Table of Contents

OPENING STATEMENT OF CHAIRMAN HOWARD P. "BUCK" MCKEON, SUBCOMMITTEE ON POSTSECONDARY EDUCATION, TRAINING AND LIFE-LONG LEARNING, COMMITTEE ON EDUCATION AND THE WORKFORCE, U.S. HOUSE OF REPRESENTATIVES *

OPENING STATEMENT OF RANKING MEMBER MATTHEW MARTINEZ, SUBCOMMITTEE ON POSTSECONDARY EDUCATION AND LIFE-LONG LEARNING, COMMITTEE ON EDUCATION AND THE WORKFORCE, U.S. HOUSE OF REPRESENTATIVES, WASHINGTON, DC *

OPENING STATEMENT OF CHAIRWOMAN NANCY JOHNSON, SUBCOMMITTEE ON HUMAN RESOURCES, COMMITTEE ON WAYS AND MEANS, U.S. HOUSE OF REPRESENTATIVES, WASHINGTON, DC *

OPENING STATEMENT OF RANKING MEMBER BENJAMIN CARDIN, SUBCOMMITTEE ON HUMAN RESOURCES, COMMITTEE ON WAYS AND MEANS, U.S. HOUSE OF REPRESENTATIVES *

STATEMENT OF CYNTHIA A. FAGNONI, DIRECTOR, EDUCATION, WORKFORCE, AND INCOME SECURITY ISSUES, U.S. GENERAL ACCOUNTING OFFICE, WASHINGTON, DC; ACCOMPANIED BY GALE HARRIS AND DIANNE MURPHY BLANK *

SEE APPENDIX D *

STATEMENT OF THE HON. RAY BRAMUCCI, ASSISTANT SECRETARY OF EMPLOYMENT AND TRAINING, U.S. DEPARTMENT OF LABOR, WASHINGTON, D.C. *

OPENING STATEMENT OF ROBERT C. GROSS, PRESIDENT, INTERSTATE CONFERENCE OF EMPLOYMENT SECURITY, AGENCIES, AND EXECUTIVE DIRECTOR, UTAH DEPARTMENT OF WORKFORCE SERVICES, WASHINGTON, D.C *

STATEMENT OF LINDA H. SOUTH, EXECUTIVE DIRECTOR, BREVARD WORKFORCE DEVELOPMENT BOARD, INC., COCOA, FLORIDA *

STATEMENT OF RICHARD RAMSBURG, PRINCIPAL, ADULT EDUCATION AND EVENING HIGH SCHOOL, FREDERICK COUNTY MARYLAND PUBLIC SCHOOLS, FREDERICK, MARYLAND *

APPENDIX A--WRITTEN OPENING STATEMENT OF CHAIRMAN HOWARD P. "BUCK" MCKEON, SUBCOMMITTEE ON POSTSECONDARY EDUCATION, TRAINING AND LIFE-LONG LEARNING, COMMITTEE ON EDUCATION AND THE WORKFORCE, U.S. HOUSE OF REPRESENTATIVES, WASHINGTON, DC *

Washington, D.C.

The subcommittee met, pursuant to call, at 2:00 p.m., in Room 2175, Rayburn House Office Building, Hon. Howard P. "Buck" McKeon [chairman of the Subcommittee on Postsecondary Education, Training and Life-Long Learning] presiding.

Present: [Subcommittee on Postsecondary Education, Training and Life-Long Learning] Representatives McKeon, Petri, Ehlers, Isakson, Martinez, Holt, Owens, and Roemer, Payne.

Present: [Subcommittee on Human Resources] Representatives Johnson, McCrery, and Cardin.

Staff Present: Linda Castleman, Office Manager; Patrick Lyden, Professional Staff Member; D'Arcy Philps, Professional Staff Member; Michael Reynard, Deputy Press Secretary; Kent Talbert, Education Policy Counsel; Shane Wright, Legislative Assistant; June Harris, Education Coordinator; Mary Ellen Ardouny, Legislative Associate/Education; and Roxana Folescu, Staff Assistant/Education.

Chairman McKeon. Good afternoon. A quorum being present, the Subcommittee on Postsecondary Education, Training and Life-Long Learning from the Committee on Education and the Workforce, and the Subcommittee on Human Resources from the Committee on Ways and Means will come to order. I would like to welcome members of the Ways and Means Committee and thank them for joining us today.

We are holding this joint subcommittee hearing today to hear testimony on assessing the progress of work-related provisions under welfare reform. We will move quickly to the testimony of the witnesses, but we will first have a few opening statements from the chairmen, ranking members and Mr. Petri.

With that, I ask unanimous consent that the hearing record remain open for 14 days to allow members' statements, witness' written testimony and other written material to be submitted for the record.

Without objection, so ordered.

Good afternoon. I would like to welcome you to today's hearing on the issue of one-stop centers. I am particularly pleased we are having this hearing along with the Ways and Means Subcommittee on Human Resources, chaired by Representative Johnson.

Two years ago, we successfully passed into law the Workforce Investment Act to consolidate and coordinate what had been a maze of separate federal job training and employment programs. One of the key provisions of the Workforce Investment Act was the establishment of one-stop centers to provide individuals with integrated and streamlined delivery of employment, job training, and other supportive services.

Just prior to the passage of the Workforce Investment Act, another major initiative was signed into law, welfare reform. Both of these laws have as a central theme the concept of work first; that is, placing a priority on providing individuals with employment opportunities as a first step toward self-sufficiency, followed by on-going services and training to help achieve and maintain that goal.

It is this similarity in the mission of the Workforce Investment Act and welfare reform that makes it so important that we at the Federal level do whatever we can to ensure that States and localities have the flexibility to effectively coordinate the delivery of these services.

The purpose of our hearing today is to examine the progress that has been made with respect to the implementation of one-stop centers. As important, we are eager to

hear from a variety of perspectives on the extent to which the integration of welfare services has been a part of this implementation. We will hear of both the success of these efforts, as well as the challenges that continue to face this goal.

It is my hope that this hearing will lead to continued discussions among our committees, Federal agencies, States and localities, not only in identifying challenges, but to figure out how best to break down barriers preventing the most effective and efficient delivery of these important services.

The vitality of this system is not only important to the millions of individuals receiving Federal employment and training assistance, but also to the thousands of employers nationwide who are desperate to find highly skilled employees to fill vacant positions. Proposals to help these employers by significantly expanding the number of H-1B visas for foreign workers are indicative of the challenges we face.

I would also like to note that this hearing is very timely in that the provisions of the Workforce Investment Act are to be in place by July 1, 2000, just two days away. We are fortunate to have the Assistant Secretary of Labor for Employment and Training, Ray Bramucci, here with us today to provide an update on the progress of this implementation.

I want to again thank Chairman Johnson for this joint hearing and for her tireless leadership in this area. I would also like to thank Ron Haskins, Staff Director of the Ways and Means Subcommittee on Human Resources, who has provided this subcommittee with invaluable assistance over the years. I want to thank each of our witnesses for being here this morning, and I look forward to your testimony.

I will now recognize Representative Martinez, ranking member of the committee, for his opening comments.

[The prepared statement of Mr. McKeon follows:]

WRITTEN OPENING STATEMENT OF CHAIRMAN HOWARD P. "BUCK" MCKEON, SUBCOMMITTEE ON POSTSECONDARY EDUCATION, TRAINING AND LIFE-LONG LEARNING, COMMITTEE ON EDUCATION AND THE WORKFORCE, U.S. HOUSE OF REPRESENTATIVES, WASHINGTON, DC—SEE APPENDIX A

Mr. Martinez. Thank you, Mr. Chairman. It is a pleasure to be here and welcome both our colleagues from the Ways and Means Committee and the witnesses that will testify before us today.

As you said earlier, in 1998 our committee I believe set a precedent by working together and forging a bipartisan piece of legislation, which stands as a testament to what we can do when we work together. Of course, there was some resistance in the beginning that had more to do with pride of authorship of the JTPA than it did with substance in providing services. But once we got over that, we were able to forge that legislation together and I believe that it is working in many places.

The Workforce Investment Act was an essential piece of the welfare reform effort. It repeals the Job Training Partnership Act and consolidated and coordinated more than 60 Federal education training and employment rehabilitation programs. In addition, that act provided States with the flexibility to necessarily implement the programs that will best suit their needs, while maintaining high standards and accountability. It wasn't as if it was something new. I visited more than 10 years ago in Texas a one-stop shop center that they had initiated, much before any of us in Washington or the Congress thought of doing this.

Finally, but perhaps the most important, it provides employers and employees alike with easy access to services through those one-stop centers.

Although the Workforce Investment Act was enacted less than 2 years ago and the official date of implementation is still two days away, many States and localities have been integrating employment and training services under the one-stop system for several years, as I mentioned, Texas.

We are gathered here today to review the initial progress of this early implementation. I understand the General Accounting Office has visited a number of these States and localities that are well ahead of the game and are prepared to provide us with preliminary information regarding what is working, where challenges lie, and what the Federal Government can do to smooth the way for other States.

I am also very interested in hearing the Department of Labor's perspective as it undertakes the challenging responsibility of altering the face of the Nation's job training and employment system and preparing the workforce to compete in an increasingly

competitive economy of the 21st century.

I am particularly interested in hearing from you at the State level and local level who have personal experience in turning this law into reality, what you have to say, for although I believe Congress did an outstanding job with the Workforce Investment Act, there is always room for improvement, and it is my hope that your testimony today will provide us with the direction as to where the improvements can be made.

Thank you very much. I yield back balance of my time.

Chairman McKeon. Thank you, Mr. Martinez. I would like now to recognize Mrs. Johnson, the chairwoman of the Subcommittee on Human Resources, for her opening statement.

Mrs. Johnson. Thank you, Mr. McKeon. It is indeed a great pleasure to be here and it has been a great pleasure to work with you and your staff to make this hearing happen. I have long believed that the jurisdictional lines in Congress are too narrow, and this kind of joint hearing is both in your interest and in ours.

Also as a State that was a pilot State for the one-stop centers, I congratulate this committee on the Workforce Investment Act, because it was an enormous help for us through our role as a pilot State. We were well aware of the opportunities that were to be had through more progressive legislative framework around job training activities and job placement activities, and indeed they have been realized. Not a day passes when I visit one of these centers, but that I am not thanked by many for the changes in the law embodied in the Workforce Investment Act.

So we appreciate past performance. We look forward to working with you in the future and we are very pleased to be at this joint hearing.

What I want to know as a result of today's hearing is the following: First, we passed major legislation to give flexibility to States in promoting work. Is it working? Are the States better able to coordinate the programs? Are they getting the maximum use out of their resources? Are there problems that we need to fix?

Second, we have had a revolution in our welfare program. At least 1 million former welfare mothers are working and on average are less likely to be poor, and they have greater incomes than when they were on welfare. We also know many of them are having trouble staying in their jobs. I want to know if we are using one-stop job centers to help these young mothers and other young workers as well stay in the labor force.

Third, although we have achieved a great deal since passing welfare reform in 1996, I am not satisfied. Mothers working in low wage jobs are better off and so are their children than they were on welfare, but I have absolute faith that many of these mothers are capable of going into bigger and better paying jobs. My question is what are we doing at the one-stop job centers to help these women get training for better jobs and move up the career ladder. If we can begin to get good answers to these questions, we will have achieved a lot today.

In the end, job training and job placement centers should not be just about that first job. They should be about career advancement, career development, and working up the job ladder and the income ladder that goes with it. If welfare reform is to succeed, then we have to succeed in this larger challenge in the job training-job placement area.

Again, let me thank Mr. McKeon and your staff, Mr. D'Arcy Philps here, for working with us to bring this committee together, and I welcome all the witnesses and thank them for coming to Washington to provide us with better information on the successes and challenges faced by our on-the-job training programs.

Thank you, Mr. Chairman.

WRITTEN OPENING STATEMENT OF CHAIRWOMAN NANCY JOHNSON, SUBCOMMITTEE ON HUMAN RESOURCES, COMMITTEE ON WAYS AND MEANS, U.S. HOUISE OF REPRESENTATIVES, WASHINGTON, DC—SEE APPENDIX B

Chairman McKeon. Thank you.

I will hear now from ranking minority member, Mr. Cardin.

Mr. Cardin. Thank you, Mr. Chairman. Indeed I join in complimenting you and Mrs. Johnson for holding this joint hearing. I think it is important that we look at the broader subjects, and sometimes that becomes very difficult within our own committee. So I thank you for convening a joint hearing today.

As Mrs. Johnson pointed out, the Subcommittee on Human Resources is charged with the responsibility of oversight of the welfare reform that this Congress passed a few years ago. We spent a lot of time in our subcommittee looking at the tools that are currently available and trying to evaluate the progress that we have made. We are all very encouraged by the reduction in the welfare rolls, but we still know we have a long

way to go in order to deal with the poverty in our community and to make sure that the people that leave welfare in fact not only have employment, but have opportunity to advance in their employment.

The one-stop centers offer us one of the tools that we want to evaluate through this hearing as to how effective it has been in helping people who are coming off of welfare.

We know that there are 17 of these centers now, States that are participating in this, that are providing most of their employment services to people leaving welfare, and another 19 States that provide other services to people coming off of welfare through their one-stop centers. What I would like to know as we proceed through the hearing is not only the direct employment services, but what are the post-employment services being offered? As Mrs. Johnson pointed out, it is not just getting a person a job, but whether that person can succeed in that job, can advance, and really have stable employment for the future.

I am also concerned as to how the one-stop centers are helping people in post-employment to make sure they get the benefits they are entitled to under food stamps and Medicaid. We have had a lot of difficulty in getting people who are eligible enrolled in these services, and I would hope as we proceed with the hearing, that we will talk about how the one-stop centers are helping us get people enrolled in the programs that they are entitled to.

I thank all the witnesses for being here today, and I look forward to your testimony.

Chairman McKeon. Thank you, Mr. Cardin.

We have Mr. Petri with us who is in line to be the chairman of the full committee next year.

Mr. Petri. Thank you, Mr. Chairman. Again, Mr. Chairman, I would like to commend you and Mrs. Johnson and your ranking members for organizing this very important hearing and just underline a concern I have, and which I hope the witnesses will address.

Mrs. Johnson emphasized the importance of not only getting people into the world of work, but also helping them move up the career and income ladder. It is my impression that it did not make much difference how the phase-out rates were coordinated and all of that, between the vast array of Federal and state programs, when people were not working, because the phase-out rates did not make any difference. But today if someone is working in Milwaukee, Wisconsin, and earning a minimum wage of $11,000, and then they do well, work overtime, improve their skills, and make $22,000, their take-home pay is actually worse. They are penalized.

That is wrong. To fix that up, it is by $3,000 or $4,000, which, is significant. So there is no real economic incentive in the short run to advance and improve oneself and work on the books.

It may not be that job centers are the full solution. It may be that we in Congress have to do a better job of coordinating between not just these two committees, but other committees that have jurisdiction over food stamps or the housing programs and a whole range of programs to make sure that these marginal phase-out rates, not income tax rates, but loss of benefit rates, are better coordinated so people don't phase out at over a 100 percent tax rate in effect, if you look at benefits as income and then the loss of them as a tax, as they improve their skills and improve their quality and nominal income.

It is very important, and I am glad these committees are having this hearing so that we can begin laying the foundation for addressing it.

Thank you, Mr. Chairman.

Chairman McKeon. Thank you. Our first witness today, first panel, is Ms. Cynthia Fagnoni, Director of Education, Workforce, and Income Security Office at the U.S. General Accounting Office here in Washington.

We changed some lights here. We don't have the big glaring red, yellow and green, but we have those little ones. I think they still work effectively. Your full testimony will be inserted in the record, and of course anything else, as I said that you wanted to submit later. However, if you want to summarize or give us your testimony now, the light goes yellow at four minutes and red at five minutes, and then we will have questioning from the members.

Ms. Fagnoni. Thank you. I would like to introduce Gale Harris and Dianne Murphy Blank here with me today, who helped oversee this particular project and have extensive knowledge of workforce as well as welfare issues.

Good afternoon, Mr. Chairman, Chairman McKeon, Chairman Johnson and members of the subcommittees. We are pleased to be here this afternoon to discuss the implementation of the Workforce Investment Act and the integration of services, including those for TANF recipients at one-stop centers. Our testimony focuses on the status of States' efforts to implement WIA, the challenges they have encountered, and the service delivery approaches that show promise. This testimony is based on our ongoing work for these subcommittees.

States are making progress in implementing WIA, but not all States will have completed all the required activities by July 1st when WIA takes full effect. All States have submitted their 5-year plans to Labor and established their local areas and nearly all have a comprehensive one-stop center in each area, but 16 States won't have completed

their cost allocation plans, and at least six States won't have the revised training systems in place.

Even though WIA does not require States to provide all program services on site at the one-stops, States told us that many services are on site, especially for the larger Labor funded programs. To fund one-stop centers' operations and infrastructure, States told us that Labor's WIA mandated programs were the largest sources.

States are also forging linkages between WIA and TANF. Forty-three States told us that TANF is a State partner with the one-stop system, and the TANF block grant was identified as a key source of one-stop funding by nearly a fourth of the States. TANF employment-related services are on site at the one-stop centers in about half the States.

As States have worked to implement WIA, they report facing the following challenges: Establishing formal partnerships with agencies that now under WIA provide services through the one-stops, has proven difficult. For example, States told us that funding limitations across program partners and the lack of guidance from State and Federal agencies made it difficult to allocate costs in a fair and equitable manner. States have also struggled with the logistical issues involved in designing and developing an integrated system under WIA.

One of the other major infrastructure challenges has been the development of computer systems to support integration. Over one-third of the States do not expect to have a management information system in place by July first.

States' efforts to integrate their programs have been affected by the multiple requirements of the Federal funding sources supporting one-stops. States told us that the way Federal funds are tracked in silos makes it difficult for them to respond to the spirit of WIA.

Despite these challenges, States and localities are developing integrated service delivery approaches that show promise. These approaches use WIA's customer focus and aim to reduce the problems that exist in the fragmented workforce development system.

Our chart over here on your left shows the key areas that we have identified as critical to successfully integrating services. One-stops need to attract and serve employers in ways that minimize wasted time and reduce frustration. The centers we visited in Titusville and Melbourne, Florida, for example, designated an individual or a team to serve as the center's representative for an employer or employment sector.

At the same time, one-stops need to bring in job seekers to help them get employment and program information. To increase community wide awareness of the centers, those in Killeen, Texas and Kanab, Utah, identify as a community resource by providing space for a variety of community wide events.

Creating a customer friendly environment for job seekers is also important. Many centers, such as Dayton, Ohio and Killeen, Texas, minimize the waiting time for services by providing a quick assessment at the information desk and then referring clients for specialized services. Some centers, like the one in Janesville, Wisconsin, use their job resource rooms as the waiting room for specialized services so customers can conduct job

searches while they wait.

Also key is providing job seeker services that are tailored and seamless. Some clients, like many TANF recipients, may need intensive case management services to help them find and keep a job. One-stop centers we visited often found ways to integrate the services provided by multiple programs, creating a seamless approach to delivering services. For example, clients in all centers in Utah see a single case manager for all services, including TANF, food stamps and Medicaid, despite the program or combination of programs that fund those services.

In Killeen, Texas, on the other hand, where more than one case manager may be involved in a case, the centers assign a primary case manager who takes the lead to coordinate most activities and assist the client to navigate the system.

Moreover, an additional new focus for the workforce development system, and one that many of you specifically focused on in your opening statements, is helping job seekers become self-sufficient by providing needed post-employment services. Once a client gets a job, the focus of one-stop services becomes one of helping the client retain the job or upgrade skills to obtain a better job. Because this post-employment program emphasis is new, most States and localities we visited were only beginning to develop post-employment efforts.

In conclusion, we are still a long way from having a nationwide comprehensive workforce investment system that effectively serves both job seekers and employers, but at this early stage of WIA implementation, we do see States making progress in integrating employment and training services. New relationships are being established and despite these challenges, States and localities are developing promising approaches to the way they serve their customers.

Mr. Chairman, this concludes my statement. We would be happy to answer any questions you or members may have. Thank you.

[The prepared statement of Ms. Cynthia Fagnoni follows.]

WRITTEN TESTIMONY OF CYNTHIA A. FAGNONI, DIRECTOR, EDUCATION, WORKFORCE, AND INCOME SECURITY ISSUES, U.S. GENERAL ACCOUNTING OFFICE, ACCOMPANIED BY GALE HARRIS AND DIANNE MURPHY BLANK-SEE APPENDIX C

Chairman McKeon. Thank you very much. In your view, how is it that some States and localities are better able to design a unified system within the constraints of multiple Federal laws, while others point to the Federal laws as barriers to coordination? Some States you mentioned, some are doing very well and some are not as well. What is the difference?

Ms. Fagnoni. I think there can be a number of reasons why some States are further ahead. I think maybe a lot of States would refer to barriers, but perhaps some have been more successful in overcoming them. One reason often is the fact there are some States that have more long-standing relationships with a broader range of programs and have been working together for a longer periods of time.

For example, there may have been linkages under the old AFDC programs, the jobs program and the JTPA programs and those kinds of linkages and relationships carry through under the new systems. I think also leadership from the State level, leadership in providing a vision and overall direction for programs. Some States have gone so far as to merge their workforce and welfare departments, for example, to try to both show the strong signal that they need to work together as one entity, but also to help try to break down some of those barriers that exist.

So I think there are a number of reasons why some States have had a head start, some have had perhaps stronger visions and pushed ahead further on some of these. But at the same time, both systems are still evolving, WIA as well as welfare reform, and a number of States are moving in the same directions.

Chairman McKeon. Is it your view that coordination between these systems has grown since the passage of the Welfare Reform and the Workforce Investment Act? Has that been helpful?

Ms. Fagnoni. I think it has been. I know in our discussions with some officials around the country, for example, they have pointed to the welfare to work grant as a program because it is housed in the Department of Labor, but yet it is designed to serve hard to serve welfare recipients and non-custodial parents of children on welfare, that that has sort of forced linkages between Labor programs and programs out of HHS and welfare programs, including TANF. So that has been viewed as something that has been advantageous.

Also, as I think we have noted in recent reports, the goals of the two systems, the workforce development system and our welfare system, have merged more closely together with a stronger emphasis on moving people into employment and now a more recent focus on helping people retain jobs and improve their skills to achieve higher standards of living.

So I think it is fair to say that while some States have had a head start, there has been movement since both of these key reform efforts for the two systems to work more closely together.

Chairman McKeon. Is that in all States?

Ms. Fagnoni. Not in all States. I think you will see much variation, as we found when we surveyed all 50 States. We found a range in terms of the extent to which the States are partnering with TANF, if you will, at the State level, the extent to which at the one-stop level services that are TANF-related are available at the one-stop.

For example, in some States a broad range of services are available to TANF recipients, including Medicaid, food stamps, and these sorts of related programs for low-income individuals. In other one-stops, the link may be with employment-related services for TANF, and the eligibility and other kinds of services might be elsewhere. So there is a mix in terms of how much is linked and at what level.

Chairman McKeon. My time is just about up. Is there anything that you see that we could do to help those States that are lagging behind?

Ms. Fagnoni. We identified some challenges that States will need to continue to work on and that all levels of government will need to work through.

One is to enhance coordination, not just between the TANF and the workforce development systems, but also even within the workforce development system, the multitude of programs, some of which not housed in the Department of Labor and ensuring there is coordination among those programs.

As we note in our testimony, another key area, the focus on job retention and post-employment services is a new one for our workforce development system, and I think it is one that, as a number of you mentioned in your opening statements, it is just beginning, but deserves attention and focus to see to what extent States are moving in this direction and to seek encouragement on that.

I think there are opportunities to look at how States and localities could be encouraged to better integrate and maybe break down some of the barriers and administrative challenges that have to do with the multiple funding streams.

Chairman McKeon. Thank you. Mr. Martinez.

Mr. Martinez. Thank you, Mr. Chairman. Can you hear me?

Ms. Fagnoni. I can, but not too well.

Mr. Martinez. My switch doesn't seem to be working. Now?

Ms. Fagnoni. Yes.

Mr. Martinez. I am having a little difficulty. The light is not going on.

The first part of the act was establishing the Workforce Investment Board on the State level. Most States have done that already?

Ms. Fagnoni. Yes.

Mr. Martinez. Then the next was to identify investment areas, and the States have done that?

Ms. Fagnoni. Yes.

Mr. Martinez. So that they are proceeding along the lines that the act suggested. It is a good thing that in many States welfare programs are collaborating with the workforce investment. Originally when JTPA was enacted, it was more or less in answer to the distress of workers that were being put out of jobs because of factories closing and moving overseas, dislocated workers. Initially when that act was enacted, one of the first places, the County of L.A., I guess, were ahead of their time, because they choose to take and start to move welfare recipients into the job training partnership programs to get them off the welfare rolls. Immediately here in Congress there was an upheaval. You know, this isn't what the act was for. It was for dislocated workers.

Slowly over the years it started to move towards trying to include in the act hard to serve welfare recipients, which they were successful in amending the act. I think the Workforce Investment Act made a big improvement, because it brought the flexibility to do all of that now together.

I can't understand why more States are not eager and moving very rapidly into a fully implemented plan. Could you tell me why?

Ms. Fagnoni. I think there are a number of reasons. As we point out in our testimony, some of the areas where States are having more difficulty in reaching the implementation requirements by July 1st, a couple of days from now, have to do with requirements to have training partners in place that have been certified, to have the individual training accounts established so that people can use vouchers in effect to seek training, and they have had some difficulties in developing some of the MOU's for some of the partners, particularly in cases where this may be new and there may be some issues with turf among the different agencies. So these are some of the areas where while they have some of the major pieces in place and are overall on track with implementation, some of these other areas, part of them administrative dealing with cost allocations among funds, have been more challenging.

In addition, States have considerable flexibility; particularly with say a program like TANF that is not a required mandatory partner under WIA. They have some flexibility and choices in terms of what they choose to include and combine together as part of the workforce development system and in the one-stops.

So there are a number of reasons why we see some ranges.

Mr. Martinez. Should the legislation be amended so that would be a requirement?

Ms. Fagnoni. That is something that I know I have heard people talk about recently, in talking about maybe they should have done that when the law was enacted or maybe used that opportunity.

In talking to people around the country, we get some varying opinions about the extent to which people feel comfortable completely incorporating TANF within the workforce development system and within one-stops.

There are those who would raise concerns that TANF recipients might not get the range of services they need and might not get the attention they need for special services if they are grouped together completely with others seeking jobs. At the same time, we have seen instances where the extent to which TANF recipients may need to go to different locations to receive different kinds of services can be very confusing and time-consuming and difficult.

So, what I think we have been talking about among ourselves is it would be important, I think, for the Congress and others to pay attention to how this system is evolving, look at the States that have been more active in incorporating TANF, look at what that has and hasn't done for TANF recipients, and we can start to get a sense of whether or not that is important enough to do that, that other States should be encouraged to do the same, or whether there are some issues that surface that one needs to pay attention to.

Mr. Martinez. Earlier you mentioned about finding the right service providers. I imagine you mean the people that would provide the training. Weren't there a lot of people in place for those kind of services already from the Job Training Partnership Act that the PICs themselves had given slots to X number of service providers, and wasn't there any transition from using those people into the new program?

Ms. Fagnoni. I think there were. I think in a number of cases they would be the same providers. But I think there are some additional requirements. For example, the trainers have to be able to show some performance so that particularly for clients who are making choices about where to go for training, would have information on how effective those trainers had been in actually placing people in jobs, for example.

There are some additional requirements. So some of the same providers that were able to provide training under the old system may need to go through some additional re-certification. They may ultimately be able to use them, but in some cases, they have to spend some additional time demonstrating that they can meet the requirements under WIA.

Mr. Martinez. Thank you. Mr. Chairman, thank you.

Chairman McKeon. Thank you. Chairwoman Johnson.

Mrs. Johnson. Thank you very much, Mr. Chairman.

What percentage of the one-stop centers have developed job retention programs, on site job support advice counseling during that first year of employment, career advancement services, advice as to what training you could take after hours, what education to move up the career ladder? How developed are those job retention and development services and how common are they?

Ms. Fagnoni. Let me premise by saying while we did survey all 50 States to get an overall sense of where they were in implementing WIA, and we did miss visiting a number of one-stops, it is not by any means a representative sample. We did visit 24 one-stops around the country for this particular project alone.

From visiting those one-stops and from talking to State officials, I will say that one-stops are very early on in thinking about how they might provide job retention services. To the extent there are, and we have an example where the State of Florida is setting up a system to work on that, the focus has been on TANF recipients and former TANF recipients, and they have been using TANF funds.

So what we saw was a very limited amount so far, in part I believe because this is a new focus under this system.

Mrs. Johnson. I did visit one of the one-stop centers in Florida and was very impressed with this aspect of their work, and I would hate for the funding stream issue to in any way inhibit the rollover of that experience into the rest of their population, because in the long run, all unemployed ought to have behind them retention services and advise about how to advance in their career.

Do you see in those States, recognizing now that this is a young service area, rolling it over to other than TANF clients?

Ms. Fagnoni. We did not see it yet, but I do think we see recognition that this is a new focus under WIA and that I think this is something that we will want to pay attention to as this system evolves.

Mrs. Johnson. Since welfare to work is specifically a Labor Department program, has that program that challenges them to help the really hard to employ, has that affected their approach to some of their own hard to employ unemployed people? In other words, people who have been on unemployment compensation quite a long time and clearly are having a hard time finding a job?

Ms. Fagnoni. To my knowledge, I think the focus has been more targeted on those that can be served under the welfare to work grant. As you know, recently the requirements for which they could serve broadened to help enable States to focus a little bit more broadly on serving individuals under the welfare to work grants.

Ms. Harris. I would like to add one thing. I have a team that just came back from doing some work in New York State. This is just what I have heard. But apparently they are going to use some of the flexibility under TANF to use TANF funds with an eligibility criteria of like 200 percent of poverty to help people who are already employed retain their jobs and advance. In other words, it is using TANF funds, but not for folks who necessarily were receiving monthly cash assistance and have then become employed. So in that way they are broadening the population that they hope to reach with their retention and advancement services.

Mrs. Johnson. There are certainly many people who are in the same position as welfare recipients in terms of both employment and development of their employment capabilities, even though they are not welfare recipients, maybe don't have children, for some other reason are not on welfare. So I certainly would want to do all that we can through the law to encourage the development of a consistent program that reaches people in terms of their need, not necessarily in terms of what program they came into. While welfare to work was a legitimate way to start, I don't think it is where we ought to be in 10 years with a population-specific program that is identified according to what program you came into the system as opposed to what your needs are.

Ms. Fagnoni. Right. Well, also in addition to the fact that you have low income families who may or may not have been on welfare, we issued a report some years ago looking at the child care system where we made the statement that welfare families and low income working poor families are often the same families at different points in time. In other words, we also have a situation where while somebody may be successful in moving from welfare to work, we know that there is considerable recidivism and it is important to understand the linkages and fluidity between welfare recipients and low-income individuals in general.

Mrs. Johnson. Lastly, I just want to raise an issue that I don't know whether your work has given you any insight into or not, but between 1994 and 2000, the decline in the welfare rolls has been 50 percent, and 80 percent have gone into full-time work. The decline in the number of people on unemployment has been only 12 percent.

So one has to ask the question, are we enforcing the work requirements in welfare more effectively than we are reflecting the job search and work requirements for those on unemployment compensation? I believe this is very important, because the longer you are out of the workforce, even if you win, the longer you are out of the workforce, the more dispirited you become and the harder you are to reemploy, for a lot of different reasons.

So why is it that we have seen this dramatic drop in the welfare rolls, and most of it into jobs, but we have not seen a dramatic drop in the unemployment rolls? Although we have seen a 33 percent decline in unemployment nationally, there is only a 12 percent decline in those on unemployment?

I realize there is a returning group of people, but it is a concern, and one has to ask are the work requirements under the unemployment compensation system enforced? Are they as effective? Has the agency stressed job placement and reemployment as aggressively with the unemployed as they do with welfare recipients?

Ms. Fagnoni. I have to say we haven't done any direct work on that.

Ms. Harris. But we do have a job ongoing that is looking at the unemployment insurance system and welfare reform to see if States are rethinking the role of unemployment insurance.

Mrs. Johnson. Do you have anything going on that looks at how States are enforcing the requirement to search for a job and take a job?

Ms. Harris. Again, I have just heard a team out there that has heard there is not that much of it going on, but there is some.

Mrs. Johnson. We will have to talk about doing that, because all of the job training research does show that on-the-job training is the most effective, and that is why the unemployment compensation system has to get better at retention, at supporting people in their first job or in a job, and then in career development, because there are ways to get people working as opposed to not working, whether they are on welfare or unemployed. But if we don't do a better job of retention and of advancement, then we won't succeed.

Thank you, Mr. Chairman.

Chairman McKeon. Thank you.

Mr. Cardin.

Mr. Cardin. Thank you, Mr. Chairman. I was listening to my chairman talk about the unemployment insurance issues, and I think the point she raised is very important. But I would hope that we would always draw the distinction between the services we provide under TANF, which are income-related benefits, social program versus unemployment insurance, which is an earned benefit, and there is a distinction between the two programs that we should always remember. That is not to say people shouldn't comply with the requirements of law, they should, but they are different programs.

Ms. Fagnoni, I think this report is very helpful. One thing I hope we will do is make sure that States get a copy of it. It seems you can learn from each other. One of the things that are going to be useful is for States to see what other States are doing, what is working, and what is not working. We are at the infancy stage of one-stop centers, and this could be useful for States to learn from each other. So I hope this report will get wide distribution.

I just want to highlight one section, one statement that you made in your report, one finding that I find very interesting from Provo, Utah, and I know that Mr. Rose is here from Utah, but where they have one-site child care facilities to help parents. That is quite an incentive to use the services. You can get your child into daycare. It looks like the contract entered into, is used well according to your report.

Ms. Fagnoni. That is not the only center we have been to where there is an on site, not just a play area for kids, but actually somebody, a licensed daycare provider on site so that people when they are trying to work at getting a job, getting services, don't have to worry about their kids being safe.

Mr. Cardin. That is quite a good approach and something we should certainly take a look at.

In your report you talk about seven States that have integrated the services for eligibility on food stamps and Medicaid into their one-stop shops. I would hope that you would make the names of those seven States available to us.

What I would like to do is see whether we have any information as to whether those States are doing better than others in getting those that are eligible for Medicaid and food stamps enrolled. I don't know if you know that or not.

Ms. Fagnoni. We don't. I kind of anticipated it would be a question. I think there certainly is the potential that the more services are collocated, there may be more of an opportunity to ensure that those people don't fall through the cracks, that somebody knows that they are eligible for food stamps, for Medicaid. But we didn't look specifically at that.

Mr. Cardin. We do have the names of the seven States. Maybe we can try to_again, I know this is the early stage, but it seems to me common sense tells us if they are coordinating it, it is one place, they can get the eligibility services done while they are there, there is a better chance the person will get the services they are entitled to.

Ms. Fagnoni. It would seem like that would be the case. For example, in Utah, which is one of the States that does that, there is one individual who actually is knowledgeable about all the programs. In other places we have somebody who may have to use other individuals for different programs, but one person coordinates for the client, so again they make sure they have all of the services to which they are entitled and need.

So I think it is something, like I said, worth looking at to see where there is broader inclusion of TANF, whether that makes a difference and what kind of difference.

Mr. Cardin. Thank you. We have talked about TANF funds being used by States as we intended them, very flexibly for these times of programs. Do we know how much TANF funds are actually being used to support these centers?

Ms. Fagnoni. We don't. From our survey we have a good sense of the extent to which States are using TANF funds and to what extent they are a major source of funds, but States aren't required to report the different pieces of funding that are used to fund one-stops, and they weren't able to provide that to us.

Mr. Cardin. Could you give us an estimate based upon what you have, or not?

Ms. Fagnoni. We don't have a dollar estimate, not for use of TANF funds.

Mr. Cardin. Would it be difficult for you_I understand you can't give us a scientific number, but would it be difficult for you to get back to us_ I see you are shaking your head.

Ms. Fagnoni. It would be up to whether or not the States could provide us with that information. I don't know how difficult. We will follow up with you on that. We would have to go to the States for that information, if they have it.

Mr. Cardin. Thank you. Thank you, Mr. Chairman.

Chairman McKeon. Thank you.

Mr. Petri.

Mr. Petri. Thank you. I have just one area that I thought I might ask you. You may not be able to respond. You allude in the report several times, certainly the idea of one-stop is partly for convenience, and it recognizes the logistical problems people have in getting around in what we now call T-21, the Transportation Act. Secretary Slater was very eager that we have a major transportation component for people who are moving from welfare into the world of work who are low-income working people.

You do talk of locating one-stop centers in low-income areas, on bus lines, to increase accessibility. We tried to make it flexible enough so that it wasn't just mass transit. Many employers in our area find that one of the biggest incentives for securing and retaining an employee is providing a car, because it is not just going from where they live to work, but it is going to church, it is going to school, it is taking kids to the doctor, it is dropping them off in daycare, and they are not all on a line. Our counties are maintaining cars for people at the county garage, because a used car with a big problem is a disaster if you have no fallback resources.

Could you mention anything about that? Is that being coordinated at all or do you have any sense of whether job centers are able to plug people in to transportation resources as part of this?

Ms. Fagnoni. In some of our other work where we looked more specifically at efforts to move TANF recipients from welfare to work in particular, we found a number of localities around the country where they were trying to make sure that clients, that people for whom they are trying to get jobs, have the sorts of support they need to be able to get and retain a job. Some key aspects are child-care and transportation. So you are right, it is not simply transportation to the one-stop, it is also making sure that they have those kinds of supports that are necessary to get a job and get to one's job.

So we have seen in a variety of jobs we have done a number of innovative approaches to ensuring that people can get to their job. So, yes, it is recognized pretty widely as a key component.

Mr. Petri. Thank you.

Chairman McKeon. Mr. Owens.

Mr. Holt.

Mr. Holt. No questions at this time. I am eager to hear Mr. Bramucci.

Chairman McKeon. Mr. McCrery.

Mr. McCrery. Thank you, Mr. Chairman. Let's talk about funding sources for these one-stop centers for just a moment. I see, I am trying to breeze through your written testimony and I see some charts that indicate the various programs that contribute to the funding of these one-stop centers, but I don't see anything indicating the relative contribution of the various programs.

Can you identify the funding according to the amount from the various sources? Does most of the money come from Employment Services, for example, or does most of the money come from some other mandated Department of Labor program? How is the breakdown there?

Ms. Fagnoni. Well, let me preface this again by saying we do not have dollar figures, but we did ask and States were able to provide us with what they identified as key funding sources. Yes, the Employment Service identified as a key-funding source.

It was primarily I think some of the key Department of Labor programs that were identified, including WIA funding, but, again, we did find, for example, that 12 States ranked TANF as among their three largest funding sources. It did vary considerably, and we had a number of States that were pulling together funding from several different programs.

Mr. McCrery. The question that Mrs. Johnson asked is an interesting one, the one that she asked about unemployment, the drop in unemployment benefits and the number of people using the service in comparison to the drop in the welfare rolls, and I guess implicit in her question was that maybe the incentives are different in the two programs, welfare reform you have to take any job, there is a time requirement and so forth; employment services or unemployment comp, there are different requirements. You get the money, you have to seek, but you don't have to find, I guess.

I am wondering if there could be a connection between the amount of money available for those services and the effectiveness of those services? Did you find that in your examination of these one-stop centers and the function of, say, the employment services branch of that one-stop center?

Ms. Fagnoni. We don't really have the information to be able to determine whether or not levels of funding made the difference. I think Congressman Cardin's point about the different nature of the two programs may account for some of those differences in terms of the way those programs are viewed and the extent to which by law some requirements are built into the programs now in terms of, for example, under TANF the requirement that people be in work activities within a certain number of years, those sorts of things. I think they make the difference.

Mr. McCrery. Since we have a number of States that are not integrating their TANF program into these one-stop centers, would you advise making that mandatory?

Ms. Fagnoni. I think this is something we would want to pay attention to see for those States where there is more integration, make the comparison as this system develops, the comparison in terms of outcomes for TANF recipients, do we see improved outcomes where there is more integration of services. I think that might give the Congress the information it may need to determine whether or not you would want to send a stronger message to the States that aren't currently integrating the services.

Mr. McCrery. Okay. Thank you. Thank you, Mr. Chairman.

Chairman McKeon. Mr. Roemer.

Mr. Roemer. Thank you, Mr. Chairman. I too welcome the distinguished panel that we have before us today on what I think is a very important and critically vital issue to many of our constituencies.

I was a strong supporter of the President's efforts to reform welfare and change what was the current system, but I also believe that we need a welfare-to-reform, and that we need to continue to watch very carefully what happens in this economy, to take care of many of the poorest of the poor people that are very much in need of continued assistance, whether it be child care and one-stop shopping, or whether it be cradle to grave learning opportunities and educational experiences.

My question would be how do we continue to, with the transient population here with one-stop shopping, how do we continue to plug people into cradle to grave education opportunities? Do you work closely with local businesses, do local businesses give you input on what skills are needed, how are you able to track and keep people involved in this kind of education system, and are local businesses encouraged to participate?

Ms. Fagnoni. Let me first talk to the point of tracking. You are right, that is a very critical aspect. If a system is going to help people once they move into the workplace, then there would need to be some kind of follow-up system, some kind of tracking across the system, I would think, so look at what kind of job that that person gets, what is the income, what kinds of training are they receiving on the job, what might they need to upgrade their skills and perhaps advance, either in that job or in a different job.

We have got some specific examples where local businesses have gotten involved in helping welfare_ former welfare recipients with on-the-job training and recognizing some special needs that people who may have had less attachment to the workforce might need. But I don't think we have sort of a broad national picture of that. But that certainly, in certain areas of the country and certain localities, I think there is a strong linkage with employers. As we noted on our chart, that is a real key element of an effective one-stop approach, making sure not to just focus on helping people that walk in the door, but unless the one-stop has an effective approach with employers, they are not going to be able to link people with the jobs and then help make sure they stay in those jobs and advance.

So I do think we have seen some specific examples of that, but I don't think we have a good national picture.

Mr. Roemer. Where regionally are we better at including some of the local business input into the needs of the local economy for those kinds of specific jobs that are open?

Ms. Fagnoni. I don't think we have reports that would identify a specific region. I think what we have is across the country we will have pockets of localities where there have been more effective linkages.

Mr. Roemer. Do we have a way to share those best practices with other communities so that we can learn what is working in one community so that we might apply it in another through kind of best practices, or Internet linkage?

Ms. Fagnoni. I think this is something that it would be useful to pursue, and it may be that the Department of Labor could play an important, useful role. That is often a very good role for a Federal department, particularly as programs have been devolved in terms of authority to States and localities. The Federal Government can play a very important role in identifying and disseminating information on best practices.

Mr. Roemer. I would certainly be interested in your suggestions in order to work with the Department of Labor on that.

Finally, you indicated that it was important to track these individuals to make sure that once they were placed with the local business, to assess how successful they were doing, if in fact they needed an upgrading in their job skills and their productivity.

It you say you do that, or we do not currently have a very good system of doing that?

Ms. Fagnoni. This is a system that is only just evolving. I would say of all the pieces of what might be an effective approach to serving individuals, this is the newest and least developed piece, this piece of paying attention to people once they move into the workforce. I think under a lot of programs in the past, and even some current programs, the focus was on getting people jobs, and I think there is now a better recognition that that is not going to be enough to fully serve people, particularly low income individuals.

Mr. Roemer. I would hope too that we could focus more on that aspect. In our economy in South Bend, Indiana, in my district I represent in northern Indiana, we are seeing people constantly in need, from the working poor to the highest paying white collar jobs, the people are in constant need of training and productivity enhancement and new learning skills, and I would hope that we would do this to especially the vulnerable population that gets into these sometimes low paying jobs and the jobs change and then we forget about them.

So, again, there is another area where I would be happy to work with you folks.

Thank you.

Chairman McKeon. Mr. Isakson.

Mr. Isakson. Thank you, Mr. Chairman. I wanted to follow up with Mr. McCrery's question if I could for a second. On page 12 of the report and in other places, it makes direct reference to where States have had difficulty because of multiple Federal requirements and multiple sources of rules. In particular I want to address myself to on page 9. It appears to me there are 12 or 13 various programs from which funds are being drawn to fund the one-stop source, is that correct?

Ms. Fagnoni. Right.

Mr. Isakson. Is the States using some or all of those?

Ms. Fagnoni. Those are mandatory programs, right.

Mr. Isakson. On page 12 it says that the various accountabilities for the use of the funds sometimes is in conflict, so the States are having difficulty using some of the funds for its intended purpose because some of the requirements are different, depending on the source of the funds.

I didn't have time to read, so I am really asking, and it may already be in here and you just point me in the right direction, have you all made any recommendation as to how we might simplify the accounting on the States' parts so they can take advantage of the ability to use multiple sources of funding to fund what is supposed to be an integrated one-stop shop?

Ms. Fagnoni. We have not made recommendations. This is our first look at this system, given that it is technically not officially in place until a couple of days from now. Therefore, this was our early look at how things are going, where the States are, and particularly looking at those localities and one-stops that seems to be further out ahead. So, no, we didn't in this particular assignment focus on that.

Mr. Isakson. Well, the reason I asked the question is that I understand how this is a problem. I talked to our_ Michael Thurman in Georgia, our Labor Commissioner, who has been a tremendous guy in implementing welfare to work and a number of things, and the most difficult problem they are having now, as Representative Johnson said, we have reduced welfare rolls substantially. Those that remain, however, are very difficult people to employ, as we all know, given the nature of our economy right now and we have got full employment, and the need for this one-stop is important, the need for support, the need for referral, the need for adult literacy. It would seem like to me that if we could get some recommendations here on what we might do to give some flexibility on the accounting side back to the source of money, it might help our States be able to really take advantage of those funds and implement a program, rather than be held back because they don't think they can account for the money, so the money doesn't get used, if you follow what I am saying there.

Ms. Fagnoni. I think this is an area where States are still working through, and what would be needed would be to get a better handle on some of the more specifics and how those might be overcome. Part of it could be talking to the other States that have kind of figured out how to pull things together. Others might be places where there could be more uniform guidelines that would enable States to better piece funds together.

Mr. Isakson. Thank you, Mr. Chairman.

Chairman McKeon. Thank you. I see in the report you visited five States and you said how many?

Ms. Fagnoni. It was twenty-four one-stops in all, actually in more than five States. We focused on five States that were sort of early implementers of one-stops, which were Texas, Florida, Kentucky, Utah and Oregon. We also visited one-stops in Ohio, Illinois and Wisconsin. While it is not a representative sample, it was a pretty broad range of one-stops.

Chairman McKeon. Do you have any idea how many one-stops there are in the country now?

Ms. Fagnoni. My understanding is there are over 1,000. I think there are 1,476 is what our number says.

Chairman McKeon. Do you have a list of those by State?

Ms. Fagnoni. Not with us.

Chairman McKeon. Can you get that?

Ms. Fagnoni. We can get that for you.

[The information follows:]

SEE APPENDIX D

Chairman McKeon. Thank you. Mr. Owens.

Mr. Owens.

Mr. Chairman, I had to step out for a markup in Government Reform down the hall, so I might have missed the answer to this question. Just one brief clarification. The TANF, the use of TANF funds you said in 12 States they use them primarily_the bulk, the proportion used is greatest of TANF funds for the funding of one-stop centers? Did I hear you correctly?

Ms. Fagnoni. What we said was that 12 States ranked TANF as among their three largest funding sources.

Mr. Owens. Is there a distinction between overhead and administrative? Is this money being used for overhead and administration costs, or being used for direct services to the clients? Is TANF the primary supplier of administrative costs?

Ms. Fagnoni. It was for infrastructure and operations, correct.

Mr. Owens. Not for client services?

Ms. Fagnoni. That would include services. It could include services to clients other than obviously the cash assistance benefit itself.

Mr. Owens. Thank you.

Chairman McKeon. Thank you very much. Now we will ask the second panel to come forward if they would. This panel will be comprised of the Honorable Ray Bramucci, Assistant Secretary of Employment and Training at the U.S. Department of Labor here in Washington; Ms. Linda South, Executive Director of the Brevard Workforce Development Board in Cocoa, Florida; Mr. Robert Gross, Executive Director of the Utah Department of Workforce Services in Salt Lake City, Utah; and Mr. Richard Ramsburg, Principal of the Adult Education and Evening High School at Frederick County Public Schools in Leonardtown, Maryland.

Let's start with Mr. Bramucci.

Mr. Bramucci. Thank you, Mr. Chairman. I welcome the opportunity to chat with you and members. I have spent the better part of two years around the country looking at, probing and poking. Rather than read a long statement, I will just tell you that what we are engaged in at the Department of Labor is an ongoing evolutionary program of bringing the right people and rooms together to talk and cooperate, to get at this issue of facilitating the movement of people to higher and dryer ground. That is a variety of people. Those people at the top end who are caught in the skills gap and the people at the bottom who are being left behind because they don't have fundamental skills.

There are uneven rules. We share the GAO's opinion of where we are with one-stops and the relative cooperation between agencies. But the issue here is confronting the issue of separate revenue streams, separate groupings of people with separate cultures, to interact more effectively in the face of a variety of interests on the part of locals and State officials.

Where there is interest, for instance, in Montgomery County in Ohio, it was years ago that they merged welfare with Labor and Human Services. So it was a natural movement for them to create one of the best one-stops in the country. As a matter of fact, I was there yesterday in Dayton with Governor Taft, and there are 47 different partners there.

In other places there aren't 47 different people getting together to do anything.

So we have been working at this. We have been working at it in the way that we say we are the coach. We are trying to get the players together. It is not rocket science, it is simply place by place, urging people to make the right alliances so that people can be served, not to only get a job, but to get a better job, and then to get the kind of services they need to stay on the job.

We are encouraged that Congress did the right thing, and we see our opportunity to administer this act in a bipartisan way, saying we are looking for implementation and not compliance; we are trying not to force people into the same shoe, regardless of their foot.

On the whole, we have been sparking the best connections between the disparate parts of Federal services and State services to senior citizens who are looking for work or who need workers that I think we have ever seen. I have been around a long time. I was Commissioner of Labor for 4 years in New Jersey and I see it from both perspectives. I tell you we are on better ground now than before we had the Workforce Investment Act.

I would just allow myself to be questioned now.

[The statement of Mr. Bramucci follows:]

WRITTEN TESTIMONY OF THE HON. RAY BRAMUCCI, ASSISTANT SECRETARY OF EMPLOYMENT AND TRAINING, U.S. DEPARTMENT OF LABOR, WASHINGTON, D.C.—SEE APPENDIX E

Chairman McKeon. Thank you. Mr. Gross.

Mr. Gross. Thank you, Mr. Chair, Madam Chairman, members. Once again, I would like to extend to you a thank you for the invitation to speak here. You have my written testimony, and I would just like to indicate at the outset that I am here essentially to offer at least three distinct perspectives.

Currently I am serving as the President of the Interstate Conference of Employment Security Agencies. That is the group of all 54 State and territorial administrators of essentially the workforce development agencies throughout the States, which are charged with the responsibility of such diverse programs as unemployment insurance, labor market information, the employment service, and in most of our States job training and its progeny.

In addition, in such States as Utah, my own State Wisconsin, and soon to be Ohio, we are also, several of us, are responsible for the implementation of essentially the TANF program or what has been referred to as the welfare programs and the integration of those.

Secondly, I guess the perspective I can offer you is one of the early implementer States. Governor Levitt from our State recruited me from the private sector four years ago essentially to oversee the implementation and consolidation of five different agencies of our State government to essentially combine all workforce development as well as welfare administrations.

Thirdly, my perspective comes from that perspective I had in the private sector. For 20 years I was a volunteer in the old JTPA system and its forerunners, serving first as a PIC chair and then as a member of our state Workforce Investment Board, the last 2 of which I served as chair.

Let me offer these perspectives very quickly, and I will try to incorporate some of the questions that have already been asked.

There are some entities, including our own entity, ICESA, which is providing essentially forums for the sharing of best practices. We do so, for example, by means of a Web site called the Workforce ATM, which many of our States and local partners are using extensively, as well as our Federal colleagues.

Secondly, we are increasingly using our labor market information people, economists throughout the country, to work with our local boards. Increasingly we are hearing from my colleagues around the country that our economists and labor market information folks are one of the things attracting business to the table in terms of the oversight of our one-stop centers.

Third, as I mentioned, we are, many of us, involved directly in welfare reform, but certainly all of our agencies are involved to some extent or another with the linkage in terms of welfare reform as well as linkages to other partners in education, higher education, vocational rehabilitation, veterans affairs and so on.

Finally, I would offer the perspective we are involved in an ongoing partnership with our colleagues at the Department of Labor in a number of self-service kinds of tools that are primarily based on technology that are doing much to improve the efficiency and effectiveness of our system primarily to self-service customers, both employers and job seekers.

Concerning the challenges, we have some, as Mr. Bramucci indicated. First, this perspective in terms of the attraction to business and employers to the table is an ongoing problem or challenge. Even under the current law, as an early implementing State I can tell you that we continue to have problems attracting business leaders and then retaining those leaders to our local and State workforce investment boards.

My own perspective and the advice of my colleagues suggest this: That essentially we bring people in with an expectation. In my own case, for example, I used to chair a board of directors in a for-profit, a board that was responsible for governance and the direction of policy matters. Yet, we expect people to join these particular boards and get to the ninth degree of minutia. Very often the boards are administered or staffed by bureaucrats, essentially who don't know any better, and essentially many of our employers come, and, if we can get them attracted at all, soon lose interest because of the morass of Federal regulation or reporting that they find themselves immersed in. These programs are extremely complicated.

Secondly, and as has already been mentioned, funding is a critical problem. As our Governor likes to say, the Congress has addressed two legs of a three-legged stool in terms of welfare reform, the Workforce Investment Act. Now we need to turn our attention, the Congress we would hope turns its attention to the adequacy of funding for the Employment Service.

I am happy to report that ICESA, along with representatives and colleagues from the Department of Labor, organized Labor and employer representatives, have been working in a group, and we have something that we are going to be proposing to the Congress shortly to address that. So funding is also a critical issue.

I know my time is up, so I will answer any questions when we get to that point.

[The statement of Mr. Gross follows:]

WRITTEN TESTIMONY OF ROBERT C. GROSS, PRESIDENT, INTERSTATE CONFERENCE OF EMPLOYMENT SECURITY, AGENCIES, AND EXECUTIVE DIRECTOR, UTAH DEPARTMENT OF WORKFORCE SERVICES, WASHINGTON, D.C—SEE APPENDIX F

Chairman McKeon. Thank you. Ms. South

Ms. South. Good afternoon. Thank you very much for the opportunity to be here. On behalf of my partners, the stakeholders and neighbors from Brevard County, the Florida Space Coast, we bring you greetings from the Space Center.

I am going to answer the questions that were raised up in the GAO study, to what extent are the Federal funding streams being utilized in a one-stop career center in Florida, and particularly Brevard. We utilize the services of WIA Title I, Wagner-Peyser, Adult Education and Literacy, Vocational Rehabilitation, Community Development Block Grants, Temporary Assistance to Needy Families, TANF, Title IV Older Workers, Postsecondary Carl Perkins, Veteran Services, Unemployment and Food Stamp Employment and Training in our Brevard job link system. So we believe we have a very thorough comprehensive integration of Federal funding in our system.

Time is short to address all the best practices and the wonderful opportunities that are available in the one-stops, so what I am going to do today is talk to you about what you apparently have some interest in, and that is the upgrading of skills of people once they come into the job market.

Florida has a system based on a step stone, stepladder type of activity. First job, first wages; better job, better wages; and high skill, high wages. Our better job, better wages program is aimed at people who have entered the workforce but are still not self-sufficient. That would include not only TANF recipients, but also first-time workers or displaced homemakers or people with disabilities or any of our customers that may have a need to upgrade their skills.

We are very fortunate to have TANF integrated as part of our one-stop services. I frankly don't understand how one-stop career services can function without TANF as an integrated part of what we are doing. In Florida we have a program called RITA, or Retention Incentive Training Accounts, where we can spend TANF funds for both former welfare people and people who are 200 percent of the Federal poverty level or lower, and remove any barrier they might have that would stand in the way of them getting additional training and learning that would allow them to go up the ladder of prosperity.

It is important for all of our customers to stay engaged with the one-stop system, regardless of where they are in their career development.

The one-stop center serves as a central clearinghouse, a dynamic marketplace, so to speak, where the role of the one-stop is to broker all of the elements of the workforce investment system for the benefit of not only job seekers, but employers, in an effort to engage them in the workforce in a faster, more efficient way than ever before.

There are multiple challenges. Some of you have heard this from my colleagues. The biggest challenge that we see is that the act provides States and local areas with the opportunity to completely streamline their workforce systems. For States that are seeking to flex the powerful potential of the WIA, we are finding barriers at the Federal level that are systemic and counterproductive to the act.

The disconnect comes from Federal partners that do not appear to understand a State or local design in delivering services and sometimes apply narrow interpretations of the law without a context in which to interpret it. This is very confusing for local areas and local partners as we attempt to apply programs in a better fashion. It is very difficult to have a local design saying one thing and Federal partners indicating that that might not be the way it is. This inconsistency makes it difficult for local leaders to get outside the box and flex the muscle of WIA in making that happen. It leads us to management by fear of monitoring versus management by leadership and forward thinking.

When you asked about the concept of TANF in the one-stops, again, Brevard County has the pleasure and privilege of doing consulting work with other workforce boards around the country as a result of our known success in the one-stop delivery. For areas that do not integrate TANF into their one-stops, we have stopped accepting them as consulting jobs because we don't know how to help them. We just don't know how to apply what we are doing locally in Brevard County to areas where TANF is not part of that program.

The Federal level leadership is the required partners that can work together to send a united message to their own associates in the regions about the visions and the opportunities under with WIA. When funding and prevailing legislation is aligned, Congress will have taken a giant step forward in ensuring that one-stop successes are not dependent on personalities in the area, but on a strong backbone of legislation.

In closing, we encourage Congress to provide the leadership necessary to keep the opportunities that WIA has possible, keep that alive and available for us at the local levels to design and keep helping our neighbors.

[The statement of Ms. South follows:]

WRITTEN TESTIMONY OF LINDA H. SOUTH, EXECUTIVE DIRECTOR, BREVARD WORKFORCE DEVELOPMENT BOARD, INC., COCOA, FLORIDA—SEE APPENDIX G

Chairman McKeon. Thank you. Mr. Ramsburg.

Mr. Ramsburg.

Mr. McKeon, Mrs. Johnson, members, you have a written statement from me, and I am going to try to sort through it and eliminate the redundancies of things that I have heard because I don't want you to have to hear them over and over again.

In Frederick County, six agencies worked together two years ago starting with discussions to form a one-stop partnership. We now have eight cooperating agencies and they are listed in the written testimony that you have here.

I guess that process, I am highlighting it very quickly, but it has not been an easy process, moving from talk to what do we want to do, how can we do it and how can we make the funding work, and the fact we are also working, all still working together and talking and making it happen I think is a major accomplishment.

In my written testimony I listed 10 significant agreements that have evolved from this. I want to highlight one in particular, because Mrs. Johnson and Mr. Cardin and I think to an extent Mr. Petri had asked about what are you doing for post-employment, and that has become perhaps the critical emphasis with our one-stop partnership.

We have moved 90 percent of our welfare recipients into jobs. The problem now is everybody has been saying, what do we do? Transportation is, of course, an issue, especially in Frederick County, which is a fairly large geographic area.

We have started and we are funding this with a combination of adult education, HUD, another partner in this, the Housing Authority, and TANF funds, where we are putting computers in the homes of former TANF people, I think it is about 90 percent female.

We are teaching them basic skills, hence the adult education piece. We are teaching them Microsoft Office, we are teaching them keyboarding, we are teaching them the WHO Office Suite, the idea being to move them from $6.50 an hour jobs into benefited and higher paid positions by giving them the technology and the self-confidence to use the technology. It eliminates the barriers of child-care; it eliminates the barriers of transportation. We are pleased with that. We have had over 100 people enrolled, and I have more statistics on that if you might be interested.

As I said, we have addressed the working poor. They are certainly our greatest challenge. I will add another group here, and that is the foreign born population who have never been on welfare of any kind, but who are working 60 to 80 hours a week in unskilled, underpaid jobs. I see that as a whole other population that we are trying to address.

We have indicated some challenges, and of course you hear the word "towers" over and over again, and that is our greatest challenge. We have funding coming into these categorical towers, if you will, and yet we are trying to work in a cooperative umbrella, and trying to break from one tower to the other without being audited and sent to jail sometimes can be a challenge.

We love the one-stop umbrella though, and I need to emphasize that. It has brought us together. WIA has given us the incentive to do that, and we are working and it was WIA and of course the welfare reform that has moved us in that direction.

We certainly want flexibility, but we don't expect it. When I say we, I mean the local level, without accountability. Our only thing is we want to be included in developing that accountability process, but we want accountability across the board for all partners.

There are other Federal regulations that complicate what we can do, and I mention two here. Perhaps the most glaring and sensitive, especially as we move into the digital transfer of information, is the whole business of confidentiality, how do we report outcomes, how do we share information, interface information from agency to agency without breaching the confidentiality of the people we want to protect. That is a major issue and one that is going to get in the way, if you will, of how we report the outcomes of the endeavors that we have. I appreciate the opportunity to be here, and will certainly respond to questions from a local one-stop perspective. Thank you.

[The statement of Mr. Ramsburg follows:]

WRITTEN TESTIMONY OF RICHARD RAMSBURG, PRINCIPAL, ADULT EDUCATION AND EVENING HIGH SCHOOL, FREDERICK COUNTY MARYLAND PUBLIC SCHOOLS, FREDERICK, MARYLAND—SEE APPENDIX H

Chairman McKeon. Thank you very much. We have had some real good input there.

Mr. Bramucci, you indicated the OMB is still reviewing the final regulations for the implementation of the Workforce Investment Act. How long have they had these regulations?

Mr. Bramucci. It had been a couple of weeks. We are going to be finished with them by Friday. There will not be any surprises, notwithstanding when we get them out, because we have been in close consultation with our partners. What we are talking about, Mr. Chairman, are fine-tunings and marginal varieties of different uses of words that don't really affect the bottom line too much. So I think that we are pretty timely with that.

Chairman McKeon. It takes effect in two days. We have had some complaints. How have you responded to States and localities have that have criticized the lack of direction and the lateness in getting these regulations?

Mr. Bramucci. By telling them that they are probably wrong, that there was no impediment to their acting and there was no mysterious regulation coming down the pike that wasn't very much different from other regulations. What we are trying to do is get off that train and get on the train to do something, and form those partnerships and get the act going, because the regulations in themselves are not impediments to actions by locals or States because they are well aware of what is in there, what the dialogue has been. And, Mr. Chairman, there has never been an effort that I can imagine in my time where we have reached out more to the local and State communities to consult and listen and adjust and conciliate different ideas than we have with implementing WIA.

Remember, we didn't say comply, we said implement. And we meant it. That has been our mode of operating, and I am confident that any reasonable groups of people out there who want to do something in the United States of America have the ability to do it.

Chairman McKeon. And if the regulations come and they are different than what they have done, they don't have to worry about it too much?

Mr. Bramucci. I am saying to you, Mr. Chairman, they are not too different. I was out in California with your people, the California Workforce Board, which is a great group of people. Before I could get to the microphone, I heard about 25 complaints of what the Governor did not do and what we did not do. I said to people, listen, it is not about what we do, it is about what you do. Because there is plenty of room under the act to put together alliances, form partnerships and getting the job done. Yes, there are a lot of gory details, outcomes and all of that, which we were working with. We are not demanding results tomorrow or next week. We are not going in there with a heavy club. So we have changed, and people ought to take advantage of that and try to find the kind of partnerships that the law allows.

Chairman McKeon. Great. Thank you.

Mr. Gross, you mentioned the Department of Labor has proposed some unnecessarily complicated reporting systems going far beyond the minimally required goal expressed under WIA. Can you please elaborate on that?

Mr. Gross. Well, let me suggest, Mr. Chair, first of all, I would reiterate what Mr. Bramucci has said. In terms of the reports from my colleagues about the flexibility of the Department of Labor and the Department of Labor support to individual States in this period of transition, it has been superb. There is concern among several of my colleagues though about the extent to which the reporting requirements, the tenor of those reporting requirements, are moving. The indication, of course, in the statute is that they should be less so rather than more so. So many States have expressed those concerns about what ultimately come out in terms of the reporting requirements themselves, in terms of reporting compliance with the act.

Chairman McKeon. This sounds to me like you kind of get involved in dealing with people and personalities. It sounds like Mr. Bramucci has a great attitude about it; you know, kind of go off, take the act and put people first and get out and help them. Maybe there are some people that haven't gotten that message in your department and maybe they are complying.

So somewhere in there, there is probably that message being sent. So if you will keep hammering on your message of implementing, not the heavy handed, and what we are really trying to do with this whole purpose is help people, each of you in your areas are doing that very well. But this is a big country and there are a lot of people out there that, you know, we pass a law and before it gets fully implemented, we have passed another law, not we, I am new here, but somebody probably did. But what we would like to do probably is, as Mr. Martinez asked, is that some way we can maybe a little tinker around the edges, but not before you have a chance to get this implemented, come in with something new. But if there is something we need to do to help, we want to be able to do that, but we don't want to get in the way of what you are trying to do. We just want to, all of us, have this attitude of helping people and what is the best way to get it done.

Mr. Bramucci. Mr. Chairman, I think the best way to do it is give us a chance to do this. We are making progress. We are on the same page. We need though the system to be supportive. We can't run a car without gas and oil and we can't run a system, whether it is one-stop or any other system, without support. We need that support.

That is all I ask of you, to look at that. I know we have had some great words from Chairman Goodling about the integrity of our programs. We would like to build on that, because we are building a system that will survive political change, and it is not ideological. We just got to do the right thing. But we need the funds to do that job.

Chairman McKeon. Okay. Well, just if you hadn't mentioned it was and all we would have probably been all right. We are leaving next week for a recess, so we won't be causing any problems except out visiting and seeing what is happening out there.

Thank you very much.

Mr. Martinez.

Mr. Martinez. Is this thing on? Yes, it is.

I have to laugh a little bit about when you say that you want them to proceed as quickly as they can ahead with what the law allows, but who is going to determine what the law allows? You have a lot of people working under your jurisdiction who you cannot absolutely control all the time, because I have seen it. They have attitudes, and I will tell you, some of the bureaucrats have an attitude like "we are the law." They did not pass the law, they were only supposed to implement the law, but they act as if we are the law, and what we say goes.

Then these people took a prerogative, let us say, or an initiative, and they did something because they thought on their level it was the best way to do it and be most effective at it. Then, all of a sudden they find that it does not really comply with this bureaucrat's interpretation of the law, because, after all, when you say that, who is going to determine what the law allows, the person sitting in that office underneath you?

So I can understand, because I came from a city government that would not take any Federal funds. You know why it won't take any Federal funds? Because we didn't want "Big Brother" from Washington sitting in our backyard telling us what we could and couldn't do, or telling us after we did something that we did it wrong and we owed them money and we had to pay it back. You see how complicated it gets, when you might think it is very simple, let's just do it.

But you know what I really want to talk about, because it has come up in several of the conversations here, is the idea of where you get your funding from, and in a way you indicated, you know, we need the resources to do the job.

Well, you know, we originally I think in the bill enacted $110 million for startup grants. Let me ask you, did any of you in starting your centers apply for any of that money?

Mr. Ramsburg. Yes.

Mr. Martinez. Okay. Now, that is not really a lot if you talk about_how many centers did they say there were? 1,476. That is a lot of centers to divide that kind of money up when it takes that kind of money. So you relied on the funds from other programs, that you were able to do because the law did indicate you could use TANF funds, et cetera, et cetera.

However, it was a concern of ours, and indicated by Mr. Cardin and Nancy, what percentage of those monies that you use. I think we need to know, I think Mr. Cardin's question is a very good one, we need to know what percentages of your operating funds come from each of those funds so you can determine how much you can rely on from those funds and that we might need to do more. Now, in the new appropriation, there was money allowed for WIA for the different programs, for the one-stop delivery system itself and the youth activities and the adult activities, et cetera. But that amount of money, that amount of money actually was, in the House_ well, in the year 2000 you got $5.4 billion for that. So you could get money from there for those activities. I think for us to understand it better we have to know how much of your operating money came from that money.

Then in the coming year, there was actually originally asked for $6.1 billion, but the House bill cut it back to $5 billion. So for us to be able to judge how much that appropriation really has to be, we need to know how much you are using of that money for most of your operation and then where you get into other funds to give you the operating funds that you need. In other words, to establish what you need to establish, a total operating budget to be able to be successful in doing the job that you are required to do. Can you respond to that?

Mr. Bramucci. Yes. First, I would like to clarify the record, I am not big brother, and I am the old grandfather. I am trying to be softer than the big brother. If that attitude that you refer to is present out there, I haven't seen it. If it is, we try to stamp on it and we try to change it.

Mr. Martinez. Well, I am going to interrupt you right now and say get your head out of the sand, because it is out there, and we have all seen it. If you haven't seen it, I am surprised.

Mr. Bramucci. Congressman, I do not have my head in the sand, and I don't see it, and I get around this country as much as any person that ever represented this government on the job.

Mr. Martinez. I have been in government now since actually 1968, from the local City Council to the State to the Federal Government. And, you know, Pat Williams on the House floor said one time, "Never underestimate the power of the bureaucracy. They are a kingdom unto themselves." Do you know why he said that? Because he was in this House more than 18 years, and he saw it over this period of time.

There are many people in this House that have said if you really want to reform government, do more oversight from the committees that you sit on of the agencies that you are supposed to have the oversight jurisdiction over in order to make sure they are complying with the laws.

Let me tell you something, I have seen in the time I was chairman laws passed, we passed here, that when the regulations start to come out from the agencies, child care is one of the best examples, the regulations not only offended the Democrats that were in charge then, but they offended the Republicans who were in charge, and we held hearings, and those Republicans came here, governors, mayors, council people, to testify that the Department is handcuffing them in their ability to manage child care in their own States.

So don't tell me that bureaucrats don't a lot of times take more power than they should have and are excessive in their interpretation of the regulations or interpretation of the law as we pass it, because that is a fact of life and it is a fact of government, and we need to be ever alert to be able to control that.

Mr. Bramucci. That is fine. I don't have my head in the sand. I want that to be understood.

Mr. Martinez. Well, if you say you have never seen bureaucrats take advantage_.

Mr. Bramucci. I did not say