Comprehensive Employment and Training Act Extension Message to the Congress.

To the Congress of the United States:

I am submitting today legislation to extend an improved Comprehensive Employment and Training Act through 1982.

This legislation is an essential complement to the balanced economic program I presented to the Congress last month. While our tax and budget proposals ensure that steady growth continues without inflation, the CETA legislation I am proposing today will make sure that more of our people share in the benefits of growth. With its training programs and direct job creation, this legislation is critical to reaching our employment goals.

In Fiscal Year 1979 we expect to spend $11.4 billion in this effort, providing jobs and training support for more than 4 million people under the CETA program.

This legislation will combine public and private efforts to attack the problem of structural unemployment, which affects groups, such as minorities and young people, who have difficulty finding work even when over-all economic prospects are good. Last year, for example, our employment situations improved markedly; 4.1 million more people held jobs at the end of 1977 than at the end of 1976, and the unemployment rate fell by 1.4 percent. But even while unemployment was falling to 4 percent among white males above the age of 20, it was rising—from 35 to 38 percent—among black teenagers.

The Comprehensive Employment and Training Act will enable us to concentrate on these groups that suffer structural problems, without putting inflationary pressures on the rest of the economy. Its major elements are:

—Public service jobs for the unemployed. In the last year, we have more than doubled the size of this program, increasing it from about 300,000 jobs to 725,000.

—The broad range of youth programs authorized by the Youth Employment and Demonstration Projects Act of 1977. Spending for youth programs has increased from about $660 million in Fiscal Year 1976 to about $2.3 billion in Fiscal Year 1979.

—The Administration's new Private Sector Initiative, which will provide opportunity for the private and public sectors to work together to provide jobs and training for the unemployed and disadvantaged.

—Other important related programs, such as the Jobs Corps, welfare reform demonstration projects, and the Federal government's job training efforts.

These CETA programs have already played a role in reducing the unemployment rate from 7.8 percent to 6.3 percent in the last 13 months.

The bill I am submitting today, which will reauthorize the Comprehensive Employment and Training Act for an additional four years, from 1979 to 1982, will sustain the current programs, establish the foundation for future growth, and improve the operation of the CETA system.

A countercyclical program under Title VI, will maintain the 725,000 public service employment slots that were part of my stimulus program through Fiscal 1979. We are rapidly approaching the 700,000 mark in that effort, and I fully expect that the 725,000 goal will be reached in the month of March.

Also, I am recommending to the Congress that we adopt a trigger formula, beginning in 1980, to insure that countercyclical public service employment is activated quickly when needed and is reduced as unemployment declines.

When the unemployment rate falls below four and three-quarters percent, the triggering formula will reduce the number of slots to 100,000, targeted on areas that still have high unemployment. For each half percentage point that unemployment exceeds that 4.75 percent level, 100,000 public service employment positions will be added in Title VI.

Recent evidence indicates the effectiveness of countercyclical public service employment. Just last week, the National Commission on Manpower Policy released a study done by the Brookings Institution showing that the substitution problem, which limits the usefulness of public service employment when Federal dollars are used to replace local funds, is not as serious as had previously been feared.

To reduce substitution, I am encouraging the use of a special project approach which, according to recent evidence, has been successful in meeting this problem.

I am also proposing strict limits on the use of these funds to support higher-wage public employment.

This new bill takes further steps to target jobs on those most in need and sharply limit substitution.

In order to target more effectively, I am recommending that funds given out under the CETA system be used only for the economically disadvantaged—defined as those whose family income is no greater than 70 percent of the Bureau of Labor Statistics' lower-income family budget standard. I am also recommending that young people whose parents claimed them as income tax deductions in the previous year include their parents' income in establishing their eligibility for the current year.

This year, I propose that we demonstrate the jobs component of my welfare reform proposal by creating 50,000 positions in selected cities. Beginning in Fiscal 1980, with the passage of the welfare reform bill, we will increase the structural unemployment program until it can accommodate the 1.4 million people I anticipate will be served in the welfare reform plan. That should ensure that, for every family containing' children and parents who want to work, there will be a job. Most families containing an employable person will see their income rise substantially above the poverty line.

The purpose of the Public Service Employment program will remain what it has been—to provide useful jobs. For example:

—Major parks in urban centers, such as Boston, that were once abandoned to overgrowth and vandalism have been reclaimed for the enjoyment of the public.

—In North Carolina, elderly people are being cared for, in their homes, by public service employment workers, rather than being forced to leave home and spend their last years in expensive, sometimes-impersonal nursing homes.

—In Portland, Oregon, CETA workers install locks, window grates and other security devices in the homes of senior citizens and low-income families living in high-crime areas.

—In Memphis, workers are building ramps for the handicapped in five areas of the city used heavily by the handicapped and elderly.

—In Humboldt County, California, CETA workers help to staff day care centers serving low-income families.

—In Worthington, Minnesota, workers are providing home insulation and energy conservation assistance to low-income households in a four-county area.

As the economy improves, employment and training programs should shift their emphasis from creating jobs in the public sector to providing training and finding jobs in the private sector.

To help place CETA participants in private-sector jobs, to provide an opportunity for cooperation between the local CETA programs and the private sector, and to tap the goodwill and commitment of private-sector businessmen, large and small, as well as labor leaders, I am asking Congress for authority to establish a new Private Sector Employment Initiative, under a new Title VII. In the budget, I have set aside $400 million for this activity in 1979.

Private Industry Councils—made up of representatives of large and small businesses and union organizations—will be responsible for developing on-the-job training and other placement opportunities with private firms for young workers and other participants in the CETA system.

The CETA legislation that I am presenting today provides Congress with a plan for a rational, efficient and targeted structural and countercyclical employment program.

We need an employment and training system which is administratively clear, that helps those most in need, that creates needed jobs and provides maximum opportunity for cooperation between the public and private sectors. To reach the goal of full employment, and price stability which we have set in the Humphrey-Hawkins bill, we must make these programs work. The legislation I am sending to Congress today can provide a framework within which we can all work together to achieve that commitment.

JIMMY CARTER

The White House,

February 22, 1978.