification by taking steps such as contacting company officials, 
surveying a company's customers, and examining aggregate industry data. 
When Labor has certified a petition, it notifies the relevant state, 
which has responsibility for contacting the workers covered by the 
petition, informing them of the benefits available to them, and telling 
them when and where to apply for benefits.

The TAA statute lays out certain basic requirements that all certified 
petitions must meet, including that a significant proportion of workers 
employed by a company be laid off or threatened with layoff. In 
addition to meeting these basic requirements, a petition must 
demonstrate that the layoff is related to international trade in one of 
several ways. Table 2 summarizes these statutory eligibility 
requirements for the TAA program.

Table 2: TAA Eligibility Requirements:

Basic requirements (both must be satisfied): 

(1) Significant number or proportion of workers in firm or subdivision 
have been separated or are threatened with separation.

(2) Affected workers must have been employed by a company that 
produced an article.[A].

Additional requirements (one must be satisfied); 

(1) Increased imports--Imports of articles like or directly competitive 
with articles produced by the firm have increased, the sales and/or 
production of the firm has decreased, and the increase in imports has 
contributed importantly to the decline in sales and/or production and 
the layoff of workers.

(2) Shift of production--There has been a shift of production by the 
firm to another country, of an article like or directly competitive 
with the article produced by the firm, and either; 
* the country to which production was shifted is party to a free trade 
agreement with the United States; 
* the country to which production was shifted is a beneficiary under 
the Andean Trade Preference Act, the African Growth and Opportunity 
Act, or the Caribbean Basin Economic Recovery Act; or; 
* there has been or is likely to be an increase in imports of articles 
like or directly competitive with articles produced by the firm.

(3) Affected secondarily by trade--Workers must meet one of two 
criteria: 
* Supplier secondary workers--Affected firm produces and supplies 
component parts to another firm that has experienced TAA-certified 
layoffs; parts supplied to the certified firm constituted at least 20 
percent of the affected firm's production, or a loss of business with 
the certified firm contributed importantly to the layoffs at the 
affected firm; 

* Downstream secondary workers--Affected firm performs final assembly 
or finishing work for another firm that has experienced TAA-certified 
layoffs as a result of an increase in imports from or a shift in 
production to Canada or Mexico, and a loss of business with the 
certified firm contributed importantly to the layoffs at the affected 
firm.

Source: GAO analysis.

[A] Leased workers of companies under contract with a company that 
produced an article also meet this eligibility requirement.

[End of table]

If Labor denies a petition for TAA assistance, the workers who would 
have been certified under the petition have two options for challenging 
this denial. They may request an administrative reconsideration of the 
decision by Labor. To take this step, workers must cite reasons why the 
denial is erroneous according to the facts, the interpretation of the 
facts, or the law itself, and must mail their request to Labor within 
30 days of the announcement of the denial. Workers may also appeal to 
the United States Court of International Trade for judicial review of 
Labor's denial. Workers must appeal a denial to the U.S. Court of 
International Trade within 60 days of either the initial denial or a 
denial following administrative reconsideration by Labor. (See app. II 
for a summary of final decisions made by the U.S. Court of 
International Trade since fiscal year 1999 on TAA appeals.)

Integration with One-Stop System and Workforce Investment Act Program:

The Workforce Investment Act (WIA) of 1998 encouraged greater 
coordination between the TAA program and other federal employment and 
training programs. WIA required the use of a consolidated service 
delivery structure--called the one-stop center system--and mandated 
that services for about 17 categories of federal employment and 
training programs, including TAA, be accessible through this system. 
These programs must ensure that certain services, such as eligibility 
determination and assessment, are available through at least one one-
stop center in each local area.[Footnote 7]

The WIA dislocated worker program, also a mandated partner in the one-
stop delivery system, is the federal government's primary employment 
and training program designed for laid-off workers. Funded at almost 
$1.5 billion in fiscal year 2004, the dislocated worker program 
includes two components: formula funds that Labor annually distributes 
to states (about $1.2 billion) and the national reserve (about $300 
million). Labor uses part of the national reserve to award national 
emergency grants to states, based on their requests throughout the 
year, to help them respond to disasters and major layoffs. Labor also 
uses part of the national reserve to award national emergency grants 
specifically to serve trade-affected workers who are also eligible for 
the TAA program.[Footnote 8]

Most Workers Are Enrolling in Services Sooner, but Some May Be 
Negatively Affected by the Enrollment Deadline:

States report that most trade affected workers are enrolling in 
services sooner than in prior years because of some of the key 
provisions of the TAA Reform Act, but the new training enrollment 
deadline has had unintended consequences for some workers. The new 40-
day time limit for Labor to process petitions has enabled workers to 
receive services more quickly after being laid off. In addition to 
setting the new petition processing time limit, the act also 
established a new training enrollment deadline for workers, and states 
reported to us that most workers are now enrolling in training sooner 
as a result of this deadline. However, states reported that some 
workers have been negatively affected by the deadline. For example, 
some workers may not enroll in the most appropriate training or may 
miss the deadline and lose extended income support. These problems are 
heightened in the case of large layoffs, some states reported.

Training Enrollment is Accelerated by Certain Provisions of the Reform 
Act:

Most workers are enrolling in TAA services sooner than in prior years 
because of two key provisions of the TAA Reform Act, the new petition-
processing time limit and the new training enrollment deadline. The 
Reform Act reduces by one-third, from 60 days to 40 days, the time 
period in which Labor must review a petition. The purpose of the 
reduced time frame is to enable workers to receive benefits and 
services more quickly. In the past, Labor sometimes had difficulty 
meeting the 60-day time limit for petition processing. But it reduced 
the average processing time from 107 days in fiscal year 2002, before 
the new time limit took effect, to 38 days in fiscal year 2003 (see 
fig. 1). Also, Labor improved the percentage of petitions processed in 
40 days or less from 17 percent in fiscal year 2002 to 62 percent in 
fiscal year 2003 after the act went into effect.[Footnote 9] According 
to a Labor official, management changes helped the agency reduce the 
average petition-processing time. For example, Labor developed a step-
by-step timeline for staff, laying out when they must complete specific 
steps in the petition review process in order to meet the 40-day 
requirement. In addition, Labor increased the number of petition 
investigators by adding more contractors. Officials also have plans to 
reengineer the petition reviews in part to expedite the 
process.[Footnote 10]

Figure 1: Average TAA Petition Processing Time, Fiscal Years 1999-2003:

[See PDF for image]

[End of figure]

Workers are also enrolling in services sooner because of the new 
training enrollment deadline.[Footnote 11] The deadline requires 
workers to be enrolled in training or have a training waiver by the 
later of two dates: either 16 weeks after being laid off or 8 weeks 
after the petition is certified. Workers who fail to meet this deadline 
become ineligible to receive extended income support benefits. Forty-
one of the 50 states surveyed reported that workers are now enrolling 
in training sooner as a result of this deadline. Most states also 
reported that the deadline accelerates the processes of determining 
eligibility and notifying and assessing workers. Prior to the TAA 
Reform Act, workers were required to be in training or have a training 
waiver in order to start collecting extended income support benefits 
after exhausting their UI eligibility--26 weeks in most states. Now, 
because of the new deadline, workers may be required to either be in 
training or possess a training waiver while still collecting regular UI 
benefits.

Training Enrollment Deadline May Have Unintended Consequences for Some 
Workers:

Although the new training enrollment deadline gets most workers into 
training sooner, it has also had unintended consequences. For example, 
officials from the majority of states reported that as a result of the 
training enrollment deadline, some workers might not be enrolling in 
the most appropriate training because less time is available to assess 
workers' training needs. In order to meet the training enrollment 
deadline, officials may feel pressured to assess workers more quickly. 
State officials in some of the states we visited told us that some TAA 
program participants are not able to carefully select training programs 
because of rushed assessments.

Another negative effect of the new time limit is that some workers miss 
the deadline and lose their eligibility for extended income support. 
Thirty-six states report that workers at least occasionally miss the 
deadline and consequently lose their eligibility for extended income 
support beyond what is available through UI benefits. A local official 
from North Carolina said that some certified workers in the local area 
who would like to enter the TAA program miss the deadline, either 
because they do not come in for TAA enrollment until after the deadline 
has passed or they come into the one-stop before the deadline but do 
not leave themselves enough time to enroll in training or obtain a 
training waiver. For example, this official told us that in the case of 
a recent layoff of 120 workers, 20 workers did not come into the one-
stop until after their deadline had passed. Other officials in North 
Carolina said that workers who lose their eligibility for extended 
income support generally are not allowed to enter training, because 
state and local officials are concerned that with no other source of 
income, workers will drop out of training.

The ability of workers to meet the new training enrollment deadline may 
be negatively affected by delays in program operations. These delays, 
as well as delays by workers themselves in registering for TAA 
services, may contribute to some workers having insufficient time for 
an assessment of their training needs or missing the training 
enrollment deadline. One of the program operation delays occurs as a 
result of the time it takes Labor to notify states about certification 
decisions. After Labor has certified a petition, it waits several days 
before informing the state, to give relevant members of Congress 
advance notification. Twenty-one states reported that the time it takes 
Labor to notify states about certifications at least occasionally 
causes workers to miss the deadline. Another delay may occur as a 
result of the time it takes for states to receive lists of affected 
workers from companies. After a state receives notification from Labor 
of a certification, it obtains from the company a list of the workers 
affected by the certified layoff and sends a letter to these workers 
informing them of their potential eligibility for TAA. Sometimes 
companies are unable or unwilling to provide these lists in a timely 
manner. In these cases, some workers miss the deadline because they 
don't receive the notification soon enough or may have insufficient 
time for an assessment of their training needs. Twenty-seven states 
reported that the time it takes states to receive the list of affected 
workers at least occasionally causes workers to miss the deadline. In 
addition to these program delays, laid-off workers may have 
insufficient time for assessment or miss their enrollment deadline 
because of their own delays in seeking assistance. Some state and local 
officials in the sites we visited told us it often takes time for 
dislocated workers to process the emotional shock of being laid off and 
accept the need for assistance, which may cause them to miss the 
training enrollment deadline. Thirty-seven states reported on our 
survey that workers' delays in reporting to one-stop centers for 
counseling at least occasionally cause them to miss the deadline and 
lose their eligibility for extended income support.

Figure 2 illustrates the program delays, using the timeline of an 
actual layoff that began in December 2002 in one of the states we 
visited. In this example, Labor notified the state 6 days after 
certifying the petition (step 5). Almost another month elapsed before 
the state received a complete list of affected workers from the company 
(step 6). As a result, by the time the state mailed notification 
letters, affected workers had, at most, 3 weeks to register for 
services and enroll in training or receive a training waiver.

Figure 2: Example of How TAA Program Delays May Leave Workers Less Time 
to Enroll in Training:

[See PDF for image]

[End of figure]

The delays described above are heightened in the case of large layoffs, 
because the volume of workers who need services within a very short 
time period overwhelms the program's capacity to provide workers with 
appropriate assessment. Processing a large number of affected workers 
quickly may be especially challenging for program administrators in 
rural areas, which do not have many staff to perform case management. 
Ten states reported that processing large layoffs often or very often 
causes workers to miss the training enrollment deadline, and an 
additional 9 states said processing large layoffs occasionally causes 
workers to miss the deadline. For example, Texas officials told us that 
when dealing with very large layoffs, states may need more time to 
assess and process workers than is allowed by the new training 
enrollment deadline. Officials in a rural area in Maine that 
experienced a large trade-related layoff said that it was challenging 
to get all affected workers to register for training within the 
deadline. This area hired additional workers to perform outreach to 
affected workers and encourage them to register for services.

In an effort to prevent workers from missing the new deadline and 
losing eligibility for extended income support, some officials are 
issuing training waivers to workers who reach their deadlines without 
having enrolled in a training program.[Footnote 12] For example, 
officials in Maine reported that during a large layoff in a rural area, 
local staff granted mass waivers to workers so they would meet the 
deadline and preserve their extended income support benefits. According 
to a Maine official, staff in this rural area could not provide 
appropriate assessment within the training enrollment deadline to all 
affected workers, so waivers were necessary to prevent workers from 
losing eligibility for extended income support.

New Health Care Provision Has Caused Increased Administrative Workload 
for Some Officials, While Other Provisions Have Been Difficult to Fully 
Implement:

Officials in some states and local areas reported an increased 
administrative workload associated with issuing more training waivers, 
primarily to accelerate Health Coverage Tax Credit enrollment, and 
noted that some other new provisions in the TAA Reform Act were 
difficult to fully implement. State officials are issuing more training 
waivers than in the past, in order to ensure that workers are able to 
access the HCTC after being laid off, and some officials told us that 
this increase in waivers has caused a significant administrative 
workload. States also reported that the provision that extends TAA 
eligibility to secondary workers and the one that provides a wage 
insurance benefit have been challenging to fully implement.

Most States Are Issuing More Waivers to Enable Workers to Receive HCTC:

Almost all states reported issuing an increased number of training 
waivers since the TAA Reform Act took effect. Three states reported in 
our survey that before the Reform Act took effect they issued training 
waivers to over 50 percent of TAA-eligible workers. Since the Reform 
Act took effect, 29 states have issued waivers to over 50 percent of 
eligible workers, and 15 of these issued waivers to over 75 percent of 
eligible workers. Labor's national data indicate that overall states 
issued over 40 percent more training waivers in fiscal year 2003 than 
in 2002 (see fig. 3).

Figure 3: Increase in Individuals Receiving Training Waivers, Fiscal 
Years 1999-2003:

[See PDF for image]

[End of figure]

Most states reported to us that the reason they have issued more 
training waivers is to ensure that workers are eligible for the 
HCTC.[Footnote 13] Thirty-eight states reported on our survey that to a 
great or very great extent, they have issued more training waivers 
since the TAA Reform Act took effect in order to allow workers to 
qualify for the HCTC. To activate eligibility for the HCTC, even while 
they are still receiving UI benefits, workers must meet the eligibility 
criteria for extended income support, including the requirement that 
they must be in training, have completed training or have a training 
waiver. Officials in all the states we visited told us that many state 
and local officials are issuing waivers so that workers can quickly 
become eligible for the HCTC. Officials in two of these states noted 
that workers need waivers to enroll in the HCTC even before they reach 
their training enrollment deadline. Furthermore, officials in two other 
states told us that workers are receiving waivers to allow them to 
enroll in the HCTC even before these workers exhaust their UI benefits.

According to officials in four of the five states we visited, issuing 
waivers to enable workers to qualify for the HCTC causes a significant 
administrative workload. The administrative workload associated with 
issuing training waivers is considerable, in part because training 
waivers have to be issued individually and must be reviewed monthly. 
Officials in one state noted that the workload associated with issuing 
waivers is especially burdensome during a very large layoff, when a 
large volume of workers must be processed. Furthermore, the increased 
administrative workload associated with issuing and reviewing training 
waivers may be compounded for states that choose to issue extensions to 
workers whose waivers expire before they exhaust their UI benefits.

Despite officials' efforts to ensure that workers are eligible for the 
HCTC, the actual rate of HCTC participation is difficult to determine 
because reliable data on the total number of individuals actually 
eligible for HCTC are not available. For example, according to an 
October 2003 survey for the IRS, some of those identified as 
potentially eligible for, but not enrolled in HCTC, were in fact 
ineligible because they had other coverage, such as Medicare or through 
a spouse's employer, that made them ineligible for the tax credit. 
Although there are no reliable national data on the HCTC participation 
rate, officials in states we visited told us that workers might not be 
taking advantage of the HCTC because eligible individuals lack 
affordable health care insurance options from which to choose. 
Furthermore, officials in one state also noted that some workers may 
not take advantage of the HCTC because they cannot afford to pay their 
entire health care insurance premium while they wait to enroll in the 
HCTC.

States Reported Difficulties Implementing Other New Provisions:

States reported having difficulties with the implementation of two 
other reform provisions--the provision that extends TAA eligibility to 
an additional category of secondary workers and the new wage insurance 
provision.

Secondary Workers Provision:

The TAA Reform Act extended eligibility to a new category of secondary 
workers--workers who supply parts to any company directly affected by 
trade, not just those affected by trade with Canada or Mexico, as was 
true under the previous NAFTA-TAA program--and the number of secondary 
workers covered by certified TAA petitions increased somewhat in fiscal 
year 2003.[Footnote 14] However, it is unclear whether the number of 
secondary workers certified after the TAA Reform Act represents a small 
or large proportion of all secondary workers who are now potentially 
eligible for the TAA program, particularly because most states reported 
difficulties in identifying secondary workers and only some have 
increased their efforts to do so. According to Labor's data, the 
estimated number of secondarily affected workers covered by approved 
TAA petitions increased from about 3,600 workers in fiscal year 2002, 
before the Reform Act took effect, to about 4,700 workers in fiscal 
year 2003 (see fig. 4).

Figure 4: Estimated Number of TAA-Certified Secondary Workers, Fiscal 
Years 1999-2003:

[See PDF for image]

Note: The data used for this figure are estimates of secondary workers 
certified as eligible for TAA, based on estimates of the number of 
affected workers submitted by companies at the time TAA petitions are 
filed with the Department of Labor. At the time petitions are 
submitted, companies may not know exactly how many workers will be 
affected. We use these estimates because the Department of Labor does 
not collect data on the number of workers ultimately certified. 
Furthermore, because the TAA Reform Act took effect for workers 
certified under petitions filed on or after November 4, 2002, data for 
fiscal year 2003 may include some secondary workers who were certified 
from October 1, 2002 to November 3, 2002 under the previous eligibility 
criteria.

[End of figure]

Secondary workers have also increased as a proportion of all TAA-
certified workers, from about 1 percent in fiscal year 2002 to about 2 
percent in fiscal year 2003 (see fig. 5). However, the total number of 
secondary workers who are potentially eligible for the TAA program 
under the new eligibility guidelines is not known. As a result, it is 
unclear what proportion of secondary workers potentially eligible for 
services have been certified under the Reform Act.

Figure 5: Estimated Proportion of TAA-Certified Workers Who Are 
Secondary Workers, Fiscal Years 1999-2003:

[See PDF for image]

Note: These percentages are percentages of all workers certified under 
both the TAA and NAFTA-TAA programs, although prior to the TAA Reform 
Act, secondary workers were eligible for services only under the NAFTA-
TAA program. Also, the data used for this figure are estimates of 
secondary workers and total workers certified as eligible for TAA, 
based on estimates of the number of affected workers submitted by 
companies at the time TAA petitions are filed with the Department of 
Labor. At the time petitions are submitted, companies may not know 
exactly how many workers will be affected. We use these estimates 
because the Department of Labor does not collect data on the number of 
workers ultimately certified.

[End of figure]

States reported facing challenges in identifying secondary workers. 
More than half of all states reported having at least some difficulty 
identifying secondarily affected workers. States reported using a range 
of methods to identify secondary workers eligible for the TAA program. 
For example, according to our survey, states are most likely to 
identify secondary workers by asking trade-affected employers for lists 
of their suppliers or finishers or by asking employers if their layoff 
was as a result of losing business from other firms that may have been 
trade affected. However, officials in most of the states we visited 
told us that some trade-affected employers are reluctant or find it 
difficult to provide the names of suppliers that may also be affected 
by their shutdown or reduced production. For example, officials in 
North Carolina told us that employers are sometimes hesitant to share 
this information because they do not want their suppliers to know that 
they are having financial difficulties. Also, officials in Maine told 
us that smaller employers may find it difficult to provide information 
on their suppliers or finishers because they do not have this 
information readily available. In addition, some trade-affected 
employers may no longer be in operation or may be difficult to contact. 
None of the state officials we talked with had developed procedures to 
identify workers in other states who are secondarily affected by 
layoffs in their own states--so workers in one state who are 
secondarily affected by a trade-related layoff in another state might 
never learn they may qualify for TAA services. Labor has also not 
developed a strategy to assist states in identifying workers who are 
secondarily affected by a layoff in a different state.

More states are making significant efforts to identify secondary 
workers now than in the past, but this number remains relatively small. 
While only 5 states reported on our survey that they sought to identify 
eligible secondary workers to a great extent prior to the TAA Reform 
Act, 13 states reported that since the Reform Act took effect, they 
have sought to identify secondary workers to a great extent.

Wage Insurance Provision:

Officials in all of the states we visited told us either that workers 
have expressed an interest in or they expect workers to be interested 
in the new Alternative TAA program--a 5-year demonstration project 
providing a wage insurance subsidy to older workers who find 
reemployment quickly but at a lower wage. Most states also reported 
having difficulty implementing this new program. Thirty-eight states 
reported that they had at least some difficulty implementing the new 
wage insurance provision. One of the most commonly reported problems 
was the difficulty of developing new payment systems for issuing 
workers' monthly checks. For example, an official in one state we 
visited told us that the state's existing UI payment system, which is 
used to issue payments to wage insurance beneficiaries, could not be 
readily modified to issue payments to wage insurance beneficiaries. 
Furthermore, an official from another state told us the state's current 
UI payment system program prohibits it from issuing checks to 
individuals identified in the system as employed. As a result, the 
state uses an off-line payment system to issue wage insurance checks. 
States also reported that a lack of guidance from Labor on this new 
provision hampered their efforts to implement it. Labor did not provide 
states with formal guidance on how to implement the provision until 
August 6, 2003, the same day that workers were first able to apply for 
the wage insurance program.[Footnote 15]

In addition, some officials and employers found the wage insurance 
eligibility criteria problematic. The TAA statute clearly indicates 
that for a group of workers to be certified as eligible for the wage 
insurance program, the workers must lack easily transferable skills and 
a significant number of the workers must be age 50 or over. Petitioners 
must apply for wage insurance coverage when the petition is submitted 
to Labor, and as part of the investigation process, employers must 
confirm that their workers lack easily transferable job skills. The TAA 
statute also clearly states that to be individually eligible for wage 
insurance payments, workers must obtain reemployment within 26 weeks of 
layoff and may not receive TAA-funded training. According to Labor, it 
has been difficult to implement the wage insurance provision because of 
eligibility criteria that include the requirement that workers must 
lack easily transferable job skills. As a result of these eligibility 
requirements, according to Labor, the only workers who are likely to 
qualify for payments are those who take low-skill jobs at significant 
pay cuts, and for whom the $10,000 maximum subsidy falls far short of 
compensating them for their wage loss. On the other hand, some workers 
who have some transferable skills, can find jobs paying closer to their 
prelayoff wage, and need only temporary financial assistance may be 
denied access to the program. According to Labor, most denied wage 
insurance requests result from failure to meet this eligibility 
requirement. Officials in one state and employers in two other states 
also found the wage insurance eligibility criteria problematic. For 
example, officials in one state we visited told us that the eligibility 
criteria requiring workers to lack transferable job skills yet still 
find employment exclude workers who can find reemployment quickly but 
at lower wages, and who therefore could be well served by a wage 
insurance benefit. In another case, an employer told us that several 
administrative workers were laid off because of a plant closure and 
were able to find new jobs that required the same job skills, but at a 
much lower pay level because they no longer had job seniority. These 
workers could have benefited from the program, according to their 
employer, but were denied the subsidy because they had transferable 
skills. In addition, a state official we visited reported that an 
employer found that it was difficult to assess the skill levels of an 
entire group of affected workers who often possess a diverse set of 
skills and skill levels.

At this stage of implementation, it is unclear how many workers will 
take advantage of the wage insurance benefit. Most states did not fully 
implement their wage insurance programs in calendar year 2003, and some 
do not expect to have their systems implemented until September 2004. 
Only 19 states implemented their wage insurance programs during 2003; 
most of the remaining states have implemented or expect to implement 
their programs during 2004 (see fig. 6). In addition, it is unknown how 
many workers are currently utilizing wage insurance benefits. Of 1,962 
TAA petitions approved during fiscal year 2003, 60 included approved 
requests for the wage insurance program[Footnote 16]--but at the time 
we conducted our data collection, Labor's Division of Trade Adjustment 
Assistance had no data on the number of older workers enrolled in the 
wage insurance program. Labor is now collecting data on the number of 
workers enrolled in the wage insurance program and will assess the 
implementation issues associated with the wage insurance provision.

Figure 6: Most States Will Have Their Wage Insurance Programs 
Operational by Mid-2004:

[See PDF for image]

Note: This figure is based on responses from 47 states. Three states 
were unable to provide this information.

[End of figure]

Demand for TAA Training Has Increased, and States Have Responded by 
Supplementing Limited TAA Funds with Other Federal Resources:

Demand for TAA services has increased in recent years, and states have 
responded by using other federal resources to supplement available TAA 
funds. States have struggled to meet the higher demand with the TAA 
resources available to them, and some states have temporarily 
discontinued enrolling TAA-eligible workers in training, partly because 
of funding shortfalls. A perception that all TAA-eligible workers are 
entitled to training has contributed to problems with managing TAA 
training funds. However, Labor has encouraged states to take various 
steps to manage their limited TAA resources more effectively and to 
avoid treating training as the best option for all participants, and 
many states have taken steps to control their TAA training expenditures 
through efforts such as a more careful screening of workers' training 
needs. Most states' primary response to the increased demand for 
training has been to supplement their TAA funds with other federal 
resources, although some barriers remain to the integration of TAA with 
other federal programs.

Demand for TAA Services Increased during a Period of Manufacturing Job 
Loss, and States Have Struggled to Meet This Demand with Available TAA 
Funds:

Demand for TAA assistance increased substantially between fiscal years 
2001 and 2002, as measured by the estimated number of workers certified 
and the number of workers entering training.[Footnote 17] After 
increasing in fiscal year 2002, the number of workers certified and the 
number of workers entering training did not experience a further 
substantial increase in fiscal year 2003. According to Labor's data, an 
estimated 270,000 workers were certified as eligible for TAA services 
in fiscal year 2002, a roughly 65 percent increase from 2001 and the 
largest number in any year since at least fiscal year 1995. The 
estimated number of certified workers then fell to about 200,000 in 
fiscal year 2003 (see fig. 7).

Figure 7: Estimated Number of TAA-Certified Workers, Fiscal Years 1999-
2003:

[See PDF for image]

Note: The data used for this figure are estimates of the number of 
workers certified as eligible for TAA, based on estimates of the number 
of affected workers submitted by companies at the time TAA petitions 
are filed with the Department of Labor. At the time petitions are 
submitted, companies may not know exactly how many workers will be 
affected. We use these estimates because the Department of Labor does 
not collect data on the number of workers ultimately certified. These 
estimates include workers certified as eligible under either the TAA or 
the NAFTA-TAA program, but workers certified under both programs are 
counted only once in our analysis. This method differs from the one 
used in an earlier report.

[End of figure]

Similarly, the number of eligible workers entering training annually 
increased in fiscal year 2002 to about 45,000, a 51 percent increase 
over fiscal year 2001 (see fig. 8).[Footnote 18]

Figure 8: Number of Workers Entering TAA Training, Fiscal Years 1999-
2003:

[See PDF for image]

Note: These data are underestimates of the total numbers of workers 
entering training, because some states did not capture all workers 
entering training in the data they submitted to Labor.

[End of figure]

The increase in program demand in fiscal year 2002 coincided with a 
sharp decline in manufacturing employment that preceded the 
implementation of the TAA Reform Act of 2002. After having been 
relatively steady since 1995, manufacturing employment began to decline 
in 1999, and the steepest decline occurred between fiscal years 2001 
and 2002--from about 16.8 million to about 15.5 million employees, 
almost an 8 percent drop (see fig. 9). According to the Congressional 
Budget Office, increased competition from imports is at least partially 
responsible for this decline in manufacturing employment, coupled with 
the recession in 2001 and other factors such as productivity 
improvements and reduced demand for manufactured goods. The increase in 
demand for TAA services may be more directly linked to the decline in 
manufacturing employment, insofar as it was related to international 
trade, than to the TAA Reform Act of 2002. While demand for TAA 
services increased substantially during fiscal year 2002, most 
provisions of the TAA Reform Act of 2002 did not take effect until 
early in fiscal year 2003.

Figure 9: Manufacturing Employment, Fiscal Years 1995-2003:

[See PDF for image]

[End of figure]

Many states report that available TAA training funds are not sufficient 
to meet the increased demand for services. Most states anticipate that 
in fiscal year 2004 they will have difficulties meeting the demand for 
TAA training with TAA training funds alone--even though the amount of 
funds available nationally for TAA training was doubled from $110 
million to $220 million between fiscal years 2002 and 2003. According 
to our survey, 35 states expect that available TAA training funds for 
fiscal year 2004 will not cover the amount they will obligate and spend 
for TAA-eligible workers during the fiscal year. Eighteen states 
estimate this gap at over $1 million.

A factor that has contributed to the difficulty states face in meeting 
increased demand is the perception that training is an entitlement for 
TAA-eligible workers. According to the TAA statute, a TAA-eligible 
worker is entitled to training if six training approval criteria are 
met, including the requirements that there is no suitable employment 
available for the worker and that the training is available at a 
reasonable cost.[Footnote 19] These criteria give states some 
discretion in determining which TAA-eligible workers should receive 
training. However, officials in four of the five states we visited said 
training has historically been viewed as an entitlement for the 
majority of TAA-eligible workers and that this perception persists 
among some case managers and unions. For example, an official in one 
state said some case managers responsible for the TAA program tend to 
approve training whenever a certified worker requests it, because they 
think these workers are entitled to training. This view may complicate 
efforts to manage limited TAA training funds. Two officials we talked 
with said training is seen as an entitlement because suitable 
employment has been defined through regulation as employment paying at 
least 80 percent of a worker's prelayoff wages. Most TAA-eligible 
workers, according to one of these officials, have high prelayoff wages 
but job skills that don't readily transfer to a new job, so they would 
need training to obtain employment paying 80 percent of their prelayoff 
wages.

Partly in response to the limited TAA training funds available to meet 
the demand for training, some states have temporarily discontinued 
enrolling TAA-eligible workers in training for periods of time. 
Nineteen states reported that, at some point between fiscal years 2001 
and 2003, they temporarily discontinued enrolling TAA-eligible workers 
in training because they lacked adequate TAA training funds.[Footnote 
20] Six states reported that they have taken this step during fiscal 
year 2004. These periods of enrollment deferral may make it more 
difficult for workers to complete their training programs. 
Pennsylvania, for example, stopped enrolling newly eligible workers in 
training for a 3-month period during fiscal year 2003 following more 
than a year of unusually high demand for TAA services. Workers seeking 
training during this period were given training waivers so they could 
continue to collect extended income support. When the state received 
additional TAA training funds from Labor, it encouraged these workers 
to register for training and many did so. However, those workers who 
enrolled in training had used up 3 months of extended income support 
payments while waiting for training funds to become available. As a 
result, they had fewer months of income support remaining to complete 
their training programs, and officials are concerned that they could be 
forced to drop out of their programs when they run out of extended 
income support payments.

Since 2002, Labor has taken several steps intended to help states 
better manage their TAA training resources at a time of increased 
demand. Labor has encouraged states to put more emphasis on up-front 
assessment of workers' employment and training needs, so they can 
provide workers with job search assistance rather than long-term 
training when appropriate. Also, Labor has changed its approach to 
distributing TAA training funds among the states. In the past, states 
requested TAA training funds from Labor throughout the fiscal year as 
their needs arose. In fiscal year 2004, for the first time, Labor 
allocated a portion of TAA training funds among the states according to 
a formula. It allocated 75 percent of available TAA training funds 
among the states at the beginning of the fiscal year, based on states' 
historical training allocations and historical number of 
participants,[Footnote 21] and held the remaining 25 percent in reserve 
to help states that experience large and unanticipated trade-related 
layoffs. Labor's goals in developing this new allocation approach were 
to give states a better idea of the training resources available to 
them, so they could more effectively plan for and budget their training 
expenditures, and to ensure that funds are distributed among states 
according to their needs. (App. IV contains information on the training 
funds received by each state in fiscal years 2001 through 2003, and 
each state's fiscal year 2004 formula allocation.) Finally, Labor has 
encouraged states to obligate the TAA training funds they receive in a 
fiscal year only for training costs that will actually be incurred 
during that fiscal year, rather than for the full costs of training 
programs that span multiple fiscal years. One of the main goals of this 
effort, according to Labor officials, is to discourage states from 
tying up current year funds for future training costs that may not be 
incurred if workers drop out of training.

Many states are now making efforts to more carefully manage their TAA 
training expenditures. More than half the states have developed new 
guidelines for enrolling participants since fiscal year 2001, including 
21 that have taken this step during fiscal year 2004. Four of the five 
states we visited told us that they are making an effort to have case 
managers more carefully assess whether training is the most appropriate 
strategy for each TAA-eligible worker. Also, many states report that 
since 2001 they have tried to control the amount of training funds 
expended per TAA-eligible worker. Almost half the states have tried to 
control training costs by enrolling TAA-eligible workers in shorter-
term training. States are also reducing the maximum amount that may be 
spent on training for each TAA-eligible worker. According to our 
survey, 37 states have established a cost limit on the amount that may 
be spent on training for each TAA participant, ranging from $3,500 to 
$25,000 (see fig. 10). Nine of these states reduced their cost limits 
between fiscal years 2001 and 2003 as a way to manage their TAA 
training funds, and 6 states have taken this step during fiscal year 
2004. For example, Pennsylvania reduced its cost limit per TAA 
participant from $20,000 to $16,000 during fiscal year 2003, as part of 
its efforts to control costs.

Figure 10: 37 States Place Limits on Training Costs per TAA 
Participant:

[See PDF for image]

[End of figure]

About half the states reported that since 2001 they have changed their 
approach to obligating TAA training funds and are now obligating 
current year funds only for current year training costs. Twenty-three 
states reported that they have taken this step in fiscal year 2004 
alone. (See fig. 11 for the number of states that have taken the steps 
discussed above. See app. V for a detailed listing of steps taken by 
each state.)

Figure 11: States Have Taken a Variety of Steps in Response to Limited 
TAA Training Funds:

[See PDF for image]

Note: States could have taken a particular step both at some point 
between fiscal years 2001 and 2003 and during fiscal year 2004.

[End of figure]

States Are Using Other Federal Funds to Supplement Case Management and 
Training for TAA-Eligible Workers:

In addition to making changes in how they manage their TAA funds, 
states have also been turning to other federal resources to help 
provide case management and training to TAA-eligible workers. Labor has 
encouraged states to combine TAA with other federal programs to serve 
TAA-eligible workers, through written guidance and a series of regional 
forums for state officials.[Footnote 22] In response to limited TAA 
funds, almost all states--46--reported on our survey that they have 
been co-enrolling TAA participants in the WIA program for job search or 
training since 2001. States are also increasingly using WIA national 
emergency grant funds to provide services, including training and case 
management, to trade-affected workers.[Footnote 23] The amount of 
national emergency grant funds awarded annually to states specifically 
to serve TAA-eligible workers more than doubled from about $50 million 
per year in fiscal years 2001 and 2002 to about $120 million in fiscal 
year 2003.[Footnote 24]

Use of Other Federal Resources to Supplement TAA Case Management Funds:

States use several federal funding sources to support case management 
for TAA-eligible workers, and increasingly are relying on WIA resources 
for this purpose. States may use their TAA administrative funds--15 
percent of their TAA training formula allocations--for case management, 
but most states we visited said TAA administrative funds were not their 
main funding source for TAA case management. Only 12 states reported 
that they distribute TAA administrative funds to local areas to support 
case managers working directly with TAA participants. In most of the 
states we visited, officials told us that state Employment Service (ES) 
staff members have historically been the primary providers of direct 
case management services to trade-affected workers, and most states 
also told us that Wagner-Peyser grant funds have been the main funding 
source for these services.[Footnote 25] Several states told us that in 
recent years, they have increased their reliance on WIA to provide case 
management to TAA-eligible workers, and in the majority of states 
nationwide WIA and ES staff are now the primary providers of case 
management services including assessment of workers' interests and 
skills, recommendation of training programs, and follow-up with workers 
during training. Officials in two states said they are relying on WIA 
to support case management for TAA-eligible workers partly in order to 
serve the increased number of workers eligible for the program. 
Officials in two other states said they are using WIA case managers to 
help meet their goal of more carefully assessing TAA-eligible workers' 
training needs, because these case managers have experience with this 
type of assessment.

Most states are combining Wagner-Peyser funds, TAA administrative 
funds, and different categories of WIA funds to support TAA case 
management (see fig. 12).[Footnote 26] Most states--38--reported using 
three or more different funding sources for TAA case management. Just 
four states reported that they relied exclusively on a single funding 
source; two said they used only Wagner-Peyser funds, and two said they 
used only TAA administrative funds.

Figure 12: States Use Various Funding Sources for TAA Case Management:

[See PDF for image]

[End of figure]

Officials from several local areas we visited said that within their 
local areas, they are increasingly taking the same approach to serving 
all dislocated workers, regardless of the programs in which they are 
participating. In a local area in Maine, for example, all case managers 
at the one-stop center--whether state ES or local WIA staff--have been 
cross-trained on the TAA and WIA programs. Any case manager can serve 
any dislocated worker, and dislocated workers receive the same case 
management services regardless of whether they are enrolled in the TAA 
program or the WIA dislocated worker program. A one-stop center in 
North Carolina that we visited supports its TAA specialist, an ES staff 
member, through several funding sources, including Wagner-Peyser grant 
funds, local WIA funds, national emergency grant funds, and TAA 
administrative funds. This staff member serves the TAA-eligible workers 
who come to the one-stop center, as well as some dislocated workers who 
are enrolled in WIA, and provides each one with similar case management 
services. In another local area in Pennsylvania, trade-affected workers 
initially meet with an ES staff member who determines their TAA 
eligibility and provides an orientation to the benefits available 
through the TAA program. They complete a set of case management 
activities, including assessment and development of a training plan, 
which is provided by a combination of ES and local WIA staff members 
and is required of all dislocated workers.

Two local areas we visited that had recently experienced large trade-
related layoffs relied on WIA's national emergency grant funds to 
support case management services for TAA-eligible workers. A local area 
in North Carolina, for example, established a temporary one-stop center 
in a plant that was shut down as a result of trade, and used a portion 
of its national emergency grant funds to hire temporary ES staff 
members to help operate this center. A local area in Maine used some of 
its national emergency grant funds to temporarily hire peer support 
workers from among the workers affected by the trade-related layoff. 
These peer support workers provided a range of services, including 
outreach to affected workers, counseling, and skill assessment. An 
official told us that affected workers are more likely to trust peer 
support workers than other case managers because they feel comfortable 
talking with a colleague who has been through the same layoff 
experience.

Use of WIA to Supplement TAA Training Funds:

In addition to providing case management for TAA-eligible workers, some 
states also use WIA funds to supplement TAA training funds, and often 
use the same lists of training providers for TAA as for WIA 
participants. For example, North Carolina has encouraged its local 
areas to use their WIA funds whenever possible to support the costs of 
TAA-eligible workers' training. State officials feel their TAA training 
allocation is inadequate to serve the large number of trade-affected 
workers in the state. A local area in Texas reported that it sometimes 
combines TAA and WIA funds to pay for a TAA-eligible worker's training, 
for example, when the worker's training program costs more than the 
state's cost limit for TAA training. Three states we visited also use 
national emergency grant funds to support training for TAA 
participants. According to our survey, 41 states have applied for 
national emergency grant funds to supplement their TAA training funds 
since 2001. In most states, workers are generally choosing from the 
same list of training providers whether they are TAA or WIA 
participants. Fourteen states reported that training programs approved 
for TAA participants must be on the state's WIA Eligible Training 
Provider List,[Footnote 27] and an additional 23 states reported that 
most training programs approved for TAA participants are on the state's 
list.

Effect of WIA Performance Measures:

While some states report making use of these other funding sources, 
some officials also told us that WIA's performance measures create an 
obstacle to improved coordination between the programs. States and 
local areas are held accountable for the employment outcomes of workers 
who receive services through their WIA dislocated worker funds, 
including the proportion of participants who obtain employment and the 
difference between participants' wages in their old and new jobs. 
States and local areas receive financial incentives and sanctions based 
on their ability to meet their goals on these performance measures. 
Officials in three states we visited reported that WIA performance 
measures create a disincentive to co-enroll TAA-eligible workers in WIA 
services. For example, an official in one state said local WIA 
administrators often perceive trade-affected workers as having high 
prelayoff wages but skills that are not readily transferable, and 
therefore as having little chance of replacing their prelayoff wages in 
a new job--one of several WIA performance measures. Local officials are 
reluctant to enroll TAA-eligible workers in WIA, out of concern that 
these workers will negatively affect their ability to meet their WIA 
performance goals.[Footnote 28]

Information on Program Results Has Been Limited, but Labor Is Taking 
Steps to Collect Better Data:

Information on TAA program results has historically been limited, but 
Labor is making efforts to gather more complete outcome data and to 
more accurately assess the program's effectiveness. In 1999, Labor 
introduced a new participant outcomes reporting system that was 
designed to collect national information on TAA program outcomes and 
uses these outcomes to track program performance against national 
goals. However, in an earlier study we found that information captured 
by this reporting system was often incomplete and many states did not 
validate information reported to Labor.[Footnote 29] Labor has taken 
steps to improve the accuracy of this information by requiring states 
to use UI wage records to track outcomes. Some categories of workers, 
however, are not included in these wage records and most states do 
little to supplement wage record data with other data sources. As a 
result, program outcomes may be understated. To evaluate the effects of 
the TAA program, Labor completed a study of the program in 
1993.[Footnote 30] However, because of methodological issues and recent 
reforms to the program, the study's conclusions are of limited 
usefulness in assessing the current program. Labor recently initiated a 
new 5-year study and expects the first of several interim reports by 
mid-2005.

Labor Has Attempted to Improve Accuracy of TAA Data, But Information 
Gaps Remain:

Labor has taken steps to improve the accuracy of TAA program 
information captured by its participant outcomes reporting system, but 
weaknesses persist. In an effort to improve information on the TAA 
program, in fiscal year 1999 Labor introduced a new participant 
outcomes reporting system, the Trade Act Participant Report (TAPR), 
that was designed to collect national information on TAA program 
participants, services, and outcomes, such as employment, employment 
retention, and wages. States are required to submit quarterly summary 
reports on participants who are no longer receiving any TAA program 
services. In an earlier study, however, we found that some states 
reported incomplete data on program outcomes and failed to validate 
participant information reported to Labor. As a result, program 
information may have been inaccurate. States reported that they relied 
heavily on participant surveys to collect information on program 
outcomes such as employment and earnings and that participants often 
did not return these surveys. Furthermore, some states reported that 
they were unable to report more complete information because they 
lacked the resources to expand their data collection efforts to better 
capture program outcomes. Similarly, Labor's Inspector General also 
found that information on participants and program outcomes collected 
in TAPR was inadequate for evaluating the program's performance against 
national goals.[Footnote 31]

In response to concerns about the reliability of data reported on TAA 
participants, Labor has taken steps to improve the information captured 
in its participant outcomes reporting system by incorporating wage 
records data, but some states may not be accessing all available wage 
data. In fiscal year 2001, Labor began requiring states to use UI wage 
records to report outcomes for TAA program participants. While wage 
records generally provide objective and accurate information to track 
workers' employment and earnings, the data have limitations that may 
contribute to understating of program outcomes. For example, state wage 
records only capture information on workers who get jobs in that state 
and states cannot easily access wage record information from other 
states. As a result, states may not be able to provide outcome 
information for TAA program participants who gained employment in 
another state.

To help track employment of TAA participants across state lines, some 
states are using the Wage Record Interchange System (WRIS), a data 
clearinghouse used under WIA that allows states to share their wage 
record data.[Footnote 32] Since June 2002, states could use WRIS for 
reporting TAA outcomes, but it is unknown how many states are using or 
plan to use this system. While Labor officials told us that states are 
encouraged to use WRIS to obtain more complete employment and earnings 
information on TAA program participants, Labor could not provide 
information on how many states are actually using this data 
clearinghouse to track former TAA program participants because it does 
not have a mechanism in place to identify these states. Officials in 
four of the five states we visited reported that they are using WRIS to 
track program participants' employment and earnings outcomes.

Some individuals may not be captured by wage record data. Wage records, 
which cover about 94 percent of workers, do not include some categories 
of workers such as the self-employed, most independent contractors, 
military personnel, federal government employees, and postal service 
employees. Most states do little to supplement wage record data with 
other data sources despite the fact that such information can be 
reported to TAPR, and, as a result, program outcomes may be 
understated. Only 12 states reported that they collect data on outcomes 
such as employment, earnings, or employment retention beyond what is 
required for TAPR. Nine of these states reported collecting information 
on whether participants find jobs after they leave the program (see 
fig. 13). This information is generally collected through telephone 
interviews or mail surveys of workers. Officials from two of these 
states reported that this information is generally used as a local 
program management tool to gauge the effectiveness of training programs 
or providers rather than to collect more complete and accurate data for 
TAPR. In contrast, in a recent study of WIA outcomes, we found that 39 
states collect additional data to more completely track the outcomes of 
WIA participants and to help them manage their programs 
locally.[Footnote 33]

Figure 13: Number of States Using Supplemental Sources to Collect Data 
on Specific Employment Outcomes:

[See PDF for image]

[End of figure]

Labor tracks TAA program outcomes against national goals, but the TAA 
program has not met all of its goals in any given year. Since fiscal 
year 2000, Labor has used outcomes that states report to TAPR to track 
program performance against national goals related to employment, 
wages, and job retention.[Footnote 34] For example, performance goals 
set for fiscal year 2003 included having 78 percent of all participants 
find employment. While Labor has exceeded some of its goals in previous 
years, it has never met all of its goals in any given year. 
Furthermore, according to Labor's outcome data, none of the TAA 
performance goals set for fiscal year 2003 were met (see table 
3).[Footnote 35]

Table 3: Labor's Fiscal Year 2003 TAA Performance and Goals:

In percent.

Employment--employed the first quarter after program exit; 
Fiscal year 2003 performance: 63%; 
Fiscal year 2003 goal: 78%.

Job retention--retention in employment in the third quarter after 
program exit of those who were employed in the first quarter after 
program exit; 
Fiscal year 2003 performance: 86%; 
Fiscal year 2003 goal: 88%.

Wages--earnings replacement rate for those employed in the first 
quarter after program exit and still employed in the third quarter 
after program exit; 
Fiscal year 2003 performance: 74%; 
Fiscal year 2003 goal: 90%.

Source: Department of Labor.

[End of table]

In fiscal year 2004, Labor announced its new initiative to implement a 
reporting system that would collect and report program performance for 
all workforce programs administered by Labor, including TAA. This 
single system is intended to reduce barriers to greater service 
integration across federal workforce programs, and Labor also expects 
it will increase the reliability of its performance data by 
standardizing measurements such as employment, job retention, and 
earnings across all programs. The majority of outcomes data will still 
be collected from wage records. However, Labor officials also reported 
that states would be able to submit supplemental information on program 
participants whose employment status and wages are not captured in wage 
records. These supplemental data, however, will not be included in 
annual performance outcomes calculations.

No Recent Data Exist on Program Effectiveness, but Labor Is Initiating 
a New Impact Study:

No information is currently available to accurately measure program 
effectiveness. However, Labor has recently taken steps to better 
evaluate the effect of TAA services on participants. While outcomes 
measures are an important component of program management in that they 
assess whether a participant is achieving an intended outcome--such as 
obtaining employment--they cannot, by themselves, measure whether the 
outcome is a direct result of program participation. Other influences, 
such as the condition of the local economy, may affect an individual's 
ability to find a job as much or more than participation in an 
employment and training program. In order to determine whether 
participant outcomes are the effects of a program, rather than of other 
factors, it is necessary to conduct an impact evaluation.

Labor last completed an evaluation of the TAA program in 1993 when it 
analyzed the impact of TAA services, particularly training, on 
participants' employment, job retention and earnings outcomes. The 
study compared TAA participants with a sample of dislocated worker non-
participants with similar prelayoff characteristics. According to the 
study's findings, TAA program participants tended to have longer 
periods of joblessness than other dislocated workers. Furthermore the 
study found that among TAA program participants, certain participants-
-including women or those with limited education--experienced 
especially long periods of unemployment (see app. VI for an overview of 
demographic characteristics of recent TAA participants).[Footnote 36] 
However, methodological issues resulted in inconclusive findings 
regarding the impact of training on TAA program participants' 
employment and earnings. In addition, Labor officials told us that 
because program benefits and services were significantly changed in 
2002, the study's conclusions are of limited use in assessing the 
current program.[Footnote 37]

Labor initiated a new 5-year study of the TAA program in 2004, and 
while details of this study are still being determined, the study is 
expected to consist of three phases. The first phase will be a study of 
the initial implementation of the TAA Reform Act. The longer-term 
phases of the study include a quasi-experimental impact study and an 
in-depth study of program administration that will identify promising 
practices and data collection issues. The second phase of the study 
will measure the effects of program services such as training on 
participants' employment, earnings, and employment retention. The 
current plans include collecting data from interviews and 
administrative records for both TAA program participants and a 
comparison group of UI claimants, which will be matched to participants 
using a technique that allows researchers to more readily identify 
appropriate comparison groups.[Footnote 38] According to Labor 
officials, the methodology expected to be used in this study to 
identify comparison groups is an improvement over the methodology used 
in the previous study and should provide them with more conclusive 
findings about the impact of TAA services on participants. Although 
this is a long-term study, several interim reports are expected. The 
first of several interim reports is anticipated in mid-2005, and Labor 
expects to issue the final report in 2009.

Conclusions:

International trade is at least partially responsible for the decline 
in manufacturing over the last several years in the United States. 
Workers affected by trade may face greater barriers to reemployment 
than workers laid off for other reasons, for example because trade-
affected workers are often older than other dislocated workers. By 
providing training and extended income support, the TAA program is 
intended to help workers laid off because of international trade obtain 
reemployment.

The TAA Reform Act of 2002 changed the program in several ways that 
were intended to improve and expand services for trade-affected 
workers. At this early stage in implementation, several changes appear 
to be helping trade-affected workers. The clearest positive effect so 
far is that trade-affected workers are enrolling in services sooner, 
because of the new time limit on Labor's processing of TAA petitions 
and the new deadline for workers to enroll in training. It is too early 
to tell what will be the results of some changes, for example, how many 
workers will take advantage of the new wage insurance benefit.

Meanwhile, states report that certain provisions of the Reform Act have 
presented implementation challenges. The new training enrollment 
deadline may be causing some workers to lose their eligibility for 
extended income support, making it more difficult for them to complete 
the training they may need to obtain reemployment at wages comparable 
to their prelayoff wages. The new enrollment deadline may also be 
preventing some workers from receiving thorough assessments of their 
training needs and enrolling in the most appropriate training. 
Furthermore, these difficulties may be heightened in the cases of very 
large layoffs. Some officials report that eligibility requirements for 
the new HCTC have increased their administrative workload by causing 
them to spend more of their resources issuing training waivers just to 
facilitate workers' eligibility for the tax credit. Resources spent on 
issuing training waivers may be detracting from time invested in 
providing workers with needed job placement and training assistance. 
Furthermore, some find the eligibility criteria for the wage insurance 
program problematic, for example because the criteria require workers 
to lack easily transferable skills yet find re-employment without TAA-
funded training. These eligibility criteria could be resulting in the 
denial of wage insurance payments to some workers who could benefit 
from the program.

Recommendation for Executive Action:

We recommend that Labor 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 
following:

* 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, and:

* 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 Comments:

We provided a draft of this report to officials at Labor for their 
review and comment. In its comments, Labor did not raise any issues 
with our findings, conclusions or recommendations. Labor provided 
technical comments, which we include as appropriate. Labor's comments 
are reproduced in appendix VII.

We are sending copies of this report to the Secretary of Labor, 
relevant congressional committees, and others who are interested. 
Copies will also be made available to others upon request. The report 
is also available at no charge on GAO's Web site at http://www.gao.gov.

Please contact me on (202) 512-7215 if you or your staff have any 
questions about this report. Other major contributors to this report 
are listed in app. VIII.

Signed by: 

Sigurd R. Nilsen: 
Director, Education, Workforce, and Income Security Issues:

[End of section]

Appendix I: Objectives, Scope, and Methodology:

We were asked to provide information on (1) how key provisions of the 
Trade Adjustment Assistance (TAA) Reform Act have affected program 
services, (2) what have been the challenges in implementing the TAA 
Reform Act's 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. To address these questions, we 
conducted a Web-based survey of all 50 state workforce agencies that 
administer the TAA program and Puerto Rico. We conducted site visits to 
5 states--Maine, North Carolina, Pennsylvania, Texas, and Washington--
and interviewed state and local officials in each state. We reviewed 
data and documents from the U.S. Department of Labor (Labor) and other 
sources. We also interviewed officials from Labor, the AFL-CIO, the 
National Association of State Workforce Agencies, and the Congressional 
Research Service.

Web-Based Survey:

To collect broad information on TAA Reform Act implementation and 
states' management of their training funds, we surveyed state officials 
from the 50 states and Puerto Rico in March, 2004. Washington, D.C. was 
not surveyed because it did not have a TAA program. This structured 
survey was administered via e-mail and the Internet and had a 98 
percent response rate, including responses from all 50 states. The 
survey was designed to obtain information on the following: Labor and 
state efforts to reach out to new categories of eligible workers such 
as secondary workers, the effect of new training enrollment deadlines 
on services to participants, and obstacles that states faced in 
implementing new provisions in the TAA Reform Act, including the Health 
Coverage Tax Credit and the wage insurance provision. The survey also 
included questions on other sources of funds used to support services 
for TAA participants and the extent to which states collect outcome 
data that is more up to date and accurate than the data required by 
Labor.

Because this was not a sample survey, there are no sampling errors. 
However, the practical difficulties of conducting any survey may 
introduce other errors, commonly referred to as nonsampling errors. For 
example, difficulties in how a particular question is interpreted, in 
the sources of information that are available to respondents, or in how 
the data are entered into a database or were analyzed can introduce 
unwanted variability into the survey results. We took steps in the 
development of the questionnaire, the data collection, and the data 
analysis to minimize these nonsampling errors. For example, GAO survey 
specialists designed the questionnaire in collaboration with GAO staff 
with subject matter expertise. Then, the draft questionnaire was 
pretested with three state officials to ensure that the questions were 
relevant, clearly stated, and easy to comprehend. When the data were 
analyzed, a second, independent analyst checked all computer programs. 
Since this was a Web-based survey, respondents entered their answers 
directly into the electronic questionnaire. This eliminates the need to 
have the data keyed into a database, thus removing an additional source 
of error.

Site Visits:

We selected 5 states for site visits according to several criteria, 
including experience with large numbers of TAA participants in recent 
years, representation of a range of adversely affected industries, 
states recommended by Labor either as models in implementing TAA or as 
states facing implementation challenges, and geographic diversity (see 
table 4). In each state we interviewed state officials on topics 
including TAA Reform Act implementation, management of TAA training 
funds, and coordination between TAA and other federal programs.

Table 4: Site Selection Criteria:

State: Maine; 
Average participants[A] per year, FY00-FY02 (national ranking): 1,286 
(14); 
Average TAA training allocation per year, FY01- FY03 (national 
ranking): $4,073,574 (17); 
Recent adversely affected industries: Paper, computer equipment, 
apparel.

State: North Carolina; 
Average participants[A] per year, FY00-FY02 (national ranking): 6,850 
(1); 
Average TAA training allocation per year, FY01-FY03 (national ranking): 
$6,596,453 (7); 
Recent adversely affected industries: Textiles.

State: Pennsylvania; 
Average participants[A] per year, FY00-FY02 (national ranking): 2,401 
(7); 
Average TAA training allocation per year, FY01-FY03 (national ranking): 
$14,846,753 (1); 
Recent adversely affected industries: Steel, airlines, chemical dye, 
electronics.

State: Texas; 
Average participants[A] per year, FY00-FY02 (national ranking): 4,368 
(2); 
Average TAA training allocation per year, FY01-FY03 (national ranking): 
$9,893,323 (3); 
Recent adversely affected industries: High-tech,[B] oil, electronics, 
garment/apparel.

State: Washington; 
Average participants[A] per year, FY00-FY02 (national ranking): 3,749 
(3); 
Average TAA training allocation per year, FY01-FY03 (national ranking): 
$11,070,045 (2); 
Recent adversely affected industries: Aluminum, lumber/paper/forest 
products, aerospace. 

Source: Department of Labor and GAO analysis.

[A] Participants are workers in training during the fiscal year.

[B] High-tech job categories include computer-related occupations and 
technical and quality assurance.

[End of table]

Combined, the 5 states constituted about 36 percent of the national 
total of TAA participants from fiscal years 2000 through 2002 (see fig. 
14).

Figure 14: Percentage of Total TAA Participants in Selected States, 
Fiscal Years 2000-2002:

[See PDF for image]

Note: Because of rounding, the total does not add up to 36 percent.

[End of figure]

We judgmentally selected two local areas in each state and visited a 
mix of urban and rural areas (see table 5). We met with local 
officials, program participants, employers, and workforce investment 
board members. We collected information on how local areas are 
implementing provisions of the TAA Reform Act and how they are 
coordinating Workforce Investment Act and TAA funds.

Table 5: Local Workforce Areas Selected for Visits:

State: Maine; 

Local workforce area: Augusta; 
City: Augusta; 
Local workforce area: East Millinocket;
City: East Millinocket. 

State: North Carolina; 
Local workforce area: Vance County; 
City: Henderson; 
Local workforce area: Kannapolis; 
City: Kannapolis.

State: Pennsylvania; 
Local workforce area: Berks County; 
City: Reading.
Local workforce area: Lehigh Valley;
City: Lehigh Valley. 

State: Texas; 
Local workforce area: Greater Austin Area; 
City: Austin.
Local workforce area: Dallas County; 
City: Richardson. 

State: Washington; 
Local workforce area: Cowlitz/Wahkiakum East;  
City: Kelso. 
Local workforce area: Tacoma-Pierce County Employment & Training 
Consortium; 
City: Tacoma. 

Source: GAO analysis.

[End of table]

Review of Data from Labor and Other Sources:

We reviewed data from Labor on petitions, participants, services, 
performance, and expenditures from fiscal year 1999 to fiscal year 
2003. For fiscal year 2003, we broke out data on petition-processing 
times between workers served prior to the TAA Reform Act and those 
served after implementation of the Reform Act in an attempt to isolate 
the effects of program changes. We assessed the reliability of key data 
by interviewing Labor officials, reviewing Labor documentation, and 
performing edit checks of computer-based data. We found some 
limitations in these data but judged the data to be sufficiently 
reliable for the purposes of our reporting objectives. In particular, 
some data on certified workers and on the number of workers entering 
training annually may have inaccuracies, but we believe these data to 
be sufficiently reliable for the purpose of demonstrating trends over 
time, the main focus of our reporting objective. Data that were used 
for background purposes and provided in app. VI were not independently 
verified.

[End of section]

Appendix II: Final Decisions Rendered by the U.S. Court of 
International Trade on Appealed TAA Cases, Fiscal Years 1999-2004:

Workers whose petitions for certification of TAA eligibility are denied 
by the U.S. Department of Labor may seek judicial review of Labor's 
decision by filing an appeal with the U.S. Court of International 
Trade. Workers may file such an appeal either after Labor's negative 
determination on the initial petition or after Labor's negative 
determination on a reconsideration of its determination. The U.S. Court 
of International Trade may affirm the action of the Department of 
Labor, set it aside in whole or in part, or return--termed remand--the 
case to Labor to take further evidence.

Table 6: Final Decisions Rendered by the U.S. Court of International 
Trade on Appealed TAA Determination Cases, Fiscal Years 1999-2004:

Number of decisions; 
Fiscal year: 1999: 2; 
Fiscal year: 2000: 4; 
Fiscal year: 2001: 3; 
Fiscal year: 2002: 4; 
Fiscal year: 2003: 8; 
Fiscal year: 2004: 5; 
Totals: 26.

Outcomes[A]: Reversed Labor's decision after remand; 
Fiscal year: 2002: 1; 
Fiscal year: 2003: 2; 
Totals: 3.

Outcomes[A]: Affirmed Labor's original decision without remand; 
Fiscal year: 1999: 1; 
Fiscal year: 2001: 1; 
Fiscal year: 2002: 1; 
Totals: 3.

Outcomes[A]: Affirmed Labor's reversal of original decision after 
remand; 
Fiscal year: 2000: 1; 
Fiscal year: 2003: 3; 
Fiscal year: 2004: 4; 
Totals: 8.

Outcomes[A]: Affirmed Labor's negative decision after remand; 
Fiscal year: 1999: 1; 
Fiscal year: 2000: 1; 
Fiscal year: 2001: 2; 
Fiscal year: 2003: 1; 
Totals: 5.

Outcomes[A]: Dismissed; 
Fiscal year: 2000: 2; 
Fiscal year: 2002: 2; 
Fiscal year: 2003: 2; 
Fiscal year: 2004: 1; 
Totals: 7.

Source: GAO analysis.

[A] Four other cases were remanded to the U.S. Department of Labor for 
reconsideration. However, the results of these remands were not 
available to us at the time of this report.

[End of table]

[End of section]

Appendix III: Certified Workers, Benefit Recipients, and Expenditures:

Table 7: TAA and NAFTA-TAA Certified Workers, Benefit Recipients, and 
Expenditures, Fiscal Years 1999-2003:

Certified workers[A]; 
Fiscal year: 1999: 175,898; 
Fiscal year: 2000: 116,720; 
Fiscal year: 2001: 164,701; 
Fiscal year: 2002: 274,081; 
Fiscal year: 2003: 204,233.

Extended income support: Payments; 
Fiscal year: 1999: $213.1; 
Fiscal year: 2000: $257.6; 
Fiscal year: 2001: $260.4; 
Fiscal year: 2002: $228.6; 
Fiscal year: 2003: $326.9.

Extended income support: New recipients; 
Fiscal year: 1999: 37,540; 
Fiscal year: 2000: 34,965; 
Fiscal year: 2001: 34,690; 
Fiscal year: 2002: 42,362; 
Fiscal year: 2003: 47,992.

Workers entering training[B]; 
Fiscal year: 1999: 32,587; 
Fiscal year: 2000: 25,258; 
Fiscal year: 2001: 30,340; 
Fiscal year: 2002: 45,771; 
Fiscal year: 2003: 47,239.

Training-related costs[C]; 
Fiscal year: 1999: $97.3; 
Fiscal year: 2000: $106.7; 
Fiscal year: 2001: $99.0; 
Fiscal year: 2002: $145.0; 
Fiscal year: 2003: $191.4.

Job search allowance: Payments; 
Fiscal year: 1999: $0.1; 
Fiscal year: 2000: $0.1; 
Fiscal year: 2001: $0.1; 
Fiscal year: 2002: $0.1; 
Fiscal year: 2003: $0.2.

Job search allowance: Recipients; 
Fiscal year: 1999: 314; 
Fiscal year: 2000: 371; 
Fiscal year: 2001: 261; 
Fiscal year: 2002: 2,126; 
Fiscal year: 2003: 433.

Relocation allowance: Payments; 
Fiscal year: 1999: $1.0; 
Fiscal year: 2000: $1.2; 
Fiscal year: 2001: $0.9; 
Fiscal year: 2002: $1.0; 
Fiscal year: 2003: $1.7.

Relocation allowance: Recipients; 
Fiscal year: 1999: 772; 
Fiscal year: 2000: 757; 
Fiscal year: 2001: 407; 
Fiscal year: 2002: 453; 
Fiscal year: 2003: 766.

Source: Department of Labor.

Note: All dollars are in millions.

[A] The data used for this table are estimates of the number of workers 
certified as eligible for TAA, based on estimates of the number of 
affected workers submitted by companies at the time TAA petitions are 
filed with the Department of Labor. At the time petitions are 
submitted, companies may not know exactly how many workers will be 
affected. We use these estimates because the Department of Labor does 
not collect data on the number of workers ultimately certified.

[B] This figure is an underestimate of the total number of workers 
entering training, because some states do not capture all workers 
entering training in the data they submit to Labor.

[C] Includes costs of tuition, transportation, subsistence, and 
related expenses for all workers who received training during the 
year. States may pay some of these costs through funding sources other 
than TAA, such as WIA funds.

[End of table]

[End of section]

Appendix IV: State Training Allocations, Fiscal Years 2001-2004:

Prior to fiscal year 2004, Labor awarded TAA training funds to states 
based on their requests throughout the fiscal year. In fiscal year 
2004, Labor allocated 75 percent of available training funds among the 
states at the beginning of the fiscal year according to a formula. The 
amounts allocated to states at the beginning of fiscal year 2004 are 
their base allocations. Labor held the remaining 25 percent of 
available training funds in reserve to help states respond to large 
and unanticipated layoffs throughout the year. States are eligible to 
submit requests for 25 percent reserve funds only after they have 
expended 50 percent of their base allocations.

Table 8: State Training Allocations, Fiscal Years 2001-2003, and State 
Training Base Allocations, Fiscal Year 2004:

State: Alabama; 
Fiscal year 2001: $6,762,498; 
Fiscal year 2002: $690,000; 
Fiscal year 2003: $2,639,932; 
Fiscal year 2004: $2,352,825.

State: Alaska; 
Fiscal year 2001: $0; 
Fiscal year 2002: $0; 
Fiscal year 2003: $1,425,664; 
Fiscal year 2004: $539,240.

State: Arizona; 
Fiscal year 2001: $4,520,650; 
Fiscal year 2002: $925,865; 
Fiscal year 2003: $4,286,604; 
Fiscal year 2004: $3,190,283.

State: Arkansas; 
Fiscal year 2001: $2,645,000; 
Fiscal year 2002: $1,451,875; 
Fiscal year 2003: $2,919,461; 
Fiscal year 2004: $2,226,153.

State: California; 
Fiscal year 2001: $6,787,415; 
Fiscal year 2002: $7,831,443; 
Fiscal year 2003: $9,437,155; 
Fiscal year 2004: $6,826,917.

State: Colorado; 
Fiscal year 2001: $1,093,500; 
Fiscal year 2002: $1,177,232; 
Fiscal year 2003: $2,590,199; 
Fiscal year 2004: $1,859,483.

State: Connecticut; 
Fiscal year 2001: $2,642,528; 
Fiscal year 2002: $2,300,000; 
Fiscal year 2003: $3,205,582; 
Fiscal year 2004: $2,388,390.

State: Delaware; 
Fiscal year 2001: $0; 
Fiscal year 2002: $0; 
Fiscal year 2003: $41,466; 
Fiscal year 2004: $0.

State: Florida; 
Fiscal year 2001: $5,168,100; 
Fiscal year 2002: $3,747,465; 
Fiscal year 2003: $5,594,035; 
Fiscal year 2004: $4,332,785.

State: Georgia; 
Fiscal year 2001: $0; 
Fiscal year 2002: $1,891,750; 
Fiscal year 2003: $0; 
Fiscal year 2004: $0.

State: Hawaii; 
Fiscal year 2001: $11,541; 
Fiscal year 2002: $0; 
Fiscal year 2003: $0; 
Fiscal year 2004: $0.

State: Idaho; 
Fiscal year 2001: $1,920,421; 
Fiscal year 2002: $3,137,200; 
Fiscal year 2003: $4,304,245; 
Fiscal year 2004: $3,155,550.

State: Illinois; 
Fiscal year 2001: $5,663,750; 
Fiscal year 2002: $4,427,500; 
Fiscal year 2003: $7,923,660; 
Fiscal year 2004: $5,809,033.

State: Indiana; 
Fiscal year 2001: $2,415,000; 
Fiscal year 2002: $3,323,500; 
Fiscal year 2003: $6,597,124; 
Fiscal year 2004: $4,836,517.

State: Iowa; 
Fiscal year 2001: $405,150; 
Fiscal year 2002: $1,035,000; 
Fiscal year 2003: $6,376,729; 
Fiscal year 2004: $4,513,308.

State: Kansas; 
Fiscal year 2001: $347,814; 
Fiscal year 2002: $2,019,208; 
Fiscal year 2003: $6,025,569; 
Fiscal year 2004: $4,417,495.

State: Kentucky; 
Fiscal year 2001: $2,388,901; 
Fiscal year 2002: $3,200,757; 
Fiscal year 2003: $2,688,600; 
Fiscal year 2004: $2,405,596.

State: Louisiana; 
Fiscal year 2001: $1,124,701; 
Fiscal year 2002: $940,010; 
Fiscal year 2003: $728,928; 
Fiscal year 2004: $612,285.

State: Maine; 
Fiscal year 2001: $3,174,980; 
Fiscal year 2002: $4,381,291; 
Fiscal year 2003: $4,664,450; 
Fiscal year 2004: $3,607,190.

State: Maryland; 
Fiscal year 2001: $34,500; 
Fiscal year 2002: $690,000; 
Fiscal year 2003: $706,808; 
Fiscal year 2004: $518,179.

State: Massachusetts; 
Fiscal year 2001: $1,667,500; 
Fiscal year 2002: $2,702,500; 
Fiscal year 2003: $8,133,369; 
Fiscal year 2004: $5,962,776.

State: Michigan; 
Fiscal year 2001: $2,866,156; 
Fiscal year 2002: $6,141,000; 
Fiscal year 2003: $8,191,855; 
Fiscal year 2004: $6,050,100.

State: Minnesota; 
Fiscal year 2001: $632,500; 
Fiscal year 2002: $3,967,500; 
Fiscal year 2003: $7,621,904; 
Fiscal year 2004: $5,173,069.

State: Mississippi; 
Fiscal year 2001: $379,562; 
Fiscal year 2002: $915,573; 
Fiscal year 2003: $2,635,960; 
Fiscal year 2004: $1,932,488.

State: Missouri; 
Fiscal year 2001: $2,169,475; 
Fiscal year 2002: $5,687,589; 
Fiscal year 2003: $8,631,673; 
Fiscal year 2004: $5,519,517.

State: Montana; 
Fiscal year 2001: $1,148,850; 
Fiscal year 2002: $1,322,500; 
Fiscal year 2003: $2,373,933; 
Fiscal year 2004: $1,118,812.

State: Nebraska; 
Fiscal year 2001: $2,098,750; 
Fiscal year 2002: $2,012,500; 
Fiscal year 2003: $344,401; 
Fiscal year 2004: $441,442.

State: Nevada; 
Fiscal year 2001: $0; 
Fiscal year 2002: $281,750; 
Fiscal year 2003: $1,066,034; 
Fiscal year 2004: $332,032.

State: New Hampshire; 
Fiscal year 2001: $195,500; 
Fiscal year 2002: $1,153,450; 
Fiscal year 2003: $885,500; 
Fiscal year 2004: $662,720.

State: New Jersey; 
Fiscal year 2001: $3,450,000; 
Fiscal year 2002: $4,018,157; 
Fiscal year 2003: $1,454,572; 
Fiscal year 2004: $1,397,110.

State: New Mexico; 
Fiscal year 2001: $0; 
Fiscal year 2002: $542,800; 
Fiscal year 2003: $820,282; 
Fiscal year 2004: $601,369.

State: New York; 
Fiscal year 2001: $4,545,317; 
Fiscal year 2002: $2,024,920; 
Fiscal year 2003: $3,471,173; 
Fiscal year 2004: $2,755,667.

State: North Carolina; 
Fiscal year 2001: $4,231,540; 
Fiscal year 2002: $6,619,170; 
Fiscal year 2003: $9,159,118; 
Fiscal year 2004: $7,246,224.

State: North Dakota; 
Fiscal year 2001: $29,900; 
Fiscal year 2002: $33,350; 
Fiscal year 2003: $11,270; 
Fiscal year 2004: $0.

State: Ohio; 
Fiscal year 2001: $4,678,912; 
Fiscal year 2002: $2,913,171; 
Fiscal year 2003: $8,144,190; 
Fiscal year 2004: $5,717,602.

State: Oklahoma; 
Fiscal year 2001: $1,220,190; 
Fiscal year 2002: $1,269,752; 
Fiscal year 2003: $2,658,052; 
Fiscal year 2004: $1,948,684.

State: Oregon; 
Fiscal year 2001: $9,805,360; 
Fiscal year 2002: $8,780,480; 
Fiscal year 2003: $6,335,181; 
Fiscal year 2004: $5,244,609.

State: Pennsylvania; 
Fiscal year 2001: $10,867,500; 
Fiscal year 2002: $8,245,500; 
Fiscal year 2003: $32,707,004; 
Fiscal year 2004: $23,725,215.

State: Rhode Island; 
Fiscal year 2001: $1,957,593; 
Fiscal year 2002: $4,934; 
Fiscal year 2003: $959,973; 
Fiscal year 2004: $764,425.

State: South Carolina; 
Fiscal year 2001: $730,250; 
Fiscal year 2002: $2,070,000; 
Fiscal year 2003: $12,506,305; 
Fiscal year 2004: $9,168,685.

State: South Dakota; 
Fiscal year 2001: $270,250; 
Fiscal year 2002: $347,300; 
Fiscal year 2003: $629,480; 
Fiscal year 2004: $461,488.

State: Tennessee; 
Fiscal year 2001: $2,806,000; 
Fiscal year 2002: $2,219,500; 
Fiscal year 2003: $2,852,109; 
Fiscal year 2004: $2,349,510.

State: Texas; 
Fiscal year 2001: $8,232,418; 
Fiscal year 2002: $6,389,309; 
Fiscal year 2003: $15,058,242; 
Fiscal year 2004: $11,211,282.

State: Utah; 
Fiscal year 2001: $214,508; 
Fiscal year 2002: $2,804,350; 
Fiscal year 2003: $3,684,565; 
Fiscal year 2004: $2,286,508.

State: Vermont; 
Fiscal year 2001: $460,000; 
Fiscal year 2002: $920,000; 
Fiscal year 2003: $317,139; 
Fiscal year 2004: $280,819.

State: Virginia; 
Fiscal year 2001: $4,600,000; 
Fiscal year 2002: $3,484,500; 
Fiscal year 2003: $7,302,968; 
Fiscal year 2004: $5,353,742.

State: Washington; 
Fiscal year 2001: $7,736,280; 
Fiscal year 2002: $4,450,500; 
Fiscal year 2003: $21,243,827; 
Fiscal year 2004: $15,412,748.

State: West Virginia; 
Fiscal year 2001: $2,300,000; 
Fiscal year 2002: $805,000; 
Fiscal year 2003: $743,636; 
Fiscal year 2004: $662,652.

State: Wisconsin; 
Fiscal year 2001: $3,323,854; 
Fiscal year 2002: $5,692,500; 
Fiscal year 2003: $16,883,175; 
Fiscal year 2004: $12,377,478.

State: Wyoming; 
Fiscal year 2001: $140,000; 
Fiscal year 2002: $16,985; 
Fiscal year 2003: $64,898; 
Fiscal year 2004: $0.

Reserve Funds; 
Fiscal year 2001: -; 
Fiscal year 2002: -; 
Fiscal year 2003: -; 
Fiscal year 2004: $55,000,000.

National Total; 
Fiscal year 2001: $129,864,614; 
Fiscal year 2002: $131,006,636; 
Fiscal year 2003: $259,047,999; 
Fiscal year 2004: $244,750,000.

Source: Department of Labor.

Note: State allocations in all fiscal years include funds reserved for 
administration in addition to funds reserved for training. Allocations 
for fiscal years 2001-2003, but not for fiscal year 2004, also include 
amounts awarded for job search and relocation benefits.

[End of table]

[End of section]

Appendix V: Detailed Listing of Steps States Report Taking in Response 
to Limited TAA Training Funds:

Table 9: Steps States Report They Have Taken in Response to Limited 
TAA Training Funds, Fiscal Years 2001-2003:

State: Alabama; 
Developed new guidelines for enrolling participants: No; 
Obligated current year funds only for current year costs: No; 
Enrolled participants in shorter-term training: Yes; 
Placed participants on temporary waiting list for training: Yes; 
Reduced training cost limit per participant: No.

State: Alaska; 
Developed new guidelines for enrolling participants: No; 
Obligated current year funds only for current year costs: Yes; 
Enrolled participants in shorter-term training: No; 
Placed participants on temporary waiting list for training: No; 
Reduced training cost limit per participant: No.

State: Arizona; 
Developed new guidelines for enrolling participants: No; 
Obligated current year funds only for current year costs: Yes; 
Enrolled participants in shorter-term training: No; 
Placed participants on temporary waiting list for training: No; 
Reduced training cost limit per participant: No.

State: Arkansas; 
Developed new guidelines for enrolling participants: No; 
Obligated current year funds only for current year costs: No; 
Enrolled participants in shorter-term training: No; 
Placed participants on temporary waiting list for training: No; 
Reduced training cost limit per participant: No.

State: California; 
Developed new guidelines for enrolling participants: No; 
Obligated current year funds only for current year costs: No; 
Enrolled participants in shorter-term training: No; 
Placed participants on temporary waiting list for training: Yes; 
Reduced training cost limit per participant: No.

State: Colorado; 
Developed new guidelines for enrolling participants: Yes; 
Obligated current year funds only for current year costs: No; 
Enrolled participants in shorter-term training: Yes; 
Placed participants on temporary waiting list for training: No; 
Reduced training cost limit per participant: Yes.

State: Connecticut; 
Developed new guidelines for enrolling participants: No; 
Obligated current year funds only for current year costs: Yes; 
Enrolled participants in shorter-term training: Yes; 
Placed participants on temporary waiting list for training: Yes; 
Reduced training cost limit per participant: Yes.

State: Delaware; 
Developed new guidelines for enrolling participants: Yes; 
Obligated current year funds only for current year costs: Yes; 
Enrolled participants in shorter-term training: Yes; 
Placed participants on temporary waiting list for training: Yes; 
Reduced training cost limit per participant: No.

State: Florida; 
Developed new guidelines for enrolling participants: Yes; 
Obligated current year funds only for current year costs: No; 
Enrolled participants in shorter-term training: Yes; 
Placed participants on temporary waiting list for training: Yes; 
Reduced training cost limit per participant: No.

State: Georgia; 
Developed new guidelines for enrolling participants: Yes; 
Obligated current year funds only for current year costs: No; 
Enrolled participants in shorter-term training: No; 
Placed participants on temporary waiting list for training: No; 
Reduced training cost limit per participant: Yes.

State: Hawaii; 
Developed new guidelines for enrolling participants: No; 
Obligated current year funds only for current year costs: No; 
Enrolled participants in shorter-term training: No; 
Placed participants on temporary waiting list for training: No; 
Reduced training cost limit per participant: No.

State: Idaho; 
Developed new guidelines for enrolling participants: Yes; 
Obligated current year funds only for current year costs: Yes; 
Enrolled participants in shorter-term training: Yes; 
Placed participants on temporary waiting list for training: No; 
Reduced training cost limit per participant: No.

State: Illinois; 
Developed new guidelines for enrolling participants: No; 
Obligated current year funds only for current year costs: No; 
Enrolled participants in shorter-term training: No; 
Placed participants on temporary waiting list for training: Yes; 
Reduced training cost limit per participant: No.

State: Indiana; 
Developed new guidelines for enrolling participants: No; 
Obligated current year funds only for current year costs: Yes; 
Enrolled participants in shorter-term training: Yes; 
Placed participants on temporary waiting list for training: No; 
Reduced training cost limit per participant: No.

State: Iowa; 
Developed new guidelines for enrolling participants: Yes; 
Obligated current year funds only for current year costs: No; 
Enrolled participants in shorter-term training: Yes; 
Placed participants on temporary waiting list for training: Yes; 
Reduced training cost limit per participant: Yes.

State: Kansas; 
Developed new guidelines for enrolling participants: Yes; 
Obligated current year funds only for current year costs: Yes; 
Enrolled participants in shorter-term training: Yes; 
Placed participants on temporary waiting list for training: No; 
Reduced training cost limit per participant: No.

State: Kentucky; 
Developed new guidelines for enrolling participants: Yes; 
Obligated current year funds only for current year costs: No; 
Enrolled participants in shorter-term training: Yes; 
Placed participants on temporary waiting list for training: Yes; 
Reduced training cost limit per participant: No.

State: Louisiana; 
Developed new guidelines for enrolling participants: Yes; 
Obligated current year funds only for current year costs: No; 
Enrolled participants in shorter-term training: No; 
Placed participants on temporary waiting list for training: No; 
Reduced training cost limit per participant: No.

State: Maine; 
Developed new guidelines for enrolling participants: No; 
Obligated current year funds only for current year costs: No; 
Enrolled participants in shorter-term training: No; 
Placed participants on temporary waiting list for training: No; 
Reduced training cost limit per participant: No.

State: Maryland; 
Developed new guidelines for enrolling participants: No; 
Obligated current year funds only for current year costs: Yes; 
Enrolled participants in shorter-term training: No; 
Placed participants on temporary waiting list for training: No; 
Reduced training cost limit per participant: No.

State: Massachusetts; 
Developed new guidelines for enrolling participants: No; 
Obligated current year funds only for current year costs: No; 
Enrolled participants in shorter-term training: No; 
Placed participants on temporary waiting list for training: No; 
Reduced training cost limit per participant: No.

State: Michigan; 
Developed new guidelines for enrolling participants: No; 
Obligated current year funds only for current year costs: Yes; 
Enrolled participants in shorter-term training: Yes; 
Placed participants on temporary waiting list for training: Yes; 
Reduced training cost limit per participant: No.

State: Minnesota; 
Developed new guidelines for enrolling participants: No; 
Obligated current year funds only for current year costs: No; 
Enrolled participants in shorter-term training: No; 
Placed participants on temporary waiting list for training: Yes; 
Reduced training cost limit per participant: No.

State: Mississippi; 
Developed new guidelines for enrolling participants: No; 
Obligated current year funds only for current year costs: No; 
Enrolled participants in shorter-term training: Yes; 
Placed participants on temporary waiting list for training: No; 
Reduced training cost limit per participant: No.

State: Missouri; 
Developed new guidelines for enrolling participants: Yes; 
Obligated current year funds only for current year costs: No; 
Enrolled participants in shorter-term training: Yes; 
Placed participants on temporary waiting list for training: No; 
Reduced training cost limit per participant: No.

State: Montana; 
Developed new guidelines for enrolling participants: No; 
Obligated current year funds only for current year costs: No; 
Enrolled participants in shorter-term training: Yes; 
Placed participants on temporary waiting list for training: No; 
Reduced training cost limit per participant: No.

State: Nebraska; 
Developed new guidelines for enrolling participants: Yes; 
Obligated current year funds only for current year costs: Yes; 
Enrolled participants in shorter-term training: Yes; 
Placed participants on temporary waiting list for training: No; 
Reduced training cost limit per participant: Yes.

State: Nevada; 
Developed new guidelines for enrolling participants: No; 
Obligated current year funds only for current year costs: Yes; 
Enrolled participants in shorter-term training: No; 
Placed participants on temporary waiting list for training: Yes; 
Reduced training cost limit per participant: No.

State: New Hampshire; 
Developed new guidelines for enrolling participants: No; 
Obligated current year funds only for current year costs: No; 
Enrolled participants in shorter-term training: No; 
Placed participants on temporary waiting list for training: No; 
Reduced training cost limit per participant: No.

State: New Jersey; 
Developed new guidelines for enrolling participants: Yes; 
Obligated current year funds only for current year costs: Yes; 
Enrolled participants in shorter-term training: Yes; 
Placed participants on temporary waiting list for training: Yes; 
Reduced training cost limit per participant: Yes.

State: New Mexico; 
Developed new guidelines for enrolling participants: Yes; 
Obligated current year funds only for current year costs: No; 
Enrolled participants in shorter-term training: No; 
Placed participants on temporary waiting list for training: No; 
Reduced training cost limit per participant: Yes.

State: New York; 
Developed new guidelines for enrolling participants: No; 
Obligated current year funds only for current year costs: No; 
Enrolled participants in shorter-term training: Yes; 
Placed participants on temporary waiting list for training: Yes; 
Reduced training cost limit per participant: No.

State: North Carolina; 
Developed new guidelines for enrolling participants: No; 
Obligated current year funds only for current year costs: No; 
Enrolled participants in shorter-term training: Yes; 
Placed participants on temporary waiting list for training: No; 
Reduced training cost limit per participant: No.

State: North Dakota; 
Developed new guidelines for enrolling participants: No; 
Obligated current year funds only for current year costs: No; 
Enrolled participants in shorter-term training: No; 
Placed participants on temporary waiting list for training: No; 
Reduced training cost limit per participant: No.

State: Ohio; 
Developed new guidelines for enrolling participants: No; 
Obligated current year funds only for current year costs: No; 
Enrolled participants in shorter-term training: Yes; 
Placed participants on temporary waiting list for training: Yes; 
Reduced training cost limit per participant: No.

State: Oklahoma; 
Developed new guidelines for enrolling participants: No; 
Obligated current year funds only for current year costs: No; 
Enrolled participants in shorter-term training: No; 
Placed participants on temporary waiting list for training: No; 
Reduced training cost limit per participant: No.

State: Oregon; 
Developed new guidelines for enrolling participants: No; 
Obligated current year funds only for current year costs: No; 
Enrolled participants in shorter-term training: No; 
Placed participants on temporary waiting list for training: Yes; 
Reduced training cost limit per participant: No.

State: Pennsylvania; 
Developed new guidelines for enrolling participants: Yes; 
Obligated current year funds only for current year costs: Yes; 
Enrolled participants in shorter-term training: No; 
Placed participants on temporary waiting list for training: Yes; 
Reduced training cost limit per participant: Yes.

State: Rhode Island; 
Developed new guidelines for enrolling participants: Yes; 
Obligated current year funds only for current year costs: No; 
Enrolled participants in shorter-term training: No; 
Placed participants on temporary waiting list for training: Yes; 
Reduced training cost limit per participant: No.

State: South Carolina; 
Developed new guidelines for enrolling participants: Yes; 
Obligated current year funds only for current year costs: No; 
Enrolled participants in shorter-term training: No; 
Placed participants on temporary waiting list for training: Yes; 
Reduced training cost limit per participant: Yes.

State: South Dakota; 
Developed new guidelines for enrolling participants: No; 
Obligated current year funds only for current year costs: Yes; 
Enrolled participants in shorter-term training: Yes; 
Placed participants on temporary waiting list for training: No; 
Reduced training cost limit per participant: No.

State: Tennessee; 
Developed new guidelines for enrolling participants: Yes; 
Obligated current year funds only for current year costs: No; 
Enrolled participants in shorter-term training: No; 
Placed participants on temporary waiting list for training: No; 
Reduced training cost limit per participant: No.

State: Texas; 
Developed new guidelines for enrolling participants: Yes; 
Obligated current year funds only for current year costs: Yes; 
Enrolled participants in shorter-term training: Yes; 
Placed participants on temporary waiting list for training: Yes; 
Reduced training cost limit per participant: No.

State: Utah; 
Developed new guidelines for enrolling participants: No; 
Obligated current year funds only for current year costs: Yes; 
Enrolled participants in shorter-term training: No; 
Placed participants on temporary waiting list for training: No; 
Reduced training cost limit per participant: No.

State: Vermont; 
Developed new guidelines for enrolling participants: No; 
Obligated current year funds only for current year costs: No; 
Enrolled participants in shorter-term training: No; 
Placed participants on temporary waiting list for training: No; 
Reduced training cost limit per participant: No.

State: Virginia; 
Developed new guidelines for enrolling participants: No; 
Obligated current year funds only for current year costs: Yes; 
Enrolled participants in shorter-term training: No; 
Placed participants on temporary waiting list for training: No; 
Reduced training cost limit per participant: No.

State: Washington; 
Developed new guidelines for enrolling participants: No; 
Obligated current year funds only for current year costs: No; 
Enrolled participants in shorter-term training: No; 
Placed participants on temporary waiting list for training: No; 
Reduced training cost limit per participant: No.

State: West Virginia; 
Developed new guidelines for enrolling participants: No; 
Obligated current year funds only for current year costs: No; 
Enrolled participants in shorter-term training: Yes; 
Placed participants on temporary waiting list for training: No; 
Reduced training cost limit per participant: No.

State: Wisconsin; 
Developed new guidelines for enrolling participants: No; 
Obligated current year funds only for current year costs: Yes; 
Enrolled participants in shorter-term training: No; 
Placed participants on temporary waiting list for training: No; 
Reduced training cost limit per participant: No.

State: Wyoming; 
Developed new guidelines for enrolling participants: No; 
Obligated current year funds only for current year costs: No; 
Enrolled participants in shorter-term training: No; 
Placed participants on temporary waiting list for training: No; 
Reduced training cost limit per participant: No.

Total; 
Developed new guidelines for enrolling participants: 18; 
Obligated current year funds only for current year costs: 18; 
Enrolled participants in shorter-term training: 22; 
Placed participants on temporary waiting list for training: 19; 
Reduced training cost limit per participant: 9.

Source: GAO survey of state workforce agencies.

Note: (Yes) indicates state has taken step at some point between fiscal 
year 2001 and fiscal year 2003.

[End of table]

Table 10: Steps States Report They Have Taken or Anticipate Taking in 
Response to Limited TAA Training Funds, Fiscal Year 2004:

State: Alabama; 
Developed new guidelines for enrolling participants: No; 
Obligated current year funds only for current year costs: Yes; 
Enrolled participants in shorter-term training: Yes; 
Placed participants on temporary waiting list for training: Yes; 
Reduced training cost limit per participant: No.

State: Alaska; 
Developed new guidelines for enrolling participants: Yes; 
Obligated current year funds only for current year costs: Yes; 
Enrolled participants in shorter-term training: No; 
Placed participants on temporary waiting list for training: No; 
Reduced training cost limit per participant: No.

State: Arizona; 
Developed new guidelines for enrolling participants: Yes; 
Obligated current year funds only for current year costs: Yes; 
Enrolled participants in shorter-term training: No; 
Placed participants on temporary waiting list for training: No; 
Reduced training cost limit per participant: No.

State: Arkansas; 
Developed new guidelines for enrolling participants: No; 
Obligated current year funds only for current year costs: No; 
Enrolled participants in shorter-term training: a; 
Placed participants on temporary waiting list for training: No; 
Reduced training cost limit per participant: No.

State: California; 
Developed new guidelines for enrolling participants: Yes; 
Obligated current year funds only for current year costs: Yes; 
Enrolled participants in shorter-term training: Yes; 
Placed participants on temporary waiting list for training: Yes; 
Reduced training cost limit per participant: Anticipates taking step 
during fiscal year 2004.

State: Colorado; 
Developed new guidelines for enrolling participants: Yes; 
Obligated current year funds only for current year costs: No; 
Enrolled participants in shorter-term training: Yes; 
Placed participants on temporary waiting list for training: No; 
Reduced training cost limit per participant: Yes.

State: Connecticut; 
Developed new guidelines for enrolling participants: Anticipates 
taking step during fiscal year 2004; 
Obligated current year funds only for current year costs: Anticipates 
taking step during fiscal year 2004; 
Enrolled participants in shorter-term training: No; 
Placed participants on temporary waiting list for training: Anticipates 
taking step during fiscal year 2004; 
Reduced training cost limit per participant: No.

State: Delaware; 
Developed new guidelines for enrolling participants: Anticipates 
taking step during fiscal year 2004; 
Obligated current year funds only for current year costs: Yes; 
Enrolled participants in shorter-term training: No; 
Placed participants on temporary waiting list for training: Yes; 
Reduced training cost limit per participant: No.

State: Florida; 
Developed new guidelines for enrolling participants: Yes; 
Obligated current year funds only for current year costs: Anticipates 
taking step during fiscal year 2004; 
Enrolled participants in shorter-term training: Yes; 
Placed participants on temporary waiting list for training: Anticipates 
taking step during fiscal year 2004; 
Reduced training cost limit per participant: Anticipates taking step 
during fiscal year 2004.

State: Georgia; 
Developed new guidelines for enrolling participants: No; 
Obligated current year funds only for current year costs: Anticipates 
taking step during fiscal year 2004; 
Enrolled participants in shorter-term training: No; 
Placed participants on temporary waiting list for training: No; 
Reduced training cost limit per participant: Yes.

State: Hawaii; 
Developed new guidelines for enrolling participants: No; 
Obligated current year funds only for current year costs: No; 
Enrolled participants in shorter-term training: No; 
Placed participants on temporary waiting list for training: No; 
Reduced training cost limit per participant: No.

State: Idaho; 
Developed new guidelines for enrolling participants: Yes; 
Obligated current year funds only for current year costs: Yes; 
Enrolled participants in shorter-term training: Yes; 
Placed participants on temporary waiting list for training: No; 
Reduced training cost limit per participant: No.

State: Illinois; 
Developed new guidelines for enrolling participants: Yes; 
Obligated current year funds only for current year costs: Yes; 
Enrolled participants in shorter-term training: Anticipates taking 
step during fiscal year 2004; 
Placed participants on temporary waiting list for training: No; 
Reduced training cost limit per participant: No.

State: Indiana; 
Developed new guidelines for enrolling participants: Anticipates 
taking step during fiscal year 2004; 
Obligated current year funds only for current year costs: No; 
Enrolled participants in shorter-term training: Yes; 
Placed participants on temporary waiting list for training: No; 
Reduced training cost limit per participant: No.

State: Iowa; 
Developed new guidelines for enrolling participants: Yes; 
Obligated current year funds only for current year costs: No; 
Enrolled participants in shorter-term training: Yes; 
Placed participants on temporary waiting list for training: Anticipates 
taking step during fiscal year 2004; 
Reduced training cost limit per participant: Yes.

State: Kansas; 
Developed new guidelines for enrolling participants: No; 
Obligated current year funds only for current year costs: Yes; 
Enrolled participants in shorter-term training: Yes; 
Placed participants on temporary waiting list for training: No; 
Reduced training cost limit per participant: No.

State: Kentucky; 
Developed new guidelines for enrolling participants: Anticipates 
taking step during fiscal year 2004; 
Obligated current year funds only for current year costs: Anticipates 
taking step during fiscal year 2004; 
Enrolled participants in shorter-term training: Yes; 
Placed participants on temporary waiting list for training: Anticipates 
taking step during fiscal year 2004; 
Reduced training cost limit per participant: No.

State: Louisiana; 
Developed new guidelines for enrolling participants: Yes; 
Obligated current year funds only for current year costs: Anticipates 
taking step during fiscal year 2004; 
Enrolled participants in shorter-term training: No; 
Placed participants on temporary waiting list for training: No; 
Reduced training cost limit per participant: No.

State: Maine; 
Developed new guidelines for enrolling participants: No; 
Obligated current year funds only for current year costs: No; 
Enrolled participants in shorter-term training: No; 
Placed participants on temporary waiting list for training: Anticipates 
taking step during fiscal year 2004; 
Reduced training cost limit per participant: No.

State: Maryland; 
Developed new guidelines for enrolling participants: No; 
Obligated current year funds only for current year costs: Anticipates 
taking step during fiscal year 2004; 
Enrolled participants in shorter-term training: No; 
Placed participants on temporary waiting list for training: No; 
Reduced training cost limit per participant: No.

State: Massachusetts; 
Developed new guidelines for enrolling participants: Yes; 
Obligated current year funds only for current year costs: Yes; 
Enrolled participants in shorter-term training: No; 
Placed participants on temporary waiting list for training: Yes; 
Reduced training cost limit per participant: Anticipates taking step 
during fiscal year 2004.

State: Michigan; 
Developed new guidelines for enrolling participants: Yes; 
Obligated current year funds only for current year costs: Yes; 
Enrolled participants in shorter-term training: Yes; 
Placed participants on temporary waiting list for training: No; 
Reduced training cost limit per participant: No.

State: Minnesota; 
Developed new guidelines for enrolling participants: No; 
Obligated current year funds only for current year costs: Anticipates 
taking step during fiscal year 2004; 
Enrolled participants in shorter-term training: Anticipates taking 
step during fiscal year 2004; 
Placed participants on temporary waiting list for training: Anticipates 
taking step during fiscal year 2004; 
Reduced training cost limit per participant: Yes.

State: Mississippi; 
Developed new guidelines for enrolling participants: No; 
Obligated current year funds only for current year costs: Yes; 
Enrolled participants in shorter-term training: No; 
Placed participants on temporary waiting list for training: No; 
Reduced training cost limit per participant: No.

State: Missouri; 
Developed new guidelines for enrolling participants: Yes; 
Obligated current year funds only for current year costs: Anticipates 
taking step during fiscal year 2004; 
Enrolled participants in shorter-term training: Yes; 
Placed participants on temporary waiting list for training: No; 
Reduced training cost limit per participant: No.

State: Montana; 
Developed new guidelines for enrolling participants: No; 
Obligated current year funds only for current year costs: Anticipates 
taking step during fiscal year 2004; 
Enrolled participants in shorter-term training: Yes; 
Placed participants on temporary waiting list for training: No; 
Reduced training cost limit per participant: No.

State: Nebraska; 
Developed new guidelines for enrolling participants: Yes; 
Obligated current year funds only for current year costs: Yes; 
Enrolled participants in shorter-term training: Anticipates taking 
step during fiscal year 2004; 
Placed participants on temporary waiting list for training: No; 
Reduced training cost limit per participant: Anticipates taking step 
during fiscal year 2004.

State: Nevada; 
Developed new guidelines for enrolling participants: Yes; 
Obligated current year funds only for current year costs: Yes; 
Enrolled participants in shorter-term training: No; 
Placed participants on temporary waiting list for training: No; 
Reduced training cost limit per participant: No.

State: New Hampshire; 
Developed new guidelines for enrolling participants: Yes; 
Obligated current year funds only for current year costs: Anticipates 
taking step during fiscal year 2004; 
Enrolled participants in shorter-term training: Anticipates taking step 
during fiscal year 2004; 
Placed participants on temporary waiting list for training: No; 
Reduced training cost limit per participant: No.

State: New Jersey; 
Developed new guidelines for enrolling participants: Yes; 
Obligated current year funds only for current year costs: Yes; 
Enrolled participants in shorter-term training: Yes; 
Placed participants on temporary waiting list for training: Yes; 
Reduced training cost limit per participant: Yes.

State: New Mexico; 
Developed new guidelines for enrolling participants: Yes; 
Obligated current year funds only for current year costs: Anticipates 
taking step during fiscal year 2004; 
Enrolled participants in shorter-term training: Anticipates taking 
step during fiscal year 2004; 
Placed participants on temporary waiting list for training: Anticipates 
taking step during fiscal year 2004; 
Reduced training cost limit per participant: Yes.

State: New York; 
Developed new guidelines for enrolling participants: Yes; 
Obligated current year funds only for current year costs: No; 
Enrolled participants in shorter-term training: Yes; 
Placed participants on temporary waiting list for training: Yes; 
Reduced training cost limit per participant: Anticipates taking step 
during fiscal year 2004.

State: North Carolina; 
Developed new guidelines for enrolling participants: No; 
Obligated current year funds only for current year costs: No; 
Enrolled participants in shorter-term training: Yes; 
Placed participants on temporary waiting list for training: No; 
Reduced training cost limit per participant: No.

State: North Dakota; 
Developed new guidelines for enrolling participants: No; 
Obligated current year funds only for current year costs: No; 
Enrolled participants in shorter-term training: No; 
Placed participants on temporary waiting list for training: No; 
Reduced training cost limit per participant: No.

State: Ohio; 
Developed new guidelines for enrolling participants: Anticipates taking 
step during fiscal year 2004; 
Obligated current year funds only for current year costs: Anticipates 
taking step during fiscal year 2004; 
Enrolled participants in shorter-term training: Anticipates taking 
step during fiscal year 2004; 
Placed participants on temporary waiting list for training: 
Anticipates taking step during fiscal year 2004; 
Reduced training cost limit per participant: Anticipates taking step 
during fiscal year 2004.

State: Oklahoma; 
Developed new guidelines for enrolling participants: No; 
Obligated current year funds only for current year costs: No; 
Enrolled participants in shorter-term training: No; 
Placed participants on temporary waiting list for training: No; 
Reduced training cost limit per participant: No.

State: Oregon; 
Developed new guidelines for enrolling participants: No; 
Obligated current year funds only for current year costs: Yes; 
Enrolled participants in shorter-term training: No; 
Placed participants on temporary waiting list for training: Anticipates 
taking step during fiscal year 2004; 
Reduced training cost limit per participant: No.

State: Pennsylvania; 
Developed new guidelines for enrolling participants: Yes; 
Obligated current year funds only for current year costs: Yes; 
Enrolled participants in shorter-term training: No; 
Placed participants on temporary waiting list for training: No; 
Reduced training cost limit per participant: No.

State: Rhode Island; 
Developed new guidelines for enrolling participants: No; 
Obligated current year funds only for current year costs: Yes; 
Enrolled participants in shorter-term training: No; 
Placed participants on temporary waiting list for training: Anticipates 
taking step during fiscal year 2004; 
Reduced training cost limit per participant: No.

State: South Carolina; 
Developed new guidelines for enrolling participants: No; 
Obligated current year funds only for current year costs: No; 
Enrolled participants in shorter-term training: No; 
Placed participants on temporary waiting list for training: No; 
Reduced training cost limit per participant: No.

State: South Dakota; 
Developed new guidelines for enrolling participants: Anticipates taking 
step during fiscal year 2004; 
Obligated current year funds only for current year costs: Yes; 
Enrolled participants in shorter-term training: Anticipates taking step 
during fiscal year 2004; 
Placed participants on temporary waiting list for training: No; 
Reduced training cost limit per participant: No.

State: Tennessee; 
Developed new guidelines for enrolling participants: Anticipates 
taking step during fiscal year 2004; 
Obligated current year funds only for current year costs: No; 
Enrolled participants in shorter-term training: No; 
Placed participants on temporary waiting list for training: No; 
Reduced training cost limit per participant: Anticipates taking step 
during fiscal year 2004.

State: Texas; 
Developed new guidelines for enrolling participants: Yes; 
Obligated current year funds only for current year costs: Yes; 
Enrolled participants in shorter-term training: Yes; 
Placed participants on temporary waiting list for training: No; 
Reduced training cost limit per participant: No.

State: Utah; 
Developed new guidelines for enrolling participants: No; 
Obligated current year funds only for current year costs: Yes; 
Enrolled participants in shorter-term training: No; 
Placed participants on temporary waiting list for training: No; 
Reduced training cost limit per participant: No.

State: Vermont; 
Developed new guidelines for enrolling participants: No; 
Obligated current year funds only for current year costs: No; 
Enrolled participants in shorter-term training: No; 
Placed participants on temporary waiting list for training: No; 
Reduced training cost limit per participant: No.

State: Virginia; 
Developed new guidelines for enrolling participants: Anticipates 
taking step during fiscal year 2004; 
Obligated current year funds only for current year costs: Yes; 
Enrolled participants in shorter-term training: Anticipates taking 
step during fiscal year 2004; 
Placed participants on temporary waiting list for training: 
Anticipates taking step during fiscal year 2004; 
Reduced training cost limit per participant: No.

State: Washington; 
Developed new guidelines for enrolling participants: No; 
Obligated current year funds only for current year costs: No; 
Enrolled participants in shorter-term training: No; 
Placed participants on temporary waiting list for training: No; 
Reduced training cost limit per participant: No.

State: West Virginia; 
Developed new guidelines for enrolling participants: Yes; 
Obligated current year funds only for current year costs: Yes; 
Enrolled participants in shorter-term training: Yes; 
Placed participants on temporary waiting list for training: 
Anticipates taking step during fiscal year 2004; 
Reduced training cost limit per participant: No.

State: Wisconsin; 
Developed new guidelines for enrolling participants: No; 
Obligated current year funds only for current year costs: Yes; 
Enrolled participants in shorter-term training: No; 
Placed participants on temporary waiting list for training: No; 
Reduced training cost limit per participant: No.

State: Wyoming; 
Developed new guidelines for enrolling participants: No; 
Obligated current year funds only for current year costs: Anticipates 
taking step during fiscal year 2004; 
Enrolled participants in shorter-term training: Anticipates taking step 
during fiscal year 2004; 
Placed participants on temporary waiting list for training: No; 
Reduced training cost limit per participant: No.

Totals taken; 
Developed new guidelines for enrolling participants: 21; 
Obligated current year funds only for current year costs: 23; 
Enrolled participants in shorter-term training: 17; 
Placed participants on temporary waiting list for training: 6; 
Reduced training cost limit per participant: 6.

Totals anticipate taking; 
Developed new guidelines for enrolling participants: 8; 
Obligated current year funds only for current year costs: 13; 
Enrolled participants in shorter-term training: 10; 
Placed participants on temporary waiting list for training: 12; 
Reduced training cost limit per participant: 7.

Source: GAO survey of state workforce agencies.

Notes: (Yes) indicates state has taken step during fiscal year 2004.

The survey was fielded in March 2004, therefore these results reflect 
steps states have taken during the first six months of fiscal year 
2004 and steps states anticipate taking during the last six months of 
fiscal year 2004.

[End of table]

[End of section]

Appendix VI: Demographic Characteristics of TAA Participants:

Through the Trade Act Participant Report (TAPR), states regularly 
submit data to Labor on the demographic characteristics of TAA 
participants. The data provided below are for participants who 
completed program services or stopped receiving services between July 
1, 2001, and June 30, 2002. These data include workers who received 
services under either or both the TAA program and the NAFTA-TAA 
program.

Table 11: Select Demographic Characteristics of Participants Exiting 
TAA Program, July 1, 2001-June 30, 2002:

Sex: Female; 
Percentage[A]: 55.
Sex: Male; 
Percentage[A]: 45.

Age: Under 30 years; 
Percentage[A]: 10.
Age: 30-45 years; 
Percentage[A]: 41.
Age: 45 years and older; 
Percentage[A]: 48.

Education: Less than high school; 
Percentage[A]: 20.
Education: High school graduate; 
Percentage[A]: 57.
Education: Some education beyond high school; 
Percentage[A]: 23.

Average tenure on prelayoff job (in years); 
Percentage[A]: 9.3.

Source: Department of Labor.

Note: Because these data are provided primarily for background 
purposes, they were not independently verified.

[A] All percentages are based only on participants for whom data were 
available.

[End of table]

[End of section] 

Appendix VII: Comments from the Department of Labor:

U.S. Department of Labor: 
Assistant Secretary for Employment and Training: 
Washington, D.C. 20210:

AUG 26 2004:

Mr. Sigurd R. Nilsen: 
Director:
Education, Workforce, and Income Security Issues: 
U.S. Government Accountability Office:
441 G Street, N.W.: 
Washington, D.C. 20548:

Dear Mr. Nilsen:

The Employment and Training Administration (ETA) is in receipt of the 
draft Government Accountability Office (GAO) report, "Trade Adjustment 
Assistance: Reforms Have Accelerated Training Enrollment, But 
Implementation Challenges Remain," GAO-04-1012. The objectives of the 
study were to determine: (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.

The report includes one recommendation for executive action. The 
recommendation is that ETA monitor the implementation of certain 
provisions of the TAA Reform Act that may have had unintended 
consequences for some workers and that may require legislative changes. 
These include the new training enrollment deadline, which may be 
negatively affecting some workers, and the eligibility criteria for the 
new wage insurance provision, which may be resulting in denial of 
services to some older workers who could benefit from them.

We believe the enclosed technical comments can improve the final 
report. If you would like additional information, please don't hesitate 
to contact me at (202) 693-2700.

Sincerely,

Signed for: 

Emily Stover DeRocco: 
Enclosure: 

[End of section]

Appendix VIII: GAO Contacts and Staff Acknowledgments:

GAO Contacts:

Dianne Blank (202) 512-5654 Lorin Obler (617) 788-0511:

Staff Acknowledgments:

Irene J. Barnett and Eric Clemons made significant contributions to 
this report in all aspects of the work throughout the assignment. In 
addition, Stuart Kaufman assisted in the design of the state survey, 
George Quinn Jr. assisted in the analysis of survey data, Ray 
Wessmiller assisted in the analysis of data collected from the 
Department of Labor, and Shana Wallace contributed to the development 
of the report's overall methodology. Jessica Botsford and Richard 
Burkard provided legal support, and Corinna Nicolaou assisted in the 
message and report development.

[End of section]

Related GAO Products:

Workforce Investment Act: States and Local Areas Have Developed 
Strategies to Assess Performance, but Labor Could Do More to Help. GAO-
04-657. Washington, D.C.: June 1, 2004.

National Emergency Grants: Labor Is Instituting Changes to Improve 
Award Process, but Further Actions Are Required to Expedite Grant 
Awards and Improve Data. GAO-04-496. Washington, D.C.: April 16, 2004.

Workforce Investment Act: One-Stop Centers Implemented Strategies to 
Strengthen Services and Partnerships, but More Research and Information 
Sharing is Needed. GAO-03-725. Washington, D.C.: June 18, 2003.

Older Workers: Employment Assistance Focuses on Subsidized Jobs and Job 
Search, but Revised Performance Measures Could Improve Access to Other 
Services. GAO-03-350. Washington, D.C.: January 24, 2003.

Workforce Investment Act: Better Guidance and Revised Funding Formula 
Would Enhance Dislocated Worker Program. GAO-02-274. Washington, D.C.: 
February 11, 2002.

Workforce Investment Act: Improvements Needed in Performance Measures 
to Provide a More Accurate Picture of WIA's Effectiveness. GAO-02-275. 
Washington, D.C.: February 1, 2002.

Trade Adjustment Assistance: Experiences of Six Trade-Impacted 
Communities. GAO-01-838. Washington, D.C.: August 24, 2001.

Trade Adjustment Assistance: Trends, Outcomes, and Management Issues in 
Dislocated Worker Programs. GAO-01-59. Washington, D.C.: October 13, 
2000.

FOOTNOTES

[1] The TAA program operates on a federal fiscal year basis, that is, 
fiscal year 2004 runs from October 1, 2003 to September 30, 2004.

[2] Not all workers covered by an approved TAA petition are 
individually eligible for TAA benefits and services. Individual 
eligibility also depends on factors including the timing and duration 
of a worker's layoff. In this report, when referring to workers 
eligible for the TAA program, we generally mean workers who have been 
certified as potentially eligible for the program. 

[3] For more information on the TAA program see GAO, Trade Adjustment 
Assistance: Trends, Outcomes, and Management Issues in Dislocated 
Worker Programs, GAO-01-59 (Washington, D.C.: Oct. 13, 2000), and GAO, 
Trade Adjustment Assistance: Experiences of Six Trade-Impacted 
Communities, GAO-01-838 (Washington, D.C.: Aug. 24, 2001).

[4] Extended income support payments may be reduced based on other 
income and training allowances.

[5] The four other reasons listed in the TAA statute are (1) worker 
will be recalled by former employer, (2) worker is within two years of 
retirement, (3) worker is unable to participate in training because of 
health problems, and (4) approved training is either not available or 
not available at a reasonable cost, or no training funds are available. 


[6] Before the TAA Reform Act took effect, the maximum TAA waiver 
duration was a worker's initial 26 weeks of extended income support. 
Now, to qualify for the HCTC, workers may need waivers while they are 
still receiving UI benefits and before they have even started to 
collect extended income support. Labor has issued guidance to states 
clarifying that the maximum waiver duration may now exceed 26 weeks if 
a worker needs a waiver during the UI eligibility period and continues 
to need a waiver throughout the initial 26 weeks of extended income 
support.

[7] For more information on the one-stop center system, see GAO, 
Workforce Investment Act: One-Stop Centers Implemented Strategies to 
Strengthen Services and Partnerships, but More Research and Information 
Sharing Is Needed, GAO-03-725 (Washington, D.C.: June 18, 2003).

[8] For more information on the national emergency grants program, see 
GAO, National Emergency Grants: Labor Is Instituting Changes to Improve 
Award Process, but Further Actions Are Required to Expedite Grant 
Awards and Improve Data, GAO-04-496 (Washington, D.C.: April 16, 2004).

[9] The percentage of petitions processed within 40 days in fiscal year 
2003 prior to implementation of the act was 20 percent.

[10] The reengineering is still in a planning stage. Draft plans are 
currently under review at a number of levels at Labor. One of the goals 
of the changes is to standardize certain operating procedures to guide 
investigators' work and to ensure consistency among the investigators' 
decisions, at least in areas where this is possible. The new process 
would be computer-rather than paper-based, and would calculate a 
recommended determination decision for the investigator based on 
qualitative and quantitative data entered into a new computer system. 
However, there would still be room for discretion on the part of Labor 
officials, who could override the system's recommendations.

[11] The new deadline is in addition to the 210-day deadline that 
predates the TAA Reform Act and is still in effect. The 210-day 
deadline is no longer an issue for participants who have enrolled in 
training within the new deadline, which they must meet before the 210-
day deadline. 

[12] The previous NAFTA-TAA program had a training enrollment deadline 
and did not allow waivers. Officials from one state we visited always 
encouraged individuals to enroll in the regular TAA program rather than 
the NAFTA-TAA program if they could--because these state officials 
believed that the deadline was so problematic. The deadline was 
expanded to cover the consolidated TAA program in an effort to focus 
participants' attention on training.

[13] In an upcoming report we will be providing a more in-depth 
analysis of the implementation of the HCTC provision of the TAA Reform 
Act. 

[14] The TAA Reform Act expanded eligibility specifically to secondary 
workers who supply component parts to any firm directly affected by 
trade. However, secondary workers who finish a product are only 
eligible for TAA services if they finished a product produced by a firm 
directly affected by trade with either Canada or Mexico. 

[15] Labor was required to establish the wage insurance program by no 
later than August 6, 2003, one year after the enactment of the TAA 
Reform Act. 

[16] During August and September 2003, the only months of fiscal year 
2003 in which petitioners had the option to apply for wage insurance 
benefits, there were 223 approved TAA petitions. Over 25 percent of the 
approved petitions during this time period, therefore, included 
approved requests for wage insurance benefits. There were 86 requests 
for wage insurance benefits submitted on TAA petitions during fiscal 
year 2003. 

[17] The number of workers certified as potentially eligible and the 
numbers receiving specific benefits and services include workers served 
under the TAA and NAFTA-TAA programs. 

[18] Other measures of demand also rose in fiscal year 2002, including 
the number of workers who started collecting extended income support 
benefits and the number who received job search allowances (see app. 
III). 

[19] The other four criteria are (1) the worker would benefit from the 
training, (2) there is a reasonable expectation of employment following 
the training, (3) the training is reasonably available from a public or 
private provider, and (4) the worker is qualified to undertake and 
complete the training. 

[20] One Labor official and one state official we talked with also 
mentioned other factors that may have contributed to periods of 
training enrollment deferral, citing, for example, occasional delays 
prior to fiscal year 2004 in Labor's response to states' requests for 
TAA training funds. 

[21] For fiscal year 2004, Labor allocated 80 percent of available 
training funds based on the average amount of funds allocated to states 
for TAA training in the previous 3 fiscal years, and 20 percent based 
on the average number of program participants in each state for the 
previous 3 years for which complete data are available. Labor plans in 
future years to include in the formula factors related to states' 
performance on program outcomes.

[22] For example, one model of coordination included in Labor's 
guidance is to use WIA funds for case management and TAA funds for 
training and income support. 

[23] Labor awards national emergency grant funds to states to help them 
respond to major layoffs.

[24] According to Labor, the amount of national emergency grant funds 
awarded specifically to serve trade-affected workers was about $80 
million in program year 2001, about $150 million in program year 2002, 
and about $90 million in program year 2003. Program years run from July 
to June; for example, while fiscal year 2003 ran from October 1, 2002 
to September 30, 2003, program year 2003 ran from July 1, 2003 to June 
30, 2004. 

[25] The ES is a nationwide system of public employment offices 
established by the Wagner-Peyser Act. ES staff provide services to job 
seekers and employers, including job search assistance, job referral, 
and job placement assistance. Federal Wagner-Peyser funds are allocated 
to each state to help support its ES staff. 

[26] In addition to WIA local formula funds and WIA national emergency 
grant funds, states also reported using WIA rapid response and 
statewide activities funds to support case management for TAA-eligible 
workers. States may reserve up to 25 percent of their WIA dislocated 
worker allocations to provide rapid response services intended to help 
laid-off workers transition quickly to new employment. States may also 
reserve up to 15 percent of their WIA allocations to provide a variety 
of other statewide activities for workers. 

[27] A state's Eligible Training Provider List contains all training 
course offerings that are available to WIA-funded individuals eligible 
for training. To remain on the list, training providers must meet 
certain performance criteria established by the state.

[28] In previous reports we have described how performance measures 
create a disincentive to enrolling various populations in WIA-funded 
case management and training, including older workers and dislocated 
workers with high prior wages. See for example GAO, Older Workers: 
Employment Assistance Focuses on Subsidized Jobs and Job Search, but 
Revised Performance Measures Could Improve Access to Other Services, 
GAO-03-350 (Washington, D.C.: Jan. 24, 2003) and GAO, Workforce 
Investment Act: Improvements Needed in Performance Measures to Provide 
a More Accurate Picture of WIA's Effectiveness, GAO-02-275 (Washington, 
D.C.: Feb. 1, 2002). 

[29] See GAO-01-59. 

[30] Mathematica Policy Research, Inc., International Trade and Worker 
Dislocation: Evaluation of the Trade Adjustment Assistance Program, 
submitted to the U.S. Department of Labor (April 1993). 

[31] Office of the Inspector General, U.S. Department of Labor, 
Improving the Trade Act Programs (DOL Office of Audit Report Number 04-
01-009-03-330, Sep. 26, 2001). 

[32] Not all states use WRIS to report WIA performance. In a recent 
study, we found that 38 states currently participate in WRIS. GAO, 
Workforce Investment Act: States and Local Areas Have Developed 
Strategies to Assess Performance, but Labor Could Do More to Help, 
GAO-04-657 (Washington, D.C: June 1, 2004). 

[33] See GAO-04-657. 

[34] TAA performance measures provide information to support Labor's 
performance goals under the Government Performance and Results Act 
(GPRA). GPRA is intended to focus government decision making, 
management, and accountability on the results and outcomes achieved by 
federal programs.

[35] Labor's reported data are compiled from TAPR data. Outcome data 
for 2003 are based on participants who exited either the TAA or NAFTA-
TAA program from July 1, 2001 to June 30, 2002. As a result, these data 
do not reflect program outcomes for participants served under the 
provisions of the TAA Reform Act, who would have been certified as TAA-
eligible on or after November 4, 2002.

[36] A more recent study found that generally trade-affected workers as 
compared with other dislocated workers are more likely to be women and 
older. As a result of these characteristics, these types of workers are 
more likely to face barriers to reemployment (Lori Kletzer, Job Loss 
from Imports: Measuring the Cost, Washington, DC: Institute for 
International Economics, 2001). 

[37] In 2004 the Office of Management and Budget (OMB) reviewed the TAA 
program through its Program Assessment Rating Tool (PART). OMB rated 
the program as ineffective based in part on the fact that the existing 
studies, including those of Labor, questioned whether the program was 
effective in helping program participants get back into suitable jobs. 

[38] According to Labor officials, because random assignment is not 
possible in the TAA program, the impact study will use quasi-
experimental methods that compare outcomes of different groups of TAA 
participants to those of comparison groups. The study will use 
propensity scoring, a technique that allows researchers to find 
comparison group members who are most closely matched to participants 
on a number of characteristics simultaneously. 

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